Tag: tax policy

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Accountability folly free trade & free markets general freedom moral hazard national politics & policies responsibility tax policy too much government

Billionaire Theater

Bill Gates, taxes, tax, government, entrepreneurs, responsibility

“I need to pay higher taxes,” Bill Gates told CNN’s Fareed Zakaria on Sunday.

He was making a case against Republican tax cuts, but his actual argument? Insignificant. It’s just another unlearned, narrow-perspective “growing inequality” farrago. But his conclusion intrigues . . . as a man-bites-dog story, because people have this goofy idea that rich people are somehow against government and for reduced taxes.

They aren’t. Not even most of the richest.

“I’ve paid more taxes, over $10 billion, than anyone else,” says the man worth $90 billion, “but the government should require the people in my position to pay significantly higher taxes.”

Why? To spend his money better than he could?

Were all the wealth of America’s billionaires confiscated whole and that sum would actually pay off the federal debt (which I doubt), what do you think Washington politicians would do? Go on the straight and narrow and never over-spend again?

No. Politicians would take the new influx of funds as a signal to go on an even bigger spending binge.

But what about his mere income tax increase notion? What then? As sure as the Blue Screen of Death it would be applied down to millionaires, too. And then rates for less-than-millionaires would likely go up. We have a history with this. And what would that do?

It would hit up-and-coming entrepreneurs the hardest. It would nip Bill Gates’s company’s competition in the bud.

But surely Gates wouldn’t be mercenary in his theatrical play for media adoration, would he? 

Not Saint Bill!

This is Common Sense. I’m Paul Jacob.

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Accountability folly government transparency local leaders moral hazard porkbarrel politics responsibility too much government

Babylon Goes Broke

California, pension, crisis, canary, cage, coal mine, spending, taxes

A few Babylonian, er, California cities going bankrupt — Stockton, Vallejo, and Bell — should be seen as more than dead canaries in a coalminer’s care.

Indeed, you don’t need special prophetic gifts to see the dangers posed by over-promising cushy pensions to government workers. Californians are coming around. And the state’s governor, Jerry Brown, appears to be “calling for reductions in gold-plated, unsustainable public-sector pensions,” as Nick Gillespie informs us at Reason.

But statewide reforms will not be easy. The problem is huge, presenting grave costs. “Absent the ability to alter pensions, states and localities have to devote more and more of their taxes to simply covering the costs of retired workers,” Gillespie explains. “Worse still, they often raise taxes to cover rising costs, typically at the expense of providing basic services such as police and road maintenance.”

Yes, over-promising defined-benefit pension packages effectively distributes wealth away from basic government services and into the pockets of the people with whom politicians work most closely.

Unfortunately, the courts long ago decided that politicians’ promises to employees outweigh basic government duties. That is, the courts determined that “public-sector employees at all levels of government had an inviolable right to the pension benefits that existed on the day they were hired.”

But the courts seem to be lightening up on this “California Rule,” and the governor has dared mention that, come “the next recession,” some headway might be possible.

No matter what you may think of this rather desperate hope, the writing is on the wall. And it is in red ink and numbers, not Babylonian.*

As America’s Babylon is finding out.

This is Common Sense. I’m Paul Jacob.

 

* And not “Mene, Mene, Tekel, Upharsin.”

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Accountability general freedom moral hazard nannyism national politics & policies privacy tax policy

Hey, It’s Your Money

tax cut, trickle down, supply side, taxes, jobs, employment

I leave it up to you how to spend your own money. You decide, based on your own circumstances and priorities.

Oh, you don’t need my permission?

Of course not.

But some people think that if you spend your own money on your own priorities in accordance with your own judgment, it is indeed a problem. At least when you get to keep more of your own money because of tax cuts.

President Trump has often suggested that recipients of new corporate tax cuts will spend the additional money mostly on increasing wages and hiring new workers. Yet some major corporations reportedly say that they will spend the additional money on paying dividends or buying back shares. Maybe others will buy more advertising, storage space or tools. Various commentators fret. But why should a firm hire new workers if other expenditures would be more productive at the moment?

Of course, in the long run, a company that is more profitable and successful can hire more people and can pay them more.

But wages are not the only expense that companies must cover in order to be successful in the long run. Managers do, and should, devote resources first to the improvements that they conclude are most urgent. That a company’s resources increase because of a tax cut doesn’t alter the necessity or reasonableness of pursuing economic goals in accordance with one’s best judgment.

An approach that, to be sure, also benefits present employees as well as future ones.

This is Common Sense. I’m Paul Jacob.

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Accountability folly general freedom insider corruption local leaders moral hazard nannyism porkbarrel politics too much government

The Biggest Loser

Illinois, corruption, exit, vote with your feet, taxes

Government is supposed to serve everybody . . . according to good, old-fashioned republican theory. But most governments serve some more than others. We can define as “corruption” any attempt to make government serve a few at the expense of the many — or the many at the expense of the few.

Illinois is corrupt, and most of us can only watch it get worse. But what can we say about those who live under the Prairie State’s thumb? When citizens see an institution slipping out of control, they can remain passive or take charge. Illinois citizens have petitioned for term limits, redistricting reform and a more transparent legislature only to be blocked again and again by the state supreme court.

What more can conscientious citizens, folks I like to call “liberty initiators” do? Well, they can

  • express themselves in criticism as well as offer alternatives;
  • vote thoughtfully and be well informed;
  • consider running for office or work for good candidates;
  • donate money to reform projects.

Alas, these and other expressions of “voice” have not exactly forestalled disaster.

The last resort is to “exit,” leave — vote with your feet.

The population of Illinois has declined. Many have pulled up stakes and fled across the border to Indiana and elsewhere. In the most recent year for which we have data, Illinois lost nearly 34,000 people, more than any other state.*

Unfortunately, this population loss is only an indicator of how bad Illinois State Government is doing. It offers no solution.

Except, of course, for the people who leave.

This is Common Sense. I’m Paul Jacob.

 

* Idaho has experienced the biggest population increase. See Reason’s reportage.

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Accountability crime and punishment folly general freedom government transparency ideological culture moral hazard Regulating Protest tax policy

Been Burned

IRS, I.R.S., corruption, taxes, budget, tears

“They’ve been burned. They’ve been hammered. They’ve been bludgeoned,” George Washington University law professor Miriam Galston explained to the Washington Post. “They’re trying to survive.”

In this heartbreaking discussion at this special time of year, the “they” are the poor, long-suffering folks . . . at the Internal Revenue Service.

According to the Post analysis, “conservatives” have schemed to “scale back the IRS and shrink the federal government.” (I guess this is supposed to tear at every American’s heartstrings.) Notably, they “capitalized on revelations in 2013 that IRS officials focused inappropriately on tea party and other conservative groups based . . . Among conservatives, the episode has come to be known as the ‘IRS targeting scandal.’”

Note that term of art: episode.

The Post saw no scandal, however — despite the IRS having admitted to harassing, blocking and delaying Tea Party and conservative groups from exercising their most fundamental First Amendment rights to freedom of association and freedom of speech, in some cases for four years.

Instead, the Post decries the response to this gross violation of citizens, a congressional check on the power — and budget — of the agency responsible: reducing the budget for the Exempt Organizations division of the IRS from $102 million in 2011 to $82 million in 2016.

Heavens, Washington is never supposed to work like that! It actually approaches . . . accountability.

The budget cuts, along with hefty settlements the IRS is now paying to victimized groups that sued, make it less likely the IRS will repeat this scandalous . . . episode.

“To many, the IRS targeting of Tea Party and conservative and even some progressive groups is not a scandal,” my Sunday Townhall.com column concluded. “To me, that’s the biggest scandal of all.”

This is Common Sense. I’m Paul Jacob.

 

N.B. The title reference is to Neil Young’s song, Burned, which begins, “Been burned, and with both feet on the ground . . .”

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IRS, I.R.S., corruption, taxes, budget, tears

 

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Accountability folly ideological culture media and media people national politics & policies tax policy too much government

The Hyperbole Is Falling

Trump Derangement Syndrome, hysteria, Donald Trump, progressives, leftists, Democrats, taxes, tax bill

A mad killer is on the loose!

That is one way to get attention . . .

The sky is falling!

You are getting the idea . . .

Trump is literally Hitler!

Extravagant hyperbole is not necessary to criticize the current President. Indeed, as Chicken Licken and the Boy Who Cried Wolf demonstrate, that can backfire. Especially when you are complaining about something on which Trump has proved to be pretty darn good — the tax bill, for instance.

Nevertheless, as it passed through Congress, Democrat pols and the major media dinosaurs have doubled down on overstatement: A “middle-class con job” was Sen. Ron Wyden’s characterization; singer-actress Barbra Streisand (presumably now living in Australia or Canada), re-tweeting a New York Times piece on “the Great American Tax Heist,” accused Trump of pushing the bill for “personal gain”; Bernie Sanders calls it a “tax cut for billionaires” who, instead of being helped, he says, should be “asked to pay more in taxes.”

Yes, the richest (by and large) will get the most reductions, since they pay the most taxes already. Bernie should be reminded that it is the very nature of taxes that “ask” is the wrong active verb. And calling a cut in what’s taken from taxpayers a “heist” is too absurd for commentary.

It does look like most taxpayers will get tax relief. That’s good. Alas, the debt may grow larger, depending on the economic growth spurred by the tax reform. But I notice that the Democrats tend to complain about deficits only when Republicans are in charge. And vice-versa.

Partisan Derangement Syndrome at work.

This is Common Sense. I’m Paul Jacob.

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Accountability ballot access general freedom government transparency initiative, referendum, and recall local leaders national politics & policies political challengers responsibility tax policy term limits too much government

What Unlimited Government Costs Us

Tim Eyman, doll, petition, taxes, Washington, initiative, democracy, voters

“Olympia can’t restrain itself,” Tim Eyman wrote the other day, a judgment on legislative irresponsibility hardly unique to the Evergreen State. Citizens around the country have cause to lament the difficulty of obtaining anything close to a good legislature.

Too often the merely “bad” would constitute a significant improvement.

Which is why legislators need to be put on a short leash. Limits on government must be written into law, where possible into either the U.S. Constitution or state constitutions, so the limits cannot be tampered with by legislators, good or bad.

Washington State initiative guru Tim Eyman, cited above, has made a career of working for just those kinds of limits. In 2007, Eyman and the citizen group Voters Want More Choices petitioned onto the statewide ballot a requirement that any tax increase must receive a two-thirds vote from both legislative chambers.

Voters passed the measure* in 2007, 2011 and 2012.

In an email to supporters this month, Eyman presents data — an “amazing real-world comparison” — to help us understand how effective the limits were . . . while they lasted.

He notes that “with the 2/3 rule in effect from 2008-2012, those 5 legislative sessions cost the taxpayers $6.894 billion” in increased taxes.

And he compares that to the five years (2013-2017) since the state’s highest court struck down the voters’ two-thirds mandate: “WITHOUT the 2/3 rule, those 5 legislative sessions cost the taxpayers $23.679 billion.”

“Without the fiscal discipline imposed by citizen initiatives,” Eyman concludes, “politicians cannot hold back.”

Now we have hard evidence for what unlimited government costs us: more than three times more!

This is Common Sense. I’m Paul Jacob.

 

* Washington State’s ballot initiative process allows voters to pass simple statutes but not constitutional amendments. For two years after passage, legislators must garner a two-thirds vote to override a ballot initiative. After those two years, only a simple majority is required.

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Accountability crime and punishment insider corruption media and media people moral hazard national politics & policies responsibility too much government

Congress Bites Taxpayers

sexual harassment, Congress, House Page, Washington, DC, hypocrisy, corruption, taxes,

Is it even humanly possible to be sleazier and more disgusting than the Harvey Weinsteins of Hollywood?

Sadly, and clearly . . . yes. There is the U.S. Congress.

In 2011, after 175 years in operation, the House page program — whereby young people came to work and learn in the capitol — was shut down. Why? For Weinsteinian reasons, because pages were being sexually propositioned and harassed.*

Now, once again, Congress leads the way . . . downward . . . not only into a culture rife with sexual coercion, but also into one with few options for victims and plenty of protections for victimizers. Members of Congress have given more effort to keep complaints quiet and protect misbehavior than to stop misbehaving.

And there’s more . . .

“Between 1997 and 2014,” the Washington Post reports, “the U.S. Treasury has paid $15.2 million in 235 awards and settlements for Capitol Hill workplace violations, according to the congressional Office of Compliance.” That’s shelling out nearly $1 million a year, though the information doesn’t detail how many complaints were for sexual misconduct.

It is despicable when individuals or companies pay hush money to silence accusers, hiding the criminal sexual behavior of powerful men. But, for goodness sake, at least we don’t have to pay for it!

Conversely, Congress’s sexual abuse slush fund comes from you and me, taxpayers.  

Regarding the swirling allegations against Alabama GOP Senate candidate Roy Moore, Sen. Cory Gardner (R-Colo.) argued that Moore “does not meet the ethical and moral requirements of the United States Senate.”

Well, then, he will fit right in.

This is Common Sense. I’m Paul Jacob.

 

* The program ended several years after the Mark Foley scandal — and there were others. The official rationale? A tight budget (stop laughing) and technology, which purportedly made the work pages were doing unnecessary. But note that the Senate continues its use of pages.

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Accountability general freedom initiative, referendum, and recall local leaders political challengers Regulating Protest too much government

Know Your BS

Tim Eyman, Washington, initiative, free speech, tax, taxes

“Help me get my B.S. in the voters pamphlet,” read the subject-line of Tim Eyman’s email. 

Eyman is a practitioner of the art of the voter initiative, foremost in his state, Washington, and one of the most effective nationwide.*

This particular call to action concerns the voter pamphlet statements about a tax increase placed on Washington State’s November ballot by the mayor and city council in Tim’s hometown of Mukilteo.

“In the pro statement,” Eyman explained, “they wrote that the need for the tax increase was ‘indisputable.’” Which his rebuttal countered with: “Politicians always say the need for higher taxes is ‘indisputable.’ We call B.S. on that.”

It is rather to the point.

But soon he received word from the city that, “The Auditor feels the language is inappropriate and would like you to choose different wording.” Rather than “We call B.S. on that,” it was suggested that he might use: “We call foul.”

Eyman objected. He pointed out that B.S. is used ubiquitously; he sent the city examples.

“I called the ACLU,” his email noted, and “they thought it was B.S. for the government to say you can’t say B.S.”

Eyman’s own attorney, Stephen Pidgeon, sent the city a detailed letter pointing out that this is “exactly the speech protected under the First Amendment.”**

The City of Mukilteo has yet to announce a final decision. Tim Eyman invites all of us to send an email to encourage the city to Let Eyman Keep his B.S. in the Voters Pamphlet.

This is Common Sense. I’m Paul Jacob.

 

* He was once even dubbed “America’s No. 1 freedom fighter” — by me.

** Pidgeon also offered, “While the pious may construe the inference of these two alphabetic avatars as meaning something crude, my client may very well have been referencing an ancient Latin phrase ‘Bubulum Stercus’ which no average voter would ever find inappropriate.”

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Accountability folly free trade & free markets general freedom initiative, referendum, and recall local leaders moral hazard porkbarrel politics responsibility too much government

Go Nats?

stadium, Potomac Nationals, pork, free markets, taxes, referendum, crony, welfare

Just a few miles away from where I live sits the stadium of the Potomac Nationals. I’m a fan. I’d hate to see the team we call the P-Nats leave.

But . . . Hasta la vista.

The owner of this minor league affiliate of Major League Baseball’s Washington Nationals is demanding a new stadium. He threatens to move out of Prince William County, Virginia, if he does not get it.

The Prince William County board of supervisors has already expressed interest in floating bonds to raise the $35 million the fancy new stadium would require — with the privately owned team paying the money back, with interest, over the next 30 years.

Compared to other crony-ish deals around the country, not such a terrible taxpayer swindle. Still, zillions of wrongs don’t make this right. County taxpayers would be on the hook in case of default. And if the marketplace believed the team could actually make such payments, a bank or other investors would come to the rescue.

Thankfully, a monkey wrench has been thrown into the deal. A county supervisor has proposed that voters should get a chance to decide, via a November referendum. The board of supervisors will consider the referendum tonight.

Voters should get the final say. But if there is a referendum, as much as I love having the team here, I will vote NO. I don’t cotton to forcing others to pay for my preferred entertainment.

Government has certain legitimate roles. Subsidizing sports is not one.

Even if the new stadium would be closer to my home than the old one.

This is Common Sense. I’m Paul Jacob.

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