Category: tax policy

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folly Popular tax policy too much government

A Fake Mystery

Gavin Newsom, Governor, California, gas, tax, prices, folly,

California’s new top banana is playing politics the old-​fashioned way: passing the buck.

Last week Governor Gavin Newsom directed the California Energy Commission (CEC) to look into the state’s higher-​than-​average gasoline prices.

“Independent analysis suggests that an unaccounted-​for price differential exists in California’s gas prices and that this price differential may stem in part from inappropriate industry practices,” he wrote in an official letter to the CEC.  “These are all important reasons for the Commission to help shed light on what’s going on in our gasoline market.”

Ah, shed light!

We are not talking about the bulb in your outbuilding.

Californians understandably grumble about having to pay higher taxes than elsewhere in the U.S. So Newsom pretends to suspect “inappropriate industry practices.” But what is inappropriate is Newsom’s directive to the CEC. As Christian Britschgi drolly informs us at Reason, Newsom, while lieutenant governor, had “supported a 2017 bill increasing the state’s gas taxes,” which looks like all we really need to know. Raise taxes, and businesses tend to increase prices rather than eat the extra cost. Higher gas prices are the result of higher taxes.

Duh.

But there’s more.

“When running for governor in 2018,” Britschgi explains, “he opposed a ballot initiative that would have repealed that same increase.”

So, is Newsom truly clueless of the obvious?

Hardly. And neither are “17 legislators who voted for the tax hike” who joined the governor in “wanting answers to this difficult headscratcher.” They are doing what pols usually do: deflect; misdirect; blame others … hoping that voters don’t pay close enough attention, or remember recent history. And busy people often do not.

Finding a bogeyman helps, too.

This is Common Sense. I’m Paul Jacob.

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Gavin Newsom, Governor, California, gas, tax, prices, folly,

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Categories
ideological culture tax policy

Class War in France

France, French, tax, protests, yellow, jackets

The French have a talent for riot, public protest, and street-​based insurrection.* The current mayhem in Paris has been escalating every weekend since starting in mid-November.

Why weekends? This is a working-person revolt.

“Rioters ran amok across central Paris on Saturday, torching cars and buildings, looting shops, smashing windows and clashing with police in the worst unrest in more than a decade, posing a dire challenge to Emmanuel Macron’s presidency,” Yahoo News informs us. “The authorities were caught off guard by the escalation in violence after two weeks of nationwide protests against fuel taxes and living costs…”

Yes, this is a tax revolt.

You see, the taxes are part of a carbon emissions reduction program — the kind of taxes that Democrats are eager to put into place in America. Leftists and environmentalists worldwide should pay special attention.

The gambit, of course, is this: cityfolk tend not to mind such taxes less because they do not take the hit immediately. People outside cities, on the other hand, drive everywhere, often for their jobs. In Paris, well, not so much. The city has even enacted an ordinance to outlaw all but electric automobiles by 2030.

It’s called the “yellow vests [jackets] movement” to symbolize the government’s anti-​driver mindset: “all motorists had been required by law — since 2008 — to have high-​visibility vests in their vehicles when driving.”

Sure, push around ordinary motorists.

The protest movement has been largely made up of these people, since many businesses and professionals get exemptions from the taxes.

It’s a class war thing. You might think Macron and other elitists in government would understand their own country.

But no.

So, why?

It’s a big government thing.

This is Common Sense. I’m Paul Jacob.

 

* Maybe that is why the street violence of “refugees” and children of Middle-​Eastern and North African migrants have been taken with as much tolerance as it has been: the rioters have seemed so very French.

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Categories
insider corruption tax policy

There You Go Again, IRS

IRS, free speech, taxes, censorship, corruption, surveillance

The old keywords were “Constitution,” “Patriot” and “Tea Party.”

The new ones? “Marijuana,” “oxycodone,” and “legalization.”

Paul Caron, the TaxProf blogger, calls attention to another IRS scandal — again about denying tax-​exempt status to organizations because of their political views. He had barely finished blogging about the scandal that came to light in 2013 when a new one burst into view.

You almost certainly remember the older scandal, in which the Internal Revenue Service had been caught intrusively scrutinizing and delaying the applications of conservative non-​profits picked on because of their conservatism.

To cover that mess, Professor Caron published a blog series called “The IRS Scandal, Day _​_​.” He added a post daily.

Every day.

For years.

The last installment, Day 1921, published on August 14, 2018, reported a settlement: meager taxpayer-​funded payouts to over a hundred victimized organizations. The IRS never admitted wrongdoing. No one was ever punished. According to the Washington Times, the agency said that it had “made changes so that political targeting can’t occur in the future.”

These changes don’t seem to include prohibiting political targeting by the IRS, however.

Now we have another case.

Caron points us to a Wall Street Journal op-​ed by David Rivkin and Randal Meyer, lawyers, who have discovered a dirty little secret in Revenue Procedure 2018 – 5. One provision authorizes IRS to withhold tax-​exempt status from applicants seeking to improve “business conditions … relating to an activity involving controlled substances,” including marijuana and oxycodone. Advocating legalization of marijuana would count as trying to improve such conditions.

Apparently, the IRS thinks its mandate entails enforcing the status quo by stifling dissent — instead of just doing its congressionally mandated (if all-​in-​all irksome) job.

This is Common Sense. I’m Paul Jacob.

 

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Categories
free trade & free markets Popular tax policy too much government

Socialists and Capitalism

New York Mayor Bill de Blasio helped snag Amazon for his city. Yes, the long-​awaited destination of Amazon’s HQ2 has been determined. Amazon is not putting all its eggs into the Queens borough, though: there’s another headquarters … to be placed near Washington, D.C.

The mayor seems quite proud of the deal.

I’ve not been de Blasio’s biggest fan; too often he sounds like a socialist. But this deal? It’s crony capitalism.

So it is with some satisfaction that I can make common cause with a self-​professed socialist, newly-​elected Congresswoman Alexandria Ocasio-​Cortez. Claiming that her Bronx constituency is “outraged” by the Amazon announcement — I doubt that — she expressed her outrage at the “billion-​dollar company” receiving “hundreds of millions of dollars in tax breaks.”

Exactly. No company, big or small, should get special treatment from a government.

Want to attract business? Make generally good business policy. Apply liberally, that is, equally.

Alas, the socialist-​elect went on to complain that “our subway is crumbling and our communities need MORE investment, not less.”

Well, Amazon is investing in the community, providing jobs.

Then came the busybodyism, demanding to know, “What’s the quality of jobs + how many are promised? Are these jobs low-​wage or high wage? Are there benefits? Can people collectively bargain?”

Uh, wages will be high enough to attract workers from their current employment or out of unemployment. And so on.

Socialists feel a need to meddle.

New Yorkers, anyway, can breathe easier knowing they sent Ocasio-​Cortez far away, to D.C. — de Blasio as mayor being bad enough.

This is Common Sense. I’m Paul Jacob.

 

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Categories
initiative, referendum, and recall tax policy

The Green in the Evergreen State

money, global warming, carbon, tax, climate

We’re told of the scientific consensus on global warming. Whatever you may say about that consensus (I’ve expressed extreme skepticism), no such consensus exists for what steps would be best to take to deal with the identified problem — which is usually understood in terms of the “carbon footprint,” of carbon put into the atmosphere in excess of what is taken out.

Most proposals for curbing carbon emissions have been shown to be far more costly than efficacious.

Nevertheless, without such a consensus, activists in Washington State are pushing Initiative 1631, a measure to tax carbon.

They had pushed a very similar measure two years ago, as science writer Ronald Bailey notes at Reason. The measure failed, however, because environmental lobbies opposed it. You see, the collected funds were given back to taxpayers. Environmental groups didn’t get a cut of the action.

This time that defect has been alleviated, and those groups are on board.

Ah, money, money, money! 

The Evergreen State, indeed.

Would the tax be effective? The goal of the measure is “to reduce, by 2035, [the state’s] emissions by 25 percent below their levels in 1990,” Bailey explains. The state had “emitted about 88 million metric tons that year, so that implies a reduction of around 22 million tons by 2035. Assuming today’s emissions, that would mean that Washington State’s planned reductions would amount to 0.42 percent and 0.06 percent of U.S. and global emissions respectively.”

Not much bang.

Sure, the measure may win on hope … and bucks.

But will it do any appreciable good? I mean, other than creating a constituency with the green of dollars.

This is Common Sense. I’m Paul Jacob.

 

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Categories
Accountability local leaders moral hazard porkbarrel politics responsibility tax policy too much government

Panic in the Prairie State

Illinois, pensions, politicians, taxes, tax, theft, shake down

When your state has the lowest credit rating in the union, the highest population decline rate, and spends nearly a quarter of its annual budget on an out-​of-​control government-​employee pension system, what do you do?

Raise taxes, of course!

That’s the advice of experts in Illinois, anyway.

You can see why they panic: The unfunded portion of Illinois’s public employee pension system amounts to $11,000 per person in the state. Something extraordinary must be done.

Yet, as Pat Hughes at the Illinois Opportunity Project insists, taxpayers need relief — not a statewide 1 percent property tax increase.

Besides, it is not as if tax hikes could solve the problem. “It was just last year that politicians raised the state income tax by 32 percent in a desperate attempt to balance the budget,” Hughes explains. “Despite over $5 billion in new taxes, the state was back in deficit spending in less than a year.” 

Hughes mentions a number of tax limitation measures in the works. More power to them. 

But what’s needed even more? Spending limitation measures.

No government can be trusted to offer anything but defined-​contribution pensions — and no government, at any level, should ever manage a pension system. Politicians can’t help themselves. They just cannot resist the temptation to buy off the government-​worker constituency by promising more in the future than financially feasible (or just plain old politically possible) to pay for now. 

Other people’s money is theirs to spend. And a future financial bind? Some other politician’s problem. 

This is Common Sense. I’m Paul Jacob.

 

N.B. Congratulations to the Illinois Policy Institute for its Liberty Center, which won its case against forced unionization, Janus v. American Federation, on June 27. Commentary about this Supreme Court case appeared on this site in early May, “Post Blindfold.”

 

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