Tag: tax policy

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Accountability folly free trade & free markets ideological culture local leaders moral hazard nannyism property rights too much government

Amazon’s Jeff Bezos Is …

Jeff Bezos, Amazon, Seattle, taxes, homeless tax, business

A half a year ago, when trying to make sense of the much-​publicized search for Amazon’s “HQ2” — a second headquarters city, away from Seattle — I concentrated on the subsidies that cities and metro areas were apparently throwing at Amazon.

It all seemed desperate, indecent.

But there was a story behind the story. Amazon has every reason to be looking for an escape route from the Evergreen State’s biggest city. 

The city’s leadership is nuts. 

“Seattle City Council members have finally released draft legislation,” the Seattle Times’ Daniel Beekman wrote last month, “for a new tax on large employers that would raise $75 million next year to address homelessness.”

The council blames the big companies for enticing workers into the city, thereby driving up rental costs and housing prices.

The tax would be on employee hours, would go into effect next year, and “in 2021, it would be replaced by a 0.7 percent payroll tax on the same category of companies,” explains the Seattle Times.

Now, if you tax something you discourage that something. That’s why progressives like sin taxes on sodas and fast foods. To discourage consumption. 

So when progressives seek to tax big producers, they are apparently trying to tax away the housing crunch by driving away big business.

Amazon reacted. It put a halt to an expansion project.

“Jeff Bezos is a bully,” said Kshama Sawant, the confessed socialist, speaking for the council. “I think we are in broad agreement on that.”

If that is her attitude, and that of the council — and the consensus of the city’s denizens — then what Amazon’s Jeff Bezos really is?

A “good businessman.”

This is Common Sense. I’m Paul Jacob.

 

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Photo by JD Lasica

 

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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