In a speech delivered to the Camp County Republicans in East Texas on Saturday, April 23, 2005, former Republican Chairman and ex-Reagan official Tom Pauken called for major policy changes in Austin and Washington, D.C. He wrote this piece afterwards and passed along to us. The state property tax was killed by the Texas Senate this morning."At a state level, we have Republicans in the Senate pushing a statewide property tax which will further erode local control over our public schools and flies in the face of our Republican-led efforts twelve years ago to successfully defeat the "Robin Hood" School Finance amendment to the Texas Constitution. Voters rejected a statewide property tax by a two-to-one margin. The Texas House has passed a school reform plan which is effectively a tax on wages combined with significant increases in sales taxes. It leaves "Robin Hood" intact. What happened to the Republican policy pledge over the past decade to eliminate Robin Hood, an unfair school financing scheme which imposes too heavy a tax burden on property owners to fund Texas public education."
Pauken called for the replacement of Robin Hood with the Hartman Plan -- a broad-based, low percentage business activities tax which would replace the franchise tax, severance tax, and insurance tax. Proposed by Austin businessman David Hartman, Pauken called the Hartman Plan the fairest and most equitable way to tax business in Texas while reducing our excessive reliance on property taxes to fund public education. The Hartman proposal can be found at www.lonestarfoundation.org on the Studies page under Economic Policy-State: "Texas State Tax Reform Via the Flat BAT by David Hartman".
Pauken added, "I am concerned that Austin lobbyists representing a variety of special interests are exercising far too much influence over the legislative process as our legislators try to come to grips with an appropriate solution to the failed Robin Hood scheme. We need a tax plan that is equitable and fair to our entire business community, rather than one that favors some businesses to the detriment of others. Otherwise, we are setting ourselves up for a personal income tax, which Texas doesn't need."
At the national level, Pauken claimed that neither Republicans nor Democratic leaders were addressing the loss of our manufacturing base and the move to outsource jobs to workers in other countries which Pauken believes threatens the long-term viability of our American middle class. We are losing too many jobs overseas. According to Pauken, "every trading nation in the world -- except the United States of America -- has a value added tax to protect its domestic industries. Moreover, we are running trade deficits that are approaching the $700 billion level this year. This is not sustainable. As Warren Buffet has noted, what we are building in America is not "an ownership society" but "a sharecropper society". We need to replace the corporate income tax which penalizes companies for creating jobs in the U.S. with a border-adjusted VAT tax, as proposed by David Hartman, which will help level the playing field for American businesses.
Pauken went on, "Any Republican leader who claims 'deficits don't matter' doesn't' know what he is talking about. You cannot continue to run current account (or trade) deficits in excess of $600 billion annually and budget deficits of more than $500 billion a year without facing a day of reckoning. What happened to our traditional economic principles which encouraged thrift and capital investment while warning of the dangers of excessive debt?"
Pauken also called for a re-thinking of our War on Terrorism and criticized the neo-conservative influence over foreign policy in the Bush Administration. We have gone from a policy that views war as a last resort to one that talks about the necessity of preemptive war. Pauken added, "I am not sure the American people realize that neo-conservative leaders are committed to the principle of "perpetual war" to force democracy all throughout the Middle East. According to Pauken, "Unlike neo-conservatives, true conservatives are wary of utopian schemes to remake human nature." Pauken called for a foreign policy that is principally driven by what is in America's national interest.
Pauken noted that the Soviet Empire fell without a shot being fired. Yet the neo-conservative architects of the War in Iraq now are calling for the overthrow of the regimes in Iran and Syria at a time when our U.S. military is already stretched too thin. According to Pauken, hardly any of the neo-conservative advocates of "perpetual war" have ever served in the military, much less in our last major war in Vietnam (Pauken is a former Military Intelligence Officer who served a tour of duty in Vietnam). Pauken questioned whether the neo-conservative strategy of perpetual war in the Middle East does not run of the risk of destabilizing the Middle East, turning more Muslims into Al Queda supporters, and furthering bin Laden's objective of radicalizing the Middle East.
Pauken concluded, "What happened to our conservative principles of local control, limited government and government spending restraints? And, why have we abandoned a foreign policy guided by what is our national interest and replaced it with one which seeks to impose so-called American-styled "democracy" everywhere in the world? Conservatives need to speak out on these issues rather than allow blind party loyalty to cause us to go along with whatever our Republican officials in Austin and Washington tell us we have to support, no matter how much those policies are at odds with our conservative principles."
Tom Pauken is a Dallas lawyer and the former chairman of the Republican Party of Texas. He can be contacted at 469-235-3995.