Category: tax policy

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Post California Soaking

California, taxes, wealth, government

Rumors that Washington Post owner Jeff Bezos has been pushing the Post in a more commonsensical editorial direction could very well be true.

A recent Post editorial slams progressives who “think of taxation the way teenage boys think about cologne: if some is good, more must be great.”

I’m no fan of even a moderate amount of that brand of cologne. But anyway. The Post is discussing a proposed ballot measure backed by the ultra-​lefty Service Employees International Union.

SEIU troops are currently collecting signatures. And before they’ve even gotten enough to post it to ballot, the people being targeted have started moving. 

Out of state.

The measure would impose a new 5 percent tax on billionaires. Some of the state’s billionaires, including Google cofounder Larry Page and Palantir cofounder Peter Thiel, aren’t willing to wait and see whether it actually reaches the ballot and passes in November. Why? The measure would apply retroactively “to those who were California residents on January 1, 2026.”

Some Democratic lawmakers are saying “good riddance,” as if it’s possible to loot billionaires who don’t wait around to be looted. Or that it’s good for state coffers to lose their billionaire entrepreneur “contributors.”

The Post says the retroactivity would open the measure to legal challenges, but that if it gets passed and survives litigation, “it’s a safe bet this won’t be a one-​off. Funding ongoing expenses like health care with one-​time taxes isn’t sustainable. Progressives will want to return to the well until they’ve sucked it dry.”

And no one should know better than Californians how dangerous dry wells are.

This is Common Sense. I’m Paul Jacob.

California, taxes, wealth, government

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property rights tax policy

Tax Assessor, House-Nabber

Pacific Legal Foundation, tax law

In 1994, Scott Pung won exemption from a school tax. He died in 2004. But years later, a local tax assessor contended that his widow, now also deceased, should have submitted new paperwork to retain the exemption.

Pacific Legal Foundation observes that according to state law, “the exemption continues as long as family members continue to live in the home.… Based on her misreading of the law, the tax assessor retroactively denied the exemption for several previous years.”

The estate’s administrator, Mike Pung, got nowhere trying to explain things to the tax assessor. So he brought his case to the Michigan Tax Tribunal. The tribunal ruled in favor of the Pungs.

Didn’t matter. When Mike paid the property taxes for 2012, the assessor called it an underpayment, since payment for the tax that the Pungs did not owe had not been included.

Mike still refused to pay the school tax. So the county grabbed the home that it had assessed at $200,000 and auctioned it for $76,000 to recover the amount of that tax.

With PLF’s help, the Pungs ultimately received $73,000 of this amount, less than half the home’s assessed value. Now PLF is headed to the Supreme Court to make the case for further compensation.

Chances are good. Two years ago, the Supreme Court affirmed in other PLF litigation that local governments “are not allowed to abuse the tax system to take more from families than is owed.”

Or not owed.

This is Common Sense. I’m Paul Jacob.

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tax policy

Hating One’s Own Tax Hikes

Maine, taxes

It’s terrible, the high taxes these days, Maine Senate President Mattie Daughtry decries. Look at property taxes. We must fix this!

“Property taxes just keep going up,” Daughtry lamented on social media. So “first-​time homebuyers can’t take the plunge … and older Mainers struggle to afford staying in the towns they know and love.… We’re setting up a Property Tax Task Force. They’ll provide suggestions to the legislature. Then legislators can use their findings to pass laws that make living in Maine sustainable for EVERYONE in our state.”

Steven Robinson, editor-​in-​chief of the Maine Wire, points out in his Robinson Report that Daughtry herself is a big reason for the problem she now supposedly wants to remedy.

Her hand-​wringing over high taxes is, he says, “borderline psychopathic behavior and true gaslighting — akin to O.J. Simpson standing over some stabbing victims and filming a TikTok video demanding an explanation for how they ended up dead.…

“On two occasions just this year Daughtry has celebrated — yes, celebrated! — taxes going up on working Mainers.”

Daughtry and other Democrats passed LD 2012, a bill to repeal the limit on municipal property tax levies. As the bill itself said right up front, “property taxes may increase.”

The Senate leader is not exactly apologizing for her tax-​and-​spend ways to date, so maybe her giddy gaslighting has something to do with seeking higher office. Who knows. 

But at least with Steven Robinson in the neighborhood, she isn’t getting away with her phony baloney scot-free.

This is Common Sense. I’m Paul Jacob

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free trade & free markets regulation tax policy

The New Old Coke

Trump, Coke, sugar

The President of these United States famously drinks Diet Coke.

Despite his preference, however, it’s regular Coca-​Cola he’s making waves about.

“I have been speaking to Coca-​Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so,” Donald Trump wrote on Truth Social last week. 

The Atlanta-​based company has confirmed the story, but it will not be removing High Fructose Corn Syrup (HFCS) Coke from the market. 

What will change? 

“Mexican Coke” (made from refined cane sugar) is available in glass bottles right now, for a premium, in many venues. In effect, Trump is merely helping promote this currently U.S.-made product, allowing it to sit next to regular Coke just as aspartame-​sweetened Diet Coke competes on the shelf with Coke Zero, which is made with a blend of artificial sweeteners, including aspartame and acesulfame potassium (Ace‑K).

Maybe all Coca-​Cola will really do is re-​brand Mexican Coke.

To “Trump Coke”?

“I’d like to thank all of those in authority at Coca-​Cola,” added the president. “This will be a very good move by them — You’ll see. It’s just better!”

Matters of taste aside, cane sugar may be marginally healthier for you than HFCS. Invented in the Fifties and Sixties in labs, it has been pushed by the USDA, which regulates its prices (as Matt Damon’s 2009 comedy The Informant! makes clear). But both are sugar, if slightly different, chemically.

Behind the proposal to switch to HFCS lies a broader reality: domestic refined cane sugar production from states like Hawaii, Florida, and Louisiana falls short of U.S. consumption needs, while protectionist policies keep its price significantly above global market levels.

For some reason, Donald Trump hasn’t been talking about reducing the sugar tariff!

This is Common Sense. I’m Paul Jacob.

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free trade & free markets international affairs tax policy

The Tariff King

The fight over the president’s tariffs is taking place in Congress. 

Or is it?

“House Republicans blocked on April 9 an effort by Democrats to force a vote on halting the reciprocal tariffs imposed by President Donald Trump,” explains The Epoch Times, “which are currently paused for three months.”

Let’s make that clearer. These now-​infamous/​much-​debated “reciprocal tariffs” went “into effect” immediately after midnight yesterday. As Republicans “sneakily” worked to change the rules to disallow any congressional move to dissolve the president’s declared emergency — which, by Congress’s own legislation, gives the executive a great deal of latitude to change tariff rates — and Democrats moved to do just that, get rid of the “state of emergency,” President Trump put most of his tariff hikes on hold for three months.

Except for those on China — now in effect, at a rate of 125 percent.

It sure looks like Trump’s main concern is trade relations with China, not Lesotho or Israel or anywhere else. And much can be said about China’s trade policies (try selling American consumer goods in China) or respect for intellectual property. But it is the matter of constitutionality that interests me most.

Whatever the alleged merits of high tariffs, unilateral free trade, or any of these issues, these policies should not be decided by the president; the Constitution gives Congress the responsibility “to lay Taxes, Duties, Imposts and Excises” and “regulate Commerce with foreign Nations.”

By handing the president “emergency” powers to change tariff policy in the first place, Congress has abdicated its role in setting tax policy. Republicans in the House seem gung-​ho about Trump’s prerogatives. And Democrats haven’t sought to repeal the International Emergency Economic Powers Act, which gives the president legislative taxing authority.

Apparently, Congress wants the president to be king.

This is Common Sense. I’m Paul Jacob.

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national politics & policies tax policy

DOGE Does the IRS

DOGE, dog, meme, watch dog, who watches the watchers?

A note of caution going into today’s subject: let us try to bite our tongues; no expressions of schadenfreude; no sarcastic “Boo-​hoos” or the like.

The IRS has been grossly inefficient for a very long time, as now uncovered in a Department of Government Efficiency [DOGE] investigation.

Courtesy of Laura Ingraham, we learn that the Internal Revenue Service is “35 years behind” in its scheduled upgrades, and “already $15 billion over budget.”

“You’ve heard the sob stories,” says Ms. Ingraham. “And they are quite entertaining at times. But the [presumably non-​Fox legacy news] media — they continue to spread this story: ‘DOGE is some dark and mysterious organization; you know, embedding itself into departments like some jack-​booted thugs, just intimidating staff, threatening those that don’t comply.’ OK. We’re asking, what is the truth?” 

So she interviewed Treasury Secretary Scott Bessant and Treasury’s DOGE adviser, Sam Corcos.

“We,” Corcos said, including himself in the IRS’s very “they” themness, “process about the same amount of data as a midsize bank. A midsize bank has 100 to 200 people in IT and a $20 million budget. The IRS? It has 8,000 IT employees and a $3.5 billion operations and maintenance budget. I don’t really know why yet.” But he does notice that 80 percent of that budget goes to “contractors and software licenses.”

“DOGE advisers have found billions in waste just by asking questions,” explains Ingraham’s report. Secretary Bessant blames the power of special “entrenched interests” that “keep constricting themselves around the power, the money, and the systems. Nobody cares.”

“Inertia” is also a word often heard on this subject.

Democrats have been complaining about the president’s cutting of the IRS budget, and number of employees. But if most of the force is just spinning gears, the cuts could hardly be said to hurt the “service.”

And you’d think that the most pro-​government party in our political system would want this key function of government — everything rests on taxes, they admit — to be efficient, do the assigned jobs well.

But for some reason that does not seem to be the case.

Shocking, I know.

This is Common Sense. I’m Paul Jacob.

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media and media people national politics & policies political economy tax policy

The Trump-​Tariff Question

Donald Trump

“To this day I cannot tell you what Trump truly believes about tariffs,” Daily Wire’s Michael Knowles recently confessed. “Does he want tariffs instrumentally, to increase trade? Does he believe in tariffs as a revenue-​raising mechanism? And is he hard-​core on tariffs? I couldn’t tell you; the man is inscrutable.”

In “Tariffs Are Awful, But The Income Tax May Be Worse,” economist Walter Block seems less confused. “Donald Trump supports them on the ground that the McKinley administration was prosperous, and relied upon tariffs,” Walter’s Eurasia Review op-​ed posits. Our free-​market economist notes that this rests on a fallacy: “since A precedes B, A must be the cause of B.”

Professor Block offers a better “historical episode to shed light on this matter, the Smoot-​Hawley Tariff of 1930.” You know, the tariff hike that worsened the Great Depression.

The best part of Walter Block’s refutation, however, follows his explanation of the Law of Comparative Advantage. He discusses the gains to our economy if the expert workers Trump fires from the IRS were to find work in the private sector.

And, contemplating the idea of switching from income taxes to tariffs, our widely-​published octogenarian notes that “it takes relatively little labor to run a tariff system. Hey, we already have tariffs in place. An increase in their level would hardly call for much more manpower, likely hardly any more at all.” The gains of nixing income taxes would be vast; the harms of higher tariffs would be comparatively minuscule.

An interesting argument? Sure. But I don’t see politicians giving up the income tax any time soon.

This is Common Sense. I’m Paul Jacob.

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subsidy tax policy

Oh, SNAP!

junk food, SNAP, welfare, food stamps, RFK, health

It appears that recipients of “food stamps” (the Supplemental Nutrition Assistance Program, or SNAP) “often have lower diet quality and higher rates of diet-​related health issues compared to non-​participants,” according to an article in healthjournalism​.org. 

“While it’s unclear whether SNAP directly causes these outcomes or if other factors are at play, some argue that the program, at minimum, sustains unhealthy eating habits by not restricting purchases of nutritionally poor foods.”

Among the “some” who argue for restrictions is Robert Kennedy, Jr., head of Health and Human Services. He promises to purge unhealthy foods from the subsidy list.

Currently, the taxpayer-​funded “benefit” may “be used for ‘any food or food product intended for human consumption,’ except alcohol, tobacco and hot foods, including those prepared for immediate consumption. Critics argue that SNAP’s allowance for purchasing sugary snacks, soda and junk food promotes unhealthy eating habits, which can lead to obesity and other related health issues.”

The critics are undoubtedly correct; indeed, the proposed limitations will almost certainly be too tame. 

If the program must exist, it should do good without enabling demonstrable harm. So instead of a cumbersome and extensive list of prohibited food items, there should be a concise list of allowed categories:

  • uncooked meats and dairy products without added sugars
  • fresh, frozen, dried, and canned beans, fruits and vegetables
  • staple ingredients of traditional meals, such as flour, spices, and oils

Some rail against any idea of restricted benefits, but government handouts are not there to expand the “freedoms” of the poor; they are provided to help folks weather hard times. 

The freedoms of taxpayers have already been sacrificed for their sake. Forcing taxpayers to watch SNAP’s EBT card users in the grocery line buying candy and sodas adds insult to the benefactors while injuring the beneficiaries.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets international affairs tax policy U.S. Constitution

Legal Trade War

Donald Trump

Donald Trump’s imposition and changing of tariffs, all by his lonesome — without Congress — vexes more than a few critics.

His authority to do this, however, derives directly from laws passed by Congress.

The U.S. Constitution gives Congress the power to “lay and collect Taxes, Duties, Imposts and Excises” under Article I, Section 8, which includes tariffs, since they are taxes on imported goods. But Congress has legislated hand-​offs to presidents, allowing significant flexibility on tariffs.

The idea seems to be that, as Commander-​in-​Chief, the president should handle trade because … like war, it has to do with foreign countries.

Laws allowing presidential discretion include Section 232 of the Trade Expansion Act, Section 301 of the Trade Act of 1974, and the International Emergency Economic Powers Act of 1977. 

The first says that the president has broad discretion to define as threats to national security all sorts of things and then impose tariffs and other trade restrictions in response.

The 1974 legislation authorizes further along Trump’s favored line, the power to retaliate against “unfair” foreign trade practices.

The IEEPA grants sweeping powers in a declared national emergency.

So if free traders and others are alarmed at Trump’s seemingly dictatorial powers regarding tariffs, it isn’t new. It has been built into the Imperial Presidency. While Congress could take its constitutional authority back, there is certainly no groundswell to do so.

Also not new?

What setting up high tariffs have historically done: elicit similar tariffs in retaliation. 

Yikes: the kind of trade war that made the Great Depression “great.”

This is Common Sense. I’m Paul Jacob.

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Destroying Dane Farming

Europe, climate, global warming, cows, bureaucrats

In February, Denmark’s farmers were worried “that plans to levy a carbon emission tax on farming” in the name of global weather control “would force them to reduce production and close farms.”

In the same month, farmers across Europe protested against assaults on their livelihood.

Meanwhile, a report by a government commission concluded that the carbon tax could cause Denmark’s agricultural production to decline by as much as a fifth. The central planners made clear that this was a price they were willing to pay in order to indulge their ideological-​meteorological fantasy.

And also, not incidentally, in order to collect more tax dollars.

But the concern and the estimates of the severity of the blow on farmers — to be penalized for providing food, a requirement of survival — availed naught.

The carbon emissions tax is being enacted and will take effect in 2030. The levy will initially be something like $96 per cow, rising to $241 per cow in 2035.

Insane. But cows produce methane “through their burps and manure,” CNN reports. So what can tyrants do but tax farmers into oblivion?

The fantasists may claim success no matter what global climate turns out to be in years to come. Or they may claim that their measures haven’t yet fixed the global climate only because the rest of the world’s countries haven’t yet followed suit and appropriately penalized their farmers for farming.

Only when civilization is fully destroyed will we be able “save” it.

This is Common Sense. I’m Paul Jacob.

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