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Cherry Picking Tax Policies

from Kevin Williamson at National Review, The U.S. Is Not the Highest-Taxed Nation in the World

The problem for the Left is that Democrats cannot, under most circumstances, tell the truth about U.S. taxes, either, because the American middle class does not want to hear that it isn’t paying enough in taxes to fund the benefits it wants. The Left insists that something, somewhere — somebody rich, preferably in a Republican-voting state — is getting over on us, that the rich are not paying “their fair share.” It is true that the highest-income Americans do make a great deal more money than do the poor and the middle class — that’s what it means to be high-income — but they already pay an even more disproportionate share of the taxes. The top 20 percent takes in about 55 percent of all income but pays about 70 percent of all federal taxes as Curtis Dubay, formerly of the Heritage Foundation, runs the numbers. Other analysts have come to similar conclusions. That’s what you’d expect: We have a progressive tax code, after all.

Country-to-country comparisons tend to be exercises in cherry-picking. Switzerland is generally considered one of the best-administered countries in the world, and its taxes and public spending are a bit higher than in the United States, though lower than in much of Europe. The Swiss pay higher income taxes, but pay very low business and investment taxes, and essentially no capital-gains tax. (There are local taxes on profits from real-estate sales in some parts of the country.) It also has high wages but no national minimum wage, very free trade, and very light regulation in most respects. On the other hand, most workers are covered by some sort of collective-bargaining agreement. There’s a lot more to economic policy than tax rates as such. Northern European welfare states may have tax rates that look confiscatory from the American point of view, but some of them have much more free economies in other respects. On the Heritage “economic freedom” index, Switzerland, the Netherlands, Ireland, Canada, and the United Kingdom all rank higher than does the United States.

HKO

Trying to compare tax systems, like comparing health care systems, isolates a single policy from its economic and political ecosystem. This includes the history that brought it there, its culture, its relative size, and the availability of other options. To think that a system that we believe is successful can be transplanted from a homogeneous small country to a giant federation of 50 states with widely differing dynamics is as politically naive as it is economically ignorant.

Creating Your New Master

Why Medicare for All Would Damage our Republic by Jay Cost at National Review

This is a very diverse array of policies, but they all exhibit a similar flaw. When the government wishes to accomplish some public purpose that it does not have the means to do itself, it contracts with private parties to accomplish the end. In exchange, the state promises, in effect, to guarantee the private parties a profit from the arrangement. The interest groups gladly accept and then use their public bounties to build a political power base, ensuring that their ends are secured, even if they are not in the public interest.

What Sanders and the left wing of the Democratic party aim to do is to top all these previous endeavors — committing to pour trillions of dollars into the medical-services industry for the sake of public health. They assure us that the government will be able, under such an arrangement, to negotiate a better deal for the taxpayer. But this assurance only demonstrates that they do not understand how our government functions in practice. History has shown that precisely the opposite has happened, again and again. Factions that are blessed by the government come to dominate it, to the detriment of the general welfare.

“Medicare for all” would be like creating a fearsome new Pretorian Guard. These elite soldiers were tasked with protecting the life of the Roman emperor, but their rarefied position gave them extraordinary influence over the affairs of state, to the extent that they sometimes assassinated emperors they opposed and set up new ones more to their liking. If the federal government commits to giving trillions to the medical-services industry to protect the lives of the American people, expect that industry to wield dangerously inflated influence. And it would be dreadful for the republican quality of our system.

HKO

The American Government is more prone to this government creation of special interest conflict because of the institutionalization of influence by way of lobbying.  Make a private interest dependent on the government and then make the government dependent on the interest they enabled; what could go wrong.

I recommend you read the entire piece. It explains a concern missing from the debate.

The Quiet Resistence

from Victor Davis Hanson at National Review, Two Resistances

Yet in contrast to the media-driven “Resistance,” there is a more authentic ongoing resistance that Trump himself capitalized on, but hardly originated. It is a pushback against the corporate and government conglomerate of identity-politics McCarthyism, and elite coastal globalism, in which everything from going to a football game and hearing the national anthem, to watching a tennis match, to visiting a cemetery or park, to keeping up with the news of horrific weather devastation is calibrated by politics. Or rather what bothers most Americans is politics now defined as nonstop sermonizing in which a rich athlete, a Pajama Boy activist, a demagogic politician, or a quarter-educated billionaire movie star lectures less fortunate Americans on the various deplorable racists, sexists, homophobes, and Islamophobes among them.

There is a populist and growing resistance to the Orwellian idea that free speech is hate speech, that equality of opportunity is defined only by equality of result, and that identity politics determines the degree of government-mandated penance and reparations.

Sometimes, millions of viewers flip the channel when jocks at ESPN lecture as if they were wizened philosophers.

Sometimes when multimillionaire athletes claim victimhood and won’t stand for the national anthem, viewers of NFL games never view again.

The quiet resistance is far larger than the loud Resistance and far more revolutionary. Its nature is still not fully understood by the elite Left, especially the growing wrath at two-dimensional traditional politics, dreary social-science platitudes, and economic orthodoxy.

Millions of the resistance, as the nation learned in 2016, apparently can express misgivings about Trump while expressing their greater misgivings about the alternatives to him — especially those candidates of both parties whom they have both voted for and against in the past. And they have become sorely disappointed for having done either.

Politics and Profits

From Thomas Donlan At Barron’s, Trump’s CEOs: In the Wrong Place at the Wrong Time (I like the title in the print edition better, There’s No Profit in Politics)

Business executives as a group rarely show the kind of sophistication that the nation needs in politics. They give money to candidates of both parties, and they expect lower taxes, fat contracts, and gratitude. They have as little understanding of citizenship as politicians do of economics. Their interest in politics is as limited as politicians’ interest in profits.

When business leaders leap into bed with politicians, they think they will gain influence and respect. Thus, they become members of the oldest profession, and they run the risk of catching a serious social disease.

HKO

As a mentor of mine said, “When business gets in bed with government, somebody gets screwed.”

 

Policy Matters

From Kimberly Strassel at The Wall Street Journal,   Here’s What Really Happened to Hillary

Mr. Sanders was an unexpected force in the primary, though mostly because he wasn’t Hillary. Sanders supporters resent this argument, and claim the only reason his agenda didn’t triumph is because the DNC robbed him of the election. If so, why did Bernie’s people and ideas fail spectacularly everywhere else on the ballot?

In Wisconsin Mr. Sanders campaigned for Russ Feingold, who promised a $15 federal minimum wage, an end to trade deals and free college. Mr. Feingold lost to Republican Sen. Ron Johnson. In upstate New York, in a white, working-class district, Mr. Sanders endorsed Zephyr Teachout, who railed against bankers and lobbyists, fought fracking and Citizens United, and opposed trade. Republican John Faso beat her for the open seat by eight percentage points, on a promise to kill Dodd-Frank. Democrats wouldn’t even vote for Tim Canova, the man who primaried Mr. Sanders’s archenemy, Debbie Wasserman Schultz.

An extraordinary 79% of Colorado voters said no to a ballot initiative for ColoradoCare, the state version of Mr. Sanders’s universal health-care proposal. This in a state that Hillary Clinton won. Liberal Vermont pulled its own single-payer plug in 2014. In California, Mr. Sanders endorsed and campaigned for Proposition 61, which was designed to impose prescription drug price controls. It went down to substantial defeat in a state Mrs. Clinton won by 30 points.

Progressives will argue that all they need to elect a Bernie or an Elizabeth is the right way of pitching their “populist” policies of free health care or price-controlled drugs to the white working class and independents. But so far they’ve been unable to sell them even to bright blue states. And this wishful thinking ignores that even if voters supported some of those provisions, they’d also have to swallow a progressive agenda that includes an energy crackdown, a retreat from the terror fight, and the culture of identity politics.

HKO

Kimberly Strassel properly points to the ideological failures of the Democratic Party.  They serve themselves poorly by perpetuating excuses and demonizing Trump.  HRC’s humiliating loss was not an aberration, but a trend of her party  losing ground  for over a decade and accelerated under Obama. Without facing the reality of their loss they are doubling down on what cost them the election.

There is a consistent theme in publications rationalizing their loss that the problem is only one of messaging. This is as insulting as the ‘deplorables’ label.  It not so subtly claims that the great unwashed is too stupid to realize how wonderful their progressive policies are, and the Democrats failure is only their inability to properly articulate their rejected policies. This is an interesting self criticism for the party that considers themselves to be intellectually superior.

The campaigns focus on personalities and character rather than policies. It is possible for charm to overcome policy, and that may explain why Obama was rated so high while his party accelerated their losses everywhere else.

Neither HRC or Trump possessed Obama’s cool, and the race came down to the least objectionable.