The Adverse Economic Consequences of Higher Tax Rates

The good news is that Joe Biden has not embraced many of Bernie Sanders’ worst tax ideas, such as imposing a wealth tax or hiking the top income tax rate to 52 percent..

The bad news is that he nonetheless is supporting a wide range of punitive tax increases.

• Increasing the top income tax rate to 39.6 percent.
• Imposing a 12.4 percent payroll tax on wages above $400,000.
• Increasing the double taxation of dividends and capital gains from 23.8 percent to 43.4 percent.
• Hiking the corporate tax rate to 28 percent.
• Increasing taxes on American companies competing in foreign markets.

The worst news is that Nancy Pelosi, et al, may wind up enacting all these tax increases and then also add some of Crazy Bernie‘s proposals.

This won’t be good for the U.S. economy and national competitiveness.

Simply stated, some people will choose to reduce their levels of work, saving, and investment when the tax penalties on productive behavior increase. These changes give economists the information needed to calculate the “elasticity of taxable income”.

And this, in the jargon of economists, is a measure of “deadweight loss.”

But now there’s a new study published by the Federal Reserve which suggests that these losses are greater than traditionally believed.

Authored by Brendan Epstein, Ryan Nunn, Musa Orak and Elena Patel, the study looks at how best to measure the economic damage associated with higher tax rates. Here’s some of the background analysis.

The personal income tax is one of the most important instruments for raising government revenue. As a consequence, this tax is the focus of a large body of public finance research that seeks a theoretical and empirical understanding of the associated deadweight loss (DWL). …Feldstein (1999) demonstrated that, under very general conditions, the elasticity of taxable income (ETI) is a sufficient statistic for evaluating DWL. …It is well understood that, apart from rarely employed lump-sum taxes and…Pigouvian taxes, revenue-raising tax systems impose efficiency costs by distorting economic outcomes relative to those that would be obtained in the absence of taxation… ETI can potentially serve as a perfect proxy for DWL…this result is consistent with the ETI reflecting all taxpayer responses to changes in marginal tax rates, including behavioral changes (e.g., reductions in hours worked) and tax avoidance (e.g., shifting consumption toward tax-preferred goods). …a large empirical literature has provided estimates of the individual ETI, identified based on variation in tax rates and bunching at kinks in the marginal tax schedule.

And here are the new contributions from the authors.

… researchers have fairly recently come to recognize an important limitation of the finding that the ETI is a sufficient statistic for deadweight loss… we embed labor search frictions into the canonical macroeconomic model…and we show that within this framework, a host of additional information beyond the ETI is needed to infer DWL …once these empirically observable factors are controlled for, DWL can be calculated easily and in a straightforward fashion as the sum of the ETI and additional terms involving these factors. … We find that…once search frictions are introduced, …DWL can be between 7 and 38 percent higher than the ETI under a reasonable calibration.

To give you an idea of what this means, here are some of their estimates of the economic damage associated with a 1 percent increase in tax rates.

As you peruse these estimates, keep in mind that Biden wants to increase the top income tax rate by 2.6 percentage points and the payroll tax by 12.4 percentage points (and don’t forget he wants to nearly double tax rates on dividends, capital gains, and other forms of saving and investment).

Those are all bad choices with traditional estimates of deadweight loss, and they are even worse choices with the new estimates from the Fed’s study.

So what’s the bottom line?

The political impact will be that “the rich” pay more. The economic impact will be less capital formation and entrepreneurship, and those are the changes that hurt the vast majority of us who aren’t rich.

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Is Gun Control Dead?

In recent months, governments released prisoners and announced that some laws wouldn’t be enforced because of the coronavirus. Now, with protests against police misbehavior, we’re seeing governments fail to maintain law and order.

As suggested by this excellent Reason video, these developments bolster the case against gun control.

But does this mean politicians will be more supportive of the 2nd Amendment?

The answer (at least for anyone with an IQ above room temperature) should be yes.

From an economic perspective, one major goal is to change the cost-benefit analysis for criminals. If bad guys have to worry that good guys may be armed, that significantly increases the potential cost of illegal behavior.

A well-functioning system of law enforcement can help, of course, but that’s not a description of how things work in some communities – even in normal times, much less when there’s civil unrest.

But all this evidence and analysis doesn’t seem to matter for Joe Biden. A look at his campaign website shows support for a wide range of gun-control laws from the soon-to-be Democratic nominee.

…gun violence is a public health epidemic. …In 1994, Biden – along with Senator Dianne Feinstein – secured the passage of 10-year bans on assault weapons and high-capacity magazines. As president, Joe Biden will defeat the NRA again. …As president, Biden will: …Ban the manufacture and sale of assault weapons and high-capacity magazines. …Regulate possession of existing assault weapons under the National Firearms Act. …Biden supports legislation restricting the number of firearms an individual may purchase per month to one. …End the online sale of firearms and ammunitions. …Give states incentives to set up gun licensing programs.

What’s especially discouraging is that Biden apparently hasn’t learned anything about so-called assault weapons since 1994.

In a 2019 column for Reason, Jacob Sullum dissected Biden’s incoherent views on the topic.

Joe Biden…is still proud of the ban on “assault weapons”… Biden argues that it made mass shootings less common…, citing a study reported in The Journal of Trauma and Acute Care Surgery last January. But that is not what the researchers, led by New York University epidemiologist Charles DiMaggio, actually found. …The study…looked not at the number of mass shootings, as Biden claims, but the number of mass-shooting deaths as a share of all firearm homicides. The difference in total fatalities during the period when the ban was in effect amounted to 15 fewer deaths over a decade, or 1.5 a year on average, including mass shootings that did not involve weapons covered by the ban. …The causal mechanism imagined by Biden is even harder to figure out. He describes “assault weapons” as “military-style firearms designed to fire rapidly.” But they do not fire any faster than any other semi-automatic. …Under the 1994 ban, removing “military-style” features such as folding stocks, flash suppressors, or bayonet mounts transformed forbidden “assault weapons” into legal firearms, even though the compliant models fired the same ammunition at the same rate with the same muzzle velocity as the ones targeted by the law.

I wonder if Biden understands the policy he’s advocating.

Does he think that “assault weapons” are actual machine guns, capable of firing multiple rounds with one pull on the trigger (a remarkably common misconception among gun-control advocates)?

Or, if he understands that a so-called assault weapon is just like any other gun (firing one round each time the trigger is pulled), then why would he think anything would be achieved by banning some guns and leaving others (that work the same way) legal?

Perhaps most relevant, does he even care what the evidence shows?

The bottom line is that people are “voting with their dollars” for gun ownership for the simple reason that they know it’s unwise to trust government (either to protect them from crime or to respect their rights).

But that doesn’t mean their constitutional freedoms will be secure if Biden wins the 2020 election.

P.S. The good news is that there will be widespread civil disobedience if politicians push for new gun bans.

P.P.S. Another silver lining is that we’ll get more and more clever humor mocking gun control.

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Joe Biden: An Incrementalist Version of Bernie Sanders

Hardly anybody noticed because the nation has been focused on protests about police misbehavior, but Joe Biden officially clinched the Democratic nomination this past week.

And he’s now comfortably ahead in the political betting markets as well as public polling.

If Biden wins in November, what does that mean for the nation’s economic policy?

According to folks on the left, a Biden presidency means bigger government and more statism.

For instance, opining for the New York Times, Jamelle Bouie applauds Biden’s leftist agenda.

…if the goal is to move America to the left…then a Biden candidacy…represents an opportunity. …If Biden goes on to win the White House, there’s real space for the pro-Sanders left to work its will on policy. …It can fulfill some of its goals under the cover of Biden’s moderation, from raising the minimum wage nationally to pushing the American health care system closer to single-payer. …Biden…is a creature of the party. He doesn’t buck the mainstream, he accommodates it. He doesn’t reject the center, he tries to claim it. …the center of the Democratic Party as far left as it’s been since before Ronald Reagan, then Biden is likely to hew to that center, not challenge it.

His colleague at the NYT, Michelle Goldberg, is similarly enthused about the prospects for bigger government under a Biden Administration.

Biden’s proposals go far beyond his call for a $15 federal minimum wage — a demand some saw as radical when Sanders pushed it four years ago. While it’s illegal for companies to fire employees for trying to organize a union, the penalties are toothless. Biden proposes to make those penalties bite and to hold executives personally liable. …should Biden become president, progressives have the opportunity to make generational gains. …To try to unite the party around him, he’s making serious progressive commitments. …he’s moving leftward. Biden recently came out for tuition-free college for students whose families earn less than $125,000. He endorsed Elizabeth Warren’s bankruptcy plan…His climate plan already went beyond any of Barack Obama’s initiatives, and he’s pledged to make it even more robust.

According to (supposedly) neutral analysts, a Biden presidency means bigger government and more statism.

In an article for Newsweek, Steve Friess discusses Biden’s shift to the left.

Being stuck running for the presidency from the basement of his home in Wilmington, Delaware, had given the former vice president a lot of time to think, he told them, and he wanted bigger ideas. Go forth, he urged his financial brain trust, and bring back the boldest, most ambitious proposals they’d ever dreamed of to reshape the U.S. economy… Biden began issuing a raft of new proposals that move his positions closer to the progressive wing of the Democratic Party, with a promise to unveil an even more transformative economic plan this summer. …It’s a yes to adding $200 a month to Social Security benefits and lowering the qualifying age for Medicare from 65 to 60. Yes to trillions in new spending, yes to new regulations on banks and industry, yes to devil-may-care deficits. …the leader he most often invokes—in interviews, in public addresses, on his podcast—is no longer Barack Obama but Franklin Delano Roosevelt. …Biden has already made a series of significant leftward policy shifts since effectively sewing up the nomination in March.

Perry Bacon, in a piece for fivethirtyeight, analyzes Biden’s statist agenda.

…if Biden is elected in November, the left may get a presidency it likes after all…if American politics is moving left, expect Biden to do the same. …Biden’s long record in public office suggests that he is fairly flexible on policy — shifting his positions to whatever is in the mainstream of the Democratic Party at a given moment. …Biden is likely to be a fairly liberal president, no matter how moderate he sounded in the primaries. …Biden’s 2020 primary platform…adopted fairly liberal policies…more liberal than his pre-campaign record suggested. The Democratic Party is more liberal now than it was when Bill Clinton took office, or even when Obama was inaugurated, and Biden’s platform reflects that shift. …Biden and his advisers are now…rolling out more liberal policy plans, speaking in increasingly populist terms and joining forces with the most progressive voices in the party. …“Joe Biden is running on the most progressive platform of any Democratic nominee in recent history. But given the pandemic, he has to look at the New Deal and Great Society traditions in the Democratic Party and go bigger,” said Waleed Shahid, the communications director for Justice Democrats, a left-wing group aligned with Ocasio-Cortez.

Writing for the Washington Post, Sean Sullivan documents Biden’s leftward drift.

Joe Biden sought to appeal to liberal supporters of Sen. Bernie Sanders on Thursday with a pair of new proposals to expand access to health care and curtail student loan debt. Biden proposed lowering the eligibility age for Medicare coverage from 65 to 60. He also came out in favor of forgiving student loan debt for people who attended public colleges and universities and some private schools and make up to $125,000 a year. …In another peace offering to liberals, Biden proposed paying for his student debt plan by repealing a provision in the recent coronavirus legislation that Congress passed and President Trump enacted. “That tax cut overwhelmingly benefits the richest Americans and is unnecessary for addressing the current COVID-19 economic relief efforts,” he wrote… Biden endorsed a bankruptcy plan put forth by Sen. Elizabeth Warren (D-Mass.), another rival who ran to his left.

And, according to more market-friendly sources, a Biden presidency means bigger government and more statism.

The Wall Street Journal editorialized about Biden’s leftist agenda.

Already Medicare is scheduled to be insolvent by 2026. …In 1970, life expectancy in the U.S. was 70.8. Now it’s about eight years longer. By lowering the age of eligibility instead, Mr. Biden would begin shifting Medicare’s focus from seniors to everybody else. Don’t worry about the funding, he insists, since the extra costs would be “financed out of general revenues.” …Mr. Biden’s new left turn on student loans is equally sharp. …Cancel all federal undergraduate tuition debt for many borrowers who went to public schools, including four-year universities. This forgiveness would be given to anyone who earns $125,000 a year or less. …How much would it cost? There’s no explanation.

Jeff Jacoby analyzed Biden in a column for the Boston Globe.

Biden…is running on a platform far more progressive — i.e., far less moderate — than any Democratic presidential nominee in history. …on issue after issue, Biden has veered sharply from Obama’s path. On health insurance, for example, Obama rejected a public option as part of the Affordable Care Act and repeatedly stressed the importance of maintaining private coverage. But Biden favors a public option open to everyone… Biden supports government-funded health care even for unauthoritzed immigrants, something Obama never came close to proposing. …No Democratic presidential nominee ever endorsed anything like the radical Green New Deal, with its price tag in the tens of trillions of dollars and its goal of eliminating the use of all fossil fuels. But Biden does. No Democratic nominee ever called for a national minimum wage of $15 an hour. But Biden does. …Sanders may not end up on the November ballot, but it will unmistakably reflect his influence. For he and his band of progressives have pushed their party to the left with such success that even the “moderate” in the race would be the most liberal Democrat ever nominated for president.

Here’s some of what Peter Suderman wrote for Reason.

Biden is a moderate compared to Sanders, but he is notably to the left of previous Democratic standard-bearers. …Biden has proposed a significant expansion of the Affordable Care Act that his campaign estimates would cost $750 billion over a decade… Biden has proposed a $1.7 trillion climate plan that is similar in scope to many candidates on his left and a $750 billion education plan… He favors an assault weapons ban and other gun control measures, a national $15 minimum wage, and a raft of subsidies, loans, and other government-granted nudges designed to promote rural economies. Has proposed $3.4 trillion worth of tax hikes—more than double what former Secretary of State Hillary Clinton proposed when she ran in 2016. …Biden’s leftward drift is thus the party’s leftward shift…, a big-government liberal, a candidate whose current incarnation was shaped and informed by progressive politics, if not wholly captured by them.

The Tax Foundation examined the former Vice President’s tax plan and the results are not encouraging.

Former Vice President Joe Biden would enact a number of policies that would raise taxes, including individual income taxes and payroll taxes, on high-income individuals with income above $400,000. …According to the Tax Foundation’s General Equilibrium Model, the Biden tax plan would reduce GDP by 1.51 percent over the long term. …The plan would shrink the capital stock by 3.23 percent and reduce the overall wage rate by 0.98 percent, leading to 585,000 fewer full-time equivalent jobs. …On a dynamic basis, we estimate that Biden’s tax plan would raise about 15 percent less revenue than on a conventional basis over the next decade. …That is because the relatively smaller economy would shrink the tax base for payroll, individual income, and business income taxes. …The plan would lead to lower after-tax income for all income levels.

Here’s a table summarizing the findings.

So what does all this mean?

At the risk of oversimplifying, Biden unquestionably would move tax policy to the left (he actually said higher taxes are patriotic, even though he engages in aggressive tax avoidance), and the same thing would happen on regulatory issues.

His spending agenda is terrible, though it’s worth noting that Democrat presidents usually don’t spend as much as Republicans (with the admirable exception of Reagan).

And, to be fair, there’s no way he could be as bad on trade as Trump.

Let’s close by looking at some hard data. Back in January, I sifted through the vote ratings prepared by the National Taxpayers Union and the Club for Growth and showed that Biden was not a Bill Clinton-style moderate.

I went back to those same sources an put together this comparison of Biden and some other well-known Democrats (scores on a 0-100 scale, with zero being statism and 100 being libertarian).

In both measures, he’s worse than Crazy Bernie!

Moreover, a lifetime average of zero from the Club for Growth is rather horrifying. His average from the National Taxpayers Union isn’t quite so bad, but the trend is in the wrong direction. Biden’s post-2000 average was less than 10, while his score for the preceding years averaged more than 23.

That being said, my two cents on this topic is that Biden is a statist, but not overly ideological.

His support for bigger government is largely a strategy of catering to the various interest groups that dominate the Democratic Party.

The good news is that he’s an incrementalist and won’t aggressively push for a horrifying FDR-style agenda if he gets to the White House.

The bad news is that he will probably allow Nancy Pelosi and other statist ideologues to dictate that kind of agenda if he wins the presidency.

P.S. My collection of Biden-oriented humor is rather sparse (see here, here, here, and here), an oversight that I’ll have to address in the near future.

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Bernie Has Faded, but Socialism Is Still a Threat

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.

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Bernie Sanders Easily Prevails in the Free-Stuff Primary

In an amazing display of incompetence, we still don’t know whether Bernie Sanders or Pete Buttigieg won the Iowa caucus.

This has created some opportunities for satire, with people asking how a political party that can’t properly count 200,000 votes somehow can effectively run a healthcare system for 340 million people.

That’s a very good point, but today let’s focus on a contest that does have a clear winner.

As explained in this video, John Stossel and his team crunched the numbers and they have concluded that “Crazy Bernie” wins the free-stuff primary.

Senator Sanders doubtlessly will be very happy with this victory, especially since he trailed Kamala Harris when Stossel did the same calculations last summer.

America’s taxpayers, however, might not be pleased with this outcome. Especially if Bernie Sanders somehow gets to the White House.

Last week, I shared new numbers from the Congressional Budget Office, which showed that the federal budget is now consuming $4.6 trillion.

Bernie Sanders is proposing a staggering $4.9 trillion of new spending – more than doubling the burden of government spending!

And the 10-year cost of his promises could be as high as $97 trillion.

To make matters worse, all this new spending is in addition to already-legislated spending increases for everything from boondoggle discretionary programs to behemoth entitlement programs.

Hello Greece.

Heck, it may be hello Venezuela if Bernie gets unleashed.

P.S. Trump’s record on spending is bad, though his mistakes are measured in billions rather than trillions.

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The “Public Option” Is a Slow-Motion Version of Medicare-for-All

Government intervention has made a mess of health care in America. Programs such as Medicare and Medicaid, along with the tax code’s healthcare exclusion, have created a massive third-party-payer problem.

The inevitable result is systemic inefficiency and ever-rising prices.

Some politicians look at these government-created problems and want us to believe that the right solution is to have even more government.

Consider, for example, the radical Medicare-for-All scheme that is supported by “Crazy Bernie” and “Looney Liz.” That’s like driving in the wrong direction at 100 miles per hour.

It’s also a bad idea to head the wrong direction at 50 miles per hour.

In a column for the Wall Street Journal, Lanhee Chen exposes the reckless nature of the so-called public option that is supported by other candidates.

Joe Biden, Pete Buttigieg and Mike Bloomberg claim they’re proposing a moderate, less disruptive approach to health-care reform when they advocate a public option—a government policy offered as an alternative to private health insurance—in lieu of Medicare for All. Don’t believe it. …those effects are predicated on two flawed assumptions: first, that the government will negotiate hospital and provider reimbursement rates similar to Medicare’s fee schedules and far below what private insurers pay; second, that the government would charge “actuarially fair premiums,” which cover 100% of provided benefits and administrative costs.

Mr. Chen explains that politicians can’t resist buying votes by offering ever-more goodies at ever-lower costs (I made similar points in a video explaining why Obamacare would be a fiscal boondoggle).

Political pressure upended similar financing assumptions in Medicare Part B only two years after the entitlement’s creation. The Johnson administration in 1968 and then Congress in 1972 had to intervene to shield seniors from premium increases. Objections from health-care providers to low reimbursement rates have regularly led to federal spending increases in Medicare and Medicaid.

And when politicians offer more goodies at lower cost, that means someone else will have to pay.

Either taxpayers today (higher income taxes and payroll taxes) or taxpayers tomorrow (more borrowing).

If premiums can’t rise to cover program costs, or reimbursement rates are raised to ensure access to a reasonable number of providers, who’ll pay? Taxpayers… If Congress’s past behavior is a guide, a public option available to all individuals and employers would add more than $700 billion to the 10-year federal deficit. The annual deficit increase would hit $100 billion within a few years. Some 123 million people—roughly 1 in 3 Americans—would be enrolled in the public option by 2025, broadly displacing existing insurance. These estimates don’t include the costs of additional Affordable Care Act subsidies and eligibility expansions proposed by Messrs. Biden, Buttigieg and Bloomberg. …if tax increases to pay for a politically realistic public option were limited to high-income filers, the top marginal rate would have to rise from the current 37% to 73% in 2049… Congress could enact a new broad-based tax similar to Medicare’s 2.9% Hospital Insurance payroll tax. The new tax would be levied on all wage and salary income and would reach 4.8% in 2049.

Mr. Chen also reminds us that the public option would surely have a very bad effect on private insurance.

Beyond fiscal considerations, the public option would quickly displace employer-based and other private insurance. …Consumers seeking coverage would be left with fewer insurance options and higher premiums. …Longer wait times and narrower provider networks would likely follow for those enrolled in the public option, harming patients’ health and reducing consumer choice.

For those of you who like lots of numbers, I also recommend a new report from the Committee for a Responsible Federal Budget.

The folks at CRFB are a bit misguided in that they focus too much on deficits and debt when they should be mostly concerned about the size of government.

But they do reliable work and their new report, Primary Care: Estimating Leading Democratic Candidates’ Health Plans, is filled with horrifying data.

We’ll start with this table looking at the details of the plans that have been put forth by Biden, Buttigieg, Sanders, and Warren. The red numbers are new spending. The black numbers are offsets (mostly tax increases).

As you can see from the above table, Warren and Sanders are definitely in the go-rapidly-in-the-wrong-direction camp.

But that shouldn’t distract us from the fact that Biden and Buttigieg also are proposing a big expansion in the burden of government.

Here’s another graphic from the CRFB report, but I’m focusing solely on the numbers for Biden and Buttigieg so that it’s clear to see that they both want about $2 trillion of new spending over the next decade.

If you look closely at the numbers for Buttigieg in Figure 2, you’ll notice that his health plan supposedly will reduce the deficit by $415 billion over 10 years (the difference between $3.3 trillion of new spending and $2.85 trillion of cost reductions and offsets).

Does that make his plan desirable? Of course not. What he’s really proposing (and this is how CRFB should have presented the data) is $1.65 trillion of net new spending (the difference between his “new spending” and his “cost reductions” ) accompanied by $2.1 trillion of new taxes.

P.S. Most of the “cost reductions” in Buttigieg’s plan are achieved with price controls on prescription drugs. At the risk of understatement, that’s a very costly way of trying to save money.

P.P.S. And if his plan is ever enacted, don’t forget that the actual amount of “new spending” will be much higher than the estimate of “new spending.”

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Joe Biden: Worse than Barack Obama, Worse than Hillary Clinton

Given their overt statism, I’ve mostly focused on the misguided policies being advocated by Bernie Sanders and Elizabeth Warren.

But that doesn’t mean Joe Biden’s platform is reasonable or moderate.

Ezra Klein of Vox unabashedly states that the former Vice President’s policies are “far to Obama’s left.”

The rhetorical clash between "leftists" and "moderates" is obscuring the deeper truth: This is the most progressive Democratic primary in history, and even if, say, Biden won the nomination, he'd be running on a platform far to Obama's left. https://t.co/x3CMj5XqAn

— Ezra Klein (@ezraklein) December 20, 2019

This is an issue where folks on both ends of the spectrum agree.

In a column for the right-leaning American Spectator, George Neumayr also says Biden is not a moderate.

Biden likes to feed the mythology that he is still a moderate. …This is, after all, a pol who giddily whispered in Barack Obama’s ear that a massive government takeover of health care “was a big f—ing deal,”…and now pronouncing Obamacare only a baby step toward a more progressive future. It can’t be repeated enough that “Climate Change” Joe doesn’t give a damn about the ruinous consequences of extreme environmentalism for Rust Belt industries. His Climate Change plans read like something Al Gore might have scribbled to him in a note. …On issue after issue, Biden is taking hardline liberal stances. …“I have the most progressive record of anybody running.” …He is far more comfortable on the Ellen show than on the streets of Scranton. He has given up Amtrak for private jets, and, like his lobbyist brother and grifter son, has cashed in on his last name.

If you want policy details, the Wall Street Journal opined on his fiscal plan.

Mr. Biden has previously promised to spend $1.7 trillion over 10 years on a Green New Deal, $750 billion on health care, and $750 billion on higher education. To pay for it all, he’s set out $3.4 trillion in tax increases. This is more aggressive, for the record, than Hillary Clinton’s proposed tax increases in 2016, which totaled $1.4 trillion, per an analysis at the time from the left-of-center Tax Policy Center. In 2008 Barack Obama pledged to raise taxes on the rich while cutting them on net by $2.9 trillion. Twice as many tax increases as the last presidential nominee: That’s now the “moderate” Democratic position. …raising the top rate for residents of all states. …a huge increase on today’s top capital-gains rate of 23.8%… This would put rates on long-term capital gains at their highest since the 1970s. …Raise the corporate tax rate to 28% from 21%. This would…vault the U.S. corporate rate back to near the top in the developed world. …the bottom line is big tax increases on people, capital and businesses. There’s nothing pro-growth in the mix.

And the ever-rigorous Peter Suderman of Reason wrote about Biden’s statist agenda.

Biden released a proposal to raise a slew of new taxes, mostly on corporations and high earners. He would increase tax rates on capital gains, increase the tax rate for households earning more than $510,000 annually, double the minimum tax rate for multinational corporations, impose a minimum tax on large companies whose tax filings don’t show them paying a certain percentage of their earnings, and undo many of the tax cuts included in the 2017 tax law. …as The New York Times reports, Biden’s proposed tax hikes are more than double what Hillary Clinton called for during the 2016 campaign. …Hillary Clinton…pushed the party gently to the left. Four years later, before the campaign is even over, the party’s supposed moderates are proposing double or even quadruple the new taxes she proposed.

The former Veep isn’t just a fan of higher taxes and more spending.

He also likes nanny-state policies.

Joe Biden says he is 100% in favor of banning plastic bags in the U.S. …let’s take a quick walk through the facts about single-use plastic bags at the retail level. …the plastic bags typically handed out by retailers make up only 0.6% of visible litter. Or put another way, for every 1,000 pieces of litter, only six are plastic bags. …They make up less than 1% of landfills by weight… 90% of the plastic bags found at sea streamed in from eight rivers in Asia and two in Africa. Only about 1% of all plastic in the ocean is from America. …Thicker plastic bags have to be used at least 11 times before they yield any environmental benefits. This is much longer than their typical lifespans. …Though it might seem almost innocuous, Biden’s support for a bag ban is symptom of a greater sickness in the Democratic Party. It craves unfettered political power.

Let’s not forget, by the way, that Biden (like most politicians in Washington) is corrupt.

Here are some excerpts from a Peter Schweizer column in the New York Post.

Political figures have long used their families to route power and benefits for their own self-enrichment. …one particular politician — Joe Biden — emerges as the king of the sweetheart deal, with no less than five family members benefiting from his largesse, favorable access and powerful position for commercial gain. …Joe Biden’s younger brother, James, has been an integral part of the family political machine… HillStone announced that James Biden would be joining the firm as an executive vice president. James appeared to have little or no background in housing construction, but…the firm was starting negotiations to win a massive contract in war-torn Iraq. Six months later, the firm announced a contract to build 100,000 homes. …A group of minority partners, including James Biden, stood to split about $735 million. …With the election of his father as vice president, Hunter Biden launched businesses fused to his father’s power that led him to lucrative deals with a rogue’s gallery of governments and oligarchs around the world. …Hunter’s involvement with an entity called Burnham Financial Group…Burnham became the center of a federal investigation involving a $60 million fraud scheme against one of the poorest Indian tribes in America, the Oglala Sioux. …the firm relied on his father’s name and political status as a means of both recruiting pension money into the scheme.

I only excerpted sections about Biden’s brother and son. You should read the entire article.

And even the left-leaning U.K.-based Guardian has the same perspective on Biden’s oleaginous behavior.

Biden has a big corruption problem and it makes him a weak candidate. …I can already hear the howls: But look at Trump! Trump is 1,000 times worse! You don’t need to convince me. …But here’s the thing: nominating a candidate like Biden will make it far more difficult to defeat Trump. It will allow Trump to muddy the water, to once again pretend he is the one “draining the swamp”, running against Washington culture. …With Biden, we are basically handing Trump a whataboutism playbook. …his record represents the transactional, grossly corrupt culture in Washington that long precedes Trump.

I’ll close by simply sharing some objective data about Biden’s voting behavior when he was a Senator.

According to the National Taxpayers Union, he finished his time on Capitol Hill with eleven-consecutive “F” scores (hey, at least he was consistent!).

And he also was the only Senator who got a lifetime rating of zero from the Club for Growth.

Though if you want to be generous, his lifetime rating was actually 0.025 percent.

Regardless, that was still worse than Barack Obama, Bernie Sanders, and Elizabeth Warren.

So if Biden become President, it’s safe to assume that America will accelerate on the already-baked-in-the-cake road to Greece.

P.S. Of course, we’ll be on that path even if Biden doesn’t become President, so perhaps the moral of the story is to buy land in Australia.

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The Painful Impact of a Financial Transactions Tax

I was interviewed a couple of days ago about rival tax plans by various Democratic presidential candidates.

It’s the “Class Warfare Olympics,” and even Joe Biden is thinking about going hard left with a tax on financial transactions.

It’s not just Joe Biden’s crazy idea. Other Democratic candidates have endorsed the idea, as has Nancy Pelosi, and CNBC reports that legislation has been introduced in the House and the Senate.

House Democrats are reintroducing their proposal of a financial transaction tax on stock, bond and derivative deals, and this time they’ve signed on a key new supporter: left-wing firebrand Rep. Alexandria Ocasio-Cortez. …“This option would increase revenues by $777 billion from 2019 through 2028, according to an estimate by the staff of the Joint Committee on Taxation,” the Congressional Budget Office’s website says. …The House bill comes on the heels of its companion legislation introduced by Sen. Brian Schatz, D-Hawaii, in the other chamber. Republicans have a 53-47 majority in the Senate.

Needless to say, I’m not surprised to see that AOC is on board. I don’t think there’s a tax she doesn’t want to impose and/or increase.

By the way, I should note that she and other advocates generally are looking at more limited FTTs that would tax transactions only in financial markets, so there wouldn’t necessarily be any direct burden when we write a check or visit the ATM.

But even this more restrained FTT would be very bad news, with significant indirect costs on ordinary people.

Some analysis from the Tax Foundation highlights some of the drawbacks from this tax.

Policymakers should be wary about adopting a financial transactions tax. Like a gross receipts tax, a financial transactions tax results in tax pyramiding. The same economic activity is taxed multiple times. For example, an individual might sell a stock worth $100 to diversify her portfolio and then purchase stock in a new company with that same $100. The $100 is being taxed twice: first, when the individual sells the stock, and then again when the money is used to buy the new security. Imagine this happening thousands of times a day. …That is why this tax would generate nearly $770 billion over a decade. …Supporters, however, argue that the Wall Street Tax Act is needed, because it would reduce volatility in financial markets. It’s not clear that it would reduce volatility. In 2012, the Bank of Canada studied the issue and concluded that “little evidence is found to suggest that an FTT [financial transactions tax] would reduce speculative trading or volatility. In fact, several studies conclude that an FTT increases volatility and bid-ask spreads and decreases trading volume.” …Sweden’s imposition of a financial transactions tax in the 1980s illustrates the challenges perfectly. The country experienced a 60 percent decrease in trading volume as it moved to other markets, as well as a decrease in revenue.

Another report from the Tax Foundation notes the tax can increase volatility and cause direct and indirect revenue losses.

A financial transactions tax would distort asset markets, as types of securities traded more frequently would be taxed much more than assets traded less frequently. This distortion would lead to investors holding certain assets longer than they should in order to avoid the tax. The tax also decreases liquidity and increases transaction costs. …it will also discourage transactions between well-informed investors; furthermore, much of the research on the issue of volatility suggests that higher transaction costs correlate with more volatility, not less. Financial transactions taxes are also not surefire revenue generators. In the 1980s, Sweden imposed a financial transactions tax, and, thanks to the relative mobility of capital markets, 60 percent of trades moved to different markets. Not only did this behavior mean that the financial transactions tax raised little revenue, it also drove down revenue for the capital gains tax, ultimately lowering total government receipts.

A column in the Wall Street Journal notes that such a levy would directly and indirectly hurt ordinary people.

The proposed 0.1% tax on all financial transactions—trades in stocks, bonds, derivatives—may sound small, but it could make markets less stable and hurt small investors. …advocates overlook the breadth of smaller investors… Each day, more than $1 trillion in securities are traded in the U.S., mostly by large investment managers that represent not only wealthy investors, but also 401(k) plans, public pensions and middle-income families. …even a small tax is significant enough to affect trading strategy and raise costs. Such firms…use the minimal cost of automated, high-frequency trading to reduce the need for paid traders, generating savings for investors. …high-frequency traders provide liquidity and have reduced the gap between bid and ask rates in almost every asset class. The disruptive effect of transaction taxes is more than theoretical. The Chinese government has taxed trades since the early 1990s, and its gradual reduction of the tax on certain types of stocks offers an occasion to measure the tax’s effects. A 2014 study by University of Southern California finance professor Yongxiang Wang found that as the tax decreased, affected companies saw corresponding increases in capital investment, innovation and equity financing. …Sweden and France similarly have introduced financial-transactions taxes over the past few decades, resulting in heightened market volatility and declining liquidity, respectively. …Even at a 0.1% rate, the Joint Committee on Taxation estimates the proposed tax would raise $777 billion over 10 years—all taken out of potentially productive private investment. …financial transactions are highly mobile and easy to move to another jurisdiction. Two parties to a financial contract settled in New York can just as easily sign and enforce the contract in the Cayman Islands, for instance, avoiding the tax.

Interestingly, the Washington Post‘s editorial on the topic back in 2016 noted some significant downsides.

It’s worth noting that the United States had a 0.02 percent tax on stock trades in force during the 1920s, and the market still crashed in 1929. If the tax is too high, however, you could stamp out needed price-discovery, hedging and liquidity, thus destroying efficiency and economic growth. Oh, and you also could end up collecting no revenue, or less than you expected, as market activity dried up or fled to more lightly taxed jurisdictions overseas. For these and other reasons, in 1991 Sweden had to repeal a financial transaction tax it had imposed just seven years earlier. An analysis of financial transaction taxes, both actual and proposed, by the nonpartisan Tax Policy Center…shows rapidly diminishing returns once the tax rate exceeds a certain level; a 0.5 percent tax brings in about the same amount of revenue as a 0.1 percent rate.

For what it’s worth, I expect that the Post will do an about-face and embrace the tax as we get closer to the 2020 election.

Though I hope I’m wrong about that.

Let’s close with some excerpts from three substantive studies.

Tim Worstall, in a report for London’s Institute for Economic Affairs, analyzes the harmful effect of a proposed European-wide FTT.

The Robin Hood Tax campaign seems to think that hundreds of billions of dollars can be extracted from the financial markets without anyone really noticing very much: a rather naïve if cute idea. The European Commission is continuing its decades-long campaign to have its ‘own resources’. Under its proposal, FTT revenue would be sent to the Commission, which would thus become less dependent on national governments for its budget. This is neither unusual nor reprehensible in a bureaucracy. It is the nature of the beast that it would like to have its own money to spend without being beholden. …The first and great lesson of tax incidence is that taxes on companies are not paid by companies. …The importance of this effect is still argued over. Various reports from various people with different assumptions about capital openness and so on lead to estimates of 30-70% of corporation tax really being paid by the workers, the rest by the shareholders. One study, Atkinson and Stiglitz (1980), points to the at least theoretical possibility that the incidence on the workers’ wages can be over 100%. That is, that the employees lose in wages more than the revenue raised by the tax. So what will be the incidence of an FTT? … the incidence of the FTT will be upon workers in the form of lower wages, upon consumers of financial products in higher prices and that the incidence, the loss of income resulting from the tax, will be over 100%. The loss will be greater than the revenues raised.

here’s some research from the Committee for Capital Markets Regulation.

For over 300 years, financial transaction taxes (“FTTs”) have been proposed, discussed, and implemented in various forms across global financial markets. And for over 300 years, FTTs have been a failure wherever imposed, frequently failing to raise the promised revenues, while simultaneously damaging the efficiency of the affected markets. Recent proposals for an FTT in the United States would likely have a similar result. …FTT proponents also ignore the empirical evidence from other countries that have imposed FTTs that universally demonstrates that (i) FTTs fall far short of revenue expectations and (ii) securities markets – and by extension the real economy as well as all investors and taxpayers – are significantly harmed by FTTs due to the wide array of beneficial trading activity that is indiscriminately targeted. In fact, many of the G20 countries that have experimented with FTTs in the past, including Germany, Italy, Japan, the Netherlands, Portugal and Sweden, ultimately repealed such taxes due to the damage that they caused.

Last but not least, a study from the Center for Capital Markets Competitiveness has lots of valuable information.

Lower stock prices make it harder for growing businesses to sell stock to raise the capital they need to grow their businesses. At the same time, business borrowing costs through the corporate bond market will go up for the same reason. Lenders will require a higher pre-tax return in order to retain the same after-tax return. …This increase in the cost of capital due to higher interest rates means that businesses will have to spend more in order to raise capital, resulting in less capital investment and fewer jobs. …For example, economists for the European Union conducted a 1,223-page study on the impact of a proposed 0.10% transaction tax under consideration, the same tax rate as that proposed by Sen. Schatz. They found that such a tax would lower GDP by 1.76% while raising revenue of only 0.08% of GDP.26 In other words, the cost to the economy is far more than the revenue raised. …We can learn from U.S. history how little revenue an FTT would raise. When the last FTT was abolished, the rate was approximately 0.4% with a limit of 8 cents per share. Congress estimated that the tax would raise a mere $195 million in 1966. This represents 0.0285% of 1966’s $813 billion GDP. Applying the same percentage to today’s $21 trillion GDP yields an annual revenue of less than $6 billon—less than one-tenth of Sen. Schatz’s projections for such a tax today.

This map from the study is especially helpful.

Just as is the case for wealth taxes, governments have not had positive experiences when they impose this levy.

P.S. Speaking of wealth taxes, I did note in the above interview that those levies are presumably the most destructive because of their negative effect on saving and investment.

P.P.S. If I’m a judge in the Class Warfare Olympics, I’m giving the Gold Medal to Bernie Sanders, the Silver Medal to Elizabeth Warren, and the Bronze Medal to Kamala Harris.

P.P.P.S. As I warned in the interview, the class-warfare taxes won’t collect much revenue, especially compared to the massive spending increases the candidates are proposing. That’s why the middle class is the real target.

P.P.P.P.S. I goofed in the interview when I identified Larry Summers as Obama’s Treasury Secretary. He was Treasury Secretary for Bill Clinton and head of the National Economic Council for Barack Obama.

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Joe Biden: Providing another Great Moment in Left-Wing Hypocrisy

I wrote last month about a group of leftist millionaires who said they should pay more in taxes.

My response was to ask why they aren’t taking advantage of the existing process that allows them to send extra money to the federal government? There’s even a special website that facilitates payments from people who want to voluntarily pay more tax.

Yet, in a glaring example of hypocrisy, these rich statists won’t “put their money where their mouths are.”

Now we have a new example of a rich leftist who says one thing and does another.

And he happens to be a former Vice President of the United States. Tax Notes reports that Joe Biden, who says he wants higher taxes if he wins the 2020 presidential election, has been very aggressive about minimizing the amount of his money that is taken by the IRS.

Former Vice President Joe Biden’s tax returns show he took advantage of a planning strategy that the Obama administration tried to shut down. The planning technique involves the use of an S corporation to allow only a small portion of an individual’s earnings to be subject to self-employment tax. On the portion that isn’t on the hook for self-employment taxes, in some cases it can also escape the 3.8 percent net investment income tax for high-income earners enacted into law during the Obama administration. “It’s truly astounding to me that Biden would take such an aggressive position while contemplating a run for president,” Steven Rosenthal of the Urban-Brookings Tax Policy Center said. “I don’t get it,” he added. …Biden, who is now a Democratic presidential candidate for 2020, released federal and state tax information on June 9 showing he and his wife, Jill, earned millions from speaking and writing engagements since leaving office.

Interesting, there are some Democrats who have chosen not to take advantage of this strategy.

…before becoming president, Barack Obama earned income as an author but listed it on Schedule C, subjecting it to self-employment tax. Sen. Elizabeth Warren, D-Mass., similarly earned income as author and listed the amounts on Schedule C.

What makes Biden’s hypocrisy so remarkable is that the Obama-Biden Administration proposed to make this type of avoidanceillegal.

In its proposed fiscal 2017 budget, the Obama administration would’ve expanded the 3.8 investment to passthrough income so it wouldn’t escape the 3.8 percent tax based on a technicality. The provision, included in a section entitled “loophole closers,” would have raised $271.7 billion over 10 years, according to the Treasury Department’s analysis of the proposal.

So Biden wanted to take away the right of other people to protect their money, yet he is perfectly happy to copy their tax-minimization tactics.

By the way, I should say, quite emphatically, that Biden made the right choice for his family.

Voluntarily giving more money to Washington would be wasteful and reckless. I’m not going to claim that politicians in D.C. are the worst people in the country. But I will assert that they’re the ones with the worst incentive to use money wisely.

In any event, there’s definitely something distasteful about a rich leftist politician behaving like a “greedy capitalist” in his private life. Especially since this politician in the past has asserted that it’s patriotic to pay more tax!

Does this make him a fiscal draft dodger? Is there smoke coming out of the Hypocrisy Meter?

And if so, does that mean John Kerry also is unpatriotic? And what about Bill and Hillary Clinton?

Though Governor Pritzker of Illinois may be the most aggressive example of taxes-for-thee-but-not-for-me.

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Joe Biden’s Self-Defense Advice

Good ol’ Uncle Joe.

Given his chief role as national laughingstock, the Vice President attracts plenty of abuse. I like this caption contest, which led to a clever winning entry.

Handgun bad, shotgun good?

Here’s an amusing joke (with the naughty word redacted), and the late-night talk shows have produced some good one liners about the Veep here, here, here, and here.

And let’s not forget the laughs we all enjoyed when he asserted that paying higher taxes was patriotic.

But Biden has reached new levels on unintentional humor with his recent advice on home defense, all of which appears to be illegal according to fellow Bulldog Mary Katherine Ham.

This video, which has been a viral phenomenon, looks at the practical implications of arming some people with 12-gauge shotguns.

This is amusing, though it’s actually not that funny when you realize that this clown is in charge of the task force putting together gun control proposals for the Obama Administration.

By the way, if you like humorous videos dealing with gun control, here are my favorites.

• A revealing look at how leftists think about gun control.
• A heartwarming adoption story.
• An amusing cartoon conversation between an anti-gun ideologue and a supporter of the Constitution.
• This Christmas greeting from the Second Amendment.

P.S. And if you want serious videos about gun control, you can access several options by clicking here.

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My Critique of Biden’s Class Warfare…and a Very Compelling Argument from A Guy Who Escaped Communism

I talked a couple of days ago to Neil Cavuto about whether the Obama Administration is slightly modifying its class-warfare tax policy.

As you can see, I’m not overly fixated on the parsing of Biden’s comments since I’m against higher tax rates for anyone.

And my takeaway message from the segment is that we need some discussion on the need to reduce the burden of government spending.

But the purpose of this post isn’t to share my appearance on the Fox Business Network. While I like to think that I offer coherent analysis and occasionally can be persuasive, I’m the first to admit that this second video is far more compelling. It features an old guy who escaped from Hungary after World War II and is now worried about creeping statism in the United States.

He does have a political message at the end, but ignore those final few seconds (after all, GOPers can be just as bad as Democrats).

I especially like his point about how class-warfare policy hurts the poor. Very similar to what Margaret Thatcher says in this powerful video.

Please share this post so more people are exposed to his message.

P.S. Since everyone is making fun of Biden, I may as well hop on the bandwagon. Here’s a joke about our feckless Vice President, and you can see a photoshop contest about “Lunchbucket Joe” by clicking here and here.

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Clowns of a Feather Stick Together: French Presidential Candidate Echoes Biden, Says Higher Tax Rates Are Patriotic

I rarely comment on Vice President Biden because he is not a serious person in the world of policy. The only attention he gets on this blog is jabs from the late-night talk show hosts, and I also posted the Joe Biden caption contest and this Joe Biden joke.

Perhaps I would have given Biden some attention if I had started this blog in 2008 instead of 2009, because the then-Delaware Senator made a very silly statement during that year’s campaign.

Joe Biden said Thursday that paying more in taxes is the patriotic thing to do for wealthier Americans. …Biden said: “It’s time to be patriotic … time to jump in, time to be part of the deal, time to help get America out of the rut.”

I’m not sure how America’s Founding Fathers would have reacted to that statement, but I suspect that Washington, Jefferson, Franklin, Mason, and Paine would have had a different perspective.

But I’m not surprised that the Socialist candidate for President in France has the same mentality (and I’m referring to the official candidate of the Socialist Party, not the socialist currently running the country). Here’s a blurb from the BBC.

The Socialist favourite in France’s presidential election, Francois Hollande, has said top earners should pay 75% of their income in tax. …Mr Hollande himself renewed his call on Tuesday, saying the 75% rate on people earning more than one million euros a year was “a patriotic act”. …”It is patriotic to agree to pay a supplementary tax to get the country back on its feet.”

Isn’t this wonderful that politicians of different nationalities and from different continents can be united in the idea that it is “patriotic” to give the world’s least competent people more money?

Maybe Biden and Hollande can also take a trip to Greece together so they can learn how to use the additional money to subsidize pedophiles and collect stool samples as a condition of getting a business license to set up an online company.

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Some Joe Biden Humor

Even though he’s widely seen as a clown and a buffoon, I’ve only had one Joe Biden joke on this blog (a two-parter you can find here and here).

Though I hasten to add that Biden has been mentioned in a few of the joke collections from the late-night comics (here, here, here, and here) and played a supporting role in this joke.

But he deserves some more love and attention, so here’s something that arrived in my inbox yesterday.

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I bought a new Ford F250 Tri-Flex Fuel Truck. Go figure. It runs on either hydrogen, gasoline, or E85.

I returned to the dealer yesterday because I couldn’t get the radio to work.

The service technician explained that the radio was “voice activated.”

“Nelson,” the technician said to the  radio.

The radio replied, “Ricky or Willie?”

“Willie!” he said, and “On The Road Again” came from the speakers.

Then he said, “Ray Charles!,” and in an instant “Georgia On My Mind” replaced Willie Nelson.

I drove away happy, and for the next few days, every time I’d say, “Beethoven,” I’d get beautiful classical music, and if I said, “Beatles,” I’d get one of their awesome songs.

Yesterday, some guy ran a red light and nearly creamed my new truck, but I swerved in time to avoid him.

I yelled, “F-ing Idiot!” Immediately the radio responded with a Joe Biden speech.

“Isn’t technology amazing,” I thought to myself.

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Joe Biden Caption Contest

I have no idea if this is a faked photo, but let’s have some fun with it. Whoever comes up with the funniest/most clever caption wins a very valuable prize.*

*Okay, there’s no real prize, but you’ll at least have the satisfaction of being…um…funny and clever.

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