Feeds:
Posts
Comments

Posts Tagged ‘Democrats’

I wrote last year about Democrats favoring certain tax breaks that overwhelmingly benefit the rich.

The state and local tax deduction is an obvious example, but Democrats also are big fans of the tax exemption for municipal bond interest and other provisions that primarily reduce tax liabilities for upper-income taxpayers.

One interpretation is that Democrats don’t like the rich, but they’re even more interested in enabling more taxes and spending by state and local governments.

But I’m also beginning to wonder whether Democrats are becoming pro-rich (or less anti-rich) for the simple reason that upper-income people are a key constituency.

For instance, they control all 20 of the richest congressional districts in America, as explained by Terry Jeffrey.

Each of the nation’s 20 wealthiest congressional districts, when measured by median household income, …held by Democrats… Seven are in or near New York City. Five are in the San Francisco Bay Area. Four are in suburbs of Washington, D.C. Two are in Southern California. One is near Boston. And another — the only one in the middle of the continent — sits west of Chicago.

And John Fund reports that Biden is overwhelmingly the candidate of Wall Street.

Joe Biden is scooping up the lion’s share of big-money contributions from finance leaders on Wall Street. People in the financial industry have given well over $50 million to back Biden, according to the nonpartisan Center for Responsive Politics, compared with some $10 million for Trump. Biden has benefited from large contributions from leaders at Blackstone, JPMorgan Chase, The Carlyle Group, and Kohlberg Kravis Roberts, among other firms.

Ramesh Ponnuru opines that Democrats also are the party of the near-rich.

…the Democrats’ solicitude for the interests of the affluent in this case may not be the aberration it appears to be. It reflects the party’s long-term movement up the socioeconomic ladder — and shows why Democrats may find it impossible to reclaim their historical identity as a working-class party. …In the 2008 election, Republican John McCain did 11 points better among voters making more than $50,000 a year than among voters making less than that. He did one point better among those with college degrees than those without. By 2016, education had become a sharper dividing line between the parties. Trump did seven points better among those making more than $50,000 than among those making less. He did nine points better among those who lacked college degrees than among those who have them. …distressingly for the left’s true believers, the shift erodes the moral credibility of their historical self-presentation as the champion of the downtrodden.

Democrats are also the party of the Ivy League, based on the revealing data contained in this tweet.

Last but not least, here are some excerpts from a column for Reason, authored by Ira Stoll.

Maybe it’s time to rebrand the Democrats as the party of the rich. …”J.B.” Pritzker…governor of Illinois. Pritzker, an heir to the Hyatt hotel fortune, is worth an estimated $3.2 billion…Edward M. “Ned” Lamont Jr., …Connecticut governor…an heir to the J.P. Morgan banking fortune of his great-grandfather Thomas Lamont…governor of Colorado, Jared Polis, filed financial disclosure forms as a member of the House of Representatives indicating estimated wealth of more than $300 million. …all Democrats. …as a professor of political science at Williams College, Darrel Paul, put it after analyzing wealthy congressional districts, “the big story of the 2018 election is the swing of the rich toward the Democrats.” …Maybe it wouldn’t be a bad thing for the country, though, if wealthy voters do become a swing constituency to be courted by both political parties, rather than a group to be insulted, scapegoated, or taken for granted. …The sweet spot is for politicians to be rich enough that they understand and appreciate wealth creation, but not so rich that they are entirely remote from the reality of ordinary Americans.

Now for my two cents.

Based on what I see when I drive around the rich neighborhoods of Northern Virginia, the reports cited above are accurate. I mostly see Biden signs in the yards of people with multi-million dollar homes. But when I drive to poorer areas of the state, the situation is reversed and Trump signs dominate.

The interesting question is why? What accounts for rich people shifting to the left, especially since Democrats still support a wide range of policies (higher income tax rateshigher capital gains taxeshigher Social Security taxeshigher death taxes, a new wealth tax, etc) that target upper-income taxpayers?

I don’t pretend to know the answer, but here are a few possibilities:

Social issues are more important than economic issues – This is the theory that rich voters care mostly about what candidates think about issues such as abortion, climate, and gay marriage. In other words, they’ll accept higher taxes to get their preferred policies in other areas.

Class identification is more important that economic self-interest – This is the theory that people are very reluctant to break ranks with the prevailing view of their social group. For example, since Trump is viewed as a blowhard by the elite, they must side with Democrats.

Ignorance – This is the theory that rich people want to help the poor, perhaps because they feel guilty about their comfortable lives, and simply don’t understand that the policies pushed by Democrats actually make it harder for the less fortunate to climb the economic ladder.

Republicans are all talk but no (or negative) action – This is the theory that Republicans don’t actually do pro-growth things when they get power (think Nixon, Bush I, and Bush II), so why bother supporting the GOP.

Government-imposed credentialing helps the rich – This is the theory that a range of government-imposed and government-encouraged policies (everything from licensing requirements to degree requirements) create economic advantages for privileged people.

Add your speculation and guesses in the comment section. I’d be interested to see what everyone else thinks.

P.S. I guess we shouldn’t overlook the possibility that rich leftists are simply a bunch of hypocrites who have no intention of abiding by the policies they impose on everyone else.

Read Full Post »

Every so often, I’ll notice a tweet that has some remarkable characteristic.

Today, we’re going to add to this collection.

The Democratic National Committee sent out a tweet back in April that seems like it should have been issued instead by the Libertarian National Committee.

My answer to the DNC’s question is “never.” That’s why I’m a libertarian.

Even when I grudgingly acknowledge that something is a legitimate function of government, I’m never tempted to say or think that “things seem to be going smoothly.”

That’s true when looking at what happens in Washington, what happens in the states, and what happens at the local level.

Needless to say, the DNC wasn’t trying to recruit libertarians. The goal was to condemn Trump’s governing style, specifically with reference to a story about the administration’s chaotic approach to the coronavirus.

And I certainly agree that Trump gives critics plenty of ammunition.

But there are plenty of similar episodes of malfeasance and incompetence during the Obama years. And the Bush years. And in every preceding White House.

The bottom line (as suggested by my collection of “Government in Cartoons“) is that Washington at best is a clumsy oaf. And quite often is a bloated bully.

Read Full Post »

I would like to think that the election results from Super Tuesday signify a rejection of the evil and destructive ideology of socialism. After all, despite promising the most handouts, Bernie Sanders was defeated in most states and quickly went from being the front-runner to a long-shot candidate.

This chart shows how political betting markets have dramatically changed in the past couple of days. Crazy Bernie (in green) has collapsed with Biden (in blue) has skyrocketed.

Moreover, the other explicitly hard-left major candidate, Elizabeth Warren, saw her support collapse even earlier.

Daniel Henninger of the Wall Street Journal opined today on the implications of this week’s political earthquake.

Before the voting began Tuesday it was conventional wisdom…that something called progressivism was on the march in the U.S., sweeping aside decades if not centuries of belief, history and tradition with a new agenda of wokeness, identity politics and socialism. …Guess what? The voters still get the last word. …Progressives, however much they dominate the culture, keep losing big, competitive elections. …Joe Biden, hardly a commanding presence, is a proxy for Democratic voters’ pragmatism and their doubts about Mr. Sanders, socialism and the American left.

By the way, it’s not just that Crazy Bernie got trounced.

As reported by the New York Times, many hard-left congressional candidates also are being rejected.

Ms. Ocasio-Cortez previously suggested that Democrats who were not sufficiently loyal to an emergent brand of progressive politics should have others like her run against them in a primary. She is now suggesting that, exit polling be damned, Mr. Biden’s latest string of successes is because of the strong-arming of corporate lobbyists, something Mr. Sanders has underscored by repeatedly calling Mr. Biden the establishment candidate. But the results speak for themselves. Ms. Ocasio-Cortez threw her weight behind Cristina Tzintzún Ramirez in her Senate primary campaign in Texas to defeat the Democratic Senatorial Campaign Committee’s chosen candidate, M.J. Hegar. Ms. Hegar ended up easily outpacing a crowded Democratic field.

All of this is very encouraging, but I’m still worried.

There are three reasons why I’m not brimming with optimism.

First, as explained by Annie Lowrey for the Atlantic, a non-trivial number of young people are enamored with the evil ideology of socialism.

A striking generational divide has emerged. Older people still see socialism and communism as dangerous, authoritarian political systems, whereas younger people are more likely to see them as economic systems, and to care far less one way or another. For millions of potential voters, the Red Scare is no longer so scary. …The simple passage of time explains a lot. Millions of Millennials and Gen Zers were never exposed to the threats of the Soviet Union; they did not live through the fall of the Berlin Wall… A recent poll conducted by the Victims of Communism Memorial Foundation showed that 36 percent of Millennials have a favorable opinion of communism, as do a quarter of Gen Zers. Roughly half of the members of those two generations have a favorable view of socialism and thinks the government should act as an employer of last resort. One in five Millennials thinks the Communist Manifesto better “guarantees freedom and equality” than the Declaration of Independence and thinks society would be better off if the government abolished private property.

I’ve shared plenty of additional data to confirm this worrisome trend.

Second, older Democrats may not embrace the socialist label, but they have shifted in that direction.

I previously wrote about how even prominent folks on the left agree that Joe Biden is far to the left of both Barack Obama and Hillary Clinton.

This graphic from the New York Times illustrates how the rest of the Democratic establishment (as measured by party platforms) has also veered toward statism.

For what it’s worth, the “Median party” line shows the average position of the world’s other political parties, so the takeaway is that America’s Democrats (and the U.K.’s Labour Party) are now further to the left than some of the world’s socialist parties.

Third, while the Republican Party hasn’t moved to the left based on its platforms, I fear that the GOP isn’t motivated today by a Reagan-style belief in limited government and individual liberty.

It’s not just that Trump is a big spender (and a protectionist). Every major Republican in the post-Reagan era has expanded the burden of government and rejected the principles of classical liberalism.

Read Full Post »

One of the most significant developments in 2020 politics is how Democratic presidential candidates have embraced hard-left economic policies.

Prominent analysts on the left have noted that even Joe Biden, ostensibly the most moderate of the candidates, has a very statist economic platform when compared to Barack Obama.

And “Crazy Bernie” and “Looney Liz” have made radicalism a central tenet of their campaigns.

So where does Michael Bloomberg, the former mayor of New York City, fit on the spectrum?

The New York Times has a report on Bloomberg’s tax plan. Here are some of the key provisions, all of which target investors, entrepreneurs, small business owners, and other high-income taxpayers.

Former Mayor Michael R. Bloomberg of New York unveiled a plan on Saturday that would raise an estimated $5 trillion in new tax revenue… The proposal includes a repeal of President Trump’s 2017 tax cuts for high earners, along with a new 5 percent “surcharge” on incomes above $5 million per year. It would raise capital gains taxes for Americans earning more than $1 million a year and…it would partially repeal Mr. Trump’s income tax cuts for corporations, raising their rate to 28 percent from 21 percent. …Mr. Bloomberg’s advisers estimate his increases would add up to $5 trillion of new taxes spread over the course of a decade, in order to finance new spending on health care, housing, infrastructure and other initiatives. That amount is nearly 50 percent larger than the tax increases proposed by the most fiscally moderate front-runner in the race, former Vice President Joseph R. Biden Jr. …Mr. Bloomberg’s advisers said it was possible that he would propose additional measures to raise even more revenue, depending on how his other domestic spending plans develop.

These are all terrible proposals. And you can see even more grim details at Bloomberg’s campaign website.

Every provision will penalize productive behavior.

But there is a bit of good news.

Though it would be more accurate to say that there’s a partial absence of additional bad news.

Bloomberg hasn’t embraced some of the additional bad ideas being pushed by other Democratic candidates.

It would…maintain a limit on federal deductions of state and local tax payments set under the 2017 law, which some Democrats have pushed to eliminate. …the plan notably does not endorse the so-called wealth tax favored by several of the more liberal candidates in the race, like Senators Elizabeth Warren and Bernie Sanders.

I’m definitely happy he hasn’t embraced a wealth tax, and it’s also good news that he doesn’t want to restore the state and local tax deduction, which encouraged profligacy in states such as California, New Jersey, and Illinois.

It also appears he doesn’t want to tax unrealized capital gains, which is another awful idea embraced by many of the other candidates.

But an absence of some bad policies isn’t the same as a good policy.

And if you peruse his website, you’ll notice there isn’t a single tax cut or pro-growth proposal. It’s a taxapalooza, what you expect from a France-based bureaucracy, not from an American businessman.

To add insult to injury, Bloomberg wants all these taxes to finance an expansion in the burden of government spending.

For what it’s worth, this is my estimate of what will happen to America’s tax burden (based on the latest government data) if Bloomberg is elected and he successfully imposes all his proposed tax increases. We’ll have a more punitive tax system that extracts a much greater share of people’s money.

P.S Take these numbers with a grain of salt because they assume that Bloomberg’s tax increases will actually collect $5 trillion of revenue (which won’t happen because of the Laffer Curve) and that GDP won’t be adversely affected (which isn’t true because there will be much higher penalties on productive behavior).

Read Full Post »

Based on rhetoric, the Democratic Party is committed to a class-warfare agenda.

They want higher income tax rates, higher capital gains taxes, higher Social Security taxes, higher death taxes, a new wealth tax, and many other tax hikes that target upper-income taxpayers.

There are various reasons why they push for these class-warfare tax hikes.

I don’t pretend to know which factor dominates.

But that’s not important because I want to make a different point. Notwithstanding all their rhetoric, Democrats are sometimes willing to shower rich people with tax breaks.

The Wall Street Journal exposes the left’s hypocrisy in the fight over the deduction for state and local taxes.

Democrats have…grown more concentrated in the richest parts of the country. That explains the strange spectacle of a Democratic presidential field running on the most redistributionist agenda in memory even as Democrats in Congress try to expand a tax break for high-earners in the New York City, San Francisco and Los Angeles metropolitan areas. …Coastal Democrats have failed with gimmicks at the state and federal level to eliminate the SALT cap. The latest effort is the Restoring Tax Fairness for States and Localities Act, which passed the House Ways and Means Committee last week. …The bill would raise the SALT deduction cap in 2019 and eliminate it in 2020 and 2021. …The Tax Foundation found the biggest benefit from the unlimited deduction went to households with incomes above $1 million.

A related issue is the federal government’s special tax exemption for interest paid to holders of state and local government bonds.

I explained in 2013 why it’s bad tax policy.

Josh Barro explained the previous year why this tax break is a boon for the rich.

In 2011, 35,000 taxpayers making more than $200,000 a year paid no federal income tax. …61 percent of those avoided tax for the same reason: their income consisted largely of interest on tax-exempt municipal bonds. As Washington looks…to eliminate tax preferences for the wealthy, why not eliminate this exemption? …Nearly all of those bondholders are either for-profit corporations or individuals with high incomes. The higher your tax bracket, the greater the value of the tax preference… muni bonds have an unfortunate feature…subsidies are linked to the interest rate. That means issuers who must pay higher interest rates get more valuable subsidies. Perversely, the worse a municipality’s credit, the greater incentive it is given to borrow more money.

Needless to say, it’s not a good idea to have a tax break that benefits the rich while subsidizing profligate states like New Jersey and Illinois.

In a column for Real Clear Policy, James Capretta analyzes how Democrats are working hard to preserve a big loophole.

The push to get rid of the Cadillac tax is short-sighted for both parties, but particularly for the Democrats. …In its estimate of H.R. 748, CBO projects that Cadillac tax repeal would reduce federal revenue by $200 billion over the period 2019 to 2029, with more than half of the lost revenue occurring in 2027 to 2029. …When examined over the long-term, repeal of the Cadillac tax is likely to be one of the largest tax cuts on record. …If the Cadillac tax is repealed, the government will have less revenue to pay for the spending programs many in the party want to expand. And Republicans will be able to say that it was the Democrats, not them, who paved the way for this particular trillion dollar tax cut.

Not only is it a big tax cut to repeal the Cadillac tax, it’s also a tax cut that benefits the rich far more than the poor.

Here are some distributional numbers from the left-leaning Tax Policy Center. I’ve highlighted in red the most-important column, which shows that the top-20 percent get more than 42 percent of the tax cut while the bottom-20 percent get just 1.2 percent of the benefit.

For what it’s worth, I don’t care whether tax provisions tilt the playing field to the rich or the poor.

I care about good policy.

That’s why I like the Cadillac tax, even though it was part of the terrible Obamacare legislation.

In other words, I think principles should guide policy.

My Democratic friends obviously disagree. They beat their chests about the supposed moral imperative to “soak the rich,” but they’re willing to shower the wealthy with big tax breaks so long as key interest groups applaud.

Read Full Post »

This week featured lots of angst-ridden headlines about the annual budget deficit for the 2019 fiscal year (which ended on September 30) jumping to $984 billion, an increase of more than $200 billion.

For reasons I’ve previously outlined, I don’t lose too much sleep about the level of government borrowing. What’s far more important is the burden of government spending.

Whether the budget is financed by taxes or borrowing, the level of spending is what really matters. Simply stated, that number measures the amount of money that politicians divert from the economy’s productive sector.

That being said, it’s sometimes very illuminating to look at why red ink goes up and down.

So I went to the Treasury Department’s most-recent Monthly Treasury Statement and looked at the raw numbers. What did I find?

Lo and behold, the deficit jumped to $984 billion because outlays are increasing twice as fast as revenue.

Perhaps even more discouraging, the burden of spending is rising more than four times faster than needed to keep pace with inflation.

These are very discouraging numbers, especially when you keep in mind that this is the calm before the storm. Because of poorly designed entitlement programs and an ageing population, our fiscal situation will deteriorate even faster in the future.

Unless there’s much-needed reform.

But I’m not holding out much hope. Trump is a big spender and Congress is filled with big spenders.

Read Full Post »

In a recent interview, I was asked whether all the new spending schemes proposed by Democratic candidates would lead (as has been the case in Europe) to enormous tax increases on the middle class.

The answer is yes, of course.

But most of the candidates are not honest on this issues (with the partial exception of Crazy Bernie). They’re promising – literally – trillions of dollars in added handouts, but their proposed tax increases only cover a tiny fraction of the cost.

Elizabeth Warren may be the most extreme example of this phenomenon.

She’s embraced every possible tax on higher-income taxpayers, including a sure-to-backfire wealth tax. But all of those tax increases wouldn’t come close to financing her spending agenda – even if one makes the heroic assumption that there’s no adverse economic impact and negative revenue feedback.

The Wall Street Journal opined on her absurd approach.

Tuesday’s Democratic debate…most important news was Senator Elizabeth Warren’s determined refusal to say if her plans would require taxes to increase on the middle class. …South Bend mayor Pete Buttigieg…added, accurately, that “no plan has been laid out to explain how a multi-trillion-dollar hole in this Medicare for All plan that Senator Warren is putting forward is supposed to get filled in.” …Senator Klobuchar…said “at least Bernie’s being honest here and saying how he’s going to pay for this and that taxes are going to go up. And I’m sorry, Elizabeth, but you have not said that, and I think we owe it to the American people to tell them where we’re going to send the invoice.” …this illuminates a problem with Ms. Warren’s agenda and her political character. On Medicare for All, everyone agrees that the cost will be at least $32 trillion over 10 years. Ms. Warren could impose her wealth tax, her higher taxes on capital gains, her higher income taxes on the affluent, and she still wouldn’t come close to paying for Medicare for All. And that’s before her plans for new spending entitlements on child care, pre-K education, free college and so much more. The only way to pay for this is to raise taxes on the middle class, which is where the real money is. That’s how government health care is financed in Europe.

But it’s not just the pro-market crowd at the Wall Street Journal that is raising the issue.

Even writers at Vox find it difficult to rationalize Sen. Warren’s evasive math.

Bernie Sanders…acknowledged that…middle-class taxes would have to go up… It was a rare moment when someone running for the Democratic presidential nomination admitted that their spending ambitions would have to be paid for by taxes that touch not just the wealthiest Americans but taxpayers further down the bracket. …Trying to sell a big progessive agenda on the backs of the rich may be popular. But the admission that middle-class taxes may have to go up is an admission that there may not be enough rich people in America to pay for it all. …Warren…indicated last week that she supports…Medicare-for-All… Such a plan would overhaul the entirety of the US health care system with a single-payer system funded through general revenue and debt. Here the promise of a vast welfare state solely funded by new taxes on the rich runs aground.

It’s gotten to the point that some left-leaning economists are scrambling to help square Warren’s circle.

Here are some excerpts from a report in today’s Washington Post, including some of the horrifying tax increases that her advisers are contemplating.

Internal and external economic policy advisers are trying to help Sen. Elizabeth Warren (D-Mass.) design a way to finance a single-payer Medicare-for-all health-care system…her team faces a challenge in crafting a plan that would bring in large amounts of revenue while not scaring off voters with big middle-class tax increases. The proposal could cost more than $30 trillion over 10 years. Complicating matters, she has already committed all of the money she would raise from a new wealth tax, close to $3 trillion over 10 years, to several other ideas… Robert Pollin, a left-leaning economist at the University of Massachusetts at Amherst who has worked with the Warren and Sen. Bernie Sanders (I-Vt.) teams, …suggests…a $600 billion annual “gross receipts” tax on businesses, …a 3.75 percent sales tax on “nonnecessities” that exempts low-income households, to raise an additional $200 billion; and a 0.38 percent tax on wealth above $1 million, which he says would raise the remaining $200 billion. Robert C. Hockett, a Cornell University professor who has also advised Warren and Sanders, said he has urged Warren’s team to propose financing Medicare-for-all in part with a “public premium” that would function similarly to a tax. …Warren’s team has also received recommendations to adopt a “progressive consumption tax”… This plan would raise trillions of dollars.

Wow, a smorgasbord of French-style tax ideas.

Let’s close with a chart from Brian Riedl of the Manhattan Institute.

As you can see, even if you combine all of the class-warfare taxes, they don’t come close to paying the $30 trillion price tag of Medicare for All.

The only good news, so to speak, is that Sen. Warren is a politician. She’s first and foremost interested in winning office and probably isn’t totally serious about actually creating all sorts of new entitlement schemes (just like I don’t particularly believe Republicans who put forth election-year plans for tax reform).

But that’s hardly a comforting observation since there would be “public choice” pressures to adopt at least some bad policy if she got to the White House.

Read Full Post »

I’ve warned (over and over and over again) that supporters of larger government want big tax hikes on ordinary people.

But you don’t have to believe me.

CNN hosted a discussion yesterday with the major Democratic candidates about global warming…oops, I mean climate change…no, sorry, the preferred term is now climate crisis.

Shockingly, something newsworthy actually happened. As reported by the New York Times, most of the candidates expressed support for a big carbon tax that would be especially painful for poor and middle-class taxpayers.

…more than half of the 10 candidates at the forum openly embraced the controversial idea of putting a tax or fee on carbon dioxide… Around the country and the world, opponents have attacked it as an “energy tax” that could raise fuel costs, and it has been considered politically toxic in Washington for nearly a decade. …In addition to proposing $3 trillion in spending on environmental initiatives, Ms. Warren also responded “Yes!” when asked by a moderator, Chris Cuomo, if she would support a carbon tax… Senator Kamala Harris of California, who on Wednesday morning released a plan to put a price on carbon, …calling for outright bans on hydraulic fracturing, or fracking, for oil and gas, and on offshore oil and gas drilling. …Mayor Pete Buttigieg of South Bend, Ind., who also released his climate plan on Wednesday, took the stage declaring his support for a carbon tax… The parade of far-reaching plans on display, ranging in cost from $1.7 trillion to $16.3 trillion… Two other candidates who said they would support carbon pricing, Senator Amy Klobuchar of Minnesota and the former housing secretary Julián Castro.

Interestingly, Crazy Bernie didn’t hop on the bandwagon.

Senator Bernie Sanders of Vermont…is one of the few candidates who has not called for a carbon tax.

In this case, his desire to selectively target upper-income taxpayers presumably is even stronger than his desire to grab more revenue to fund bigger government (and the burden of government would be far bigger under the Green New Deal).

By the way, there was a very interesting admission in the article.

The United States generates almost 25 percent of global economic output, yet our share of carbon emissions is much smaller.

…the United States is the world’s largest historic polluter of greenhouse gases, it today produces about 15 percent of total global emissions.

You would think the climate fanatics would be praising America. But they instead want people to believe the U.S. is worse than Cuba.

Anyhow, let’s return to the main topic of today’s column.

What exactly would it mean for ordinary people if politicians imposed a carbon tax?

The Democrats didn’t offer many specifics last night, so we’ll have to use a proxy estimate. In a column for the Hill, Vance Ginn and Elliott Raia highlight how families would get hit if U.S. politicians followed U.N. suggestions.

…travel…could soon be cost-prohibitive, if the U.N.’s Intergovernmental Panel on Climate Change (IPCC) has its way. …Its recommendation: a carbon tax of as much as $200 per ton of carbon dioxide emissions by 2030 to an astonishing $27,000 per ton by 2100. For America families, this could mean the price of gasoline soaring to $240 per gallon. Remember when we thought $4 per gallon was high? …Regardless of the amount, a carbon tax would…disproportionately hurt the poor and middle class, who pay a higher percentage of their incomes for motor fuel and energy. …Concrete, for example, is perhaps one of the most common carbon-intensive products… At the IPCC rate of $200 per ton of carbon dioxide emissions by 2030, the cost of building with concrete would rapidly rise. …Take a new home of 3,000 square feet. A simple slab foundation (with no basement) could use 100 cubic yards of concrete. Adding a $370 tax per cubic yard for a ton of carbon based on the $200 rate above would mean the cost of that home would likely rise $37,000.

For what it’s worth, the statists at the International Monetary Fund endorsed a $1.40 tax increase on a gallon of gas in America, which was part of a proposal to increases taxes on the average household by more than $5,000.

To be fair, I imagine the Democrats – if ever pressed for specifics – will propose taxes lower than what the U.N. or I.M.F. are suggesting.

That being said, it’s also fair to warn that taxes which start small almost always wind up becoming onerous.

Let’s close with a political observation.

At the risk of stating the obvious, people don’t like being saddled with higher taxes. And, as Sterling Burnett explains, they seem especially hostile to energy-related taxes.

From Alberta to Australia, from Finland to France, and beyond, voters are increasingly showing their displeasure with expensive energy policies imposed by politicians in an inane effort to purportedly fight human-caused climate change. …This is what originally prompted protesters in France to don yellow vests and take to the streets in 2018. They were protesting scheduled increases in fuel taxes, electricity prices, and stricter vehicle emissions controls, which French President Emmanuel Macron had claimed were necessary to meet the country’s greenhouse gas reduction commitments… Also in 2018, in part as a reaction against Canadian Prime Minister Justin Trudeau’s climate policies, global warming skeptic Doug Ford was elected as premier of Ontario, Canada’s most populous province. Ford announced he would end energy taxes imposed by Ontario’s previous premier and would join Saskatchewan’s premier in a legal fight against Trudeau’s federal carbon dioxide tax. …in August 2018, Australian Prime Minister Malcolm Turnbull was forced to resign over carbon dioxide restrictions he had planned… In Finland, …the Finns Party, which made the fight against expensive climate policies the central part of its platform, came out the big winner with the second-highest number of seats in Parliament.

I’ve previously written about taxpayer uprisings in France and Australia.

Perhaps the most relevant data, though, is from the state of Washington. Voters in that left-leaning state rejected a carbon tax in 2018 (after rejecting a different version in 2016).

So maybe Crazy Bernie was being Smart Bernie by not embracing the tax. And Joe Biden also chose not to explicitly back the proposed tax hike.

P.S. The parasitical bureaucrats at the OECD also have endorsed higher energy taxes on the United States.

P.P.S. I don’t have an informed opinion on the degree of man-made warming, but I am highly confident that statists are using the issue to promote bad policies that they can’t get through any other way.

Read Full Post »

Since I’m a policy economist, I rarely comment on political matters.

But I am worried that the Democratic Party is veering too far to the left. Bernie Sanders, an out-of-the-closet socialist is leading the way, followed closely by other leading Democrats with hard-left policy agendas, such as Kamala Harris and Elizabeth Warren.

But not every 2020 candidate is hopping on the socialism bandwagon. Some of the major candidates, such as Joe Biden, have avoided saying anything favorable about socialism.

And two of the candidates have explicitly rejected the poisonous ideology.

Interestingly, they’re both from Colorado.

CNN reports that the former governor, John Hickenlooper. received a very hostile reception when he rejected socialism.

The welcoming cheers 2020 presidential hopeful John Hickenlooper received when he first graced the stage at California’s Democratic Convention quickly crumbled into boos and jeers after he rejected socialism as the answer to Democrats’ problems. “If we want to beat Donald Trump and achieve big progressive goals, socialism is not the answer,” Hickenlooper said to a crowd of more than 4,500 delegates and observers on Saturday.Before he could get finish his next sentence, a chorus of boos…overtook his speech, lasting for more than 30 seconds. …The former Colorado governor is one of 15 Democratic candidates to address the San Francisco crowd, which is known to be home to some of the party’s furthest left progressives.

And, as reported by the Hill, one of the state’s U.S. Senators, Michael Bennet, also condemned socialism for being contrary to American ideals.

Sen. Michael Bennet (D-Colo.), a 2020 presidential hopeful, said on Sunday that his dismissal of socialism as a solution for America is not out of the mainstream for the Democratic Party. “I don’t think I’m out of step,” Bennet told ABC’s “This Week.” “I think we have 230 years of being the longest-lived democracy on the planet. That’s something we need to preserve.” …Bennett made the comments in response to a viral moment in which his fellow Democratic presidential candidate, former Colorado Gov. John Hickenlooper, was booed at the California Democratic Convention over the weekend …Bennet…is on the moderate end of the Democratic primary field.

I hope Joe Biden and other Democrats join Hickenlooper and Bennet.

In my fantasy world, the next Democratic president will turn out to be another Bill Clinton who presides (either intentionally or unintentionally) over an expansion of economic freedom in the United States.

But at the very least, I don’t want the country to take a big step toward statism, which was the mistake the United Kingdom made under Clement Attlee after World War II.

P.S. I realize many Democrats today don’t really have a firm understanding of socialism. Many of them don’t realize it implies government ownershipcentral planning, and price controls. Heck, some of them probably think the market-oriented Nordic welfare states (which have similar levels of economic freedom as the United States) are socialist. Regardless, they definitely want government to get bigger at a faster rate, so I’m hoping they’re not the majority of the Democratic Party.

Read Full Post »

We had an election yesterday in the United States (or, as Mencken sagely observed, an advance auction of stolen goods). Here are five things to keep in mind about the results.

First, the GOP did better than most people (including me) expected.

This tweet captures the zeitgeist of last night.

The Senate results were especially disappointing for the Democrats. It does appear the Kavanaugh fight worked out very well for Republicans.

Second, better-than-expected election news for the GOP does not imply better-than-expected news for public policy. Given Trump’s semi-big-government populism, I fear this tweet is right about the increased risk of a counterproductive infrastructure package and a job-destroying increase in the minimum wage.

For what it’s worth, I think we’ll also get even more pork-filled appropriations spending. In other words, busting the spending caps after already busting the spending caps.

The only thing that might save taxpayers is that Democrats in the House may be so fixated on investigating and persecuting Trump that it poisons the well in terms of cooperating on legislation.

Fingers crossed for gridlock!

Third, there was mixed news when looking at the nation’s most important ballot initiatives.

On the plus side, Colorado voters rejected an effort to replace the flat tax with a discriminatory system (in order to waste even more money on government schools), California voters sensibly stopped the spread of rent control, Washington voters rejected a carbon tax, Florida voters expanded supermajority requirements for tax increases, and voters in several states legalized marijuana.

On the minus side, voters in four states opted to expand the bankrupt Medicaid program, Arizona voters sided with teacher unions over children and said no to expanded school choice, and voters in two states increased the minimum wage.

Fourth, Illinois is about to accelerate in the wrong direction. Based on what happened last night, it’s quite likely that the state’s flat tax will be replaced by a class-warfare-based system. In other words, the one bright spot in a dark fiscal climate will be extinguished.

This will accelerate the out-migration of investors, entrepreneurs, and businesses, which is not good news for a state that is perceived to be most likely to suffer a fiscal collapse. It’s just a matter of time before the Land of Lincoln becomes the land of bankruptcy.

Interesting, deep-blue Connecticut voters elected a Republican governor. Given the state’s horrific status, I suspect this won’t make a difference.

Fifth, Obama was a non-factor. Democrats lost almost every race where he campaigned.

Though I should point out that he deserves credit for trying to have an impact in close races. Many top-level politicians, looking to have a good “batting average,” only offer help to campaigns that are likely to prevail.

That being said, this adds to my hypothesis that Obama was basically an inconsequential president.

Read Full Post »

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?

Read Full Post »

It’s very risky to trust the promises made by politicians.

But at least there’s a potential downside when they break their word. President George H.W. Bush lost the 1992 election, for instances, after violating his read-my-lips, no-tax-hike promise.

So I think it’s useful to get politicians to explicitly commit to good policies, such as the no-tax-increase pledge.

But what about getting language in a party platform? Is that a vehicle for getting good policy, or at least is it a way of blocking bad policy?

For the most part, I don’t think party platforms bind politicians or constrain their behavior. To be sure, I’m happy when platforms embrace policies that I like, but I’m not foolish enough to think that this automatically will translate into better policy after politicians get elected.

For the most part, platforms are a way for politicians to appease the more philosophically inclined people in their parties. So the Democratic platform is generally farther to the left than Democratic politicians and the GOP platform is generally farther to the right than Republican politicians.

With these caveats taken care of, let’s review the proposals and policies in the Democratic platform (I’ll assess the Republican platform tomorrow). I’ve excerpted the items that are noteworthy and I follow each item with a brief observation.

Let’s get started.

Democrats will expand Social Security…[and] will achieve this goal by taxing some of the income of people above $250,000.

This is like stepping on the accelerator while approaching a cliff. In inflation-adjusted dollars, the program’s unfunded liability is a staggering $37 trillion, yet Hillary and her friends want even more spending. And they want to compound the damage with a huge tax increase on investors, entrepreneurs and small-business owners.

Democrats will also create an independent, national infrastructure bank.

This is a recipe for cronyism that will further expand the federal government’s role into an area that should be reserved for states, local governments, and the private sector.

Democrats will defend the Export-Import Bank.

Bernie Sanders was good on this issue, so this platform language means Hillary Clinton’s support for corporate welfare prevailed.

Democrats will provide direct federal funding for a range of local programs that will put young people to work and create new career opportunities.

Since job-training programs have a long track-record of failure, too bad they didn’t suggest repealing job-killing minimum-wage laws.

Democrats will not hesitate to use and expand existing authorities as well as empower regulators to downsize or break apart financial institutions when necessary to protect the public and safeguard financial stability, including new authorities to go after risky shadow-banking activities.

Other than pointing out that big isn’t necessarily bad, I don’t really have any policy reaction. I’m only sharing this blurb since I imagine you’ll also laugh out loud at the platform’s implicit assertion that Hillary Clinton somehow will crack down on her friends and donors at Goldman-Sachs. Yeah, I’m sure that’s high on her list. Right after putting inner-city schoolkids before the teacher unions.

We will ban golden parachutes for those taking government jobs.

Will that rule apply retroactively to Treasury Secretary Jacob Lew?

Democrats will claw back tax breaks for companies that ship jobs overseas, eliminate tax breaks for big oil and gas companies, and crack down on inversions and other methods companies use to dodge their tax responsibilities.

There are no “tax breaks” for companies that invert.

We will end deferrals so that American corporations pay United States taxes immediately on foreign profits and can no longer escape paying their fair share of U.S. taxes by stashing profits abroad.

The “fair share” should be zero for income that is earned (and therefore already subject to tax) in other nations.

We will ensure those at the top contribute to our country’s future by establishing a multimillionaire surtax to ensure millionaires and billionaires pay their fair share.

Even the IRS admits the tax system is very biased against the so-called rich.

…we will shut down the “private tax system” for those at the top, immediately close egregious loopholes like those enjoyed by hedge fund managers, restore fair taxation on multimillion dollar estates, and ensure millionaires can no longer pay a lower rate than their secretaries.

Wow, endorsing higher capital gains taxes, higher death taxes, and dishonest math in one sentence fragment.

We will work to crack down on tax evasion.

Unfortunately, they want higher compliance by expanding the power of the IRS, not by lowering tax rates.

…we will make sure that law-abiding Americans living abroad are not unfairly penalized by finding the right solutions for them to the requirements under the Foreign Account Tax Compliance Act (FATCA) and Report of Foreign Bank and Financial Accounts (FBAR).

This language is vacuous, but it’s nonetheless noteworthy that even the Democrats feel compelled to say bad things about one of Obama’s worst laws.

Democrats believe it is long past time to close this racial wealth gap. Disparities in wealth cannot be solved by the free market alone, but instead, the federal government must play a role in eliminating systemic barriers to wealth accumulation for different racial groups and improving opportunities for people from all racial and ethnic backgrounds to build wealth.

More vacuous language, though it’s disappointing that the platform doesn’t endorse personal retirement accounts, which would fix one of the ways minorities are hurt by government policy.

We believe that the states should be laboratories of democracy on the issue of marijuana, and those states that want to decriminalize it or provide access to medical marijuana should be able to do so.

Easily the most pro-liberty part of the Democratic platform.

Democrats will develop a national strategy, coordinated across all levels of government, to combat poverty. We will direct more federal resources to lifting up communities that have been left out and left behind.

Anyone think this will work any better than all the other failed anti-poverty schemes from Washington? I didn’t think so.

Democrats will protect proven programs like the Supplemental Nutrition Assistance Program (SNAP)—our nation’s most important anti-hunger program—that help struggling families put food on the table.

The only thing “proven” about the food stamp program is that it’s riddled with fraud and it creates dependency.

We will dramatically increase federal infrastructure funding for our cities.

It’s not the role of the federal government to pave roads and and build bridges and corrupt big-city political machines shouldn’t be offloading their responsibilities onto taxpayers in the rest of the country.

We will continue to support public funding for the National Endowment for the Arts, for the National Endowment for the Humanities, and for programs providing art and music education in primary and secondary schools.

If I want to listen to cowboy poetry, I should pay for it myself.

We believe America must be running entirely on clean energy by mid-century. We will take bold steps to slash carbon pollution.

Mostly vacuous rhetoric, but it could lead to “bold steps” to undermine prosperity.

Democrats believe that carbon dioxide, methane, and other greenhouse gases should be priced to reflect their negative externalities, and to accelerate the transition to a clean energy economy and help meet our climate goals.

You don’t have to read between the lines to recognize that “should be priced” is DC-speak for a big energy tax.

All corporations owe it to their shareholders to fully analyze and disclose the risks they face, including climate risk. Those who fail to do so should be held accountable. Democrats also respectfully request the Department of Justice to investigate allegations of corporate fraud on the part of fossil fuel companies accused of misleading shareholders and the public on the scientific reality of climate change.

This is probably the most reprehensible part of the Democratic platform. America is not a banana republic and people shouldn’t be attacked with “lawfare” for disagreeing with the political establishment.

Democrats are unified in their strong belief that every student should be able to go to college debt-free, and working families should not have to pay any tuition to go to public colleges and universities.

A plan that unambiguously will increase the cost of college.

Democrats believe that health care is a right, not a privilege, and our health care system should put people before profits. …Americans should be able to access public coverage through a public option, and those over 55 should be able to opt in to Medicare.

For those who think the Obamacare boondoggle didn’t go far enough.

Democrats will fight any attempts by Republicans in Congress to privatize, voucherize, or “phase out” Medicare as we know it. And we will oppose Republican plans to slash funding and block grant Medicaid and SNAP.

Let’s bury our heads in the sand and pretend there’s no entitlement crisis.

Democrats believe that global institutions—most prominently the United Nations—and multilateral organizations have a powerful role to play

A powerful role is not the same as a productive role or positive role. Though the United Nations is mostly feckless. The real damage is caused by the International Monetary Fund and the Organization for Economic Cooperation and Development.

I could analyze additional planks, but there’s a limit to have much statist claptrap I can endure.

If I had to give a grade to the Democratic platform, it would be “L” for leftist. Just like the Party’s nominee.

Read Full Post »

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.

Read Full Post »

If you like to go along to get along, I suggest you don’t become a libertarian. At least not if you follow politics or work in Washington.

Otherwise, you’re doomed to a life of endlessly pointing out that the emperor has no clothes. Here are three examples.

1. When almost every Republican and Democrat argued for a Keynesian-style stimulus in 2008, libertarians had the lonely job of explaining that you don’t get more growth by increasing the burden of government spending.

2. And when most Republicans and Democrats said we needed a TARP bailout that same year, it was libertarians who futilely argued that the “FDIC-resolution” approach was a far more sensible way of dealing with the government-created crisis.

3. More recently, there were a bunch of stories complaining that 2013 was a very unproductive year for Congress, and libertarians were among the few to state that we’re better off with fewer laws rather than more laws.

The same is true for “bipartisanship.” Almost every pundit, politician, and lobbyist in Washington will extol the virtues of bipartisanship. But what they really mean is that they want both Republicans and Democrats to join arms in a business-as-usual game.

Indeed, the standard libertarian joke is that you get bipartisanship when the Stupid Party and the Evil Party both agree on something. Needless to say, that often means laws that are both stupid and evil.

Which is a good description of Bush’s 2008 stimulus and the corrupt TARP legislation.

But since we’re at the end of the year, I don’t want to get overly depressed. So let’s share some cartoons that celebrate the Murray-Ryan budget, which is the most recent example of “bipartisanship.”

We’ll start with ones that have a Christmas theme.

The politicians were glad to escape the fiscal constraint of sequestration, but Lisa Benson is not overly impressed by their cooperative effort.

Budget Deal Cartoon 8

Gary Varvel isn’t very happy, either.

Budget Deal Cartoon 1

Varvel is very explicit in this cartoon about Democrats and Republicans being united against taxpayers.

Budget Deal Cartoon 4

The bag should have been labelled “spending,” but that’s a minor complaint.

Steve Breen points out that the budget deal achieved three out of four goals.

Budget Deal Cartoon 2

And Michael Ramirez astutely identifies too much spending as the problem and shows that the budget deal did nothing to address that issue.

Budget Deal Cartoon 3

Here’s another Lisa Benson cartoon, though this one focuses on establishment GOPers trying to hook the Tea Party on the demon rum of big government.

Budget Deal Cartoon 5

Sort of reminds me of this great Henry Payne cartoon about Obama and Greece. Or maybe this Nate Beeler cartoon about weak-willed GOPers.

I’ve saved the best for last.

This Glenn McCoy cartoon shows what bipartisanship really means inside the DC beltway.

Budget Deal Cartoon 6

McCoy had another cartoon last year with a similar theme, as did Michael Ramirez.

In closing, I want to say something vaguely optimistic. The Murray-Ryan budget deal was unfortunate, but it was a rather minor setback compared to the kinds of “bipartisan” big-government schemes we got during the Bush years.

It was sort of akin to the fiscal cliff deal at the beginning of the year. Government got a bit bigger and a bit more expensive, but it was peanuts compared to TARP, the prescription drug entitlement, and many of the other schemes that eroded economic liberty last decade.

P.S. Fairness requires that I point out that bipartisanship doesn’t automatically mean bad legislation. The bipartisan 1997 budget deal between the GOP Congress and Bill Clinton cut some taxes and reduced the growth of federal spending. And the successful sequester came about because of the bipartisan 2011 debt limit legislation.

Read Full Post »

According to a story from U.S. News and World Report, there’s new research showing that 4th of July celebrations boost the GOP. I have no idea if the methodology is sound, but the researchers found that attending Independence Day events influences voting behavior. Key findings include: “When done before the age of 18, it increases the likelihood of a youth identifying as a Republican by at least 2 percent” and “It raises the likelihood that parade watchers will vote for a Republican candidate by 4 percent.”

Here’s more from the USNWR story.

Democratic political candidates can skip this weekend’s July 4th parades. A new Harvard University study finds that July 4th parades energize only Republicans, turn kids into Republicans, and help to boost the GOP turnout of adults on Election Day. …”The political right has been more successful in appropriating American patriotism and its symbols during the 20th century. Survey evidence also confirms that Republicans consider themselves more patriotic than Democrats. According to this interpretation, there is a political congruence between the patriotism promoted on Fourth of July and the values associated with the Republican party. …Their findings also suggest that Democrats gain nothing from July 4th parades, likely a shocking result for all the Democratic politicians who march in them. …What’s more, the impact isn’t fleeting. “Surprisingly, the estimates show that the impact on political preferences is permanent, with no evidence of the effects depreciating as individuals become older,”said the Harvard report.

I’m interested in how to get people to believe in freedom, not vote Republican, so I’m not sure what to think about the Harvard study. But my Republican friends can probably make a few snarky observations about whether patriotism is inconsistent with being a Democrat. My thoughts on patriotism, meanwhile, can be found here.

Read Full Post »

The main political goal of the left is to seduce Republicans into supporting higher taxes. Bluntly stated, all of their fiscal policy goals require more tax revenue coming to Washington.

The most important factor (from their perspective) is that they can’t make government much bigger than it is right now without a major tax increase. Sure, they can finance spending with borrowing, but it appears that we’ve finally gotten to a point – both politically and economically – where higher deficits are no longer an option.

But here’s the problem for the left. Higher taxes generally are not popular with voters and politicians who campaign for higher taxes do not fare very well. This is why Democrats, if they want to get more tax revenue and avoid political fallout, need to somehow convince GOPers to be part of the process (indeed, The Hill has reported that “the Democratic playbook has changed, with a key goal: get Republicans to violate the Americans for Tax Reform (ATR) pledge not to raise taxes.”

It’s easy to understand why the left wants the GOP to give up the no-tax-increase pledge. Voters today think Democrats want to raise their taxes and Republicans want to protect them. That’s political gold for the GOP.

But if dumb Republicans can be convinced to sell out, then the political dynamics get completely reversed. All of a sudden, voters have a big incentive to make sure they’re not the ones who get hit, so they are prone to support higher taxes on the rich. This is where the Democrats have a home-field advantage.

Democrats already are willing to endorse higher tax rates on upper-income taxpayers, to be sure, even without getting cover from Republicans. But it’s much better to lure the GOP into a tax deal. After all, even soak-the-rich tax hikes generate a lot of opposition. Simply stated, voters wisely suspect that higher taxes on the so-called rich eventually will translate into higher taxes on everybody else.

But even if they could unilaterally impose class-warfare taxes on upper-income taxpayers, that still doesn’t solve the left’s problem. They would never admit it publicly, but smart left wingers understand that there are two very powerful reasons why soak-the-rich tax increases won’t raise much revenue.

    1. There are not enough rich people to finance big government. According to the latest IRS data (from 2008), there are only about 321,000 households with income greater than $1 million of annual income. And they have aggregate taxable income of only about $1 trillion. That’s a lot of money, of course, but it wouldn’t balance the budget even if the government confiscated every penny (which would have catastrophic consequences on the incentives of rich people to earn and report income in future years).

    2. Rich taxpayers will change their behavior to avoid the tax increases. This is the “Laffer Curve” effect, and it basically means that higher tax rates don’t raise as much revenue as expected because people respond to incentives and reduce the amount of income they are willing to earn and report. The Laffer Curve is especially strong for upper-income taxpayers because rich people have much greater access to lawyers, lobbyists, and accountants. Moreover, rich people are far more likely to earn capital income (interest, dividends, capital gains, etc), and it is much easier to control the timing, level and composition of capital income.

This doesn’t mean the left won’t push for class-warfare tax increases. They will. But their main motive will be politics, not raising revenue.

This is why, looking at the long-run fiscal situation, the left needs a value-added tax. The VAT is the only realistic way to collect the huge amount of revenue that would be necessary to finance promised entitlement benefits. As I’ve noted before, the VAT is a giant source of tax revenue, so the left no longer would have to worry about financing a European-sized welfare state. After all, a VAT would give America a European-style tax system.

But a VAT would generate a firestorm of opposition. The Democrats would be committing political suicide to push such a tax scheme, especially since it would be a huge burden for the poor and middle class. This is why the left desperately needs to trick gullible Republicans into going along with a tax hike.

Enacting a VAT would be a win-win situation for the left. The torrent of new revenue would make it much easier to preserve the welfare state, so it’s easy to understand why they want to make it happen from a policy perspective. But the political benefits for the left are equally large. Here are a couple of inevitable consequences if GOPers get tricked into participating in a budget summit and wind up getting seduced into supporting a VAT.

    1. There will be civil war inside the Republican Party. The vast majority of GOP politicians have pledged to vote against higher taxes. Some of them are insincere, of course, but many of them genuinely believe if defending taxpayers. A tax-increase deal would create a divisive fight, similar to what happened in 1990. This is a very nice fringe benefit for the left.

    2. Conservative voters will rebel against the GOP establishment. When Republicans do the wrong thing, “base” voters get disillusioned. Some inside-the-beltway GOPers say this doesn’t matter because these voters have “no other options.” But they have the option of staying home, like they did in 2006 and 2008. Or sometimes they have a third party option, like in 1992. This is a very nice fringe benefit for the left.

    3. Putting a VAT on the table will give the left a perfect opportunity to impose additional class warfare taxes. Because of the zero-sum mindset on Capitol Hill, there is strong bias to maintain the existing “distribution” of the tax burden. This means that a VAT, which is perceived as discriminating against the poor and middle class, almost surely will be married with some punitive taxes that target the nation’s most productive taxpayers. This is a very nice fringe benefit for the left.

To summarize, the VAT would be a fiscal policy disaster. It would single-handedly guarantee that the United States would turn into a Greek-style welfare state. And for those who care about the political future of the GOP, it would cripple the party in the eyes of voters.

Fortunately, there is a very simple way of stopping this horrible outcome. Republicans merely need to say no. At the risk of stating the obvious, there is no way that a VAT would be imposed without the GOP giving political cover to the Democrats. Indeed, it is highly unlikely that any significant tax increase, from this point forward, could be enacted without Republicans providing the margin of victory.

They may be the “Stupid Party,” but it’s an open question whether they are that self-destructively foolish. Especially when there is no legitimate argument for higher taxes.

Read Full Post »

For my latest electoral prediction, click here.

===================================

A lot of my Republican friends (yes, I admit to having some) are feeling very confident about the 2012 election. They’re not quite measuring the drapes in the Oval Office, but this electoral map seems to be their “worst-case” example of how the states will break in 2012.

Notwithstanding my reasonably accurate 2010 election predictions, I don’t think I’m an expert on politics. But that’s never stopped me from commenting on things beyond economics, so here’s why I think Republicans are prematurely giddy.

First, while I certainly agree that Obama is much less popular than he was in 2008, that’s not terribly important since the election is still more than 18 months away.

Second, we don’t know what the economy will be a net plus or net negative next year. There’s a lot of evidence that people vote on pocketbook  issues, and it appears that disposable income is an important variable. If we manage to have any sort of growth, even sub-par growth of perhaps 2.5 percent annually, that may be enough to make people more comfortable and to bring unemployment down close to 8 percent. If that happens, Obama will claim he brought the nation back from the brink of a second Great Depression. The fact that his policies actually retarded the recovery will be overlooked.

Third, you can’t beat something with nothing. Barack Obama’s secret weapon is the names on this list.

Read Full Post »

When existing spending authority expires on March 4, the “non-essential” parts of the federal government will shut down unless Republicans and Democrats reach an agreement. This is causing lots of agitation in Washington, both by Democrats who don’t want the money spigots in the off position and Republicans who fret that they will be blamed for (gasp) gridlock.

I have a new piece at National Review that explains how the GOP can win this fight. Indeed, I explain that Republicans actually did a pretty good job during the 1995 fight, even though they now have negative memories of the experience. This excerpt provides my basic assessment, but the full article has lots of additional information, including quotes from news accounts in 1995 showing that the GOP held the upper hand, as well as four specific recommendation of how advocates of limited government can do even better this year.

With the GOP-led House and the Democratic Senate and White House far apart on a measure to pay the federal government’s bills past March 4, Washington is rumbling toward a repeat of the 1995 government-shutdown fight (actually two shutdown fights, one in mid-November of that year and the other in mid-December). This makes some Republicans nervous. They think Bill Clinton “won” the blame game that year, and they’re afraid they will get the short end of the stick if there is a 1995-type impasse this year. A timid approach, though, is a recipe for failure. It means that President Obama and Senate Majority Leader Harry Reid can sit on their hands, make zero concessions, and wait for the GOP to surrender any time a deadline approaches. In other words, budget hawks in the House have no choice. They have to fight. But they can take comfort in the fact that this is not a suicide mission. The conventional wisdom about what happened in November of 1995 is very misleading. Republicans certainly did not suffer at the polls. They lost only nine House seats, a relatively trivial number after a net gain of 54 in 1994. They actually added to their majority in the Senate, picking up two seats in the 1996 cycle. More important, they succeeded in dramatically reducing the growth of federal spending. They did not get everything they wanted, to be sure, but government spending grew by just 2.9 percent during the first four years of GOP control, helping to turn a $164 billion deficit in 1995 into a $126 billion surplus in 1999. And they enacted a big tax cut in 1997. If that’s what happens when Republicans are defeated, I hope the GOP loses again this year.

Read Full Post »

I am pleasantly stunned that GOP leaders have increased the level of cuts in the bill that will fund the government for the final seven months of fiscal year 2011. Kudos to the freshman members, the Tea Party, and the conservatives who have led the charge and achieved so much. They certainly exceeded my expectations. Here’s the good news from the Washington Post.

Republicans, who control the House, yielded to calls from their conservative wing and roughly doubled the size of spending cuts to be considered next week as part of a resolution to fund the government for the remainder of fiscal 2011. They offered a real cut in spending of almost $61 billion. But, more important to conservatives, the reductions amount to $100 billion less than President Obama’s 2011 budget called for. The budget was never enacted. …”It’s not about demands; it’s about us standing up on some principles and letting [people] know that we support them,” said Rep. Allen B. West (Fla.), an outspoken member of the new freshman class. West will give the keynote speech Saturday at the Conservative Political Action Committee’s conference. The package of spending cuts is the largest since just after World War II… The legislation would eliminate more than $121 million in funding inside the White House, including money for the so-called health-care czar and climate-change czar. And it would slash the Environmental Protection Agency’s annual budget by almost 30 percent. Republicans proposed earlier this week to eliminate funding for the Corporation for Public Broadcasting and AmeriCorps. …The House expects to begin debate on the bill Tuesday and to set up a final vote by the end of the week.

I’m particularly happy to see that my election-night buddy, Cong. Allen West, continues to be a strong leader on these issues.

But let’s not rest on our laurels (I’m not even sure what laurels are, but hopefully they’re not too comfortable since there’s a lot more work to be done). This legislation presumably will be approved by the House, notwithstanding a few big-government Republicans. But we know that Harry Reid and the Senate are a big obstacle, and President Obama surely won’t approve anything to reduce the burden of government.

So does this mean a government shutdown? Under current law, funding for the government runs out on March 4. If there’s not an agreement by that time, this will mean a high-stakes battle very reminiscent of the battle between congressional Republicans and Bill Clinton in the 1990s. Republicans feel they got out-maneuvered in that conflict, so they may be a bit gun-shy if the same fight occurs this year.

And let’s not forget that a similar dynamic will exist later this year on the vote to increase the debt limit. Republicans will be very reluctant to give the government more borrowing authority without getting something in exchange. But if Democrats are obstinate, that sets up another game of brinksmanship.

Having been very involved in those battles in 1995 and 1996, I’ll soon have more to say about how fiscal conservatives can win these government shutdown battles.

Read Full Post »

This is the type of story that makes me sick to my stomach. I’ve already commented on how I don’t like redistribution from rich to poor, but I really, really hate redistribution from poor to rich. And that’s exactly what happens when taxpayers subsidize the presidential nominating conventions of the two big political parties.

Republicans claim to be on the side of taxpayers, but read this story from the Tampa newspaper to get a flavor for how the Republican National Committee was wasting our money.

They rented an exclusive waterfront mansion, wined and dined at five-star restaurants and hired family members and friends, all on the taxpayers’ dime. …Recently filed Federal Election Commission records show that Steele’s convention team, which was headed by Belinda Cook, his long-time personal assistant, spent most of a $1 million line of credit to the RNC’s Committee on Arrangements. That loan was backed by $16 million in federal funds the committee will receive for convention security next year. …Since the 1970s, the federal government has subsidized both the Republican and Democratic party conventions as part of the public financing program for presidential campaigns. Parties can use the money for any legitimate political expenses.

Political conventions are largely four-day parties for political hacks and lobbyists. And even if they were serious affairs, taxpayers should not be subsidizing private political organizations. Republicans and Democrats should be able to nominate candidates without reaching into my wallet…or your wallet.

Read Full Post »

House Republicans will read the Constitution today, out loud, on the floor of the House of Representatives. I’m guessing this is how some politicians will react. More accurately, this is how they would react if the Supreme Court actually upheld the Founding Fathers’ vision of the Constitution.

I think I see Henry Waxman and Barney Frank in this video.

I’ll resist the temptation to say who is represented by the person in this video.

To be fair, most Republicans would be equally horrified if the Constitution was properly interpreted. After all, the Founding Fathers are probably still rolling in their graves at what GOPers did when they were last in power. The no-bureaucrat-left-behind education bill, the corrupt farm bills, the Medicare prescription drug entitlement, the pork-filled transportation bills, Sarbanes-Oxley, the TARP bailout, etc, etc.

Read Full Post »

%d bloggers like this: