The national government currently faces a national debt of $18 trillion. National entitlement programs are all on paths to bankruptcy, some as soon as this year. Many states and cities face their own impending financial cliffs as years of over-promising wages and benefits to public workers collide with chronic under-funding of public pension funds. Government debt is a “ticking time bomb” that threatens to destroy people’s savings, the economy, and America’s leadership in the world.
The regulatory state is similarly out of control. According to the Competitive Enterprise Institute’s annual survey of the cost and reach of regulations, federal regulation and intervention cost American consumers and businesses an estimated $1.88 trillion in 2014 in lost economic productivity and higher prices. Economy-wide regulatory costs amount to an average of $14,976 per household – around 29 percent of an average family budget of $51,100. Although not paid directly by individuals, this “cost” of regulation exceeds the amount an average family spends on health care, food, and transportation.
In order to stop tax hikes and compel elected officials to control spending, free-market advocates must first prove that lower taxes, privatization of public services, and tax and spending limitations yield stronger economic growth and prosperity. The Heartland Institute, along with many other excellent think tanks and advocacy groups, produces research and commentary making this point. Legislators armed with good information can win debates and get their legislation passed, persuade constituents, and mobilize interest groups that benefit from good policy choices.
Constitutional reform: Taxes and spending by the national government have risen far above levels that are sustainable. Congress and the president have demonstrated their inability to constrain spending or to balance the budget. The only real solution is for the states to exercise their power under Article V of the constitution to propose constitutional amendments that will mandate a balanced budget and in other ways rein in the federal government.
Entitlement reform: Heartland Senior Fellow Peter Ferrara has written extensively on the best ways to reform Social Security and Medicare to ensure that the benefits promised to seniors are kept without economy-crushing tax increases.
Public pension crisis: States across the country face structural budget deficits as a result of too-generous pension promises made to their employees. Mandatory payments into pension funds divert money away from essential government services and create pressure for tax increases.
Welfare reform: Income inequality is an issue being widely debated today. Democrats think they have a solution in raising the minimum wage, but a better solution is bipartisan welfare reform that takes money from bureaucracies and programs that aren’t working and gives it to the poor through programs that reward work and lead to self-sufficiency.
Excise taxes: State governments collected approximately $32 billion in 2014 by taxing “sinful” products and activities, including gambling, smoking, and alcohol. But relying on sin taxes is poor tax policy: They are regressive, unreliable, and unrelated to the benefits of public services financed by their revenues.
Right-to-Work Laws: There are now 26 right-to-work states as a result of educational efforts by The Heartland Institute and others. Right-to-work is a reform that creates new jobs and improve states business climate and economic competitiveness by guaranteeing that no person applying for a job can be forced, as a condition of gaining employment, to join or pay dues to a labor union.
The Heartland Institute's experts on tax policy are available for legislative testimony, speaking engagements, and media interviews.