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I’ve already shared a bunch of data and evidence on the importance of low tax rates.

A review of the academic evidence by the Tax Foundation found overwhelming support for the notion that lower tax rates are good for growth.

An economist from Cornell found lower tax rates boost GDP.

Other economists found lower tax rates boost job creation, savings, and output.

Even economists at the Paris-based OECD have determined that high tax rates undermine economic performance.

And it’s become apparent, with even the New York Times taking notice, that high tax rates drive away high-achieving people.

We’re going to augment this list with some additional evidence.

In a study published by a German think tank, three economists from the University of Copenhagen in Denmark look at the impact of high marginal tax rates on Danish economic performance.

Here’s what they set out to measure.

…taxation distorts the functioning of the market economy by creating a wedge between the private return and the social return to a reallocation of resources, leaving socially desirable opportunities unexploited as a result. …This paper studies the impact of taxation on the mobility and allocation of labor, and quantifies the efficiency loss from misallocation of labor caused by taxation. …labor mobility responses are fundamentally different from the hours-of-work responses of the basic labor supply model… Our analysis builds on a standard search theoretic framework… We incorporate non-linear taxation into this setting and estimate the structural parameters of the model using employer-employee register based data for the full Danish population of workers and workplaces for the years 2004-2006. The estimated model is then used to examine the impact of different changes in the tax system, thereby characterizing the distortionary effects of taxation on the allocation of labor.

They produced several sets of results, including a look at the additional growth and output generated by moving to a system of lump-sum taxation (which presumably eliminates all disincentive effects).

But even when they looked at more modest reforms, such as a flat tax with a relatively high rate, they found the Danish economy would reap significant benefits.

…it is possible to reap a very large part of the potential efficiency gain by going “half the way”and replace the current taxation with a ‡at tax rate of 30 percent on all income. This shift from a Scandinavian tax system with high marginal tax rates to a level of taxation in line with low-tax OECD countries such as the United States increases total income by 20 percent and yields an efficiency gain measured in proportion to initial income of 10 percent. …a transition from a Scandinavian system with high marginal taxes to a system along the lines of low-tax OECD countries such as the United States. This reduces the rate of non-employment by around 10 percentage points, increases aggregate income by almost 20 percent (relative to the Scandinavian income level), and gives an efficiency gain measured in proportion to income of 9.9 percent. Thus, almost 80 percent of the efficiency loss from marginal taxation (9.7% divided by 12.4%) would be eliminated by shifting from a Scandinavian tax system to the system of a low-tax OECD country according to these estimates.

The authors also confirmed that lower tax rates would generate revenue feedback. In other words, the Laffer Curve exists.

We may also use the reform experiment to compute the marginal excess burden of taxation as described above. When measured in proportion to the mechanical loss of tax revenue, we obtain an estimate of 87 percent. …this estimate also corresponds to the degree of self-financing of the tax cut. Thus, the increase in tax revenue from the behavioral response is 87 percent of the mechanical loss in tax revenue.

Too bad we can’t get the Joint Committee on Taxation in Washington to join the 21st Century. Those bureaucrats still base their work on the preposterous assumption that taxes have no impact on overall economic performance.

Since we just looked at a study of the growth generated by reducing very high tax rates, let’s now consider the opposite scenario. What happens if you take medium-level tax rates and raise them dramatically?

The Tax Foundation looks at precisely this issue. The group estimated the likely results if lawmakers adopted the class-warfare policies proposed by Thomas Piketty.

Piketty suggests higher taxes on the wealthiest among us. He calls for a global wealth tax, and he recommends establishing a top income tax rate of 80 percent, with a next-to-top income tax rate of 50 or 60 percent for the upper-middle class. …This study…provides quantitative estimates of what his proposed tax rates would mean for capital formation, jobs, the level of income, and government revenue. This study also estimates how Piketty’s proposed income tax rates would affect the distribution of income in the United States.

Piketty, of course, thinks that even confiscatory levels of taxation have no negative impact on economic performance.

Piketty claims people (or at least the upper-income people he would tax so heavily) are totally insensitive to marginal tax rates. In his world view, upper-income taxpayers will work and invest just as much as before even if dramatically higher taxes reduce their after-tax rewards to a fraction of what they were previously. …Piketty’s vision of the world strains credulity.

When the Tax Foundation crunched the numbers, though, its experts found that Piketty’s proposal would be devastating.

Under Piketty’s 55 and 80 percent tax brackets, people in the new, ultra-high tax brackets will work and invest less because they will be able to keep so little of the reward from the last hour of work and the last dollar of investment. …As the supplies of labor and capital in the production process decline, the economy’s output will also contract. Although it is only people with upper incomes who will directly pay the 55 and 80 percent tax rates, people throughout the economy will indirectly bear some of the tax burden. For example, the average person’s wages will be lower than otherwise because middle-income workers will have less equipment and software to enhance their productivity, and wages depend on productivity. Similarly, people throughout the economy will have fewer employment opportunities and will lose desirable goods and services, because businesses will grow more slowly and be less innovative.

The magnitude of the damage would depend on whether the higher tax rates also applied to dividends and capital gains. Here’s what the Tax Foundation estimated would happen to the economy if dividends and capital gains were not hit with Piketty-style tax rates.

These are some very dismal numbers.

But now look at the results if tax rates also are increased on dividends and capital gains. The dramatic increase in double taxation (dwarfing what Obama wanted) would have catastrophic consequences for overall investment (the “capital stock”). This would lead to a big loss in jobs and a dramatic reduction in overall economic output.

The Tax Foundation then measures the impact of these policies on the well-being of people in various income classes.

Needless to say, upper-income taxpayers suffer substantial losses. But the rest of us also suffer as well.

…the poor and middle class would also lose. They would suffer a large, but indirect, tax burden as a result of the smaller economy. Their after-tax incomes would fall over 3 percent if capital gains and dividends retain their current-law tax treatment and almost 17 percent if capital gains and dividends are taxed like ordinary income.

And since I’m sure Piketty and his crowd would want to subject capital gains and dividends to confiscatory tax rates, the 17 percent drop is a more realistic assessment of their economic agenda.

Though, to be fair, Piketty-style policies would make society more “equal.” But, as the Tax Foundation notes, some methods of achieving equality are very bad for lower-income people.

…a reasonable question to ask is whether a middle-income family is made better off if their income drops 3.2 percent while the income of a family in the top 1 percent drops 21.0 percent, or their income plummets 16.8 percent while the income of a family in the top 1 percent plummets 43.3 percent.

Of course, if Margaret Thatcher is correct, the left has no problem with this outcome.

But for those of us who care about better lives for ordinary people, this is confirmation that envy isn’t – or at least shouldn’t be – a basis for tax policy.

Sadly, that’s not the case. We’ve already seen the horrible impact of Hollande’s Piketty-style policies in France. And Obama said he would be perfectly content to impose higher tax rates even if the resulting economic damage is so severe that no additional revenue is collected.

There’s lot of criticism of the IRS and the tax code on the Internet. Indeed, I like to think I contribute my fair share.

But I’m surprised at (what I consider to be be) the limited amount of humor on those topics.

As I look through my archives, I can find only a few cartoons about the overall tax code.

Regarding tax reform, all I have is this Barack Obama flat tax that I created.

Here are a few cartoons about tax policy negotiations.

I found a bit more to choose from on the IRS scandal (see here, here, here, here, and here).

And I do have a decent number of cartoons about Obama’s class-warfare tax policy (see here, here, here, here, here, here, here, and here).

But that doesn’t seem like a lot, particularly since I’ve been blogging since 2009.

So let’s augment the collection with some humor about corporate inversions.

But just like you’re supposed to eat your vegetables before dessert, here’s one bit of serious info before we move to the cartoons.

For those who want to see the Cato Institute in action, here are my remarks about the issue of corporate inversions to Capitol Hill staffers.

If you want to see the full event, which would include the commentary of David Burton and Ike Brannon, click here.

Now that the serious stuff is out of the way, let’s enjoy some laughs.

This Nate Beeler cartoon is my favorite of today’s collection because it correctly implies that the entire U.S. corporate tax code is a festering sore.

Michael Ramirez notes that America is the “king” of the wrong kind of realm.

Here’s a contribution from Dana Summers, who cleverly mocks the grotesque hypocrisy of Warren Buffett.

Chip Bok addresses the same theme in this cartoon.

I can’t resist closing with one additional serious observation. If we don’t like our corrupt tax system, there is a very good solution.

Addendum: I forgot to include this example of death tax humor.

It boggles the mind to think that the United States now has the highest corporate tax rate in the industrialized world.

But it’s even more amazing that America arguably has the most punitive corporate tax rate in the entire world.

Here’s some of what I wrote on the topic for today’s U.K.-based Telegraph.

…the United States has the highest corporate tax rate in the developed world (and the highest in the entire world, according to KPMG, if you ignore the United Arab Emirates’ severance tax on oil companies). …The central government in Washington imposes a 35pc rate on corporate income, with most states then adding their own levies, with the net result being an average corporate rate of 39.1pc. This compares with 37pc in Japan, which has the dubious honour of being in second place, according to the tax database of the Organisation for Economic Co-operation and Development (OECD). …if you broaden the analysis, it becomes even more evident that the United States has fallen behind in the global shift to more competitive corporate tax systems. The average corporate tax for OECD nations has dropped to 24.8pc. For EU nations, the average corporate tax is even lower, with a rate of less than 22pc. And don’t forget the Asian Tiger economies, with Singapore, Taiwan and Hong Kong all clustered around 17pc, as well as the fiscal paradises that don’t impose any corporate income tax, such as Bermuda and the Cayman Islands.

I also explain that America’s system of “worldwide” taxation exacerbates the anti-competitive nature of the U.S. tax system for companies trying to compete in global markets.

And I warn why making “inversions” illegal is a misguided and self-defeating response.

Blocking inversions…is like breaking the thermometer because you don’t like the temperature. It simply masks the underlying problem. In the long run, the United States will lose jobs and investment because of bad corporate tax policy, regardless of whether companies have the right to invert.

In other words, America desperately needs a lower corporate tax rate.

The crowd in Washington, however, says American can’t “afford” a lower corporate tax rate. The amount of foregone revenue would be too large, they claim.

Yet let’s look at what happened when Canada lowered its corporate tax burden. Here’s a chart prepared by the Tax Foundation.

The Tax Foundation augmented the chart with some important commentary on why companies are attracted to Canada.

Part of the attraction is the substantial tax reforms that occurred over the last 15 years in Canada. First among these is the dramatic reduction in the corporate tax rate, from 43 percent in 2000 to 26 percent today.

What about tax revenue?

The U.S. currently has a corporate tax rate of 39 percent, but lawmakers are reluctant to do what Canada did, i.e. lower the tax rate, for fear of losing tax revenue. …According to OECD data, corporate tax revenue increased following Canada’s corporate tax rate cuts that began in 2000. …Corporate tax revenue as a share of GDP in Canada has averaged 3.3 percent since 2000, while it averaged 2.9 percent over the years 1988 to 2000, when Canada’s corporate tax rate was 43 percent.

My colleague Chris Edwards also reviewed this issue (and he’s a former Canadian, so pay close attention).

Here’s his chart showing the corporate tax rates imposed at the national level by both the U.S. government and the Canadian government.

As you can see, the rates were somewhat similar between 1985 and 2000, with the Canadians having a slight advantage. But then Canada opened up  a big lead over America by dropping the central government tax rate on corporations to 15 percent.

So what happened to corporate tax revenue?

As you can see from his second chart, receipts are very volatile based on economic performance. But the Canadian government is collecting more revenue, measured as a share of total economic output, than the American government.

In spite of having a lower tax rate. Or perhaps it would be more accurate to say the Canadians are generating more corporate tax revenue because of the lower tax rate.

In other words, the Laffer Curve is alive and well.

Not that we should be surprised. Scholars at the American Enterprise Institute estimate that the revenue-maximizing corporate tax rate is about 25 percent, far below the 39.1 percent rate imposed on companies in the United States.

And Tax Foundation experts calculate that the revenue-maximizing rate even lower, down around 15 percent.

P.S. Don’t forget that when politicians impose high tax burdens on companies, the real victims are workers.

P.P.S. And since America’s corporate tax system ranks below even Zimbabwe, we’re in real trouble.

In April of 2013, I introduced a Moocher Hall of Fame to “celebrate” some very odious examples of welfare dependency.

Since that time, I keep thinking that it’s time to do something similar for government bureaucrats. This compilation from last December would be a good place to start, though I’d have to figure out whether to have group memberships so that we could include the bureaucrats at the Patent and Trademark Office who get paid to watch TV, as well as the paper pushers at the Department of Veterans Affairs who got big bonuses after creating secret waiting lists that led to the death of former soldiers.

But if we’re creating a Bureaucrat Hall of Fame, I won’t want to discriminate against foreigners.

The U.K.-based Telegraph reports, for instance, that an unnamed doctor from Italy is a very worthy candidate for this award.

The notorious inefficiencies of Italy’s state sector were laid bare on Thursday as news emerged of a Sicilian doctor who has done just 15 days’ work in the past nine years.

How has he “achieved” this degree of non-work?

…the doctor disappeared off on a university training course, reportedly paid for by taxpayers’ money, when he started work in 2005. Returning to work on October 31, 2008, the doctor immediately asked for, and obtained, paid family leave until May the following year. Then he worked 15 days at the hospital before calling off sick until July 2009. Recovered from illness, the doctor obtained a place on another university training course, once again reportedly swapping his wage for payment from the state university, which lasted until June this year, said wire agency ANSA. The doctor is now allegedly planning more time off to obtain a doctorate which will finish in December 2016.

By the way, our lazy doctor has lots of company. Indeed, Sicily sounds like the California of Italy.

The problem is pronounced in Sicily, where an army of around 144,000 regional staff – both permanent and temporary – includes 26,000 forestry workers, more than in British Columbia in Canada. Around 7,000 Sicilians have been given government jobs teaching work skills to Sicilians without jobs.

With that amount of waste and featherbedding, no wonder Italian taxpayers are beginning to revolt.

Here’s a specific example that boggles the mind.

Red tape on the island has also created surreal working weeks for those employed by the local government. In March, a vet in Trapani complained that the work he was contracted to carry out for the local authority had been spread over a such a long period he was required to do just one minute’s work every week. “Once a week I go to the office and stamp my pass,” said Manuel Bongiorno. “I walk in, wait for a minute to go by, then stamp the pass again. It’s been going on for months,” he added.

I don’t know if “vet” means he’s an animal doctor or a former soldier, but he doesn’t qualify for membership in the Bureaucrat Hall of Fame because he apparently wants to do some work.

That’s preposterous, but what would you expect in a nation where government is so incompetent that the wrong people are appointed to high-level jobs that shouldn’t even exist.

So you can see why I don’t really care which party rules Italy. The names may change at the top, but government always comes out ahead.

Though a New York Times columnist actually wrote that America should become more like Italy. And he wasn’t being satirical. At least not on purpose.

P.S. The U.K. government has raised its terror threat level from “substantial” to “severe.” I realize this is a serious issue, but I couldn’t help but think about the humorous version of European threat levels.

I wrote a column for the Wall Street Journal last week about the policy debate over whether it’s better to lower tax rates or to provide targeted tax cuts for parents.

Since this meant I was wading into a fight between so-called reform conservatives (or “reformicons”) and traditional conservatives (or “supply-siders”), I wasn’t surprised to learn that not everyone agreed with my analysis.

James Pethokoukis of the American Enterprise Institute, for instance, doesn’t approve of what I wrote.

…why are some folks on the right against giving middle-class families a big tax cut and letting them keep more of what they earn? …Cato’s Dan Mitchell, in a Wall Street Journal commentary today, concedes Stein’s idea would indeed help middle-class families right now… Yet Mitchell still thinks cutting marginal tax rates is the better idea.

Pethokoukis accurately notes that I want lower marginal tax rates because, from my perspective, faster long-run growth would be even more beneficial to middle-class families.

He disagrees and offers five counter-arguments. Here they are (summarized fairly, I hope), along with my response.

1.) House Ways and Means Chairman Dave Camp has put forward tax reform with a top rate of 25% vs. 40% today. Yet his plan would likely increase the economy’s size by less than 1% over the next decade, according to the Joint Tax Committee. …This is not to say lower tax rates aren’t good for economic growth. But marginal rates at those levels are almost certainly already deep on the good side of the Laffer Curve.

I have a couple of reactions.

First, the top tax rate in the Camp plan is 35 percent rather than 25 percent, so we shouldn’t be surprised that the plan doesn’t generate much additional growth.

Second, the JCT’s model is flawed and it should not be given credibility by any supporter of good tax policy. The Tax Foundation has a much better model.

Though it doesn’t really matter in this case because the Tax Foundation analysis of the Camp plan also shows a very weak growth response, largely because the slightly lower tax rates in the Camp plan are “paid for” by increasing the tax burden on saving and investment. Which is why I also wrote that the plan was disappointing.

Regarding the point about the Laffer Curve, the Tax Foundation responded to the Pethokoukis criticism of my column by noting “the Laffer Curve refers to tax revenue, not economic growth. It says there is a tax rate at which tax revenue is maximized. The tax rate at which economic growth is maximized is almost certainly well below that.”

Needless to say, I fully agree. I want to maximize growth, not tax revenue.

Now let’s move to his second point.

2.) And consider this: just how would the GDP gains, such as they are, from cutting top marginal rates be distributed in an economy where middle-wage jobs are disappearing and income gains are tilted toward the highly skilled and educated? The US economy needs to grow faster, but faster growth alone in the Age of Automation may not substantially increase living standards for a larger swath of the American people. That reality is a big difference between the 2010s economy and the 1980s economy, one many on the right have yet to grasp. Cranking up GDP growth is necessary but not sufficient.

If I understand correctly, Pethokoukis is saying that faster growth doesn’t guarantee good jobs for everyone.

I don’t disagree with this point, but I’m not sure why this is a criticism of lower marginal tax rates. Isn’t it better to get some extra growth rather than no extra growth?

Now let’s address the third point from the Pethokoukis column.

3.) Mitchell asserts, “Tax-credit conservatives generally admit that child-oriented tax cuts have few, if any, pro-growth benefits.” That’s not true. …expanding the child tax credit would serve as a sort of human-capital gains tax cut for worker creators (also known as families). It might just be nudge enough for financially-stressed families to have another kid… Modern pro-growth policymakers should fret as much about the nation’s birthrate as productivity and labor-force participation rates. …A younger American society with a higher birth rate, helped by a tax code that offsets anti-family government policy, would be more dynamic, creative, and entrepreneurial.

I’m less than overwhelmed by this argument.

Yes, we have a demographic problem, but more population is merely a way of increasing total GDP, not per-capita GDP. And it’s the latter than matters if we want higher living standards.

In his fourth point, Pethokouis notes that both supply-siders and reformicons agree on policies to reduce the tax burden on saving and investment.

4.) To give Mitchell some credit here, he does acknowledge there is more to the conservative-reform tax agenda than the child tax credit.

Since we both agree, there’s no need to rebut this part of the column.

And I don’t think there’s anything for me to rebut in Pethokoukis’ final point.

5.) Let me add that there is more to the conservative reform agenda for the middle class than just tax reform, including regulatory, health care, K-12, and higher-education reform. And there should be more to the supply-side, pro-growth agenda than cutting marginal tax rates, including reducing crony capitalist barriers — such as Too Big To Fail megabank subsidies… American needs more growth, and worker creators (strong families) are just as important to achieving that as job creators (strong companies). Let’s have both.

Since I’m among the first to acknowledge that fiscal policy is only about 20 percent of what determines a nation’s prosperity, this is an area where I’m on the same page as Pethokoukis.

Reformicon Founding Fathers

Indeed, I wrote last year that there’s much to admire about the agenda of the reformicons.

I just think that they don’t have sufficient appreciation for the value of even small increases in long-run growth.

Let’s close by looking at one sentence from some supposed analysis by Matt O’Brien in the Wonkblog section of the Washington Post.

His column is dedicated to the proposition that Republicans are overly fixated on cutting taxes for the rich. That might be a defensible hypothesis, but I doubt O’Brien has much credibility since he misrepresents my position.

 Daniel Mitchell of the Cato Institute downplays the idea that giving middle-class families more money even helps them, and says Republicans should keep focusing on cutting tax rates.

Just for the record, here’s what I actually wrote about middle-class families in my WSJ piece.

Child-based tax cuts are an effective way of giving targeted relief to families with children… The more effective policy—at least in the long run—is to boost economic growth so that families have more income in the first place. Even very modest changes in annual growth, if sustained over time, can yield big increases in household income. … If good tax policy simply raised annual growth to 2.5%, it would mean about $4,500 of additional income for the average household within 25 years. This is why the right kind of tax policy is so important. …since more saving and investment will lead to increased productivity, workers will enjoy higher wages, including households with children.

Does any of that sound like I’m indifferent to middle-class families? And the first sentence of that excerpt specifically says that the reformicon approach would mean relief to families with kids.

And the entire focus of my column is that supply-side tax policy would be even more beneficial to those households in the long run.

But accurately reporting what I wrote would have ruined O’Brien’s narrative. Sigh.

P.S. I wrote a couple of days ago that France was is a downward spiral because of high-tax statism. A few people have pointed out that French President Francois Hollande has picked a new industry and economy minister, Emmanuel Macron, who famously said that the new 75 percent top tax rate meant that France was “Cuba without the sun.”

Does this change my opinion, these folks have asked. Doesn’t this signal that taxes will start going down?

The answer is no. At best, I think it simply means that Hollande won’t push policy further to the left. But that doesn’t mean we’ll see genuine liberalization and a reduction in the fiscal burden of government.

If you think I’m being pessimistic, just keep in mind this excerpt from a Bloomberg story.

Macron apologized yesterday for his “exaggerated reputation” for free-market thinking.

I hope I’m wrong, but that doesn’t sound like the words of someone committed to smaller government?

Since I’ve been in Washington for nearly three decades, I’m used to foolish demagoguery.

But the left’s reaction to corporate inversions takes political rhetoric to a new level of dishonesty.

Every study that looks at business taxation reaches the same conclusion, which is that America’s tax system is punitive and anti-competitive.

Simply stated, the combination of a very high tax rate on corporate income along with a very punitive system of worldwide taxation makes it very difficult for an American-domiciled firm to compete overseas.

Yet some politicians say companies are being “unpatriotic” for trying to protect themselves and even suggest that the tax burden on firms should be further increased!

In this CNBC interview, I say that’s akin to “blaming the victim.”

While I think this was a good interview and I assume the viewers of CNBC are an important demographic, I’m even more concerned (at least in the short run) about influencing the opinions of the folks in Washington.

And that’s why the Cato Institute held a forum yesterday for a standing-room-only crowd on Capitol Hill.

Here is a sampling of the information I shared with the congressional staffers.

We’ll start with this chart showing how the United States has fallen behind the rest of the world on corporate tax rates.

Here’s a chart showing the number of nations that have worldwide tax systems. Once again, you can see a clear trend in the right direction, with the United States getting left behind.

Next, this chart shows that American companies already pay a lot of tax on the income they earn abroad.

Last but not least, here’s a chart showing that inversions have almost no effect on corporate tax revenue in America.

The moral of the story is that the internal revenue code is a mess, which is why (as I said in the interview) companies have both a moral and fiduciary obligation to take legal steps to protect the interests of shareholders, consumers, and employees.

The anti-inversion crowd, though, is more interested in maximizing the amount of money going to politicians.

Actually, let me revise that last sentence. If they looked at the Laffer Curve evidence (here and here), they would support a lower corporate tax rate.

So we’re left with the conclusion that they’re really most interested in making the tax code punitive, regardless of what happens to revenue.

P.S. Don’t forget that your tax dollars are subsidizing a bunch of international bureaucrats in Paris that are trying to impose similar policies on a global basis.

P.P.S. Let’s end with a note on another tax-related issue.

We’ve already looked at evidence suggesting that Lois Lerner engaged in criminal behavior.

Now we have even more reasons to suspect she’s a crook. Here are some excerpts from the New York Observer.

The IRS filing in federal Judge Emmet Sullivan’s court reveals shocking new information. The IRS destroyed Lerner’s Blackberry AFTER it knew her computer had crashed and after a Congressional inquiry was well underway. As an IRS official declared under the penalty of perjury, the destroyed Blackberry would have contained the same emails (both sent and received) as Lois Lerner’s hard drive. …With incredible disregard for the law and the Congressional inquiry, the IRS admits that this Blackberry “was removed or wiped clean of any sensitive or proprietary information and removed as scrap for disposal in June 2012.” This is a year after her hard drive “crash” and months after the Congressional inquiry began. …One thing is clear: the IRS has no interest in recovering the emails. It has deliberately destroyed evidence and another direct source of the emails it claims were “lost.” It has been blatantly negligent if not criminal in faiing to preserve evidence and destroying it instead.

Utterly disgusting.

The Export-Import Bank is noxiously corrupt example of crony capitalism.

It never should have been created. But that’s something we could say about most government programs.

So the real question is how to reverse the damage.

If we reform a big program such as Medicare, you can’t end it overnight. You have to deal with the reality that millions of people have made plans based on government policies. And even if those policies are wrong, you can’t pull the rug out from folks who did nothing wrong.

So it’s important to put in place appropriate and fair transitions when reforming a major program.

But that’s not an issue with the Export-Import Bank. It provides undeserved subsidies to big companies. Those big companies will be just fine without having their snouts in the public trough. The right thing to do, from both a moral and economic perspective, is to shut it down immediately.

Indeed, this should be a test as to whether supposedly pro-taxpayer politicians in Washington understand the critical difference between being pro-business and being pro-market.

But what about the argument that the Export-Import Bank is somehow a win-win for the American economy? I tend to automatically dismiss such claims for the simple reason that all sorts of companies in the private sector would do what the Ex-Im Bank is doing if it really was a money maker.

But with the issue heating up, it would be a good idea to examine this claim more closely. Fortunately, Matt Mitchell (no relation) of the Mercatus Center does an excellent job of explaining the dodgy economics of the Ex-Im Bank is this short video.

In some sense, Matt is channeling Frederic Bastiat, the great French thinker who said that a good economist looks at both direct and indirect consequences of policies (the “seen” and the “unseen”).

Matt shows that the negative indirect impact of the Ex-Im Bank is far larger than any putative benefits generated by handouts to politically well-connected firms.

Just like bailouts, s0-called stimulus, and green-energy programs all look bad when you examine all the costs and benefits.

For more information, I also recommend this superb video on why cronyism is so corrosive.

And if you want a humorous analysis, scroll to the bottom of this post and see what the Kronies have to say about the Ex-Im Bank.

Or just enjoy this Glenn Foden cartoon.

P.S. I shared six jaw-dropping examples of left-wing hypocrisy last month.

But maybe it’s time to create a special Hypocrisy Hall of Fame, because the Wall Street Journal reveals that we another member who would be a shoo-in for the award.

It seems that Warren Buffett was not being terribly sincere or honest when he said people like him should be paying higher taxes.

Now this is awkward for President Obama and Senate Democrats. …Warren Buffett’s Berkshire Hathaway is expected to help finance Burger King’s  pending acquisition of Canadian doughnut-chain Tim Hortons. The deal will allow Miami-based Burger King to claim Canada as its new legal home for tax purposes. Beltway Democrats had been hoping to use a recent wave of such corporate inversions as a campaign tool. The idea was to propose new taxes on the companies that move. Step two was to beat up Republicans who don’t agree to make the free world’s most punitive corporate tax system even more punitive. But now that Democratic tax hero Mr. Buffett has been spotted surfing on top of this wave, the political challenge has become more difficult.

Sort of makes you wonder whether Buffett endorses higher taxes for the self-interested reason that the political class will then give him a free pass on issues such as the Burger King inversion?

Shocking, just shocking, to think that rich leftists are hypocrites.

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