Category: tax policy

Categories
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.

PDF for printing

Illustration created with Krea and Firefly and ChatGPT

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
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.

PDF for printing

Illustration created with Krea and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
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.

PDF for printing

Illustration created with Krea and Fireflly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
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.

PDF for printing

Illustration created with Krea and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
free trade & free markets regulation tax policy

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.

PDF for printing

Illustration created with Midjourney and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
free trade & free markets international affairs tax policy

Trump’s Tariff Question

China, trade, war, tariffs, economy

If Donald Trump fails to re-​take the White House in November (and then for real in early 2025), his legacy may quickly devolve into a matter for historians, not live politics. After people calm down and the culture war stuff recedes (once again, if allowed by events), what will be left to argue over are a half-​dozen major issues, which include war, mass migration … and tariffs.

Tariffs have long been Mr. Trump’s major hobby horse; he gets excited about 100 percent levies. The whole business about the “bloodbath” quote was his insistence that American auto industry will be destroyed if Trump himself doesn’t get the chance to erect ultra-​high tariffs against automobiles from Mexico.

Trump looks at tariffs on foreign goods as harming foreign nations and helping us, the Americans.

But it is worth noting that economists from Adam Smith and David Ricardo onward have regarded tariffs as chiefly harming consumers within the country that erects them. 

At Reason you can read Veronique de Rugy make the classic free-​trade case, anew, in “No, Trump-​Style Tariffs Do Not Grow the Economy.” If Frédéric Bastiat didn’t convince you, maybe de Rugy will.

But something’s missing. Surrounding Trump’s talk against free trade in general and China in particular there was always another element that neither Bastiat nor de Rugy emphasize: free-​trading with China helps Chinese and Americans, sure; gotcha — but it also helps the Chinese state, and its ruling Communist Party. 

“Trump is an avowed restrictionist on both immigration and trade,” de Rugy writes. But both unchecked immigration and free trade present problems not economic so much as political. It’s about real bloodbaths, actual warfare, not metaphorical ones.

Even if Trump misdiagnosed the domestic economy, he saw problems with China perhaps more clearly than anyone else.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Firefly

—

See all recent commentary
(simplified and organized)

See recent popular posts