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The System is Rigged

Bernie Sanders

In the final days and hours leading up to the Iowa Caucuses, media attention is turning to Bernie Sanders' "the system is rigged" campaign theme. An Iowa poll of likely caucus participants reveals that over two-thirds of Democrats and nearly 40% of Republicans surveyed agree with Sanders: hard work is no longer sufficient to get ahead; the system is rigged against all but the rich and powerful. Says Sanders:

The main point in the Congress, it’s not that Republicans and Democrats hate each other...the real issue is that Congress is owned by big money and refuses to do what the American people want them to do.

The sad fact of the matter is that Senator Sanders and his supporters are right. Money does play too big, and potentially corrupting, a role in our political process. The 40% of Republicans who agree that the system is rigged are far more likely to favor Donald Trump, who is perceived as "too rich to be bought." And we at the Convention of States Project have been saying for years that the divide in America is not between left and's between the politically-connected and the rest of us.

But what neither Trump nor Sanders are talking about is how little authority the President has to change the system. The federal election law that governs the financing of campaigns for Congress is authored by -- wait for it -- Congress. Does anybody really think Congress is going to act against its own self-interest? Of course not. That's why an Article V Convention, that can make reforms without the involvement of Congress, is necessary.

Big-money donors are not usually ideologically motivated, but rather, expect favorable treatment for themselves or their business interests once their candidate is sworn in as legislator. We believe taking away the favors politicians have to dispense will dry up this money and restore the level playing field Americans hold dear far more effectively than continued attempts at a regulatory solution...which someone always finds a workaround for, anyway.

One of the most common means for politicians to reward their supporters is through regulatory exemptions. An amendment that prohibits members of Congress from exempting themselves and their friends from the laws they make for the rest of us not only enjoys the unanimous support of voters we’ve surveyed, but also removes a powerful incentive for business owners to attempt to “buy” candidates. A companion amendment removing de facto lawmaking authority from unelected bureaucrats will help prevent members of Congress from hiding these activities from voters. Such amendments will also help locally-owned businesses compete more effectively with large corporations, who can afford lobbyists and attorneys to keep them in compliance with ever more burdensome and complex federal regulations. Americans agree that a business should succeed because it offers a superior product or service to its customers...not because it has friends in Washington.

One particular category of exemption that can result in a financial bonanza for an organization is tax exemptions. These can be employed by granting or withholding tax exempt status from an organization, by controlling which expenses are and are not deductible, by declaring certain kinds of income tax-exempt, or by granting tax credits. The 2015 Internal Revenue Code is nearly 5,000 pages long and its index contains over 22,000 entries. This needless complexity not only invites abuse, but diverts national resources to compliance that could be better invested in our local economies. An amendment replacing the income tax with a national sales tax exempting food and medicines, while highly progressive, has the power to eliminate the ability of politicians to reward big donors through our tax code.

Another vehicle for cronyism rests in the power of politicians to use taxpayer money to invest in & award grants, loans, and loan guarantees to for-profit businesses. Why should the politically-connected get to shake down the American taxpayer when they couldn’t convince local banks and investors to fund their projects? American taxpayers have lost multiplied billions of dollars on companies owned by big political donors that received federal funding and then went bankrupt. Moreover, when the federal government invests in businesses even as it regulates them and the financial markets in which they function, it acts as both referee and player. This creates an additional dimension of conflict-of-interest that everyday Americans find unacceptable.

The only way these practices will be stopped is for the states to propose and ratify amendments prohibiting them; there is too much power and money involved to expect Congress to reform itself.

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