Tag: tax policy

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Accountability folly general freedom moral hazard porkbarrel politics property rights responsibility tax policy too much government

No Rich No More

Connecticut, taxes, revenue, budget, tax and spend, wealth, common sense

Connecticut has a budget problem. There’s not enough money to spend.

WTNH-​TV in New Haven paraphrased the situation along with the response of Connecticut’s very progressive governor: “Income tax revenue collapses; Malloy says taxing the rich doesn’t work.”

The news story explains, “Connecticut’s state budget woes are compounding with collections from the state income tax collapsing, despite two high-​end tax hikes in the past six years.”

Hmmm. Despite the tax increases? Or … “because the state of Connecticut depends too much on its wealthy residents,” as the report continued, “and wealthy residents are leaving …”

A Yankee Institute report notes that “the exodus of wealth from the state as top earners and businesses relocate to more tax-​friendly states” is a major problem. Institute President Carol Platt Liebau calls it a “terrible cycle of tax increases followed by deficits followed by even more tax increases.” 

Yet, state legislative Democrats are back pushing more tax hikes on “the rich.” Senate legislation would jack up the tax rate — retroactively — on those with income of $500,000 or more. House legislation would slap a 19 percent surcharge on some hedge fund earnings. In response, the head of the Connecticut Hedge Fund Association testified that his “industry is populated by exactly that type of person that will move based on tax policy.”*

A song by Ten Years After comes to mind: 

Tax the rich, feed the poor
Till there are no rich no more

Doesn’t sound like a good idea even in song.

This is Common Sense. I’m Paul Jacob.

 

* It’s worth noting that Gov. Malloy is now “against raising taxes again to fill the deficits and is instead focusing on spending cuts …”

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Accountability free trade & free markets general freedom national politics & policies tax policy

Death and …

taxes, tax cut, Trump, gift, give away, rights, growth, economics

It’s a sure thing — that most folks will like President Trump’s tax cuts. Though we don’t yet know all the details.

When it comes to taxes, less is more. 

That is, if you’re paying taxes. It is no great mystery that people like it when their own taxes are reduced.

But what about reducing other people’s taxes?

“The core economic case for tax cuts is that they reduce the obstacles to creative and productive activities,” economist Don Boudreaux explained yesterday at the Café Hayek blog. 

Cutting the corporate tax rate — which even former President Bill Clinton supported during last year’s campaign — won’t immediately appear in people’s paychecks, but can stimulate economic growth helping everyone. Recent experiences in both Britain and Canada bear this out. 

Cutting taxes, of which “the rich” pay more, can also spur growth.

Yet, these ideas do not dominate popular discussions of tax cuts. Boudreaux lamented media reporting that treats any tax reduction as simply a “‘gift’ to high-​income earners,” dubbing the coverage: “Biased. Benighted. Blind.”

“Suppose that freedom of the press were reported in the same way as … a ‘giveaway to the press’?” he asked. “Most people, of course, do not own newspapers or other media outlets.”

Boudreaux concluded, “When the press is free, the chief beneficiaries are the general public.”

Freedom — of both the press and to keep more of the fruits of our labors — helps the common man. As well as the uncommon man. A tax cut for me helps me directly, and you indirectly. And vice versa. Just as a free press is great for those in journalism as well as those of us not in journalism.

That is not blind, but eyes open; not benighted, but enlightened; not biased, but …

… Common Sense. I’m Paul Jacob. 

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Accountability folly free trade & free markets moral hazard national politics & policies porkbarrel politics

Super-​Subsidize Me

welfare, taxes, charity, subsidy, subsidize, shrimp, stadium, Tesla

“In American political discourse, those on the side of the sick, poor, and underprivileged tend to favor more federal government intervention,” writes Heartland Institute policy advisor David D’Amato at The Hill. He explains that many “see government as … rather like a charity …”

Sure, government can act charitably, except that its money isn’t given voluntarily, and the recipients are often not so needy.

Earlier this month, the stock price of electric car company Tesla, Inc. rose high enough to overshadow General Motors. That’s great news for billionaire Elon Musk, Tesla’s CEO. But an Investor’s Business Daily editorial noted, “[T]he company is heavily reliant on taxpayer support.”

Who benefits (in addition to Musk)? “A study published by the National Bureau of Economic Research found that 90% of electric car subsidies go to the top 20% of households,” the editorial stated. IBD added that it was “a lot of welfare-​for-​the-​rich for very little environmental benefit.”

In addition to funding advanced technology, American taxpayers have spent $6.7 billion over the last few decades to subsidize stadiums for wealthy sports team owners. The latest? In Clark County, Nevada, taxpayers forked over $750 million ($354 for every resident) to bribe — er, bring — the Oakland Raiders to Las Vegas. 

The ridiculous Minnesota legislation to feed $5 million in state funds to start two shrimp farms almost seems reasonable in comparison. Almost.

“Maybe growing shrimp in Minnesota is a great idea,” admits John Hinderaker of the Center of the American Experiment. “If so, the owners should do what other small businessmen do: either find investors, or get a bank loan.”

Government’s crony capitalism taxes the poor to give to the rich.

This is Common Sense. I’m Paul Jacob.

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Common Sense general freedom ideological culture initiative, referendum, and recall political challengers responsibility term limits too much government U.S. Constitution

Duck/​Rabbit, Maiden/​Crone, and Taxes

maiden/crone, illusion, paradigm shift

Revolution! Must we?

Can’t we reform at a reasonable pace?

Well, whether we change slowly or quickly, change must occur. Today’s in-​place policies are not stable.

But a better future itself must be stable. Or else it will not be better.

And a key to successful change is change in the hearts and minds of the people. The vast majority, East and West, need to shift mental gears and shift their ideological paradigms. (That is the term most famously used by Thomas Kuhn.)

Take yesterday’s story. I first heard about it from proponents of Oregon’s big business excise tax hike. They were saying that Oregon had the lowest business taxes in the union, and took that as a cue to raise taxes. I looked at it as a great political success, and one that had contributed mightily to Oregon’s remarkable economic resilience in these trying economic times.

The difference between the Higher Taxes reaction (which views low taxes as an opportunity only to raise them, and the consequences mainly as who gets the tax funds) and my reaction (which concentrates on the consequences of the expropriation, and looks to a longer period of time to gauge results) is a paradigm shift. To go from one to the other (preferably from the pro-​tax to the low tax position) requires a shift in vision.

It is like what happens when you refocus on the Duck/​Rabbit image, or the Maiden/​Crone. Give a person some time. Be patient. And hint that a shift in perspective is warranted to see both.

And that we might gain something from a paradigm shift.

This is Common Sense. I’m Paul Jacob.

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maiden/crone, illusion, paradigm shift

 

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Accountability free trade & free markets property rights tax policy

Taxation to What End?

Oregon, tax, taxes, corporate, corporation, illustration, Measure 97

Oregonians have quite a few ballot measures this year.

And only one of them seems obviously nutty: Measure 97.

It would raise taxes on the very biggest of companies. The richest — that is, those with $25 million in sales.

Among the reasons given for this excise hike, which is estimated to be the biggest in the state’s history, are a whole bunch of “ooh, look at what we can do with all that loot!” enticements. Yes, and then there is the tried-​and-​untrue staple of the left, the “make large and out-​of-​state corporations pay their fair share in taxes” ploy.

Admittedly, trying to get out-​of-​state entities to pay for your benefits is classic. What “Let somebody else pay” lacks in nobility and morality it makes up for in avarice’s perennial appeal.

But the practical problem? A tax hike is just a bid on a future expropriation. Tax targets can, in effect, counter-​offer by moving, or threatening to move, out of taxing territory.

Imagine yourself a thief. Then imagine first announcing to your victims where, when and how much you intend to take.

Right now Oregon sports the tenth best business environment in the country and, maybe, the lowest business taxes*. Raise taxes to the “middle of the pack” and businesses begin to look at states with lower rates.

Objectionable? Doesn’t matter. Folks go into business to make profits, not pay taxes.

Against this reality? Measure 97’s many bigwig supporters: the progressive Democratic governor, Democratic legislators and big-​spending public employee unions eager to expand their bottom lines.

But by seeking to maximize near-​term tax rates, these greedy special interests risk losing revenue further off, after businesses flee the state.

This is Common Sense. I’m Paul Jacob.

 

* The Oregon Center for Public Policy ranks Oregon as tied with Connecticut for the lowest in the nation.

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Oregon, tax, taxes, corporate, corporation, illustration, Measure 97

 

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Accountability nannyism national politics & policies tax policy

The Year of Translucency

tax code, power, politicians, transparency, illustration

Barack Obama promised transparency in government. He didn’t deliver.

But others stepped up to the plate.

It’s now possible to see through a lot of political, elitist, and bureaucratic bunk courtesy of fugitives like Snowden, convicts like Manning, and citizens using FOIA (Freedom of Information Act) procedures.

And we are learning more about Hillary Clinton with each info dump from Julian Assange’s Wikileaks and every court-​ordered disclosure thanks to lawsuits to enforce FOIA by organizations like Judicial Watch.

Some folks demand that Donald Trump release his tax returns. On the one hand, hooray for public demands for more information about candidates. But on the other hand, the richer you are, the longer and stranger your tax returns become. One shifts income around to avoid taxes — indeed, you take every “loophole” the law allows. As Justice Brandeis advised. Some folks may be shocked by Trump’s creative-​but-​legal accounting.

To avoid future confusion, we should demand simple tax returns from the rich. That would require jettisoning most of the tax code, simplifying the system. But ask your congressional representative why he or she will not support such a reform.

The reason we have an opaque and complicated tax code is … well, transparent. Under a simple tax system, there would be fewer favors to “trade” … and thus less power to accumulate, less oomph to parlay into pomp and splendor.

Which is why politicians rarely provide much transparency, and why it must often be wrested from them.

Merely by being merchants of opacity, our pols reveal, if inadvertently, the nature of our Too Big Government.

This is Common Sense. I’m Paul Jacob.

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tax code, power, politicians, transparency, illustration