Freedom.What a novel idea. To be more precise, the idea being proposed for Detroit and other distraught urban centers by Senator Rand Paul is “free enterprise”. Instead of government bailouts, Sen. Paul suggest we let the private sector and the good people of Detroit do the bailing. Here are just a few links to articles on Rand Paul’s plan to pull Detroit out of the bowels of hell: here, here, here, and here.
In a nut shell, what Rand Paul is suggesting is to take an idea that Jack Kemp back in the 80’s, economic freedom zones, and apply it to parts of Detroit and other cities where there exist very high unemployment. Specifically, those zones in a city that have unemployment rates of 1.5 times the national average (12%) would become Economic Freedom Zones (EFZ). In these zones, Paul suggest a flat tax of 5% for businesses and individuals. He is also suggesting that in these zones that capital gains taxes be reduced. There’s more to his plan; but these are the key elements.
It’s a simple idea. Investors would be attracted to these Economic Freedom Zones to take advantage of a 5% tax rate for their business rather than the standard 35%. Once investments are announced, real estate developers will buy up cheap property in Detroit to build suburbs inside the now devastated city. And, people would want to buy these homes to be close to their work and enjoy the low 5% income tax rate. In this way, Detroit and other suffering cities would recover and it wouldn’t require the federal government to spend taxpayer monies. Detroit would bail itself out.
Sen. Paul plans to introduce his bill in the Senate on Monday. My guess is it will never see the light of day. Harry Reid will see to that. Even on the one in a million chance that Harry allows a vote on the Economic Freedom zones and it passed, you can be sure that President Obama would veto it. You can read some of the response from Left land here and here. Mostly it the same old demagoguery about tax cuts for the rich, voodoo economic, or their favorite: trickle down economics. One liberal Nimrod had this to say:
Paul, like many in his party, wants to take us back to the time of robber barons, where the rich could do what they wanted, without fear of reprisal, in exchange for the promise that they might, at some point, step in clean up their messes…
We know why they are really against Rand Paul’s plan, don’t we? They are deathly afraid that Economic Freedom Zones would actually work and millions of inner-city dwellers might begin to question why they’ve been voting for Democrats all these decades. They can’t have that. Much better for them to have another Obama stimulus plan where the only thing stimulated are the bank accounts of big time Democratic Party campaign contributors and bundlers.
Well, that’s what I’m thinking. What are your thoughts?