[Congress] Working on the Work Tax!

Day 2,371, 12:12 Published in USA Peru by Hazelrah

What a weekend in Congress.

Full Disclosure:
I am a member of the American Military Party and voted in favor of repealing the FSPA and temporarily maintaining the 10% work tax. Opinions here are mine alone.

If you've been following the conversations in Public Congress, you'll know that the Work Tax debate is heating up.

First, a little background on the Fiscal Solvency Protection Act (FSPA).

In September of 2013, Congress decided it would be prudent to establish a minimum amount for the national reserves in order to be able to deficit spend during an invasion and potential wipe. The number $10 Million was decided on somewhat arbitrarily but based roughly on spending during the previous invasion.

The Act required that the work tax be increased to 10% in order to more quickly establish the aforementioned reserves. The intent of the Act was that once the $10 Million in reserves had been reached, taxes could be lowered as long as income at least matched budgeted expenditures.

The reserve target was recently met. This combined with the arrival of the fiscally conservative Black Sheep Party to Congress led the discussion to a tipping point.

The following are the work tax discussions from the passing of the FSPA until today.

Sep 13 - Reserve Target http://eusaforums.com/forum/index.php/topic,28332.0.html
Oct 13 - Tax Decrease [Failed] http://eusaforums.com/forum/index.php/topic,28500.0.html
Dec 13 - Tax Decrease [Failed] http://eusaforums.com/forum/index.php/topic,29478.0.html
Jan 14 - Spending Inquiry http://eusaforums.com/forum/index.php/topic,29879.0.html
Jan 14 - Reserve Update http://eusaforums.com/forum/index.php/topic,29881.0.html
Jan 14 - Tax Decrease [Failed] http://eusaforums.com/forum/index.php/topic,29849.0.html
March 14 - Tax Decrease [Failed] http://eusaforums.com/forum/index.php/topic,30784.0.html
May 14 - Tax Refund [Failed] http://eusaforums.com/forum/index.php/topic,31408.0.html
May 14 - Tax Decrease [Failed] http://eusaforums.com/forum/index.php/topic,31532.0.html
May 14 - FSPA [Repealed] http://eusaforums.com/forum/index.php/topic,31561.0.html


After the reserve target was met, Speaker of the House Cromstar removed the FSPA from the Code interpreting it as having achieved its intended objective. If Congress wanted to vote to lower the work tax rate they could, but his interpretation was that the Act did not mandate an immediate reduction.

An initial discussion to decrease the work tax to 8% did not gather much support until it became a discussion of enforcing the language of the FSPA. The dissenting interpretation of the Act was that it mandated an immediate tax reduction to match budgeted expenditures. This was calculated to be approximately 6% if we continue to hold all current regions. Some supporters of the FSPA found the 6% number to be too low and recommended a compromise of 8%. When the "Enforce the FSPA" proposal went to a vote, it included the 8% number.

Some argued that the proposal was not in fact a referendum on the FSPA, but rather a simple tax reduction proposal to 8%. This would be more consistent with the language in the Act, since Enforcement would mean a reduction to 6%.
    -Since the FSPA was being used as the catalyst for this particular tax discussion, a Repeal of the Act was discussed.
    -On 5/16 at 8:11pm, the 8% tax proposal was proposed.
    -One hour later at 9:07pm, the Repeal of the FSPA was proposed.
    -The repeal proposal reached the necessary approvals and went to vote first on 5/17 at 2:30am.
    -The tax reduction proposal titled
"Enforce the existing Fiscal Solvency Protection Act" went to vote shortly after at 4:00am.

What did this mean? If the repeal passed first, would the tax reduction as described be void?
Was it actually a vote on a tax decrease to 8% independent of the interpretation of the FSPA?

Today, those questions became irrelevant as the FSPA was repealed 25-21 and the 8% tax was rejected 26-25.
The work tax will remain at 10% for now.

Interestingly, the votes emerged in a fairly uniform fashion with Federalists and the Black Sheep Party voting in a straight party line in favor of both enforcing the FSPA and decreasing the tax to 8%.
USWP voted as a block along with most of the WTP and AMP in favor of repeal and maintaining the 10% work tax.

The following congressmen bravely broke rank and have very nuanced perspectives on the state of the nation's taxes. I have enjoyed my conversations with them and respect them greatly:
John Largo - AMP
The Mike - WTP
Geronimo100 - WTP

As we approach another congressional election, the conversation is shifting to the purpose of the national reserves and the question of "Exactly how much should we save?" Other questions that will likely be explored further include

-"Who benefits the most from a tax decrease?"
-"Do the benefits outweigh the risks?"
-"How often will we need to re-raise taxes to avoid spending down our reserves?"
-"Should we raise taxes every time we begin to lose occupied regions and our income falls below budgeted expenditures?"
-"Should every budget adjustment be accompanied by a tax adjustment?"
-"Who should approve unbudgeted Executive spending: Congress or the Select Committee on Intelligence?"
-"Should we limit Combat Order spending with a budgeted line item?"

I look forward to being a part of the discussions next month as the LAPers who missed out this month arrive as part of the WTP.

Sincerely,