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Every American aspires to a better future. Every person wants the freedom to fully
use his or her talents and abilities in pursuit of opportunity. Only with that freedom can people have a chance to realize their best hopes and dreams. Only with that
freedom can each generation hope to enjoy a better life than the generation before. Government cannot create that better future for us. History has shown that we must do it ourselves.
Nonetheless, during the 1960s, our government launched an all-out attempt to
eradicate poverty with taxpayer dollars. However well intentioned, the initiative was doomed from the start. Now, some thirty years later, the government has spent more
than $5 trillion in taxpayer funds on its war against poverty. The result? The incidence of poverty is just as high as it was in 1967. In effect, taxpayers received zero return
on the government’s use of their tax dollars – not just poor value, but no value whatsoever.
Poverty remains a fact of life for more than one in eight Americans. American
individuals and families have only higher taxes to show for government’s long, losing war on poverty. A new approach to government spending is needed; one that empowers the people.
The better way is the National Tax Rebate.
A Brief Description
The National Tax Rebate would return to Americans a sizable portion of the tax
revenues currently collected by the federal government. Briefly, the Rebate would involve cashing-out a multitude of failed or ineffectual social and corporate welfare
programs (there are 342 programs devoted to economic development, alone, all of which consume taxpayer resources while contributing little or nothing in the way of
real economic growth) and returning the savings to the American people each year in the form of a sizable tax rebate.
With a National Tax Rebate, individuals and families would make many of the
spending choices currently made for them by government bureaucracies. Americans could then address their own unique needs and circumstances far more effectively than has ever been possible under the existing system.
The Promise
The National Tax Rebate would be an unparalleled opportunity creation-grant,
providing individuals and families with capital to invest in their own better futures. We have seen what capital can accomplish in the marketplace; and infusion of capital
can act the same way in our own lives. A National Tax Rebate, combined with the famous American ingenuity, could simultaneously improve the lives of individuals and families and enrich the nation as a whole.
A National Tax Rebate would provide meaningful tax relief. Up to $270 billion in
federal spending could be returned to the American people each year as a National Tax Rebate. In addition, a National Tax Rebate could virtually eliminate poverty,
making welfare unnecessary. When combined with even a minimum-wage job, a National Tax Rebate would allow every person to live above the poverty threshold.
A National Tax Rebate would transform America into the land of unlimited opportunity
envisioned by the Founding Fathers more than two hundred years ago. In short, it would create a better America with less government.
The Research
The Institute for SocioEconomic Studies assessed the viability and potential
effectiveness of the National Tax Rebate concept using a variety of tools:
- Data obtained from a microsimulation analysis of the concept
performed by Columbia University’s School of Social Work
- Information generated from the experience of lottery winners
- The performance of the Alaska Dividend, a state-based annual tax rebate
The Columbia University research project had two aims: (1) to determine the
feasibility of financing a sizable National Tax Rebate, and (2) to determine the impact such a rebate would have. The microsimulation study was conducted by noted
poverty researcher Dr. Irwin Garfinkel and Chien-Chung Huang of Columbia University’s School of Social Work, in coordination with Martin R. Cantor, CPA. Five
potential rebate plans were analyzed. The study found that a large National Tax Rebate could be financed without increasing taxes or government spending. In
addition, results demonstrate that a National Tax Rebate would dramatically reduce the poverty rate.
The lottery comparisons were used to test the potential impact of a large National
Tax Rebate on work incentives. A study of lottery winners by Dr. H. Roy Kaplan of the Florida Institute of Technology revealed that winning the lottery had little adverse
impact on the work habits of lottery winners. A recent study of 39 lottery winners from Roby, Texas supported Dr. Kaplan’s findings.
Alaska has disbursed a steadily increasing dividend for the past two decades. Last
year, more than half a million Alaskans received a dividend from the state of nearly $1,300 per person from their state. Far from reducing work incentives or promoting
financial irresponsibility, the Alaska dividend has contributed substantially to job creation in the state and has allowed Alaskans to provide for their educations, health insurance, and retirement.
In 1997, the Institute for SocioEconomic Studies awarded three families
demonstration tax rebates of $1,000 a month for 20 years. The early results have been encouraging. A Louisiana family is exploring starting its own business. A
Colorado family has just purchased its first home. An Illinois family is setting aside its rebate for the higher education of its children and to hire part-time help on the family farm.
Academic and real-life evidence demonstrates that a National Tax Rebate could be
effective in reducing poverty without compromising work incentives, and could play an important role in helping every American realize a better future.
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