There has been this long-held notion that in America one can achieve prosperity in a way you can’t in many other places in the world because of the freedoms guaranteed by the country’s founding documents.
But that’s something Time magazine editor-at-large and CNN host Fareed Zakaria doesn’t buy into.
On Zakaria’s Sunday CNN broadcast “Fareed Zakaria GPS”, he offered a solution to something he viewed as broken – the American dream. But his solution involved federal intervention and a shift in public behavior. He argued the government should make so-called “investment” in the certain technologies, which would be paid for by increased taxation.
“The federal government, despite big increases under the Obama administration, isn’t spending as much on R&D as a percentage of GDP as America did in the 1950s,” Zakaria said. “I think spending on R&D should be up twice that level. Now in the 1950s, there were millions of new jobs being created in basic manufacturing, in steel, in cars. Today, the new jobs will come from knowledge industries, like biotech and nanotech, and in all those areas we are falling behind.”
The CNN host said such investment would entail massive expenditures, but luckily for his viewers he had a way to pay for it, since he doesn’t “believe in a free lunch.” He called for an “innovation tax” that would be like a national sales tax, or a value-added tax.
“Six percent of GDP is $800 billion, about what we spend on the military these days, but it’s a big chunk of change, and I don’t believe in a free lunch,” he continued. “So I’m going to tell you how I’ll pay for it — an innovation tax. Many nations have a value added tax, the United States doesn’t. But I think it needs one, a national sales tax of maybe five to seven percent, which will be the lowest in the industrialized world but would bring in a lot of revenue.”
As of late, Zakaria has been outspoken on how Americans behave. Earlier this month on the network’s “Parker Spitzer” program, Zakaria said Americans were a problem because of their spending and consuming ways. But with this tax he has in mind, that will no longer be the case, he explained.
“And, by the way, if it causes Americans to consume a bit less, that’s actually a good thing,” Zakaria said. “So, that’s the money. The toughest piece of this puzzle, of course, is getting Washington to get the nation’s fiscal house in order. It needs to get health care and other entitlements under control. It needs to rationalize taxes. Basically, the effort should be to reduce spending on consumption, which is what tax cuts are, which is what bigger pensions are, and start spending on investment.”
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