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Archive for May 30th, 2013

I’ve shared some bizarre horror stories about adults being victimized by anti-gun fanaticism, including the Washington, DC, man who got fined $1,000 for saving a child’s life and a British man who got arrested for finding a gun and turning it over to the police.

But I get more worried about the future of the country when I read reports of children being subjected to this kind of politically correct nonsense.

Consider, for instance, these absurd details from a local news report.

Lego gunA Massachusetts kindergartener has been given detention and could be suspended from the bus after bringing a Lego-sized gun to school last week. …the incident happened on an Old Mill Pond Elementary School bus in Palmer last week. A 6-year-old had the toy gun, which is slightly larger than a quarter, on the bus and it was seen by another student, who alerted the bus driver. The boy’s mother, Mieke Crane, said her son had to write a letter of apology to the driver, was given detention and could be temporarily suspended from the bus.

Reading that passage, I don’t know whether to be more angry with the bratty tattle-tale kid who told the bus driver, or with the bus driver who obviously must have informed the school.

Both of them could use some serious counseling.

But that’s just part of the story.

The school sent home a letter to parents explaining what happened, stressing no gun was on the bus and there was never any danger. “(The driver) said he caused quite a disturbance on the bus and that the children were traumatized,” Crane told WGGB.

A letter to parents about a tiny plastic toy gun?!? Are the bureaucrats in this school so under-worked that they have time to waste on such nonsense? If I was a parent in this school district, I would put my kids in a private school.

Especially if it’s true that “children were traumatized” by a piece of Lego. I wouldn’t want to take the risk that wimpiness and poor cognitive skills could be transmitted by proximity to my kids (perhaps causing them to need “emotional support” animals in college).

By the way, this is not an isolated example. To get depressed about the future of the country, read these posts about children being exposed to foolish thinking.

Stories like this make me wonder whether I should emigrate, though the rest of the world tends to be in worse shape so the moral of the story is that we need to save the United States from the brainless (and overpaid) bureaucrats who are trying to ruin our children.

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As a long-time advocate of tax reform, I’m not a fan of distortionary loopholes in the tax code. Ideally, we would junk the 74,000-page internal revenue code and replace it with a simple and fair flat tax – meaning one low rate, no double taxation, and no favoritism.*

The right kind of tax reform would generate more growth and also reduce corruption in Washington. Politicians no longer would have the ability to create special tax breaks for well-connected contributors.

But we won’t get to the right destination if we have the wrong map, and this is why a new report about “tax expenditures” from the Congressional Budget Office is so disappointing.

As you can see from this excerpted table, CBO makes the same mistake as the Tax Policy Center and assumes that there should be double taxation of income that is saved and invested. As such, they list IRAs and 401(k)s as tax expenditures, even though those provisions merely enable people to avoid being double-taxed.

Likewise, the CBO report assumes that there should be double taxation of dividends and capital gains, so provisions to guard against such destructive policies also are listed as tax expenditures.

CBO Tax Expenditure List

The CBO report says that tax expenditures will total about $12 trillion over the next 10 years, but about one-third of that amount (which I’ve marked with a red X) don’t belong on the list.

By the way, at least the Tax Policy Center has an excuse for putting its thumb on the scale and issuing a flawed estimate of tax expenditures. It’s a project of the Brookings Institution and Urban Institute, both of which are on the left side of the political spectrum. So it’s hardly a surprise that they use a benchmark designed to promote punitive tax policy.

But what’s CBO’s excuse?

To be fair, at least CBO admitted in the report that there’s a different way of seeing the world.

…tax expenditures are measured relative to a comprehensive income tax system. If tax expenditures were evaluated relative to an alternative tax system—for instance, a comprehensive consumption tax, such as a national retail sales tax or a value-added tax—some of the 10 major tax expenditures analyzed here would not be considered tax expenditures. For example, because a consumption tax would exclude all savings and investment income from taxation, the exclusion of net pension contributions and earnings would be considered part of the normal tax system and not a tax expenditure.

But admitting the existence of another approach doesn’t let CBO off the hook. At the very least, the bureaucracy should have produced a a parallel set of estimates for tax expenditures assuming no double taxation. That basic competence and fairness.

By the way, the Government Accountability Office is worse than CBO. When GAO did a report on corporate tax expenditures, that bureaucracy didn’t even acknowledge that there was an alternate way of looking at the data.

*Actually, the ideal approach would be to dramatically reduce the burden of government spending, shrinking the size and scope of the federal government back to what the Founding Fathers had in mind. Under that system, there presumably wouldn’t be a need for any broad-based tax.

P.S. This new report is not even close to being the worst thing produced by CBO. The bureaucrats on several occasions have asserted that higher taxes are good for growth, even to the point of implying that the growth-maximizing tax rate is 100 percent! And CBO is slavishly devoted to Keynesian economics, notwithstanding several decades of evidence that you can’t make an economy richer by taking money out of one pocket and putting it in another pocket.

Yet for inexplicable reasons, Republicans failed to deal with CBO bias back when they were in charge.

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