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I should get an award for equal opportunity.

The Bureaucrat Hall of Fame has plenty of American members, but it also has civil servants from India, France, and Italy, and the United Kingdom, all of whom have gone above and beyond the call of duty in their efforts to rip off taxpayers.

And now we have a new applicant from overseas, so maybe we’ll enjoy even more diversity.

The U.K.-based Times reports on a Spanish bureaucrat that didn’t bother to show up for work for six consecutive years.

A civil servant in Spain didn’t turn up to work for six years. …He had continued to collect his annual salary. Records show that the engineer started working for a water company run by the municipal authorities in Cádiz in 1990 but last did a day’s work in 2004.

Even though this bureaucrat is an amateur compared to the Indian civil servant who skipped work for two decades, I think he’s worthy of membership in the Hall of Fame.

Especially since one aspect of the story perfectly symbolizes the mind-boggling inefficiency of government.

…his absence was noticed only when he was due to collect a long-service award. …Mr Blas said: “We thought the water company had supervised him but it was not the case. We discovered this when we were about to present him with a commemorative plaque for his 20 years of service.”

You may be thinking that this combination of sloth and incompetence at least led to a termination.

Not exactly.

…he cannot be sacked from his €37,000-a-year job as he has since retired.

For what it’s worth, Senor Garcia supposedly is now obliged to return 30,000 euro of his ill-gotten loot.

I’m not holding my breath expecting that to happen.

However, even though it’s not mentioned in the story, I feel very confident that he’ll get a bloated pension courtesy of the Spanish taxpayers.

Why do I think a deadbeat will get a pension?

For the simple reason that Spain – even though it’s in the middle of a deep fiscal crisis – has an above-average burden for bureaucratic compensation.

P.S. Back in 2012, I pointed out that Obama and Romney both were endorsed by different porn stars.

So you probably won’t be surprised to learn that porn stars also are playing a role in the 2016 campaign.

First, the Cruz campaign put together a commercial featuring an actress who is better known for her other roles. The Daily Caller has the details.

Amy Lindsay, the actress featured in films such as Kinky Sex Club, Milf, Carnal Wishes and Sex Sent Me to the ER starred in Sen. Ted Cruz ‘s latest campaign ad entitled “Conservatives Anonymous.” In the ad, the Lindsay said, “Maybe you should vote for more than just a pretty face next time.” Seconds before this story was to be published, the Cruz campaign removed the ad from YouTube.

The Daily Caller also reports that the other conservative senator in the race also has a link to the adult industry.

Jenna Jameson…former porn star recently criticized the $1.1 trillion omnibus federal spending plan, and on Monday, she expressed some serious support for Republican presidential candidate Sen. Marco Rubio.

But she apparently doesn’t like compassionate conservatives.

Jameson told TheDC that she isn’t a fan of Bush.

Though maybe I’m making a mistake by assuming that she’s referring to President Obama’s big-spending predecessor.

The quality of economic analysis from politicians is never good, but it becomes even worse during election season.

The class-warfare rhetoric being spewed by Bernie Sanders and Hillary Clinton is profoundly anti-empirical. Our leftist friends genuinely seem to think the economy is a fixed pie and that it’s their job to use coercive government power to reallocate the slices.

The only real quandary is whether Bernie’s sincere demagoguery is more disturbing or less disturbing than Hillary’s hypocritical attacks on the top 1 percent.

Since I mentioned that the left’s rhetoric is anti-empirical, let’s look at the evidence.

I’ve previously shared very detailed IRS data showing that the so-called rich pay a hugely disproportionate share of the tax burden.

Let’s augment that analysis by perusing some data on income mobility.

Writing for Money, Chris Taylor explains that America is not a land of dynastic wealth.

…70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy. …When I asked financial planners why…second- and third-generation heirs turn out to be so ham-handed, the answers were surprisingly frank. A sampling: “Most of them have no clue as to the value of money or how to handle it.” “Generation Threes are usually doomed.” “It takes the average recipient of an inheritance 19 days until they buy a new car.”

But you don’t have to examine several generations to recognize that American society still has a lot of income mobility.

Tami Luhby looks at how people move up and down the income ladder during their lives.

The Top 1% is often considered an exclusive, monolithic group, but folks actually rise up into it and fall out of it quite often. …Some 11% of Americans will join the Top 1% for at least one year during their prime working lives (age 25 to 60), according to research done by Thomas Hirschl, a sociology professor at Cornell University. But only 5.8% will be in it for two years or more. As for holding onto this status for at least 10 years? Only a miniscule 1.1% of Americans are this fortunate. “Affluence is dynamic, said Hirschl… “The 1% really isn’t the 1%. People move around a lot.”

The same is true for the super-rich, the upper-middle class, and the poor.

The IRS looked at how frequently the same Top 400 taxpayers appeared on the list over a 22-year period ending in 2013. Some 72% ranked that high for just one year. Only 3% were listed for a decade or more. …While just over half of Americans reach the Top 10% at least once in their careers, only 14% stay in it for a decade or more, Hirschl found. …On the flip side, it’s not uncommon for Americans to spend some time at the bottom of the heap. Some 54% of Americans will be in or near poverty for at least one year by their 60th birthday, Hirschl said.

Here’s a table of numbers for those who like digging into the data.

Now let’s shift back toward public policy.

The good news (relatively speaking) is that the politics of envy don’t seem to work very well. This polling data finds that most Americans do not support higher taxes (presumably from the rich) to impose more equality.

And when you combine these numbers with the polling data I shared back in 2012, I’m somewhat comforted that the American people aren’t too susceptible to the poison of class warfare.

Let’s close with some ideological bridge building.

I certainly don’t share the same perspective on public policy as Cass Sunstein since the well-known Harvard law professor leans to the left.

But I think he makes an excellent observation in his column for Bloomberg. Smart leftists should focus on how to help the poor, not demonize the rich.

Bernie Sanders and Hillary Clinton have been operating within the terms set by Top 1 Percent progressivism. …For Top 1 Percent progressives, the accumulation of riches at the very top is what gets the juices flowing. They prioritize much higher taxes on top-earners, more aggressive regulation of Wall Street, restrictions on the compensation of chief executives, and criminal prosecution of those responsible for the financial crisis. Top 1 Percent progressivism emphasizes the idea of fairness — but it’s nevertheless a politics of outrage, animated by at least a trace of envy.  It’s as if “millionaires and billionaires” were the principal problem facing America today.

Sunstein correctly says the focus should be helping the less fortunate.

Bottom 10 Percent progressives  are not  enthusiastic about concentrations of wealth. But that’s not what keeps them up at night. Their focus is on deprivation and lack of opportunity. They’re motivated by empathy for people who are suffering, rather than outrage over unjustified wealth. They want higher floors for living standards, and do not much care about lower ceilings.

So far, so good.

I’ve also argued that our goal should be reducing poverty, not punishing success.

This is why I want pro-growth tax reform, a smaller government, and less suffocating red tape.

Unfortunately, Prof. Sunstein then wanders into very strange territory when it comes to actual policy. He actually endorses the utterly awful economic “bill of rights” proposed by one of America’s worst presidents.

Their defining document is one of the 20th century’s greatest speeches, delivered by Franklin Delano Roosevelt in 1944, in which he called for a Second Bill of Rights, including the right to a decent education, the right to adequate medical care and food, and the right to “adequate protection from the economic fears of old age, sickness, accident, and unemployment.”

If you think I’m exaggerating about FDR being an awful President, click here.

And if you want more information about FDR’s terrible “bill of rights,” click here.

So I like his diagnosis of why the left is wrong to fixate on hating success.

But he needs to look at real-world evidence so he can understand that free markets and small government are the right prescription for prosperity.

P.S. Here’s my video listing five arguments against class-warfare taxation.

There’s a lot of material in a short period of time, though I think the most disturbing part occurs at about 4:30. What sort of person would actually want to impose tax policy that is so punitively destructive that the government doesn’t collect any additional revenue?!?

Remember when I wrote about a week ago that I was somewhat optimistic about entitlement reform?

Well, given what just happened in New Hampshire, I must have been smoking crack. It would now be more accurate to say something will happen with entitlements, but it will be deform rather than reform.

That’s because a Bernie Sanders nomination victory followed by a win in November might pave the way for a massive expansion of government. Much of this would be a result of a single-payer healthcare scheme (oh, and don’t forget that the Republican victor in New Hampshire also has endorsed government-run healthcare).

Now that we have to take Senator Sanders seriously, let’s investigate his agenda.

Holman Jenkins of the Wall Street Journal is not a fan of the Vermont Senator’s statism.

His socialism is farcical in a country that can’t afford the entitlements it already has. …Mr. Sanders, far from being a radical departure, is merely a perfection of what Democrats have offered since the Clinton era, namely denial. Ignore the problem. If forced to acknowledge it, insist there’s no problem because the rich will pay. In the meantime, savage every reform proposal as an attack on “unmet needs.” Collect the political rents from serving as defender of every spending interest in our overcommitted republic. …Bernie…, for all his exotic pretenses, is just another machine Democrat.

I think Holman nails it. Sanders’ socialism is just a gimmick. He just a standard-issue redistributionist, and he doesn’t even have any idea of how to finance those empty promises.

Like many other leftists, Sanders presumably knows that “taxing the rich” doesn’t work because they can alter their behavior.

As Europe demonstrates, the only way to finance large government is to have big tax burdens on ordinary people.

Yes, Sanders endorses a few tax hikes on the middle class, but mostly he relies on unicorns and fairy dust.

Consider, for instance, his very prominent proposal for a single-payer health system. Avik Roy of Forbes digs into the details.

In Sanders’ eight-page campaign white paper, entitled “Medicare for All,” the self-described “democratic socialist” outlines his plan’s core principles. The plan would effectively abolish the private health insurance industry… Berniecare would also abolish cost-sharing by patients; i.e., no co-pays, deductibles, or coinsurance payments, and minimal premiums. …Berniecare would also abolish cost-sharing by patients; i.e., no co-pays, deductibles, or coinsurance payments, and minimal premiums.

And what would all this cost?

Citing estimates prepared by Gerald Friedman, an economist retained by the Sanders campaign, Avik finds the numbers very unconvincing.

…even by Friedman’s own optimistic projections about what single-payer health care could save, Berniecare would increase federal spending by $28.3 trillion over ten years. If Friedman is wrong, and the plan fails to reduce the growth of health care spending, it would result in $32.7 trillion in new federal spending. The Congressional Budget Office projects that total federal spending from 2017 to 2026, under current law, will exceed $51 trillion. So, under Friedman’s rosy scenario, Sanders’ health care plan would increase federal spending by an astounding 55 percent. If the promised savings fail to materialize, it would increase federal spending by 64 percent—or more.

That’s a huge expansion in the burden of government, even by Washington standards.

But Avik may be an optimist.

Also writing for Forbes, Professor Chris Conover of Duke thinks the spending increase would be even larger.

the actual cost of the Sanders health plan will be at least 40% more than he claims. In the worst case, it will be 49% higher….In short, the Sanders health plan would require a 71% increase in federal spending over the next decade. …everyone with even a passing knowledge of economics knows that if you lower the cost of something, demand for it will increase.

Based on a RAND Corporation study, he looks at behavioral responses.

So the empirical question is how much of an increase in demand to expect from this expansion in coverage. …The HIE demonstrated convincingly that among those with “free” health of the sort being proposed by Senator Sanders–i.e., zero copays or deductibles–health spending was 32% higher compared to those who had been randomly assigned to a cost-sharing plan having no deductible but required patients to pay 25% of every bill up to a maximum out-of-pocket limit of $1,000 (about $1,972 in 2016 dollars. …the RAND study showed the actual figure will be more than 10 times that amount. Correcting this error adds $12 trillion to the cost of the Sanders plan (whoops!).

In effect, Conover is generating more accurate numbers based on dynamic analysis (in the same way advocates of dynamic scoring try to fix mistakes in revenue estimates that assume no behavioral responses).

He includes a pie chart is his column so readers can get a sense of proportion.

By the way, guess what? All the new spending will mean lots of new taxes.

…the actual increase in federal taxes required by the Sanders plan is $28 trillion over 10 years, not the $13.8 trillion originally estimated by Prof. Friedman. When we further adjust this figure to more realistically account for higher demand due to moral hazard, the figure comes to $36.3 trillion

Yet if you look at all the new taxes proposed by Senator Sanders (including those designed to finance other expansions of government), the total is nowhere near $28 trillion or $36 trillion.

So when you look at this horrifying list, which the Washington Examiner estimates is a 47 percent increase in the tax burden, keep in mind that the actual increase would be larger and more pervasive.

And we shouldn’t forget that Senator Sanders wants lots of spending in other areas, not just government-run healthcare.

So everything you’ve already read is actually the best-case scenario.

P.S. These images (here, here, and here) tell you everything you need to know about socialism/statism vs markets/liberty.

We have good news and bad news.

The good news is that President Obama has unveiled his final budget.

The bad news is that it’s a roadmap for an ever-growing burden of government spending. Here are the relevant details.

  • The President wants the federal budget to climb by nearly $1.2 trillion over the next five years.
  • Annual spending would jump by an average of about $235 billion per year.
  • The burden of government spending would rise more than twice as fast as inflation.
  • By 2021, federal government outlays will consume 22.4% of GDP, up from 20.4% of economic output in 2014.

I guess the President doesn’t have any interest in complying with Mitchell’s Golden Rule, huh?

While all this spending is disturbing (should we really step on the accelerator as we approach the Greek fiscal cliff?), the part of this budget that’s really galling is the enormous tax increase on oil.

As acknowledged in a report by USA Today, this means a big tax hike on ordinary Americans (for what it’s worth, remember that Obama promised never to raise their taxes).

Consumers will likely pay the price for President Obama’s proposed $10 tax per-barrel of oil, an administration official and a prominent analyst said Thursday. Energy companies will simply pass along the cost to consumers, Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks gas prices nationwide, said in an interview with USA TODAY. ….a 15-gallon fill-up would cost at least $2.76 more per day.  It would also affect people who use heating oil to warm their homes and diesel to fill their trucks.

Isn’t that wonderful. We’ll pay more to fill our tanks and heat our homes, and we’ll also pay more for everything that has oil as an input.

While middle-class consumers will see a big hit on their wallet, the Washington Post explains that Obama wants the new tax revenue to fund an orgy of special-interest spending.

…the tax would raise about $65 billion a year when fully phased in. …The administration said it would devote $20 billion of the money raised to expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize the nation’s freight system; and expand the Transportation Investment Generating Economic Recovery program launched in the 2009 economic stimulus bill to support local projects. …The budget would also use roughly $10 billion per year in revenues for shifting how local and state governments design regional transportation projects. Obama would also propose investing just over $2 billion per year in “smart, clean vehicles” and aircraft.

More railway money pits and Solyndra-style boondoggles? Gee, what could go wrong?

By the way, the Administration is claiming that the big new energy tax won’t really hurt our pocketbooks because oil prices have been falling. Here are parts of a story by the Washington Examiner.

President Obama said the oil supply glut that has forced prices down to about $30 a barrel makes his proposal to levy a $10 per-barrel tax on crude oil timely. …the White House appears to be of the view that consumers would have an easier time paying it during record low prices.

Gee, how thoughtful of them.

But is anybody under the illusion that the politicians in Washington will repeal the tax when energy prices rise?

Anybody? Bueller?

Here’s one last gem. As cited by the Los Angeles Times, the President offered this pithy statement.

“Rather than subsidize the past, we should invest in the future,” Obama said during his weekly Saturday address.

Now think about what he’s saying. Obama wants us to believe that the absence of a tax today and in the past is actually a subsidy!

Not that we should be surprised. Our friends on the left have a strange habit of arguing that we’re getting a subsidy when we’re allowed to keep our own money. Indeed, they even have a concept called “tax expenditures” that is based on that perverse notion.

P.S. The folks at Politico have a story about Obama’s plan, and there’s a bit of speculation about how it could become an issue for Hillary Clinton in the 2016 presidential race.

…the proposal could be particularly awkward for Hillary Clinton, who has embraced most of Obama’s policies but has also vowed to oppose any tax hikes on families earning less than $250,000 a year.

I think this analysis is absurd.

Hillary will promise all through the campaign that she opposes tax hikes on everyone other than the rich. But then, just like Obama, she’ll break that promise if she gets to the White House.

P.P.S. Lest anyone think I’m taking a partisan jab at Hillary because she’s a Democrat, keep in mind that I’m terrified that Republicans may decide (not withstanding their “dead on arrival” comments) to like Obama’s scheme. After all, many of them last year were very tempted by gas tax hikes to fund more pork-barrel spending.

P.P.P.S. And what’s really depressing is that I explained just last month that it would be very simple to shrink the relative burden government (and also balance the budget very quickly if that’s what you care about) if the federal budget “only” grew by the rate of inflation.

P.P.P.P.S. One final comment is that I might be tempted to accept an oil tax in exchange for the abolition of a tax – perhaps the death tax or capital gains tax – that collects a similar amount of revenue.

But I’d have two condition: First, the net result has to be a tax system that is less destructive to prosperity. Second, I’d have to be convinced that the swap wouldn’t backfire, with politicians somehow winding up with more power and/or money when the dust settles (which has been my concern about the Rand Paul and Ted Cruz plans to impose a value-added tax, even though their plans theoretically would produce a much less destructive tax system).

P.P.P.P.P.S. Oops, several people have reminded me that I forgot to include predictions for New Hampshire. These are only worth what you’re paying for them (in other words, nothing).

Trump  31
Kasich  17
Bush     12
Rubio   11
Cruz     10
Christie  7
Fiorina   5
Carson   4

Sanders   57
Clinton    42

Given what he did to expand Medicaid dependency in Ohio, I’m not sure I’m happy about Kasich’s strong showing. On the other hand, he played a key role in the spending restraint of the 1990s.

Since Hillary and Bernie are two peas in a pod, I have no strong thoughts about that race.

Taxpayers don’t like coughing up big amounts of money so other people can choose not to work.

And they really get upset when welfare payments are so generous that newcomers are encouraged to climb in the wagon of government dependency.

This has an effect on the immigration debate in the United States. Most Americans presumably are sympathetic to migrants who will boost per-capita GDP, but there is legitimate concern about those who might become wards of the state.

Welfare migration also has become a big issue in Europe.

Reuters has a report on efforts by the U.K. government to limit and restrict the degree to which migrants from other E.U. nations can take advantage of redistribution programs.

Cameron says he needs a pact to curb benefits for new migrant workers from EU countries… Proposals to allow British authorities to withhold in-work benefits for up to four years from EU citizens moving to work in Britain are under intense scrutiny.

You can understand why Cameron feels pressure to address this issue when you read horror stories about foreigners coming to England and living comfortable lives at taxpayer expense.

This isn’t just a controversy in Britain.

The U.K.-based Guardian has a story on support for such measures in Austria.

The Austrian foreign minister, Sebastian Kurz,…would not only call on the chancellor, Werner Faymann, to vote in favour of Cameron’s “emergency brake” on migrants’ benefits, but also to adopt the measure in Austria as soon as possible. …”Those who don’t pay into the system will get fewer benefits or none at all,” Kurz told the newspaper Kronen Zeitung. “We should embrace that principle if we want to guarantee that our welfare state remains affordable and attractive for top talent.” …he also supported Cameron’s call for the UK to be allowed to stop paying child benefit to EU migrants whose children live abroad.

European politicians are right to be worried. There’s evidence even from Sweden that welfare programs lure migrants into dependency.

And studies of American data show that excessive levels of redistribution can be at least a partial magnet for welfare recipients.

Here are some of the findings from a 2005 scholarly article by Professor Martin Bailey of Georgetown University.

…the results also indicate that welfare benefits exert a nontrivial effect on state residential choice. …the welfare migration hypothesis does not require welfare to exert a dominant effect, only a real effect. And here, the results provide strong, robust indications that the effect is real. …the results imply that migration may discourage states from providing high welfare benefits because such generosity attracts and retains potential welfare recipients.

Professor Bailey then found in a 2007 academic study that states understandably impose some restraints on welfare spending because of concerns that excessive benefits will lure more dependents.

Whether states keep welfare benefits low in order to prevent in-migration of benefit-seeking individuals is one of the great questions in the study of federalism. …This article develops a model which…suggests that competition on redistributive programs does…constrain spending to be less than what the states would spend if migration were not a concern.

This makes sense, and it echoes the findings of a study I wrote about in 2012 by some German economists.

Simply stated, you get better policy when governments compete.

But that doesn’t mean Cameron and other European politicians are doing the right thing. Instead of limiting handouts just for migrants, they should be lowering redistribution payments for everybody, including natives.

After all, European nations (like many American states) have elaborate redistribution systems that often make dependency more attractive than work.

Indeed, the United Kingdom has a more generous package of handouts that almost every other European nation.

The bottom line is that it’s a bit hypocritical (and in some cases perhaps even racist) for Cameron and others to target welfare for migrants without also addressing the negative impact of similar payments for natives.

P.S. To give British politicians credit, there have been some recent positive steps to reduce welfare dependency by cutting back on handouts.

P.P.S. In any event, Americans shouldn’t throw stones because we live in a glass house based on our foolish laws that shower refugees with initiative-sapping handouts.

When I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and economics.

The ethical argument is about the desire for a fair system that neither punishes people for being productive nor rewards them for being politically powerful. As is etched above the entrance to the Supreme Court, the law should treat everyone equally.

The economic argument is about lowering tax rates, eliminating double taxation, and getting rid of distorting tax preferences.

Today, let’s focus on the importance of low tax rates. More specifically, let’s look at why it’s important to have a low marginal tax rate, which is the rate that applies when people earn more income.

Here’s the example I sometimes use in my remarks. Imagine a taxpayer who earns $50,000 and pays $10,000 in tax.

With that information, we know the taxpayer’s average tax rate is 20 percent. But this information tells us nothing about incentives to earn more income because we don’t know the marginal tax rate that would apply if the taxpayer was more productive and earned another $5,000.

Consider these three simple scenarios with wildly different marginal tax rates.

  1. The tax system imposes a $10,000 annual charge on all taxpayers (sometimes referred to as a “head tax”). Under this system, our taxpayer pays that tax, which means the average tax rate on $50,000 of income is 20 percent. But the marginal tax rate would be zero on the additional $5,000 of income. In this system, the tax system does not discourage additional economic activity.
  2. The tax system imposes a flat rate of 20 percent on every dollar of income. Under this system, our taxpayer pays that tax on every dollar of income, which means the average tax rate on $50,000 of income is 20 percent. And the marginal tax rate would also be 20 percent on the additional $5,000 of income. In this system, the tax system imposes a modest penalty on additional economic activity.
  3. The tax system has a $40,000 personal exemption and then a 100 percent tax rate on all income about that level. Under this system, our taxpayer pays $10,000 of tax on $50,000 of income, which means an average tax rate of 20 percent. But the marginal tax rate on another $5,000 of income would be 100 percent. In this system, the tax system would destroy incentives for any additional economic activity.

These examples are very simplified, of course, but they accurately show how systems with identical average tax rates can have very different marginal tax rates. And from an economic perspective, it’s the marginal tax rate that matters.

Remember, economic growth only occurs if people decide to increase the quantity and/or quality of labor and capital they provide to the economy. And those decisions obviously are influenced by marginal tax rates rather than average tax rates.

This is why President Obama’s class-warfare tax policies are so destructive. This is why America’s punitive corporate tax system is so anti-competitive, even if the average tax rate on companies is sometimes relatively low.

And this is why economists seem fixated on lowering top tax rates. It’s not that we lose any sleep about the average tax rate of successful people. We just don’t want to discourage highly productive investors, entrepreneurs, and small business owners from doing things that result in more growth and prosperity for the rest of us.

We’d rather have the benign tax system of Hong Kong instead of the punitive tax system of France. Now let’s look at a real-world (though very unusual) example.

Writing for Forbes, a Certified Public Accountant explains why Cam Newton of the Carolina Panthers is guaranteed to lose the Super Bowl.

Not on the playing field. The defeat will occur when he files his taxes.

Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? …Newton is looking at a tax bill more than twice as much, which will swallow up his entire Super Bowl paycheck, win or lose, thanks to California’s tops-in-the-nation tax rate of 13.3%.

You may be wondering why California is going to pillage Cam Newton since he plays for a team from North Carolina, but there is a legitimate “nexus” for tax since the Super Bowl is being playing in California.

But it’s the level of the tax and marginal impact that matters. More specifically, the tax-addicted California politicians impose taxes on out-of-state athletes based on how many days they spend in the Golden State.

Before we get into the numbers, let’s do a quick review of the jock tax rules… States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year.

Now let’s look at the tax implication for Cam Newton.

If the Panthers win the Super Bowl, Newton will earn another $102,000 in playoff bonuses, but if they lose he will only net another $51,000. The Panthers will have about 206 total duty days during 2016, including the playoffs, preseason, regular season and organized team activities (OTAs), which Newton must attend or lose $500,000. Seven of those duty days will be in California for the Super Bowl… To determine what Newton will pay California on his Super Bowl winnings alone, …looking at the seven days Newton will spend in California this week for Super Bowl 50, he will pay the state $101,600 on $102,000 of income should the Panthers be victorious or $101,360 on $51,000 should they lose.

So what’s Cam’s marginal tax rate?

The result: Newton will pay California 99.6% of his Super Bowl earnings if the Panthers win. Losing means his effective tax rate will be a whopping 198.8%. Oh yeah, he will also pay the IRS 40.5% on his earnings.

In other words, Cam Newton will pay a Barack Obama-style flat tax. The rules are very simple. The government simply takes all your money.

Or, in this case, more than all your money. So it’s akin to a French-style flat tax.

Some of you may be thinking this analysis is unfair because California isn’t imposing a 99.6 percent or 198.8 percent tax on his Super Bowl earnings. Instead, the state is taxing his entire annual income based on the number of days he’s working in the state.

But that’s not the economically relevant issue. What matters if that he’ll be paying about $101,000 of extra tax simply because the game takes place in California.

However, if the Super Bowl was in a city like Dallas and Miami, there would be no additional tax.

The good news, so to speak, is that Cam Newton has a contract that would prevent him from staying home and skipping the game. So he basically doesn’t have the ability to respond to the confiscatory tax rate.

Many successful taxpayers, by contrast, do have flexibility and they are the job creators and investors who help decide whether states grow faster and stagnate. So while California will have the ability to pillage Cam Newton, the state is basically following a suicidal fiscal policy.

Basically the France of America. And that’s the high cost of high marginal tax rates.

Whenever there’s a fight over raising the debt limit, the political establishment gets hysterical and makes apocalyptic claims about default and economic crisis.

For years, I’ve been arguing that this Chicken-Little rhetoric is absurd. And earlier this week I testified about this issue before the Oversight and Investigations Subcommittee of the House Financial Services Committee.

By the way, when I first showed up, my placard identified me as Ms. Mitchell.

Since I work at a libertarian think tank, I reckon nobody would object if I wanted to change my identity. But since I’m the boring rather than adventurous kind of libertarian, I guess it’s good that I wound up being Dr. Mitchell.

More important, here’s some elaboration and background links to some of the information from my testimony.

America’s long-run fiscal problem isn’t debt. That’s just a symptom. The real challenge is a rising burden of government spending, largely because of demographic change and poorly designed entitlement programs.

Measured as a share of economic output, the tax burden already is above historical levels. Moreover, taxes are projected to rise even further, so there is zero plausible evidence for the notion that America’s future fiscal crisis is the result of inadequate tax revenue.

International bureaucracies such as the IMF, BIS, and OECD show America in worse long-run shape than Europe, but the U.S. is actually in a better position since a spending cap easily would prevent the compounding levels of debt that are driving the terrible long-run outlook in the United States.

It’s good to have debt limit fights today if such battles enhance the possibility of averting a future Greek-style economic calamity.

Arguments against using the debt limit as an action-forcing event usually are based on the bizarre claim that an inability to borrow more money would cause a default and wreck the “full faith and credit” of the United States. Nonsense. Treasury would be able to avoid default in the absence of a higher debt limit for the simple reason that tax receipts are far greater than what’s needed to pay interest on the debt.

This last point is worth some extra attention. I’ve been arguing for years that debt limit fights are harmless since there’s no risk of default. I even explained to the Senate Budget Committee a few years ago that it would be easy for the Treasury Department to “prioritize” payments to ensure that bondholders would never be adversely impacted.

The Obama Administration routinely denied that it was sufficiently competent to engage in “prioritization” and even enlisted the then-Fed Chairman Ben Bernanke to dishonestly fan the flames of economic uncertainty.

Well, thanks to the good work of the Subcommittee on Oversight and Investigations, we now have a report outlining how the White House was prevaricating. Simply stated, of course there were and are contingency plans to prioritize in the event of a standoff on the debt limit.

By the way, I didn’t get the chance to mention it in my oral testimony, but my full written testimony addressed the silly assertion that any delay in a government payment is somehow a “default.”

I will close by noting the utterly disingenuous Administration tactic of trying to…make it seem as if delaying payments of things like crop subsidies and Medicaid reimbursements is somehow equivalent to default on interest payments.

One final point. Let’s imagine that we’re four years in the future and political events somehow have given us a Republican president and a Democratic Congress. Don’t be surprised if the political parties then reverse their positions and the GOPers argue for “clean” debt limits and make silly claims about default and Democrats argue the opposite.

That’s why I’m glad I’m at the Cato Institute. I can simply tell the truth without worrying about partisanship.

P.S. Here are some jokes about the debt limit, and you can find some additional humor on the topic here and here.

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