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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.

Statutory vs Actual Tax Rates

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

We do have an extraordinarily high top corporate-tax rate — on paper, anyway. Our statutory top corporate rate is among the highest in the world, but the corporate tax code is a welfare program. You know how basically every president at every State of the Union address announces a special plan to encourage U.S. manufacturing or green energy or something like that? Those end up as exemptions and deductions in the corporate tax code, which, along with other tax-code favoritism, is why companies such as General Electric sometimes pay no taxes even in years in which they seem to be making a great deal of money. The effective corporate tax rate — what corporations actually pay — in the United States is not especially high, and it’s low if you have the right friends in Washington. The fact that corporate taxes vary so much from company to company and industry to industry is not an accident — the code is designed that way on purpose. It gives big powerful market incumbents a way to disadvantage potential competitors while giving power-brokers in Washington the power to make or break entire industries.

HKO

We conflate statutory tax rate with actual- those rates after deductions,credit, and loopholes you obtain through lobbying and political connections. The greater this difference the greater the government is influencing and polluting market decisions.

The Trump Constitutional Lesson

from Kevin Williamson at National Review, Three and a Half More Years!

Trump was, and is, unfit for the office he holds. He is also the duly elected president of the United States of America. Nothing since January has changed that.

We cannot allow the current state of affairs, in which the loss of a presidential election is met with ever wilder and more vicious attempts to immobilize the executive, to become the new normal. We cannot treat every lost election as an illegitimate one — which is precisely the direction in which the Democrats have us pointed at the moment. Our federal government already is dysfunctional, and that kind of banana-republic total-war opposition, carried on without rest or relief, will lead to a country that is truly ungovernable and not simply acting ungovernable for short-term political reasons. Driving Trump from office would hurt Republicans in the short term. It would hurt Democrats a great deal very soon after. And, much more important, it would do great violence to our constitutional order and our long and proud history of regular government. The Yorks wouldn’t have peace with a Lancaster on the throne, and vice versa, but the United States of America is a republic. Fortunately, the president is only the chief administrator of the federal government, not a personification of the national ideal.

HKO

The best result of the election of Donald Trump may be an appreciation of the Constitution for those who have recently ignored it.

We Need More Memorials

by Henry Oliner

In The National Review, Kevin Williams writes Let It Be.  He addresses the myth that slavery was only a secondary issue that led to the Civil War, but does not hide the political opportunism that pollutes the moralizing that is pushing for the removal of the Civil War memorials in so many towns.

Kevin suggests that memorials can be re-purposed.  The confederacy should be remembered as a watershed event in American history that corrected a major flaw in our constitution.  Our history is a struggle to bring the rights and privileges of our constitution to the people who were not originally included.

It rings hollow to sing the praises of good men who fought for a misguided or bad cause.  We can remember the terrible destruction the South wreaked upon itself in the name of saving an economic and political system dependent on slavery.  We can also admit that it was a good thing that we lost.

The most underutilized word in the lexicon of historical revisionists is “and”.  Woodrow Wilson was the intellectual engine of the progressive movement “and” a racist.  Do we reject the premises of progressivism because of Wilson’s racism?  Do we reject the political genius of Thomas Jefferson because he owned slaves?

Do we reject the moral crusade of the abolitionists because many of them were anti-Semitic? History is full of such incongruences.

Before the Civil War there were more Jewish representatives in Congress from the South than from the North.  Immigrant Jews encountered less anti-Semitism in the South than in the North. 3500 Jews fought in the Confederate Army.  The Jewish Confederates  by Robert Rosen documents the Jewish contribution to the confederacy.  The treasurer of the Confederacy, Judah Benjamin, was Jewish.

This is an embarrassment to the liberal Jews of today, but the history remains.  We cannot pretend that Jews in the South did not own slaves, even if it may have been at a lower rate.  Nor can we assume that the Jews of the South treated their slaves better.  Perhaps they did but this is more wishful thinking than historically validated.

But just as we can acknowledge that the Founding Fathers who accepted slavery, however limited, should not be exclusively defined by this flaw, perhaps we can acknowledge that the culture of the South may stand for something more than slavery, however hideous this institution was. The monuments do stand for something more than slavery in the eyes of many, even if this is hard to comprehend to moralizing opportunists.

If they are offensive, they can be moved, but they can also be repurposed to examine the history of slavery and the Confederacy and the evolution of Civil Rights in America.  We should construct new memorials to remember the giants of the Civil Rights Movement. Maybe they should replace the confederate memorials, but maybe they should share a space to highlight the contrast.

We as a nation are the sum of our sins and our virtues.  The defining characteristic of America is its motion and progress.  We continuously redefine ourselves. We do not cherish our history of slavery, but our growth out of it and continued efforts to eradicate its legacy with Amendments 13, 14 16, The Civil Rights Act and further acts until we could not only elect a Black president but re-elect him.

Our desire to preserve our history is not the same as a desire to preserve our sins.

 

 

 

The Critical Difference Between Good and Bad Regulation

Mark Levin is a rabid right wing radio talk show host.  Because I at least scan about any title with the word progressivism in it, I viewed his latest book Rediscovering Americanism: and the Tyranny of Progressivism and was pleasantly surprised at the depth of his topic. His study of the origin of natural rights, his survey of the philosophers like Montesquieu who influenced the founders and framers, and his review of the changes in our fundamental governing ideas that came with progressivism make this a very worthy read.  Its depth is surprising and at least for me required a slow reading.

Kevin Williamson at National Review wrote an excellent review in Rediscovering Austrianism and focused further on Levin’s distinction between our constitutional heritage and progressivism:

Levin applies the Hayekian standard to the case of regulation. Hayek, a classical liberal who gave a great deal of thought to the mode and character of economic regulation, argued that there were sure to be cases in which the conditions for market competition could not be created or maintained. What economic liberals (funny word, “liberals”) could not accept, in Hayek’s view, was the replacement of functioning market competition with “inferior methods of coordinating individual efforts.” What this means, Levin argues, is that the alternative to progressivism is not doctrinaire libertarianism but political action within the context of government power, particularly federal power, operating within its properly understood role. “Regulations informed by America’s founding principles and instituted for the limited but significant purpose of nurturing, improving, or promoting private property and economic vibrancy are both prudential and essential to safeguarding individual liberty and the civil society,” Levin writes. But regulations organized along other lines — “schemes to fundamentally transform society” as he describes them — are something else, inevitably put forward in the service of “progressive ideology, special interests, crony capitalism, etc.” and constituting “a perversion and abuse of legitimate governing authority.”

Free societies are delicate things, and they are based on complex economic and social systems that are not the design of any single intelligence and not subject to reform or management by any single intelligence. Hence, it is necessary, as EPA administrator Scott Pruitt likes to put it, for regulation to be regular. That means developing rules that are broad, stable, generally applicable, predictable, and oriented toward general social ends rather than toward highly specific political goals. (E.g., “We’ll generate x percent of our energy from solar and wind by year y.”)

HKO

This is an admission that markets are imperfect and necessary conditions may be hard to maintain. But it does not mean than any centrally planned government intrusion is preferable.  If market forces are not delivering what is wanted in an acceptable time frame (patience is rarely a good campaign slogan), then the best alternative is to fund the outcome as directly and as transparently as possible. Even then policy makers should be keenly aware of the consequences of usurping normal market functions and incentives.

The worst solution is to imagine that any centrally planned agency or bureaucracy can engineer or maintain a complex economic system that will serve all needs.

Hayek warned, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”