Quick Thought on Tax Reform

The Progressive-Democrats won a majority in the House, and the Republicans look like they’re going to expand their majority in the Senate.  That looks like legislative paralysis in the next Congress.

However.

The next Congress won’t be sworn in until 3 January 2019.  That gives two months for the present Congress, with Republican majorities in both houses, to get some remaining stuff done.

Top on that list in my august view is tax reform.  This Congress needs to move to make permanent the individual income tax cuts that otherwise will expire in 2025.  Get it done now, before the Progressive-Democrats, with their gridlock, take sufficient office to block the reform.

A Government Personnel Shakeup

This one in the Republic of Korea.  RoK President Moon Jae-in has removed many of his economic cabinet members because the RoK’s economy has continued to stagnate.

So far, the government’s prescribed medicine—big increases in public-sector hiring and the minimum wage—hasn’t proved an elixir.

What a surprise—government crowding out the private sector, competing with the private sector for labor, demanding that workers be paid more than their work is worth isn’t economically stimulative.

Unfortunately, Moon is only changing personnel; he’s not correcting policy. Here’s Lee Sang-jae, Eugene Investment & Securities macroeconomy analyst:

Mr Moon’s policy will stay on course and hardly change, just with a second line of its original architects at the helm[.]