Monthly Archives: August 2018

Corporate Free Rides

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Alex Sanchez, Florida Bankers Association President and CEO, is worried about corporate welfare.

The problem with modern American credit unions boils down to a simple question: why should a family of four pay more income taxes than a $90 billion financial institution? That’s the total amount of assets held by Navy Federal Credit Union. Yet it is exempt from federal and state corporate income taxes, as well as sales taxes (and, in my home state of Florida, intangible taxes). This is corporate welfare.

He’s right that this isn’t a balanced approach to taxation, but he’s wrong about it being corporate welfare.  The answer isn’t to start levying income taxes on credit unions.  Since customers, American citizens, are the ones who end up paying the vast majority of a business’ taxes, the right answer is to reduce the income taxes on all businesses to the credit unions’ rate.

I agree, too, that even in a zero corporate income tax regime, personal income taxes are too high.  The present temporary personal income tax cuts should be made permanent—as most of our politicians now recognize; it’s only the Progressive-Democrats who not only oppose permantizing the current rates but want to raise them to Kennedy-era rates. Following closely on making those rates permanent, we then should debate lowering them further.

A family of four should pay a higher income tax rate than a multi-billion dollar business, or even a mom-and-pop business, pays, especially since that family already is paying those business’ taxes.

That family just should not be paying as much more.

Income Equality

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William Galston doesn’t think we have enough, and it’s the successful one’s fault.

[T]his [trade leaving nations generally better off] is small comfort to those who lose out, especially because the winners rarely compensate them commensurately.

Galston is operating from a blatantly false premise here.

He does have a couple of solutions to offer.

First, they [government] could significantly expand the earned-income tax credit to bolster the incomes of workers somewhat higher up the income ladder. Second, they could implement a broader program of wage subsidies that would raise the wages of lower- and middle-income earners toward a specified hourly target.

Never mind that, with a Progressive-Democratic Uncle Sugar government paying these wage fractions, employers will have no incentive to pay as high wages.

Why not just skip these middle steps, and provide a Universal Basic Income?

Oh, wait….

Distractions

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Mark Warner (D, VA), Ranking Member of the Senate Intelligence Committee, has objected to President Donald Trump’s revoking ex-CIA Director John Brennan’s security clearance.

This might be a convenient way to distract attention, say from a damaging news story or two. But politicizing the way we guard our nation’s secrets just to punish the President’s critics is a dangerous precedent.

This is neither politicization nor punishment, but a safeguard of our nation’s secrets.  No one, regardless of rank, once they leave government service should have a security clearance.  They neither have a need to know nor a need for access, the two Critical Items—both of which must be present, not just one of them—for granting clearances.  Trump’s only error here is in not ordering the revocation for all persons who have left government service.

No, what’s happening is that Progressive-Democrats like Warner are using this manufactured kerfuffle over Brennan’s security clearance revocation to distract from the fact that their Party has no message whatsoever other than that America is not, and never has, been great and never will be until there’s free stuff for everyone, paid for by taxing the rich, taxing the energy engine of our economy, cutting back our ability to defend ourselves, and on and on.

Surprised

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Writing on the topic of our applying economic pressure on Turkey as a means of getting an American hostage (among others) freed, Greg Ip expressed surprise and worry about the weaponization of trade in his Wednesday Wall Street Journal article.

Trade wars may be morphing into something more dangerous: financial wars.

This, though, merely exposes his misunderstanding of international trade.  Such trade is far more about national policy applied internationally than it is about economics, and international finance is just a tool of that trade venue.  Trade has always been “weaponized;” it has always been about achieving national political goals, of which economics is merely one.

Ip’s discourse also misuses the term “war;” although, he is not alone in this error.  Trade “wars,” even with finance tools being used extensively, are not shooting conflicts, and even with the global financial dislocations of events like the Great Depression or the Panic of 2008, nations’ existences were never at risk.  While trade, freely wielded as a tool of policy, can be effective at pushing the targeted nation to alter its behavior, it never threatens that nation’s independence.  It’s never war.

What Are You Going to Do about It?

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“The Vatican” has proclaimed its regret for the decades of abuse in Pennsylvania of 1,000 or more children by hundreds of the Vatican’s priests.

The abuses described in the report are criminal and morally reprehensible. Those acts were betrayals of trust that robbed survivors of their dignity and their faith.

The Church must learn hard lessons from its past, and there should be accountability for both abusers and those who permitted abuse to occur[.]

On the other hand, Pennsylvania’s Attorney General has pointed out the skill with which this perfidy was executed.

The cover-up was sophisticated. And all the while, shockingly, church leadership kept records of the abuse and the cover-up.  These documents, from the dioceses’ own “Secret Archives,” formed the backbone of this investigation.

Because the men who run the Catholic Church chose not to conduct their own investigation.  It’s a reminder of the atrocity in Boston two decades ago where the Cardinal there, far from nailing his child-abusing priests, simply relocated them to fresh hunting grounds.  It’s a reminder of the abuses inflicted on Argentine children only recently uncovered—officially, that is.

Talk is cheap, men of the Vatican, and rended garments easily replaced.  What are you actually going to do?