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Archive for the ‘Republicans’ Category

Fundamental tax reform such as a flat tax should accomplish three big goals.

The good news is that almost all Republicans believe in the first two goals and at least pay lip services to the third goal.

The bad news is that they nonetheless can’t be trusted with tax reform.

Here’s why. Major tax reform is based on the assumption that achieving the first two goals will lower tax revenue and achieving the third goal will generate tax revenue. A reform plan doesn’t have to be “revenue neutral,” of course, but politicians would be very reluctant to vote for a package that substantially reduced tax revenue. So serious proposals have revenue-raising provisions that are roughly similar in magnitude to the revenue-losing provisions.

Here’s the problem.   Notwithstanding lip service, Republicans are not willing to go after major tax loopholes like the healthcare exclusion. And that means that they are looking for other sources of revenue. In some cases, such as the proposal in the House plan to put debt and equity on a level playing field, they come up with decent ideas. In other cases, such as the border-adjustment tax, they come up with misguided ideas.

And some of them are even talking about very bad ideas, such as a value-added tax or carbon tax.

This is why it would be best to set aside tax reform and focus on a more limited agenda, such as a plan to lower the corporate tax rate. I discussed that idea a few weeks ago on Neil Cavuto’s show, and I echoed myself last week in another appearance on Fox Business.

Lest you think I’m being overly paranoid about Republicans doing the wrong thing, here’s what’s being reported in the establishment press.

The Hill is reporting that the Trump Administration is still undecided on the BAT.

The most controversial aspect of the House’s plan is its reliance on border adjustability to tax imports and exempt exports. …the White House has yet to fully embrace it. …If the administration opts against the border-adjustment proposal, it would have to find another way to raise revenue to pay for lowering tax rates.

While I hope the White House ultimately rejects the BAT, that won’t necessarily be good news if the Administration signs on to another new source of revenue.

And that’s apparently under discussion.

The Washington Post last week reported that the White House was looking at other ideas, including a value-added tax and a carbon tax… Even if administration officials are simply batting around ideas, it seems clear that Trump’s team is open to a different approach.

The Associated Press also tries to read the tea leaves and speculates whether the Trump Administration may try to cut or eliminate the Social Security payroll tax.

The administration’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.

I’m not a big fan of fiddling with the payroll tax, and I definitely worry about making major changes.

Why? Because it’s quite likely politicians will replace it with a tax that is even worse.

This would require a new dedicated funding source for Social Security. The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses. This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates.

Last but not least, the New York Times has a story today on the latest machinations, and it appears that Republicans are no closer to a consensus today than they were the day Trump got inaugurated.

…it is becoming increasingly unlikely that there will be a simpler system, or even lower tax rates, this time next year. The Trump administration’s tax plan, promised in February, has yet to materialize; a House Republican plan has bogged down, taking as much fire from conservatives as liberals… Speaker Paul D. Ryan built a tax blueprint around a “border adjustment” tax… With no palpable support in the Senate, its prospects appear to be nearly dead. …The president’s own vision for a new tax system is muddled at best. In the past few months, he has called for taxing companies that move operations abroad, waffled on the border tax and, last week, called for a “reciprocal” tax that would match the import taxes other countries impose on the United States.

The report notes that Trump may have a personal reason to oppose one of the provisions of the House plan.

Perhaps the most consequential concern relates to a House Republican proposal to get rid of a rule that lets companies write off the interest they pay on loans — a move real estate developers and Mr. Trump vehemently oppose. Doing so would raise $1 trillion in revenue and reduce the appeal of one of Mr. Trump’s favorite business tools: debt.

From my perspective, the most encouraging part of the story is that the lack of consensus may lead Republicans to my position, which is simply to cut the corporate tax rate.

With little appetite for bipartisanship, many veterans of tax fights and lobbyists in Washington expect that Mr. Trump will ultimately embrace straight tax cuts, with some cleaning up of deductions, and call it a victory.

And I think that would be a victory as well, even though I ultimately want to junk the entire tax code and replace it with a flat tax.

P.S. In an ideal world, tax reform would be financed in large part with spending restraint. Sadly, Washington, DC, isn’t in the same galaxy as that ideal world.

P.P.S. To further explain why Republicans cannot be trusted, even if they mean well, recall that Rand Paul and Ted Cruz both included VATs in the tax plans they unveiled during the 2016 presidential campaign.

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On major economic issues, it does not appear that Republican control of Washington makes much of a difference.

  • Efforts to repeal Obamacare have bogged down because GOPers are willing to deal with the fiscal wreckage of that law, but don’t seem very comfortable about undoing the interventions and regulations that have caused premiums to skyrocket.
  • Efforts to cut taxes and reform the tax code don’t look very promising because House Republicans have proposed a misguided border-adjustment tax and the White House seems hopelessly divided on how to proceed.
  • Efforts to restrain government spending haven’t gotten off the ground. A full budget is due next month, but it’s not overly encouraging that Trump’s proposed domestic cuts would be used to expand the Pentagon’s budget.

Let’s see whether we get a different story when we examine regulatory issues.

We’ll start with some good news? Well, sort of. It seems the United States has the largest and 4th-largest GDPs in the world.

You may think that makes no sense, but this is where we have to share some bad news on the regulatory burden from the Mercatus Center.

Economic growth has been reduced by an average of 0.8 percent per year from 1980 to 2012 due to regulatory accumulation. Regulations force companies to invest less in activities that enhance productivity and growth, such as research and development, as companies must divert resources into regulatory compliance and similar activities. …Compared to a scenario where regulations are held constant at levels observed in 1980, the study finds that the difference between the economy we are in and a hypothetical economy where regulatory accumulation halted in 1980 is approximately $4 trillion. …The $4 trillion dollars in lost GDP associated with regulatory accumulation would be the fourth largest economy in the world—larger than major countries like Germany, France, and India.

By the way, this data from Mercatus gives me an opportunity to re-emphasize the importance of even small variations in economic growth. It may not make that much difference if the economy grows 0.8 percent faster or slower in one year.

But, as just noted, a loss of 0.8 percent annual growth over 32 years has been enormously expensive to the U.S. economy.

The Competitive Enterprise Institute has a depressing array of data on America’s regulatory burden. Here’s the chart that grabbed my attention.

And here’s a video on the burden of red tape from the folks at CEI.

Who deserves the blame for this nightmare of red tape?

The previous president definitely added to the regulatory morass. The Hill reported last year on a study by the American Action Forum.

The Obama administration issues an average of 81 major rules, those with an economic impact of at least $100 million, on a yearly basis, the study found. That’s about one major rule every four to five days, or, as the American Action Forum puts it, one rule for every three days that the federal government is open. “It is a $2,294 regulatory imposition on every person in the United States,” wrote Sam Batkins, director of regulatory policy at the American Action Forum, who conducted the study.

And there was a big effort to add more red tape in Obama’s final days, as noted by Kimberly Strassel of the Wall Street Journal.

Since the election Mr. Obama has broken with all precedent by issuing rules that would be astonishing at any moment and are downright obnoxious at this point. This past week we learned of several sweeping new rules from the Interior Department and the Environmental Protection Agency, including regs on methane on public lands (cost: $2.4 billion); a new anti-coal rule related to streams ($1.2 billion) and renewable fuel standards ($1.5 billion).

As you might expect, the net cost of Obama’s regulatory excess is significant. Here’s some of what the Washington Examiner wrote during the waning days of Obama’s tenure.

According to new information from the White House, finally released after a two year wait, the total burden of federal government paperwork is more than 11.5 billion man-hours a year. That’s almost 500 million man-days, or 1.3 million man-years. More importantly, it’s 35 hours every person in the country (on average) has to spend doing federal paperwork every year, on average. …Time is money, and paperwork time alone costs the country almost $2 trillion a year, or about 11 percent of GDP.

But it’s not solely Obama’s fault. Not even close.

Both parties can be blamed for this mess, as reported by the Economist.

The call to cut red tape is now an emotive rallying cry for Republicans—more so, in the hearts of many congressmen, than slashing deficits. Deregulation will, they argue, unleash a “confident America” in which businesses thrive and wages soar, leaving economists, with their excuses for the “new normal” of low growth, red-faced. Are they right?

They may be right, but they never seem to take action when they’re in charge.

Between 1970 and 2008 the number of prescriptive words like “shall” or “must” in the code of federal regulations grew from 403,000 to nearly 963,000, or about 15,000 edicts a year… The unyielding growth of rules, then, has persisted through Republican and Democratic administrations… The endless pile-up of regulation enrages businessmen. One in five small firms say it is their biggest problem, according to the National Federation of Independent Business.

Though I would point out that President Reagan was the exception to this dismal rule.

That being said, who cares about finger pointing? What matters is that the economy is being stymied by excessive red tape.

So what can be done about this? President Trump has promised a 2-for-1 deal, saying that his Administration will wipe out two existing regulations for every new rule that gets imposed.

Susan Dudley opines on this proposal, noting that Trump hasn’t put any meat on the bones.

Like pebbles tossed in a stream, each individual regulation may do little economic harm, but eventually the pebbles accumulate and like a dam, may block economic growth and innovation. A policy of removing two regulations for every new one would provide agencies incentives to evaluate the costs and effectiveness of those accumulated regulations and determine which have outlived their usefulness. Mr. Trump’s statement doesn’t provide details on how this new policy would work.

Ms. Dudley points out, however, that other nations have achieved some success with similar-sounding approaches.

…his team could look to experiences in other countries for insights. The Netherlands, Canada, Australia and the United Kingdom have all adopted similar requirements to offset the costs of new regulations by removing or modifying existing rules of comparable or greater effect. …The Netherlands program established a net quantitative burden reduction target that reduced regulatory burdens by 20% between 2003 and 2007. It is currently on track to save €2.5 billion in regulatory burden between 2012 and 2017 by tying the introduction of new regulations “to the revision or scrapping of existing rules.” Under Canada’s “One-for-One Rule,” launched in 2012, new regulatory changes that increase administrative burdens must be offset with equal burden reductions elsewhere. Further, for each new regulation that imposes administrative burden costs, cabinet ministers must remove at least one regulation. Similarly, Australia’s policy is that “the cost burden of new regulation must be fully offset by reductions in existing regulatory burden.” The British began with a “One-in, One-out” policy, requiring any increases in the cost of regulation to be offset by deregulatory measures of at least an equivalent value. In 2013, it moved to “One-in, Two-out” (OITO) and more recently to a “One-in, Three-out” policy in an effort to cut red tape by £10 billion.

The bottom line is that progress will depend on Trump appointing good people. And on that issue, the jury is still out.

The legislative branch also could get involved.

In a column for Reason, Senator Rand Paul explained that the REINS Act could make a big difference.

…13 of the 15 longest registers in American history have been authored by the past two presidential administrations (Barack Obama owns seven of the top eight, with George W. Bush filling in most of the rest)…federal lawmakers should pass something called the REINS Act—the “Regulations from the Executive in Need of Scrutiny Act. The REINS Act would require every new regulation that costs more than $100 million to be approved by Congress. As it is now, agencies can pass those rules unilaterally. Such major rules only account for about 3 percent of annual regulations, but they are the ones that cause the most headaches for individuals and businesses. …the REINS Act did pass the House on four occasions during the Obama administration. Lack of support in the Senate and the threat of a presidential veto kept it from ever reaching Obama’s desk.

But would it make a difference if Congress had to affirm major new rules?

Given how agencies will lie about regulatory burdens, it wouldn’t be a silver bullet.

But,based on the hysterical opposition from the left, I’m betting the REINS Act would be very helpful.

REINS would fundamentally alter the federal government in ways that could hobble federal agencies during periods when the same party controls Congress and the White House — and absolutely cripple those agencies during periods of divided government. Many federal laws delegate authority to agencies to work out the details of how to achieve relatively broad objectives set by the law itself. …REINS, however, effectively strips agencies of much of this authority.

That sounds like good news to me. If the crazies at Think Progress are this upset about the REINS Act, it must be a step in the right direction.

Let’s close with a bit of evidence that maybe, just maybe, Republicans will move the ball in the right direction. Here are some excerpts from a Bloomberg story.

The White House estimates it will save $10 billion over 20 years by having rescinded 11 Obama-era regulations under a relatively obscure 1996 law that lets Congress fast-track repeal legislation with a simple majority. …In all, the law has been used to repeal 11 rules, with two more awaiting the president’s signature… About two dozen measures with CRA’s targeting them remain, but because the law can only be used on rules issued in the final six months of the previous administration, Congress only has only a few more weeks to use the procedure.

Before getting too excited, remember that the annual cost of regulation is about $2 trillion and the White House is bragging about actions that will reduce red tape by $10 billion over two decades. Which means annual savings of only $500 million.

Which, if my math is right, addresses 0.025 percent of the problem.

I’ll take it, but it should be viewed as just a tiny first step on a very long journey.

P.S. The Congressional Review Act was signed into law by Bill Clinton. Yet another bit of evidence that he was a surprisingly pro-market President.

P.P.S. If you want some wonky analysis of regulation, I have some detailed columns here, here, here, here, here, here, and here.

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As part of an otherwise very good tax reform plan, House Republicans have proposed to modify the corporate income tax so that it becomes a “destination-based cash-flow tax.”

For those not familiar with wonky inside-the-beltway tax terminology, there are three main things to understand about this proposal.

  • First, the tax rate on business would drop from 35 percent to 20 percent. This is unambiguously positive.
  • Second, it would replace depreciation with expensing, which is a very desirable change that would eliminate a very counter-productive tax on new investment outlays. This is basically what makes the plan a “cash-flow” tax.
  • Third, any income generated by exports would be exempt from tax but the 20-percent tax would be imposed on all imports. These “border-adjustable” provisions are what makes the plan a “destination-based” tax.

I’m a big fan of the first two provisions, but I’m very hostile to the third item.

I don’t like it because I worry it sets the stage for a value-added tax. I don’t like it because it is designed to undermine tax competition. I don’t like it because it has a protectionist stench and presumably violates America’s trade commitments. I don’t like it because that part of the plan only exists because politicians aren’t willing to engage in more spending restraint. And I don’t like it because politicians should try to reinvent the wheel when we already know the right way to do tax reform.

Heck, I feel like the Dr. Seuss character who lists all the ways he would not like green eggs and ham. Except I can state with complete certainty I wouldn’t change my mind if I was suddenly forced to take a bite of this new tax.

Today, I’m going to augment my economic arguments by noting that the plan also is turning into a political liability. Here are some excerpts from a news report in the Wall Street Journal about opposition in the business community.

A linchpin of the House Republicans’ tax plan, an approach called “border adjustment,” has split Republicans and fractured the business world into competing coalitions before a bill has even been drafted. …There is also global uncertainty: Other countries may retaliate, either by border-adjusting their corporate taxes or by challenging the U.S. plan at the World Trade Organization as too tilted toward American producers.

And The Hill reports that grassroots organizations also are up in arms.

Americans for Prosperity is stepping up its efforts to advocate against a proposal from House Republicans to tax imports and exempt exports, as lawmakers are increasingly raising concerns about the proposal. …AFP has hundreds of volunteers and staff who are making phone calls about the proposal. The group has about 100 meetings set up with Congress members and their staff for next week, while Congress is in recess.

Meanwhile, the Economist reports that the plan is causing uncertainty around the world.

To offset a border-adjusted tax of 20%—the rate favoured by House Republicans—the greenback would need to rise fully 25%, enough to destabilise emerging markets burdened with dollar-denominated debts. If the dollar stayed put and wages and prices rose 25% instead, the Federal Reserve would have to decide how to respond to an unprecedented surge in inflation. Why tolerate such disruption?

Holman Jenkins of the Wall Street Journal has a devastating take on the issue.

Like a European value-added tax, its cost would be deeply hidden in the price of goods, thus easily jacked up over time. Also, compared with the current tax structure, businesses would see less incentive to move abroad in search of lower taxes, eroding a useful pressure on politicians to be fiscally sane. And because the tax would alter the terms of trade, it would be expected to lead to a sharp increase in the dollar. U.S. holders of foreign assets would suffer large paper losses. Since many foreigners borrow in dollars too, a global debt crisis might follow. The tax might also violate World Trade Organization rules, inviting other countries to impose punitive taxes on U.S. exports.

Last but not least, John Tamny outlines some of the political downsides at Real Clear Markets.

…the House of Representatives…is aggressively promoting a…tax on imports. …When we get up and go to work each day, our work is what we exchange for what we don’t have, including voluminous goods and services produced for us around the world.  …Party members are proudly seeking a tax on our work. …Only the “stupid” Party could come up with something so injurious to every American, to the American economy, and to its growth-focused brand.  But that’s where we are at the moment.  The Party that attained majorities with its tax cutting reputation is aggressively seeking to shed its growth brand through the introduction of tax hikes meant to give politicians even more of what we the people produce.  If so, the majority Party can kiss its majority goodbye.  It will have earned its minority status.

For what it’s worth, I think John overstates the case against the plan. The additional revenue from border-adjustable tax provision would be used to cut taxes elsewhere. Heck, the plan is actually a significant net tax cut.

But John is right when you look at the issue through a political lens. If the DBCFT actually began to move through the legislative process, opponents would start running commercials about the “GOP scheme to impose new consumption tax on Americans.” Journalists (most of whom dislike Republicans) would have a field day publicizing reports about the “GOP plan to raise average family tax bill by hundreds of dollars.”

Such charges would be ignoring the other side of the equation, of course, but that’s how politics works.

All of which brings me back to one of my original points. We already know that the flat tax is the gold standard of tax reform. And we already know the various ways of moving the tax code in that direction.

My advice is that Republicans abandon the border-adjustable provision and focus on lowering tax rates, reducing double taxation, and cutting back on loopholes. Such ideas are economically sounder and politically safer.

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Donald Trump is, to be charitable, a rather unique and colorful presidential candidate. He seems incapable of letting a day pass without doing something that makes the political establishment shudder with disdain.

Since I’m not a fan of the status quo in Washington, I have no objection to ruffling the feathers of DC insiders. That being said, it’s important to look at why Trump elicits such hostility.

The bottom line is that the enemy of your enemy isn’t always your friend.

In other words, my ideal candidate almost surely would be hated by the crowd in DC, but the hostility would be based on the candidate’s agenda to shrink the size and scope of the federal government, not because the candidate makes offensive and/or controversial statements.

Heck, I’d be willing to forgive a certain amount of distasteful behavior in a politician if that was the price of getting a genuine reformer. For what it’s worth, I’m even willing to tolerate a politician’s misbehavior if he simply allows good reform to happen, which is why I now have a certain after-the-fact fondness for Bill Clinton’s presidency.

As a policy wonk, I don’t spend much time wondering whether Trump is a good or stable person. I’m more focused on the policies he would push (or simply allow) if he wound up in the White House.

On that basis, I’m not brimming with optimism. Here’s some of what I wrote for the U.K.-based Guardian, when asked to share my assessment about the possible economic policy agenda of a Trump Administration. I start by saying we are in uncharted territory.

Normal presidential candidates put forth proposals that usually have been vetted by policy experts. They also generally have track records from their time as elected officials. …Trump is not a normal candidate.

I then point out that Trump is all over the map on policy.

…his views on major economic issues are eclectic. He promises a big tax cut, but it’s probably not very serious since he has no concomitant plan to restrain the growth of government spending. He threatens to impose steep tariffs, which would risk triggering a trade war, but he claims protectionism would merely be a stick to extort concessions from trading partners. ….He makes noises about potentially defaulting on debt but then pivots and says the debt can be financed by printing money. …either approach causes angst among most economists.

My conclusion (which is nothing more than a guess) is that the overall burden of government would increase with Trump in the White House.

With all this uncertainty about what Trump really believes, it’s impossible to guess which policies will change and how the economy would be impacted. For what it’s worth, libertarians generally fear that Trump ultimately would govern as a left-leaning populist.

By the way, this is also why I was not a fan of Richard Nixon, Gerald Ford, George H.W. Bush, Bob Dole, George W. Bush, John McCain, or Mitt Romney.

Simply stated, non-ideological Republicans (whether pseudo-populists like Trump or career politicians) don’t challenge the conventional wisdom of Washington. And that generally results in a go-along-to-get-along approach to policy, which means continued growth of government.

Which is why I’ve pointed out that Democrats in the White House sometimes result in less damage.

By the way, my jaundiced assessment of Trump does not imply that Hillary Clinton is any better. She also has personal foibles that – in a normal society – would disqualify her from holding public office.

And I also wrote for the Guardian about her approach to economic policy, which is basically the same direction as Bernie Sanders but at a slower pace.

…she would move public policy incrementally to the left. Some tax increases, but not giant tax increases. Some new regulations, but not complete government takeovers of industry. A bigger burden of government spending, but not turning America into Greece. An increase in the minimum wage, but not up to $15 an hour. More subsidies for higher education, but not an entitlement for everyone. And some restrictions on trade, but no sweeping reversal of the pro-trade consensus that has existed since the second world war.

In other words, become Greece at 55 miles per hour rather than Bernie’s desire to become Greece at 90 miles per hour.

P.S. Since our topic today is so depressing, let’s end with some humor.

We’ll start with this PG-13 pro-Gary Johnson comparison of the candidates.

This shows libertarians can be funny, even though I think it’s wrong to characterize Trump as being on the right (at least from an economic perspective).

Here’s an amusing comparison of a teenage boy and Donald Trump.

I’ll have to add this to my limited collection of Trump humor, most of which is at the bottom of this post.

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Yesterday, I shared some of the highlights (and lowlights) of the Democratic Party platform.

It wasn’t a fun task. The Democrats put together a rat’s nest of taxes, spending, cronyism, and red tape, so my blood pressure probably went crazy as I read the document. Crazy Bernie Sanders may have lost the war for the nomination, but it seems that he mostly won the battle over the platform.

The plank about letting states be in charge of marijuana policy was the only part of the platform that I actually liked (even though I personally disapprove of drug use).

Though it mostly doesn’t matter what’s in party platforms. As I pointed out yesterday, platforms tend to be ideological statements to please party activists. Politicians generally don’t care about their respective party platforms, and they definitely don’t allow their behavior to be constrained by platform language.

With that important caveat in mind, let’s now review the GOP platform. And I’ll use the same approach that I used when looking at the Democrat’s document. I’ll provide a short excerpt and then give my two cents.

Here are some of the main economic issues addressed (or bungled) by Republicans.

We believe the Constitution was written not as a flexible document, but as our enduring covenant.

That’s true, but why aren’t GOPers defunding most of the federal government if that’s what they really believe?

Because of the vital role of religious organizations, charities, and fraternal benevolent societies in fostering generosity and patriotism, they should not be subject to taxation and donations to them should remain deductible.

Endorsing the deduction for charitable contributions isn’t an optimistic sign for those of us who support fundamental tax reform.

To guard against hypertaxation of the American people in any restructuring of the federal tax system, any value added tax or national sales tax must be tied to the simultaneous repeal of the Sixteenth Amendment, which established the federal income tax.

This may be my favorite part of the GOP platform. Hopefully it will discourage Rand Paul and Ted Cruz from including a VAT if they run for president again and put forth tax reform plans.

We propose to level the international playing field by lowering the corporate tax rate to be on a par with, or below, the rates of other industrial nations.

Hard to argue with that plank, though it raises the question of why Republicans haven’t enacted this change already.

We endorse the recommendation of the National Commission on Fiscal Responsibility and Reform, as well as the current Administration’s Export Council, to switch to a territorial system of taxation so that profits earned and taxed abroad may be repatriated for job-creating investment here at home.

Territorial taxation is good policy, so amen.

Republicans believe that no financial institution is too big to fail. We support legislation to ensure that the problems of any financial institution can be resolved through the Bankruptcy Code.

This is the right policy. Too bad many GOPers ignored this bit of wisdom and voted for TARP.

We propose to phase out the federal transit program.

They should phase out the entire Department of Transportation, but this would be a good start.

…we oppose a further increase in the federal gas tax.

That’s good, though repealing the tax would be even better.

Amtrak is an extremely expensive railroad for the American taxpayers, who must subsidize every ticket. The federal government should allow private ventures to provide passenger service in the northeast corridor.

All this sounds good, but it’s a bit vacuous. There should be an explicit commitment to end Amtrak subsidies.

We reaffirm our intention to end federal support for boondoggles like California’s high-speed train to nowhere.

A welcome commitment, though it should be extended to all transportation projects.

We should reduce the occupational licensing laws that shut untold millions of potential workers out of entrepreneurial careers.

This is largely a problem caused by state and local governments, but it’s nonetheless nice to see a statement of support for much-needed change.

We must overturn the regulatory nightmare, created by the Dodd-Frank law, for the community banks and savings and loans that provide nearly half of all small-business loans and over three-quarters of all agricultural loans.

Maybe I’m being paranoid, but where’s the language explicitly calling for repeal of the Dodd-Frank bailout bill?

The taxpayers spend an average of $35,000 a year per employee on non-cash benefits, triple the average non-cash compensation of the average worker in the private sector. Federal employees receive extraordinary pension benefits and vacation time wildly out of line with those of the private sector. We urge Congress to bring federal compensation and benefits in line with the standards of most American employees.

Federal bureaucrats are overcompensated, so it goes without saying (though I’m still glad they said it) that costs should be contained.

We must impose firm caps on future debt… A strong economy is one key to debt reduction, but spending restraint is a necessary component that must be vigorously pursued.

Capping debt is fine. Capping spending would be far better.

The Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank and Asset Reporting Requirements result in government’s warrantless seizure of personal financial information without reasonable suspicion or probable cause. …FATCA not only allows “unreasonable search and seizures” but also threatens the ability of overseas Americans to lead normal lives. We call for its repeal and for a change to residency-based taxation for U.S. citizens overseas.

Unambiguous opposition to FATCA is great, but it’s also big news that the GOP wants territorial taxation for labor income.

We call on Congress and state legislatures to enact reforms to protect law-abiding citizens against abusive asset forfeiture tactics.

Civil asset forfeiture is abusive by definition. Repeal the laws entirely.

The Constitution gives the federal government very few powers, and they are specifically enumerated… In obedience to that principle, we condemn the current Administration’s unconstitutional expansion into areas beyond those specifically enumerated.

This is true, but it’s too bad Republicans aren’t serious about this plank.

We oppose any carbon tax.

Good. It’s never a good idea to give politicians a new source of tax revenue.

The Republican path to fiscal sanity and economic expansion begins with a constitutional requirement for a federal balanced budget.

At the risk of being repetitive, spending caps are better.

We support the following test: Is a particular expenditure within the constitutional scope of the federal government? If not, stop it. Has it been effective in the past and is it still absolutely necessary? If not, end it. Is it so important as to justify borrowing, especially foreign borrowing, to fund it? If not, kill it.

If GOPers were serious about this part of the platform, this would put them on record to abolish 90 percent of the federal government.

Impose no changes for persons 55 or older. Give others the option of traditional Medicare or transition to a premium-support model designed to strengthen patient choice, promote cost-saving competition among providers, and better guard against the fraud and abuse that now diverts billions of dollars every year away from patient care.

To their credit (and notwithstanding Trump’s unserious approach to the issue), Republicans still embrace the right type of Medicare reform.

We applaud the Republican governors and state legislators who have undertaken the hard work of modernizing Medicaid. We will give them a free hand to do so by block-granting the program without strings.

It’s also good to see support for the right kind of Medicaid reform.

…all options should be considered to preserve Social Security. As Republicans, we oppose tax increases and believe in the power of markets to create wealth and to help secure the future of our Social Security system.

This is vacuous language, though at least it provides an indirect endorsement of personal retirement accounts. Though I don’t want “all options” on the table since that could be construed to include tax hikes.

We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment.

What?!? This is the most disappointing and economically illiterate part of the GOP platform.

…the Constitution gives [the federal government] no role in education.

True, so why don’t Republicans explicitly call for abolishing the Department of Education?

We agree with the four dissenting judges of the Supreme Court: “In our view, the entire Act before us is invalid in its entirety.” It must be removed and replaced with an approach based on genuine competition, patient choice, excellent care, wellness, and timely access to treatment.

Nice, though remember that repealing Obamacare is just the first step if you want a genuine market-based healthcare sector.

We propose to end tax discrimination against the individual purchase of insurance and allow consumers to buy insurance across state lines.

I like the latter part about breaking down the government-imposed barriers to interstate commerce, but I worry the part about tax discrimination is so vague it could be used to expand tax preferences when the real goal should be to get rid of the healthcare exclusion.

The FDA has slowly but relentlessly changed into an agency that more and more puts the public health at risk by delaying, chilling, and killing the development of new devices, drugs and biologics that can promote our lives and our health.

This is correct, but it would be nice to see specific reforms.

We commend those states that have passed Right to Try legislation, allowing terminally ill patients the right to try investigational medicines not yet approved by the FDA. We urge Congress to pass federal legislation to give all Americans with terminal illnesses the right to try.

This is a very good idea. If I ever have a deadly illness, I’ll want the freedom to roll the dice in hopes a new medicine or procedure will work.

Two grave problems undermine the rule of law on the federal level: Over-criminalization and over-federalization. In the first case, Congress and federal agencies have increased the number of criminal offenses in the U.S. Code from 3,000 in the early 1980s to more than 4,500 today. That does not include an estimated 300,000 regulations containing criminal penalties. …We urge Congress to codify the Common Law’s Rule of Lenity, which requires courts to interpret unclear statutes in favor of a defendant.

If bigwigs like Hillary Clinton can get away with violating very clear-cut national security laws because she didn’t intend to do damage to the nation, then ordinary people surely should get the benefit of the doubt as well when they inadvertently violate some complicated law or regulation.

…we oppose any form of Global Tax.

Amen. Now let’s see if Republicans put our money where their mouths are and defund pro-tax international bureaucracies such as the Organization for Economic Cooperation and Development.

Let’s wrap this up. There are more policies that could be addressed, but this column already is too long.

The bottom line is that the platform has many good policies. Heck, if I though GOP politicians actually planned to pursue the agenda outlined in the document, I might consider becoming a Republican.

But does anybody think the average Republican politician even knows what is in the GOP platform? More importantly, does anyone think that Donald Trump has any commitment to the policies in the platform?

So now perhaps you can understand why advocates of small government sympathize with Uncle Sam in this cartoon.

Is it Tweedledee and Tweedledum, or the other way around?

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I will always have fond feelings for Playboy, though not for the stereotypical reason.

My appreciation for the magazine is largely based on the fact that I got a very nice honorarium from the German version back in the 1990s for writing an assessment of Bill Clinton’s likely approach to economic policy (confession: he turned out to be much better than I predicted).

Unfortunately, I’ve forgotten almost all of the German I learned in high school, so I can’t read the translated version of the article that appeared in the magazine.

Now Playboy has done something else that I appreciate, putting together a very clever matrix showing what Democrats, Republicans, Libertarians, and Greens think about various policy issues.

It’s obviously satire, but it’s very clever and effective because it does a good job of capturing stereotypes from each group (just like this poster showing 24 types of libertarians).

As you can see, the “libertarian chicken” obviously provided the answers for the third column.

In addition to mind-your-own-business Libertarians, Playboy gives us abortion-über-alles Democrats, elitist Republicans, and fuzzy-headed Greens. A bit of truth in all those caricatures.

So kudos to them for mocking all parties equally. Comedy Central probably wouldn’t be losing so many viewers if it also took this even-handed approach.

P.S. If you like libertarian-oriented humor (both pro and con), then click here and here.

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The good thing about being nonpartisan is that I can freely criticize (or even praise) policy makers without giving any thought to whether they have an R or D after their name.

That doesn’t mean Republicans and Democrats are the same, at least with regards to rhetoric. The two big political parties in the United States ostensibly have some core beliefs. And because of that, it is sometimes very revealing to identify deviations.

Democrats supposedly believe the rich should pay higher taxes and that low-tax jurisdictions should be persecuted, yet many Democrat bigwigs utilize tax havens.

Republicans supposedly believe in smaller government, yet many of them decide to get rich by lobbying to expand the size and scope of Washington.

Democrats supposedly believe there’s a big gender pay gap, but Obama’s top economic adviser said such numbers are fake and Hillary gave higher pay to men in her office.

Let’s now add to the list.

The IRS has stonewalled and treated Congress with contempt. The bureaucrats have disregarded the law to advance Obama’s hard-left agenda. They have used their power to help Obama’s reelection campaign. And IRS employees even donate lots of money to Democrats.

Given all this, you would think Republicans would be doing everything possible to punish this rogue bureaucracy. Even if only because of self interest rather than principles.

Yet GOPers decided, as part of their capitulation on spending caps (again!), to boost the IRS’s budget. I’m not joking. The Hill has a report with the sordid details.

The spending bill…provides an increase in funding to the Internal Revenue Service, a rare win for an agency that has been on the outs with congressional Republicans. The $1.1 trillion omnibus provides an additional $290 million for the IRS, an increase of 3 percent over the last fiscal year.

What’s especially discouraging is that Congress was on track to reduce the IRS’s bloated budget.

…the outcome for the IRS in the omnibus could have been far worse. A bill advanced by the House Appropriations Committee earlier this year that would have slashed IRS funding by $838 million, while a bill passed by the Senate Appropriations Committee would have reduced funding by $470 million. Instead, the spending package gives the IRS a nearly $300 million bump.

This is yet another piece of evidence that budget deals crafted behind closed doors inevitably produce bad numbers and bad policy.

And it’s certainly another sign that Republicans truly are the Stupid Party.

Just in case you think I’m being unfair to either GOPers or the IRS, let’s look at some recent developments. Here are the best parts of an editorial on unseemly IRS behavior from the Washington Examiner.

President Obama’s IRS repeatedly los[es] hard drives loaded with data related to scandals at the agency. To lose one might be regarded as suspicious happenstance; to lose two looks like conspiracy. The most famous case is that of Lois Lerner, whose division became notorious for targeting conservative groups applying for nonprofit status. Her computer hard drive malfunctioned before that scandal broke, around the same time Congress was looking for information on a separate IRS targeting scheme aimed at conservative donors. …The newest case of IRS hard drive trouble happened last April, but came to light only this month. …the IRS has notified the Justice Department that it erased a hard drive after being ordered not to do so by a federal judge. In this case, the missing communications are those of a former IRS official named Samuel Maruca in the Large Business and International division. He is believed to have been among the senior IRS employees who made the unusual and possibly illegal decision in May 2014 to hire the outside law firm Quinn Emanuel to help conduct an audit of Microsoft Corporation.

And here’s some shocking (or maybe not so shocking) information from the Daily Caller. The IRS’s new ethics chief (wow, there’s an oxymoron) has a track record of illegally destroying records.

The new head of the Internal Revenue Service’s (IRS) ethics office once oversaw the illegal shredding of documents sought by the federal tax agency’s inspector general (IG), and allegedly retaliated on the colleague he believed snitched on him about it.

Yup, he sounds like the kind of guy who deserves a bigger budget.

Let’s close with some very good advice from the Washington Examiner.

In the nearly three years since the targeting scandal was revealed, it has become clear that it was just a symptom of a much deeper problem at the IRS — a culture that lacks accountability, rewards failure, and persecutes the innocent. …it needs a thorough housecleaning, not…bonuses.

Too bad Republicans decided the entire IRS deserved a big bonus.

P.S. From my archives, here are some examples of the bureaucrats who will benefit from a bigger IRS budget.

P.P.P.S. And since we’re recycling some oldies but goodies, here’s my collection of IRS humor, including a new Obama 1040 form, a death tax cartoon, a list of tax day tips from David Letterman, a cartoon of how GPS would work if operated by the IRS, an IRS-designed pencil sharpener, two Obamacare/IRS cartoons (here and here), a sale on 1040-form toilet paper (a real product), a song about the tax agency, the IRS’s version of the quadratic formula, and (my favorite) a joke about a Rabbi and an IRS agent.

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