Category Archives: political economy

Wealth Taxes

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Progressive-Democratic Party Presidential candidates and Senators Elizabeth Warren (D, MA) and Bernie Sanders (I, VT) have proposed taxes on the wealth of Americans—2% on individuals worth more than $50 million and 3% on billionaires in Warren’s case, and from 1% on married couples worth $32 million, rising to 8% on those with wealth over $10 billion in Sanders’.

These are direct taxes, which would make them unconstitutional.  Their unconstitutionality does not arise from their directness but from their lack of State proportionality.  Proportionality—apportionment in the Constitution’s terms—means that such taxes can only be assessed in accordance with a State’s population relative to the other States’ populations, just as Representation in the Federal government House of Representatives is.

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A Price for Stability

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Global tax reform is a path to a stable international economic regime??

[T]he potential global tax overhaul would force many companies to pay more to governments, not less. But this may be a small price to pay for a stable international framework.

After all,

Existing global tax rules allow companies to transfer those profits, often to a low-tax jurisdiction.

Never mind that an even smaller price—indeed, a net positive gain in prosperity—would be lowering national taxes to the level of the lowest rates imposed by any nation. This would eliminate tax competition, reduce compliance costs as multinational companies no longer had to maneuver the way they realize their incomes and taxes owed, lead to lower end-user prices by reducing taxes as a multinational’s cost center to be covered by the price of its goods.

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One-Upping Elizabeth

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Who can be more socialist than the other?  Progressive-Democratic Party Presidential candidate and Senator Bernie Sanders (I, VT) now has proposed

an annual wealth tax topping out at 8% for the richest Americans, offering the farthest-reaching Democratic plan to pay for expanded government programs and break up concentrated fortunes.

That’s much more than fellow Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) now paltry 2% wealth tax.

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Some Numbers

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…on President Donald Trump’s war on women.  Here they are for women-led households.  The latest Census Bureau report says

  • the share of workers in female-led households who worked full-time year-round increased by 4.2 percentage points among blacks
  • 6 percentage points among Hispanics.

Notice that.  Not 4.2 percent—4.2 percentage points.

Then there’re these numbers:

  • real median earnings for female households with no spouse present jumped 7.6% last year.
  • poverty rate among female households declined 2.7 percentage points for blacks
  • declined 4 percentage points for Hispanics
  • declined 7.1 percentage points for their children

And

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Powell and Trump

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Nick Timiraos, writing in Friday’s Wall Street Journal, is concerned with messaging from Federal Reserve Chairman Jerome Powell to President Donald Trump—is Powell being too subtle, or does he need to answer more explicitly, Trump’s often heated admonishments?  Timiraos is concerned particularly against the backdrop of the often deprecatory nature of Trump’s opprobrium.

This is headed into a cul-de-sac, though.

The question of Fed messaging—to Trump or anyone else—shouldn’t even come up. The Fed’s role is to maintain stable pricing, full employment, and low interest rates.

Full stop.

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Government vs Charity

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Which is to say, Government welfare/wealth redistribution vs private charity.  Progressive-Democratic Party Presidential candidate and Senator (I, VT) Bernie Sanders has given the Progressive-Democrats’ game away.  The subject is private donors giving hundreds of millions of their own money to fund scholarships at colleges and universities.  Sanders tweeted that

Mr Smith’s gift was “extremely generous” but added that the “student crisis will not be solved by charity. It must be addressed by governmental action.”

Robert Smith is Vista Equity Partners CEO, and his gift was directly to Morehouse College class of 2019: he’s covering 100% of their college debt.  Other private donor gifts include

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Market Demand

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In a Letter to the Editor in a recent Wall Street Journal, Thomas Michaels wrote,

John E Stafford asks why “starting salaries for public-school teachers in many states are under $40,000 a year….” The answer is supply and demand. There are more “qualified” teaching graduates looking for a job than there are openings in their desired location. Union protection and state-mandated benefits assure that placeholders stay in place. Market theory says that when there are more goods available than the market requires, the price goes down.

A bit of basic high school-level economics, a subject that isn’t taught in high school very much.

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Medicare-for-All and Middle Class Taxes

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Even Stephen Colbert wants to know: under Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) payment scheme for her Medicare-for-All scheme, will middle class Americans’ taxes go up? He put the question to her in so many words:

You keep being asked in the debates how are you going to pay for it, are you going to be raising the middle-class taxes…. How are you going to pay for it? Are you going to be raising the middle-class taxes?

Warren’s answer:

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EU Version of Brexit

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EU Commission President Jean-Claude Juncker says that the risk of a no-deal Brexit is very real.  He also says he told British Prime Minister Boris Johnson

…I have no emotional attachment to the backstop.  But I made clear that I do have an intimate connection to its commitments. I have asked the prime minister to make, in writing, alternatives.

The commitment of the backstop, the open border between Northern Ireland and the Republic of Ireland, which violates a central premise of the vote to leave the EU—British control of British borders—still amounts to a backdoor to partitioning Great Britain. Keep in mind that one of the EU’s early offers on this backstop was that Great Britain could put its hard border on the Irish Sea coast—an offer quickly deleted when its purpose was recognized as too obviously presented.

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Continued Intransigence

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European Commission President Jean-Claude Juncker makes it clear.

Britain has still not proposed any workable alternatives to the Northern Ireland “backstop” within the Brexit withdrawal agreement, the EU said on Monday.

And

President Juncker underlined the commission’s continued willingness and openness to examine whether such proposals meet the objectives of the backstop. Such proposals have not yet been made[.]

Juncker knows full well that the “backstop” is not just a deal-breaker, it’s a non-starter for the British. It demands that a core feature of the Brexit vote three years ago was so that Great Britain gets control of its own borders back, yet the “backstop” requires Great Britain to surrender its Irish border to the EU.  That can only be taken as a first step to dismantling Great Britain.

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