Summer Recess

Congress is lumbering into its summer recess. This is the time our Senators and Representatives use to recharge their batteries, attend fund raisers, and otherwise plan for their next Congressional session.

The notebook that contains their fall upcoming plans is bare of substance, unfortunately.

For Representatives, a plan book might correctly reflect certain needs of their district. They are, of course, “representatives” of those who elected them. “Must do’s” which raid the public trough and return tax dollars to their local district will help the district and get each representative reelected.

But is that short sighted?

Without knowing the specific wish list each Representative has developed, it is safe to say their list is incomplete. There are important legislative bills that impact all districts, some directly and others indirectly. Immigration reform is an obvious challenge which may seem remote to some districts yet the way the US handles economic refugees says a lot about who the citizens of our 50 States have become.

Another top of the list bill should be a broad list of infrastructure projects aimed at maintaining roads, bridges, railways, and rivers. At the heart of this essential work would be appropriate taxes to pay for it (no free lunch). While it does not matter which tax is increased or newly added in order to afford infrastructure repair, gasoline is an ideal place to begin.

The idea of raising gasoline taxes, unfortunately, is “off the table” and that says the worst about our representatives. The US and a few other third world countries still offer gasoline at the $4 a gallon or less (an unsustainable appeasement to voters).  The modern industrialize world, on the other hand, have all increased gasoline taxes in order to covered road related expense and to encourage more fuel efficient transportation.

Even an exceptional country like the US would do well to consider this. It is not a sure bet that our Representatives will even consider infrastructure maintenance, much less how to pay for it.

Our representatives’ tactics (as opposed to a strategy of ensuring a sound infrastructure for maximum economic results) simply do not include taxes to pay for necessary services.

If you were to ask them, however, about the role of productive assets and depreciation write offs each business uses, my guess is they would be able to cite chapter and verse. He might say, “a business invests in machinery and equipment and receives a tax deduction from its revenue equal to a prorated portion of an assets value based upon the asset’s productive life”.

The representative knows a wise businessman/woman would save this deducted amount so that they could maintain the asset (say a machine or truck) so it would last a long time, and when it was too old to be useful, there would be enough money to replace it.

The fundamental law is that assets wear out and must be repaired and ultimately replaced. Why cannot our Representatives comprehend the US public productive assets the same way?

One might think these public servants were absent from class when depreciation was taught.

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