Tag Archives: jobs

Byzantine Taxing

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Many companies, sitting on billions of dollars of tax credits, want to be able to cash them in promptly.

For example:

Duke has been unable to use all the corporate-research and renewable-energy credits it accumulated because it has been using accelerated tax deductions for capital investments to lower its taxable income, said Dwight Jacobs, the company’s chief accounting officer. That bumped it up against tax-code rules that limit tax credits, leaving $1.8 billion in unused credits on Duke’s books. Under the proposal, the company could get that within months instead of years.
The proposal “would give us more cash today and that would cause us to avoid borrowing money that we would otherwise have to borrow,” said Mr Jacobs.

And

Under the tax code, companies can claim credits for activities encouraged by the government. Among the largest are credits for conducting corporate research, funding low-income housing, and producing renewable energy….
Unlike deductions, which lower taxable income, credits reduce a company’s tax bill directly. But there are limits. Companies can generally offset only 75% of the taxes they owe by using credits. Any leftover credits can be used for one previous year or up to 20 years in the future.

Sound complicated? That’s the point. This isn’t a matter of helping out Duke, et al., with a particular section of the tax code. This is a matter of a too-complicated tax code.

We need, badly, to simplify it. A single, low rate, with no deductions, subsidies, credits, or other froo-froo would be suitably simple.

Better, would be eliminating corporate taxes altogether. In the end, the taxes a business pays are just costs passed on to customers in the form of higher prices; the taxed business doesn’t itself pay very much of its tax liability.

Either move would be doubly beneficial: more money left in the company’s coffers for R&D, marketing, capital improvement, jobs, wage increases from the reduced/eliminated taxes. More money also would be left in the company’s coffers for R&D, marketing,… from the reduced/eliminated tax compliance costs.

And all of that adds up to lowered prices for the company’s customers.

Foolishness

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The United Teachers Los Angeles union put out a paper earlier this month, and among the union’s claims is this one”

Police violence is a leading cause of death and trauma for Black people, and is a serious public health and moral issue.

Wow.

There are thousands of blacks killed or traumatized and families traumatized by other blacks every year. Police violence causes more black deaths and trauma than that?

Thousands of black babies murdered in the womb every year. Police violence causes more black deaths and trauma than that?

The UTLA is insulting the intelligence of all of us with this…foolishness. The UTLA is especially demonstrating its soft bigotry of low expectations with this insult to the intelligence of blacks.

The UTLA doesn’t care a fig about the welfare of blacks or of black children or of any of our children or of any of us. The union just wants money.

Full stop.

An Efficient Labor Market

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A writer, published in Wall Street Journal‘s Letters, responded to the idea that emphasis on education credentials over actual experience averred that the emphasis isn’t at all misplaced.

It’s more likely that there is a limited number of high-wage jobs available and that the market has efficiently set the wage based on the supply/demand curves.

This is a remarkably ill-informed claim, assuming as it does that we actually have an efficient market in labor.

Such a market cannot exist, though, in an environment where unions have monopoly power over labor in the industries in which they operate, nor can it exist in an economy with such widespread minimum wage mandates.

Since both of those exist, we are even farther from an efficient market for labor.

Becoming Happy

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It’s what Thomas Jefferson said a while ago:

If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy.

If the people become happy, though, they—we—would have little need for so large a government. And that would put a lot of bureaucrats, and most importantly, politicians out of business.

That is what today’s Progressive-Democrats and too many establishment Republicans fear, even above fearing failing our nation—being unnecessary.

The Party of Economic Sense

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A Sunday editorial in The Wall Street Journal provides some pretty dispositive data concerning State economic behaviors during the present Wuhan Virus situation.

The baseline: the national unemployment rate for May was 13.3%.

Ten States remained above even 15% in their individual unemployment rates:

  • Nevada 25.3%
  • Hawaii 22.6%
  • Michigan 21.2%
  • California 16.3%
  • Rhode Island 16.3%
  • Massachusetts 16.3%
  • Delaware 15.8%
  • Illinois 15.2%
  • New Jersey 15.2%
  • Washington 15.1%

These States also had some of our nation’s most draconian lockdown requirements.

States with no lockdown or very light-handed stay-home instructions coupled with very early reopening include these, and their May unemployment rates:

  • Georgia 9.7%
  • Arkansas 9.5%
  • Arizona 8.9%
  • Utah 8.5%
  • Nebraska 5.2% (our nation’s lowest rate)

It’s a nearly pure Progressive-Democrat vs Republican view of the importance of economic health, and so of overall health. As with most things, though, there are a couple of exceptions.

Massachusetts, in that top-ten list of poor performance, has a Republican Governor and Lieutenant Governor, although it has Progressive-Democratic Party veto-proof majorities in both houses of the State’s legislature.

Colorado, Progressive-Democrat-run, isn’t on the list of top-five best performers, but that government ended its lockdown very early, and its unemployment rate is below the national average and falling further: from April’s 12.2% to 10.2% in May.

Notice that. The economic recovery rate is markedly improved by early release from lockdown gaol or by not locking up the citizens in the first place.

Keep in mind who has the better sense—economic, liberty, health—this November.