Federalism and State Taxes

A Wall Street Journal editorial opens with this:

One great benefit of America’s federalist Constitution is policy competition among the states. Voters in Florida don’t have to live under New York’s laws, and Americans and businesses can vote with their feet by moving across state lines.

The editors proceeded to a description of State-level tax laws and the mobility of us Americans and our businesses in leaving States with high taxes in favor of States with, often markedly, lower taxes. But that lede overstates the case.

Federalism applies, often, with State taxes, but State-level business regulations are a different matter. It’s only necessary to see the outsize impact on our auto industry, for instance, or our pork industry, that California’s regulations have on vehicle requirements and on how hogs must be raised to see the lack of federalism in our regulatory environment.

With specific regard to California’s fuel requirements, there’s this from the Federal government’s EPA:

The Clean Air Act allows California to seek a waiver of the preemption which prohibits states from enacting emission standards for new motor vehicles.

The Federal government has long granted that waiver, and during the Biden administration, the feds made their latest move—overtly to refuse to rescind the waiver, effectively nationalizing a State regulation at the expense of federalism.

On the California’s hog-raising regulation, the Supreme Court upheld that regulation, which mandated the minimum space in which hogs must be raised, anywhere in the United States, in order for them to be marketable in California. The Court nationalized this State-level regulation—again at the expense of federalism.

If we’re going to preserve our federalist structure of governance, federalism must be restored to State regulations, as well as State-level taxes. Don’t look for any of that to happen under any Progressive-Democratic Party-dominated Federal government, though.

Mandating Supply in the Absence of Demand

What could go wrong? Look at Progressive-Democrat President Joe Biden’s mandate, through his Energy Department (run by the Secretary who thought it hilarious that we should—or could—produce more oil), that American automakers—Ford, GM, and Stellantis—make only battery cars by 2032. Along the way, look at his Energy Department’s proposed new rule:

The Energy Department in the spring proposed to eliminate the 6.67 multiplier….
Detroit auto makers would be slammed harder than foreign competitors by the regulatory changes because pick-ups and SUVs make up a larger share of their fleet sales. “The average projected compliance cost per vehicle for the D3 is $2,151, while non-D3 auto manufacturers only see an increase of $546 per vehicle,” the Big Three recently told the Energy Department.

That multiplier was an early regulation that made it possible to impute (however accurately or inaccurately) the miles per gallon achieved by internal combustion engines—itself subject to increasingly higher requirements under successive ED regulations—to the “mileage” achieved by battery cars. ED’s proposed rule change—under that D3 regime—essentially eliminates the mileage equivalent multiplier.

Combined with Biden’s requirement that our automakers make only battery cars by 10 (now 9) years from now, results in this outcome:

[U]nder the Energy Department’s proposal, it could make more sense to pay the government penalties than to increase production of EVs that don’t sell. This may be why GM is now throttling EV production, as Ford has also done.

It’s cheaper for the manufacturers to non-comply and pay the vig than it is for them to produce and pay the even bigger cost of not selling a government-required product the buyers—us ordinary Americans—don’t want and won’t buy.

And what does that preference for violating a law say about a culture of routine law-breaking?

Biden and his Progressive-Democratic Party syndicate can’t even get Rule by Law right, much less live within the dreary and inconvenient process of operating within the law—Rule of Law. And we Americans pay the price of that.

Federal Energy Subsidies

Here are some data regarding the magnitude of favoritism the Federal government is displaying for one American industry over others. These are from the government’s own Energy Information Administration.

  • Renewable energy, led by wind and solar, received $15.6 billion in federal government subsidies in fiscal year 2022
  • natural gas and petroleum liquids industry received $2.3 billion
  • coal industry received $0.873 billion

“Green”-sourced energy is getting orders of magnitude more taxpayer money than are the far cheaper and reliable fossil fuel-sourced energy.

This is how much green energy is supported by taxpayer funds rather than by energy users with the rates they pay their utilities.

This is how desperate “green” energy pushers are for funding because of how far distant “green” energy is from being economically viable.

Why Lend?

How can a financial entity lend? Progressive-Democrat President Joe Biden now is moving to hide individuals’ medical debt from potential lenders.

[P]roposed regulations would prohibit consumer reporting companies from including medical debts and collecting information on consumer reports that creditors use to make underwriting decisions. Creditors would also be barred from using medical collections information when evaluating borrowers’ credit applications.

This on the heels of his constant attempts to render student debt holders unaccountable for their debt.

Since lenders are increasingly being denied recourse, and now they’re to be denied useful information about a potential “borrower’s” ability to repay a debt a priori, why—how—could any lender make a decision to lend, other than to raise its interest rate very high, commensurate with the very high risk being inflicted on that lender by Government?

Look for the Biden administration to start trying to cap lending interest rates, next.

Not at all Baffling

Last weekend, the San Francisco 49ers and the Los Angeles Rams played an NFL football game. With four seconds to go in the game, and the Rams in possession and down by ten, they went for—and made—a field goal. No time left, and the Rams lose by seven. Had they gone for a touchdown (not a pipe dream, the line of scrimmage was the 49ers’ 20 yard line) and made that, they would have lost by three (or two had they then chosen a two-point conversion). Fail on the touchdown try, and they’d have lost by those ten. Some folks thought the Rams’ decision was “baffling.”

But maybe losing by seven points was all they needed.

By game start, the betting spread on the game had settled at the 49ers winning by 7 points or 7.5 points, depending on the betting parlor. (Lots of parlors don’t like gambling ties, and that half-point in the spread eliminates those.) By losing by 7 instead of by 10, they beat the spread, and the field goal was a surer thing than going for the touchdown. The parlors paid holders of the correct side of the 7.5 point spread, and they refunded all bets on the 7 point spread (one reason parlors don’t like ties).

The Rams coach, Sean McVay, has a different take on his decision. Before the field goal’s prior play, he intended that prior play simply to get them into field goal range, and with time on the clock, hit the field goal, recover an ensuing onside kick, and go for the tie or win. In the realization, though, the down and in (in-cut) ran longer on the field and on the clock than expected so there wasn’t time left–those four seconds–to hit the field goal, get the onside kick, and…. At that point, he simply decided to stick with the field goal. He says he was unaware of the betting line [bowlegs in the original]:

Apparently, (Rams V.P. of communications) Artis (Twyman) told me there’s a lot of people in Vegas pissed off about that decision. I clearly was not aware of that stuff[.]

The first-linked article went on at some length about the spread and the field goal, but it missed the larger point: this is the impact of allowing gambling on professional sports, even if McVay, on the sidelines, wasn’t aware of the betting line. The mere discussion of the betting implications demonstrates the vulnerability.