America’s two-party system has roots in one of the most important debates in our history. The Federalists and the Anti-Federalists went toe to toe over issues related to the ratification of the Constitution. Since then, many third-party candidates have gone after the big prize. But for the most part, one of the big two gets elected. We can thank Congress for that. On both the state and federal level, representatives to Congress compete in single-member races. One winner represents one district. Whoever gets the most votes wins. The conventional wisdom is that it’s best not to split the votes up too many ways, so candidates organize themselves into parties to maximize their chances of winning. Other features of the American system of elections, such as campaign finance rules, the Electoral College, and rules giving party candidates ballot access, further solidify the two-party system in the United States.
Those factors all work against third-party candidacies. Circumstances sometimes dictate that the two-party approach isn’t the best. I’d say that’s true all the time. Third parties give people more choices, and choice equals freedom.
At various times in our history, including in 1860, events give rise to stronger third-party challenges. On the eve of the Civil War, that was the case.
Abraham Lincoln was a representative of one of the four parties whose candidates won at least one state that year—the Republican Party. We were truly a house divided even before the Civil War began, and those election results reflect that to a degree. And then there was the subdivision. In a move that prefigures that war, the divisiveness within the Democratic Party over the issue of slavery caused them to split into two factions. They did so along geographic lines—North and South—that matched their antislavery / proslavery positions. (You also need to remember that back then, the Democrats’ beliefs were more like those of the Republicans of today, and vice versa.) Obviously, the Northern Democratic Party was antislavery, and the Southern Democrats were proslavery.
Lincoln, the Republican candidate, ran against Southern Democrat Stephen Breckenridge, Northern Democrat Stephen Douglas, and John Bell, representing the new Constitutional Union Party. All things considered, Lincoln enjoyed a relatively decisive victory, but that house divided ended up dividing again. Even before he could be sworn in, seven Southern states seceded from the Union.
War soon followed.
Many find it interesting to think about the Civil War in terms of classic libertarian doctrine. There’s no consensus among all thinkers, but the most common approach to libertarian philosophy and the Civil War has libertarian sentiment on the side of the Confederacy. That’s because it resisted the federal government in favor of states’ rights. It tried to reject the imposition of a northern military authority. It made arguments in favor of free trade and political self-determination. All valid points, but oh, the humanity. Trying to figure out a cost-benefit analysis of that conflict is a tough one. I’m glad I haven’t had to face the choices and circumstances that faced those living in the 1850s and 1860s. That scenario makes 2016 look positively rosy in comparison.
When you look at the roster of those who’ve run as third-party candidates, you come across some familiar names. Here’s a representative sampling of the known candidates.
|
Candidate |
Party |
Year(s) |
|
Martin Van Buren |
Free Soil |
1848 |
|
Millard Fillmore |
American / Know Nothing |
1856 |
|
Theodore Roosevelt |
Progressive / Bull Moose |
1912 |
|
Strom Thurmond |
States’ Rights |
1948 |
|
Douglas MacArthur |
Constitution / America First |
1952 |
|
Eugene McCarthy |
Independent / Consumers |
1968, 1976,1988 |
|
George Wallace |
American Independent |
1968 |
|
Dick Gregory |
Freedom and Peace |
1968 |
|
Eldridge Cleaver |
Peace and Freedom |
1968 |
|
Ron Paul |
Libertarian, Various, Write-In |
1988, 2008 |
|
Ross Perot |
Independent, Reform |
1992, 1996 |
|
Ralph Nader |
Green, Reform, Independent |
1996, 2000, 2004, 2008 |
|
Roseanne Barr |
Peace and Freedom |
2012 |
We’ve had Communist, Socialist, Workers’, Progressive, Poor Man’s, Prohibition, and a whole host of other parties. Other interests have been represented as well. That’s as it should be. These parties and their candidates represent the various hues in the political spectrum. Too often their candidacies are seen as quixotic efforts, focused more on raising awareness of a single issue than legitimate options for good leadership. They’re seldom taken seriously, though those who’ve undertaken these campaigns, in most cases, did so with serious intent. Even the comedians. I’d like to believe that tilting at windmills is an act of nobility, not delusion.
Did some of these third-party candidates believe they really had a shot at winning? Difficult to say. Their motives were likely complex. But I’d defend to my death their right to give us greater freedom of choice. In their own way they and their efforts exemplify the spirit of individualism that marks American culture. When people say that a third-party candidacy is a quixotic undertaking, I say, “What’s wrong with that?”
I also add that a quixotic enterprise isn’t necessarily preordained to fail.
So why did I present just the “knowns” in the list above? Because that’s frequently how it goes with third-party candidates, as well as some candidates from the two major parties, during the primaries. You have to get your name out there. That costs money. Major parties have OPM out the wazoo and MOM from within, thanks to their elaborate party structures, fund-raising machines, and super PACs. Third-party candidates seldom do.
I limited the list in this way to illustrate that if you don’t know candidates’ names, it’s almost as if they don’t exist. If they don’t exist, you can’t vote for them.
I’ll spare you the details of getting on the ballot. Let me just say that it, too, takes time and money. Once you’re on the ballot, it takes enormous amounts of money and time to get name recognition, and without that, you don’t do well in the polls. If you don’t do well in the polls, you don’t get into the debates. If you don’t get into the debates, you don’t do well in the general election. If you don’t do well in the general election (gain 5 percent of the popular vote), you don’t qualify for funds available from Americans voluntarily contributing via their tax returns. Without those funds, that party/candidate will struggle again in the next election cycle. So it goes, around and around again, spinning off more and more dissatisfaction and more people calling for a major third party to emerge.
As a result of this perceived let’s-get-the-funds-and-be-happy-with-that mentality, third-party candidates are often criticized as spoilers. They know they can’t win, so they just want to take votes away from someone else. It’s mean-spirited and disrupts the natural order.
Really?
And who decreed this divine right to a two-party system? The Federalists and Anti-Federalists were battling over ratifying the Constitution. I don’t think it was about a constitutional mandate for a two-party system. I don’t think they envisioned squeezing parties and candidates, like the Green Party’s Jill Stein, from the choices Americans can make.
I related earlier that I did vote for Ross Perot in his race against Bill Clinton and George H. W. Bush in 1992. I was primarily focused on the deficit, which was already spiraling out of control at that time. Perot seemed to be the best choice for reining in that debt. President Bush was the incumbent, but he was seen as vulnerable, having reneged on his famous “No new taxes” pledge. President Clinton won by a large margin. Perot did not carry any states, but he did earn 19 percent of the popular vote, the most impressive showing of a third-party candidate since 1912, when former president Teddy Roosevelt lost the Republican nomination to William Howard Taft. Rather than leave the field, Roosevelt decided to battle on and created the Progressive Party. On election day, 4.1 million voters—27 percent of the total vote—came out to support him. He earned 88 electoral votes, compared to 435 for Wilson and 8 for Taft. Though he didn’t win, his was the best showing by any third-party candidate since the modern two-party system was established in 1864. Clearly, as a former president, Roosevelt did have name recognition; but having lost his own party’s nomination did not bode well. Sometimes being an outsider has its advantages.
That brings us back to Ross Perot.
Perot was a Washington outsider. He had never held public office. With his East Texas accent and his experience running several successful companies—Electronic Data Systems (EDS), which he founded in 1962, by 1973 had revenues of more than $100 million—he had skills and experience that I admired.
Some of Perot’s popular success was due to his focus on domestic issues like balancing the federal budget, strengthening the war on drugs, and holding “electronic town halls” to promote direct democracy. One factor beyond his control also worked in his favor: the collapse of the Soviet Union had eased some of our geopolitical fears, allowing us to turn toward matters at home as a priority. In my mind back then, Perot was the right man at the right time. What no one could see early in his candidacy was how his authoritarian ways would have him spiral out of control.
I guess we should have seen it coming.
In February 1992, Perot made an appearance on Larry King Live. When King asked if there was any way he’d consider running for president, Perot said he didn’t want to run. Then he revealed that he would campaign if he thought that ordinary people wanted him to. If they signed petitions and helped him get on the ballot in all fifty states, he’d do what was necessary for the common good. Volunteers worked the phone banks, and with all that popular support behind him, he made good on his pledge to enter the race. By May he was ahead of the two major party candidates in Texas and California. Wow.
Where’s the authoritarianism in that? He presented himself as the champion of the people. You want me in? Okay. But you’re going to have to go to work for me and prove your devotion. Get me on the ballot. And people did. In my mind, nothing wrong with this approach.
So far, so good.
Then the wheels started to wobble. A report came out that Perot had initiated private investigations into the Bush family at the end of the 1980s—a little Texas border war, I suppose. Perot got his back up and said that it was the Republicans who dug this up, and that he’d been warned that with his clean record, they’d come after him. Lots of negative press ensued. Then came the “you people” remark at an NAACP address. It later came out that Perot had a speechwriter prepare his remarks, but he’d rejected them and used his own. More bad press, more reports that Perot wasn’t listening to his advisers. He was a control freak, people said, and made his volunteers sign loyalty oaths. As the poll numbers dropped, paranoia set in. People within his camp claimed that others were plants from the Bush team and had ties to the CIA.
In mid-July Perot announced he was withdrawing from the race, provoking more finger-pointing from within his team. He’d spent $12 million, but wouldn’t listen to advice on how to spend it wisely. Negative press had gotten under his skin, and he was losing interest in the game. Was this a ploy?
Late in July Perot issued his economic plan. I was all ears. He’d developed a workable action plan that would have wiped out the deficit in five years. Some of the details were devils, but even if he wasn’t going to get everything done in the manner he said, he was addressing the major issue with great seriousness and insight.
By October 1 he was back in the race. He was also in everyone’s face, buying nearly $35 million in airtime on the major networks with his infomercials. He’d charted his course, saying, “Our president blames Congress, Congress blames the president, the Democrats and Republicans blame each other. Nobody steps up to the plate and accepts responsibility for anything.”
Can you see why I voted for the guy? Can you also see some of the similarities between the business tycoons of 1992 and 2016?
In the end, for all the votes he received, many say that Perot essentially played the role of the spoiler. That’s often the best that a third-party candidate can do—influence the results but not win the office. Or at least that’s the claim. I don’t agree. Perot was on the ballot in all fifty states. He received 19 percent of the vote. Just because he didn’t win doesn’t mean he was merely a spoiler. He was trying to advance his cause to reduce the debt and otherwise better the country. He wanted to win the office. In hindsight, it is easy to look at those who didn’t win and argue that the votes cast for them took away votes cast for others. Isn’t that, at heart, what an election is? Isn’t that a natural consequence of any vote cast?
Are third-party candidates doomed to fail? Is it possible for one to avoid the authoritarian trap Perot and others have fallen into? Will a man or woman of action always end up being too ego-driven to listen to reason? Is there something self-sabotaging about every third-party run for the highest office in the land? Does the dizzying altitude get to everybody when they rise that high in the polls?
I don’t think that’s a necessary conclusion to draw from Perot or any other failed attempt thus far. If I remember my logical fallacies correctly, the “This doesn’t necessarily follow that” version of wrong thinking applies here.
The consumer advocate and political activist Ralph Nader is another case in point. In 2000, he chose to run against George W. Bush and Al Gore. Back to what I discussed earlier about this election and the level of anger and dissatisfaction that surrounds the two major-party candidates. Admittedly, Nader was also angry. He didn’t like the two-party system. He was anticorporate. He wanted to see campaign finance reform. He did have an agenda that he wanted to advance—workers’ rights and increasing the minimum wage, exonerating nonviolent drug offenders, legalization of commercial hemp, free education through college, universal health care. He had views on serious issues that needed to be discussed and debated.
Many of his critics claimed that all Nader wanted to do was get to the threshold to receive matching campaign funds—5 percent. Well, I have to go back to what I learned early on about running for office. It takes money. For a little guy running, those matching funds often mean the difference between keeping the lights on and having to lock the doors and go home.
Some unfairly stated that Nader tilted the election in George W. Bush’s favor. Other studies have shown it was the exact opposite: he took more votes from Bush than Gore. In the end, it doesn’t matter. He had the right to be there. Voters had the right to choose. He played by the rules that he didn’t create but had to live with. Where’s the problem in that?
I do think that enough factors are in place in 2016 for a candidate from outside the two-party system to win. Let me remind you of some of them:
In regards to the electoral process being unfair or broken, Donald Trump has been crying foul about the rigged nature of the electoral system. In some ways he’s right. Regardless of the points of nuance (something I don’t think he’s actually articulated), most Americans agree with him. A March 2016 Gallup poll shows that 66 percent think the presidential process is broken, and according to an April 2016 Reuters/Ipsos poll, 51 percent think the presidential nominating process is rigged.
All of these factors contribute in greater or lesser degree to the chances that a candidate from outside the broken two-party system may step into the center and lead.
Bernie Sanders has railed against the use of superdelegates who give political elites an inordinate amount of power to be the deciders. Authoritarianism rears its ugly head once again. Sanders is the longest-serving independent (read: third-party) member of Congress in history. I’ve always said that politics and elections are about momentum. (I’m not the only one who believes that.) When Bernie first announced his candidacy, he trailed Hillary Clinton in the polls by 57 percent! In the end, he wound up losing by 12 percentage points—that is, he made up 40 percent of the ground. That’s pretty astounding. It’s also a clear signal that Democratic voters were willing to consider an alternative to Hillary Clinton. I don’t have the time and you don’t have the patience to read a granular account of why Sanders ultimately fell short. But big picture, there was nearly a monumental upset.
This year, more than ever, there’s a millennial wild card. Why this year? Well, there’s the confluence of the Bernie factor and the appeal he had with millennials. Also, numbers speak volumes. As of April 2016, according to US Census data, millennials outnumber baby boomers as the largest demographic group, 75.4 versus 74.9 million—not a huge difference, but still enough to take seriously. Also consider this: they are one-quarter of the eligible electorate. As always, the question is, will those registered come out and vote?
Here’s where the numbers get a little tricky. It seems as if the exact parameters of who is a millennial and who isn’t aren’t set in stone. Some say those between eighteen and thirty-four, some say eighteen to twenty-nine. An NPR report stated that voters between the ages of eighteen and twenty-nine comprise 19 percent of the electorate, while Baby Boomers (no age range given) make up 38 percent. Are we comparing apples to oranges?
The best I can say is that regardless of those numbers, somebody is going to have to appeal to both groups. That means that someone who is socially inclusive and fiscally conservative has a chance to appeal across party lines to a majority of voters. In my imaginary Venn diagram of the overlapping concerns of those two groups, a Libertarian candidate offers the right blend of apple and orange juice.
Contrary to what authoritarian leadership suggests, having a strong man in power is not what we need. If people are dissatisfied, afraid, and angry, imagine how they are going to feel when they see their liberties eroded. The chief executive of the United States is not a king, not a dictator, not an emperor. In a very real sense, an election is like the hiring process. The American people have earned the right—in fact are owed the right constitutionally—to interview qualified candidates and make their selection based on merit.
I understand that people want change without revolutionary disruption. To accomplish this, a president must be both an outsider (in the sense of not being overly partisan or beholden to special interests) but enough of an insider to work effectively in Washington.
They don’t need someone to come in with the authoritarian mind-set and methods. I think we’re seeing that reflected in the polls. Many say that Mr. Trump is the more authoritarian of the two candidates. I think he has a limited appeal, even among those in his own party. I estimate that roughly 30 percent of Republicans truly believe in the message he’s delivering and in the policies he’s put forth. That 30 percent represents some but not all of those who are the most dissatisfied, the most frightened, and the most angry. They are the ones most likely to respond to Mr. Trump’s more obvious authoritarian ways.
As for the Democrats, the subtler and more secretive authoritarianism of the left is harder to quantify in terms of its appeal. But is Hillary Clinton really more subtle, or has she just been around for so long that in the interim between revelations of her authoritarian nature, we forget the previous ones? From her pre-law school days to her time in the White House as First Lady, the following statements have been attributed to her.
Any third-party candidate who has libertarian or other credentials that demonstrate a desire to preserve individualism and liberty would have a leg up on Mr. Trump and Mrs. Clinton.
So what does all that mean in practical terms?
America needs a president who belongs to the center—not a centrist per se, but someone with a commitment to liberty and individualism as core American values. In short—a libertarian.
Nor should he be a dictator who promises to knock people’s heads together until they do what he wants, but an arbiter in chief who can bring both sides together in a search for common ground.
How would a libertarian president function? As stated above, that libertarian would have to conduct business in the Oval Office as an arbiter. Why an arbiter and not a judge? Perhaps the distinctions are subtle, but they are critical. A judge is a member of the judiciary. I don’t want to use a term that violates the concept of separation of powers. Remember, one of the central tenets of liberalism is that powers need to be kept in check and not concentrated in any one area.
As I use the term, I take two elements from the word’s definition and combine them to demonstrate how a third-party president’s role would play out. The arbiter in chief would help settle disputes. The arbiter in chief’s actions would have great influence.
As I envision it, the AIC would make decisions. I can’t deny that. You can’t have someone at the top who doesn’t make choices. I have to be realistic about this. I know I wouldn’t want someone in charge who couldn’t make determinations and be discerning. Rather than handing down decisions, as we frequently hear and read in stories about the courts, an arbiter in chief would work toward compromise and agreement. He’d bring the two parties with a dispute or competing ideas together and find the common ground. That doesn’t mean that would happen all the time. No one wants to see policy by committee—that’s a cause of gridlock.
When decisions have to be made, the AIC would make them, but by applying a set of criteria that doesn’t take into account things like party affiliation, the influence of special interest groups, donors, and all the other factors and factions that contribute to people believing that public officials are primarily interested in getting elected and protecting the interests of those they are beholden to.
The three questions the AIC needs to ask in evaluating legislation, policy, and programs are:
I believe this approach will
Also, as an influencer and not a decider, the AIC will set the tone and demonstrate how to evaluate programs, policies, and legislation. It will take some time, and there will be some resistance, but once this template is in place, and if the AIC allows for some input from others on the process, this will become standard operating procedure. This is the kind of problem-solving and critical thinking that businesses apply all the time. I see no reason why it can’t work in the federal government.
It takes far too long for problems to be solved under the current system, with two parties haggling and mismanaging to benefit their special interests. The common good needs to be attended to. Moreover, we should not expect perfection in matters of policy and problem-solving.
I wish that political gridlock was caused by a desire for perfection; too often it’s caused by a desire for reelection.
For that reason I’d suggest implementing term limits on the federal level. I’d urge states to consider the same. I know that I had a greater sense of urgency, knowing that the clock was ticking on my administration as governor of New Mexico. In my business life, I knew that people wanted our crews to be in and out, to be done with the work when promised. The same holds true for how we do the work of representing the will of the people.
Common sense.
Simple.
Unbiased.
A president from a minority party would be blissfully exempt from all the issues that plague representatives of the two major parties. He would be evaluating bills and policies and programs based on merit and not on which side created them and whose agenda will be served. He would not be so worried about the downstream effects on elections and public perceptions. He also wouldn’t care about whose idea a bill or program was, only about how effective it would be at solving a problem, meeting a need, and making government as simple as possible so that it can succeed.
He would also be bipartisan in making appointments to key positions within the government. Every administration does this to a certain degree, but a Libertarian administration would truly be bipartisan. Can you believe that if either of the major party candidates won the election, they would really be able to back up their claims to reach across the aisle? Given how contentious things are, do you really think that Democrats and Republicans can kiss and make up? I don’t think that’s realistic at all.
As Thomas Paine said, “I draw my idea of the form of government from a principle in nature which no art can overturn, viz. that the more simple any thing is, the less liable it is to be disordered, and the easier repaired when disordered.”
Those words apply to the virtues of small government, to the nature of legislation, as well as to how those who govern should act.
This is where the philosophical rubber meets the policy, program, and legislation road. Among the various tenets that make up the libertarian philosophy, small government and choice are the ones most people think of. But there’s another facet of the libertarian philosophy that I have so far not addressed, which has wide-ranging implications for policy, programs, and legislation.
One of the cornerstones of libertarian thought is the non-aggression principle (NAP). According to this principle, aggression against the person or property of others is wrong. An individual should never use force against any other individual.
It’s important to keep in mind that even though this is a cornerstone of libertarianism, different individuals interpret it in different ways. There’s a spectrum of approaches to applying this principle in life. At one end of the spectrum, the strictest interpretations can lead to some tricky problems as you try to go about your daily business. For example, driving might be considered an act of aggression; you are polluting the air that others breathe. Burning wood in your fireplace? The same thing. A more centrist libertarian would say that aggression needs to be more narrowly defined as the initiation of force against another person.
Mainly, it’s important to understand that libertarians believe that the government can exert force; therefore it too should strive to never initiate force against others.
For that reason, libertarians are pro-choice. The government should not force a woman to carry a child to term. In general, when it comes to an individual’s body, the government should not limit what it ingests, what it views, and so on. Obviously there are limitations to this, and only those who hold to the strictest interpretation of this principle apply it absolutely. No absolutist libertarian candidate would be able to compete in the 2016 election, just as no absolutist liberal, conservative, or populist would be.
Clearly, libertarians are anti-authoritarianism. Though I’ve characterized the two major party candidates as such, they are not absolutist authoritarians. An absolutist authoritarian would say that an agency outside the individual has the right to tell you what to do with your body. So, for example, when it comes to abortion, Mr. Trump and Mrs. Clinton are both pro-choice. Well, Mr. Trump isn’t. Or is he? If you go to the source, his website, in an op-ed dated February 2016, he makes it clear that he is pro-life. That stance is very much in keeping with his authoritarian nature—a mother must do what the state tells her to do.
One of the things that I’m most proud of is that from its inception, the Libertarian Party has championed the rights of the LGBT community, even before that term came into common usage. The same is true of marriage equality. Here’s the inclusive language of the Libertarian Party’s platform:
Sexual orientation, preference, gender, or gender identity should have no impact on the government’s treatment of individuals, such as in current marriage, child custody, adoption, immigration or military service laws. Government does not have the authority to define, license or restrict personal relationships. Consenting adults should be free to choose their own sexual practices and personal relationships.
Both the Republican and Democratic nominees, now that the Supreme Court has issued its ruling, are in favor of full marriage equality. That said, Mr. Trump has suggested that he would potentially appoint a Supreme Court justice who would be in favor of overturning that high court decision—a decider taking action to reverse another authority’s decision.
When it comes to gun control, it should be obvious that a libertarian would be opposed to government interference with an individual’s right to bear arms, or with gun production and trade. This is one area in which libertarians and the authoritarian Mr. Trump can find some common ground. As might be expected, Mrs. Clinton supports stricter regulation of so-called assault weapons, a greater number of background checks for various gun sales, and increased oversight and legislation regarding gun safety. Big authoritarian points being awarded here.
One of the issues where there is the clearest distinction between libertarians and the two major party candidates is the death penalty. Both Trump and Clinton are in favor of it. The libertarian opposition to the death penalty probably best illustrates the application of the non-aggression principle. There’s no more dramatic application of force than ending an individual’s life. The same principle bolsters the libertarian stance on eliminating sentencing for drug crimes. Drug crimes are generally nonviolent—no force or aggression—so it is out of line with the NAP to impose criminal sentences on someone who hasn’t violated the NAP.
Also, when it comes to force and aggression, libertarians are opposed to the unproductive and fiscally wasteful military interventions and regime-change operations that have recently entangled us. While Mr. Trump wouldn’t put boots on the ground to go after ISIS, for example, his authoritarian position demands that we go after the oil fields and refineries that help to fund the terrorist organization. Similarly, Mrs. Clinton opposes sending troops into battle but would also support strong involvement.
I could go on doing a point-by-point, issue-by-issue evaluation, but now that you have a fundamental understanding of the positions that a non-absolutist libertarian would take, and the authoritarian ways in which Trump and Clinton operate, there are plenty of other resources online that provide those kinds of comparisons. While most likely won’t take the authoritarian-versus-libertarian point of view I take, you can apply that lens yourself to a thoughtful examination of the issues.
To illustrate how a more middle-of-the-road libertarian might tackle a crucial issue, I’d like to take a look at a tax program that many support: the Fair Tax Plan. The idea has been around for a decade or so, and each year eighty or so congresspeople support it. In lieu of income and corporate tax, we’d all pay a 28 percent consumption tax on new goods and services. Buy a new house or a new car? You’ll pay a 28 percent tax. Buy a previously owned home or car, for example, and you wouldn’t pay that tax. Frugality rules the day. Buy within your means.
Twenty-eight percent sounds like a lot of money, especially for big-ticket items like cars and houses. (Some supporters believe that 23 percent is the right figure.) Well, consider this. Every paycheck you receive will be larger under this system, with nothing taken out for income tax, for social security, for Medicare, and so on. Also, without those corporate taxes being added on to your bill, prices should be lower than they currently are. Ignoring that part of the equation for a moment, let’s look at an example.
A can of Coke sells for $1. Included in that price are corporate taxes, the Social Security match, unemployment, Medicare, and the attorney and accounting fees that go along with having the IRS involved. These are all costs that a business pays to produce a product. Of course, that cost gets passed on to you in the purchase price. (All of these are considered the hidden taxes we all pay.) You take all those, and arguably that adds up to 28 percent.
So, the can of Coke could theoretically sell for $0.72 instead of $1. Apply the 28 percent tax, and you still end up paying about $1. The big two entitlement programs would still be funded. If all we had to do was pay one federal consumption tax, no corporate tax, I believe tens of millions of jobs would get created in this country just because of how simple it would be. The whole world would emulate this model if we could pull it off.
I admit that there’s a problem. The consumption tax is regressive—the less well-off will be paying a greater proportion of their income in tax than they would otherwise. The fair tax gets around that by issuing a prebate check to everyone to ensure that each family unit can consume tax-free up to the poverty level. Again, this isn’t a perfect solution, but eliminating the IRS, simplifying the tax code, and putting more money in your pocket to spend as you wish has many, many advantages. Many Libertarians believe that no tax is ever fair, but in reality, some forms of taxation are fairer than others.
An added benefit of this approach? Eighty percent of the lobbyists in Washington would be left without jobs. That vast majority of Washington lobbyists exist because of tax policy. They’re lobbying this, that, and the other for their industry, for their break. They say they do this so that the interest they represent can compete fairly or create jobs. The reality is that those interests are now being given an upper hand. They’re put in a category where it’s really, really difficult to compete with them because they’ve been given preference.
That leads me to the innovations of the sharing economy, which have me really excited—and have some entrenched organizations howling. Uber and Airbnb are just the two most obvious examples. If government gets out of the way, I envision a future where we have Uber plumbers, Uber lawyers, and so on. Eliminating the middleman is another form of freedom that we should all embrace. Unfortunately, not everyone understands the benefits of this approach. I recently spoke with a young woman who lived in Baltimore. She graduated from college and was encumbered with a massive student debt. She thought that she could help pay off those loans by renting out her apartment on Airbnb. That worked for a while until the city of Baltimore squashed her plans and no longer allowed her to rent the space in her apartment. It is that kind of interference in free trade that I hope will become a thing of the past.
I seldom give advice, and it is worth exactly the price you paid for it, but I urge everyone to apply everything you know to entrepreneurial efforts. Create a job for yourself. Create a job for others. I’m excited about the sharing economy. I’m excited about the Internet and all the opportunities it continues to provide for entrepreneurs. I simply want government to get out of the way and stop erecting barriers to innovation, entry, and success. Let the markets rule the day and stop marketing more rules and regulations!
Finally, I know that people are frightened, frustrated, and angry. At times I am too. One of the ways I get over those negative feelings is by considering some of the basic principles that form the foundation of libertarianism. Libertarianism presupposes that people will choose to do good. It assumes that you can stand on your own two feet and be self-reliant. It asks that you accept the consequences of your actions and wisely manage the responsibility that comes with your freedoms. You can enjoy a sense of liberation that comes from knowing that you can trust yourself, you can trust your neighbor, you can trust your community, and you can trust your nation. Libertarianism arises spontaneously from our essentially positive and hopeful and capable human nature. We don’t have to be fearful, frustrated, or angry. Those are choices we all make. If we trust in ourselves and place our trust in those who will return it in kind, we will have better days ahead.
Don’t just trust me on this.
Trust yourself.