The Fed’s Interest Rates

In a Letter to the Editor in a recent Wall Street Journal, was this remark:

[A] major reason for doing this [artificially suppressing interest rates] is an attempt to raise inflation to their sacrosanct 2% level.

Interest rates are inherently inflationary, since they raise the cost of money. If the Fed were serious, they’d set their benchmark rates at levels historically consistent with 2% inflation, and then they’d sit down and shut up.

One factor keeping the Fed interfering, though, is universal to all bureaucracies—the bureaucrats can’t sit down and shut up, they think they have to be constantly doing or yapping.

Minimum Wage in San Francisco

City Supervisor Jane Kim, in a recent Letter to the Wall Street Journal Editor sang huzzahs for the city’s $15/hr minimum wage and touted a tax on robots that were replacing those low-skilled workers priced out of the labor market by that minimum wage.

The minimum wage isn’t a pathway to the middle class; it is a safety net to prevent destitution.

And

[A] “robot tax” is a practical way to smooth the transitions caused by automation….

She’s wrong.

I’m sure the robots and kiosks that are replacing those low-skilled workers appreciate being saved from destitution.

Why Not All of Them?

President Donald Trump wants Congress—which is to say, Republicans, since the Progressive-Democrats in Congress want nothing to do with any Trump or Republican generally proposal—to take up welfare reform as the next major Government revamp after tax reform goes through (assuming, of course, a few Republican ego-riven snowflakes don’t blow that up).  However, Louise Radnofsky, who wrote the WSJ piece at the link, seems not to understand the scope of the problem.  Commenting on a speech concerning the matter that Trump gave in Missouri a bit ago, Radnofsky wrote this:

The president didn’t offer specifics about which of the dozens of welfare programs he was seeking to change….

That’s the Point

Six months after it went into force, China’s tough new cybersecurity law is still troubling US technology executives who fear that it will put the intellectual property of their companies and the data they collect in jeopardy.

And

…while the law went into effect June 1, the Chinese government is still drafting specific implementation rules.

And

Company and trade-group representatives are also concerned that the network-equipment security reviews could expose proprietary source code, jeopardizing their trade secrets[.]

How Close Are the House and Senate Tax Reform Bills?

See the table below, from The Wall Street Journal.  While the Left and its NLMSM emphasize the differences, and the Progressive-Democratic Party denizens rail at the claimed iniquities in their manufactured dudgeon, the tax reform bills on offer from the House and the Senate are remarkably similar.  The agree right down the line on the goals of tax reform, and they agree right down that same line on the means of achieving those goals.  The differences between the two bills are matters of degree, details bordering on trivial.

Tax Reform and SALT

The Wall Street Journal Friday opined that a House-Senate conference on the tax reform bills passed by the House and then-on offer by the Senate (since passed, with some changes to the on-offer version) could improve on the two bills and produce a better one for final passage and President’s signature.  The Editorial Board is right as far as it goes.

Notably in the context of their piece and this post, one of those changes to the Senate’s version that was included in what finally was passed was a change to their complete removal of State and local taxes: the Senate-passed version now includes the House’s deductibility of up to $10,000 in property taxes paid.

Showcase Potential

Brussels is worried, and we should be, too, but for different reasons.  The People’s Republic of China is gaining influence in eastern Europe, and it’s doing it with one of my favorite tactics: international trade as a national policy tool.

In Hungary it is hailed as the “Eastward Opening.” Serbian authorities see it as the glue in a “reliable friendship”, while the Polish government describes it as a “tremendous opportunity.” Yet the 16+1, a grouping of 16 central and eastern European countries led by China, receives more caustic reviews in leading EU capitals, with diplomats fearing it could be exploited by Beijing to undermine union rules and take advantage of growing east-west tensions in the pact itself.

It’s Only a Few

It’s only a few Americans that we don’t like—the despicable 1% (actually the 0.2%).  That’s the Progressive-Democratic Party’s excuse for insisting that the death tax be kept in place in the current tax code reform effort.

The estate tax affects a very small—and very wealthy—number of Americans.

Only the estates of about 2 out of every 1,000 Americans who die face this tax right now.

Besides, repealing the tax, the Progressive-Democrats claim, would

unfairly provide more benefits to the wealthy over low- and middle-income Americans.

A State Runs a Budget Deficit

Louisiana, run by Progressive-Democrats since Bobby Jindall was term-limited out of office, is facing a $1.5 billion deficit as “temporary” tax increases implemented earlier begin to expire.  Jay Dardenne, the center-left Republican Commissioner of Administration, Louisiana governor John Bel Edwards’ chief budget officer, says that “devastating” spending cuts would be necessary absent a renewal of the tax increases or enactment of other tax increases.

Law Be Damned

The city of Seattle passed a law earlier this year that levied an income tax on the city’s wealthiest—all in the name of equality of outcome and so…fairness.

It turns out that tax was contrary to the State’s law, which said that only the State can levy an income tax and, explicitly, cities cannot.  The question also was raised regarding whether the Seattle law was even contrary to the State’s constitution—illegitimate—as well as illegal, but the judge avoided the constitutional question.

King County Superior Court Judge John Ruhl ruled in a Wednesday that Seattle did not have the authority to impose the tax because state law prohibits tax on net income.