The issue of economic inequality and poverty is shaping up to be a major issue in 2014. President Obama has begun to focus on the issue in order to reclaim the narrative away from the failures of Obamacare and the continuing weak economy. Newly elected New York City Mayor Bill de Blasio has vowed to address that city’s wealth gap. De Blasio and Massachusetts Senator Elizabeth Warren have been characterized by left-leaning commentators as part of a new New Left that is more economically statist than what has been offered by the Democratic Party since the Clinton era. Democrats believe that they have a winning issue to reclaim Congress in 2014 and win the White House in 2016. However, Republicans must be ready to confront the issues of poverty and economic inequality, and if they handle this issue in the right way, they can turn it into a winning issue.
The Democrats are answering the issue in their usual time-tested ways: supporting a minimum wage increase because apparently labor costs have nothing to do whether or not a business decides to hire people; extending unemployment benefits even though the stimulus, Obamacare, and Polar Vortices were supposed to create lots and lots of new jobs; the creepy sounding Promise Zones, which is ironic from a man who doesn’t know how to keep a promise; and everyone’s favorite Native American Senator, Elizabeth Warren, wants to raise Social Security benefits because Social Security isn’t going broke fast enough. The Democrats are falling back on their old approach to poverty: give a man a welfare check and make him a Democrat voter for life.
Republicans and conservatives need to answer this challenge on poverty and economic inequality with a positive, hopeful message and ideas to counter the left’s vision of dependence on the state. As the child of a single mom, I believe we cannot run away from the fact that there is a marriage gap on poverty and the perverse anti-marriage incentives in anti-poverty programs. Nearly 30% of households led by a single motherare in poverty, as opposed to nearly 10% of married households. While marriage is not a magic wand that can solve all problems, and most single parents are not single parents by choice; statistically, children raised by married parents are better off than those raised by single parents. Having said that, it is very important as a society that we do not stigmatize single moms and that we applaud all parents who raise their children well.
We also need to change the way we address poverty in this country. Instead of having a whole bunch of complicated anti-poverty programs and a minimum wage that discourages job creation, let’s have a Negative Income Tax. I will keep this so simple that even a Common Core math student can understand it. If the threshold is $15,000 and a person makes $10,000 and the Negative Income Tax rate is 50%, the government will give the person a check for $2500, which is 50% of the difference between $15,000 and $10,000. We also need to implement tax reform by instituting a flat tax and cutting corporate and capital gains taxes and reducing regulations so that businesses can have an incentive to hire. While we would abolish most tax deductions, the one tax deduction that should be kept and expanded is the charitable contribution deduction to strengthen civil society. As for the long-term unemployed, instead of just cutting them an unemployment check, how about paying them to go back to school to learn new skills? Just an idea.
Finally, we need to implement two more solutions in the long term. We need to kill Obamacare and replace it with a free-market-based alternative health care system based on choice and competition. We also need to champion school choice so all children can develop to their best available potential, regardless of their background. The increased availability of private and charter schools will improve public schools because they will have to improve if they want to keep their students and tax dollars.
We cannot allow Democrats to wage class warfare and create a new permanent underclass in the name of fighting economic opportunity. Instead, we must seize this opportunity to improve the lives of our fellow Americans.