Tag Archives: political economy

It Still Is

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The Supreme Court is hearing a case, South Dakota v Wayfair Inc, wherein South Dakota is looking to overturn a generation-old ruling that exempts out of state retailers from State sales taxes unless the retailers also have a physical presence in the State.  I wrote about one aspect of the matter here among other places.

Here’s another, more critical aspect of the matter [emphasis added].

In a 1992 mail-order catalog case [Quill Corp v North Dakota], the court held that, absent congressional approval, states could impose tax-collection duties only on retailers with a “physical presence” within their borders. Congress, with its constitutional power to regulate interstate commerce, was the place to balance state revenue needs with burdens on business, the court said at the time.

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Nonsense

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Germany wants to be excused from American sanctions against Russia, sanctions that were imposed over Russia’s misbehaviors.  The misbehaviors include meddling in our elections, and Russia’s continued efforts to meddle in our upcoming elections.

Germany does a lot of business with Russia. Trade between the two countries rose to €54.5 billion ($67.4 billion) last year from €45 billion in 2016, despite increasingly stringent sanctions, and German companies have invested more than €20 billion in Russia in recent years.

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Two Birds

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I’ve often argued against government spending on matters unrelated to the Constitutionally mandated payment of government debt, providing for the national defense, and seeing to the general Welfare (as defined by the clauses of Article I, Section 8).  I’ve also argued for privatizing the major social welfare programs of Social Security and Medicare.

Now Oklahoma illustrates the failure to limit the one and do the other at the State level, with Medicaid standing in for Medicare.

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State Taxation of Internet Businesses

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The Supreme Court is hearing a case, South Dakota v Wayfair Inc, that seeks to overturn an older precedent that prevents States from taxing businesses doing business in the State that don’t have a physical presence there.  South Dakota is claiming that

…the 1992 precedent harms state treasuries and disadvantages taxpaying home-grown businesses.

That argument might hold water if the States were powerless. They’re not. There’s nothing at all preventing them from lowering the tax rates they impose on the brick-and-mortar and home-grown businesses resident in those States so they can compete. There’s nothing at all preventing the States from lowering their spending rates and thereby protecting their treasuries.

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Tax Cuts, Deficits, and Economic Growth

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The hype is that the tax cuts enacted at the end of last year will lead to trillion dollar Federal government deficits.

On the other hand, there’s this bit about economic growth in the CBO’s report that also carried that deficit forecast [emphasis in the original].

  • Last June, the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3%—a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.
  • [T]he CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.
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Taxing vs Spending

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In a Wall Street Journal piece about Tennessee’s required closure of failing bridges problem, a Leake County Democrat supervisor, Joe Andy Helton, had this:

…he was frustrated by politicians being afraid to raise taxes—even to pay for basic services like roads and bridges.

“There’s only but one way to fix things on the local, state or federal level and that’s taxes,” he said.

Of course. Reallocating spending is utterly inconceivable to him.

The two bridges in Helton’s county that must be closed until repaired would cost, at most, a bit over a half-million dollars, together.  That’s not pocket money for a rural county like Leake, but it’s not that much, either.  County and State spending could be (re)directed toward the repairs.

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Guaranteed Basic Income

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Italy’s 5-Star Movement, nominal winners of the latest Italian national elections, wants to provide one.  5-Star Movement (M5S) Senator Nunzia Catalfo has proposed legislation giving every Italian whose existing income falls below the nation’s defined poverty level a Guaranteed Basic Income of up to €780 ($960) per month, with the actual amount presumably varying in relation to how much the person’s existing income falls below that poverty line.

We want to grant a decent life to those millions who are unemployed or whose wages and income are below the poverty line[.]

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Union Threat

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The American Federation of Teachers doesn’t like guns, gun owners, gun manufacturer, or those who support them.  That’s fine; this is America.

The union’s President, Randi Weingarten, has taken a typically union follow-on step: threatening a union boycott of Wells Fargo if the bank doesn’t end its relationship with the National Rifle Association and with those manufacturers.

We’re issuing Wells Fargo an ultimatum.  They can have a mortgage market that includes America’s teachers, or they can continue to do business with the NRA and gun manufacturers. They can’t do both.

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Messaging and the Midterms

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Here’s a bit about income taxes, via Laura Saunders in Friday’s Wall Street Journal.

For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.

And

[T]he lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year.

And this:

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A Simple Solution to the US-PRC Trade Dispute?

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More like a simplistic one.  Martin Feldstein, ex-Chairman of the Council of Economic Advisers under President Ronald Reagan, has one, summarized by the headline and subhead in his Wall Street Journal op-ed:

How to Make Trade Peace With China
A mutual promise to abide by the WTO’s intellectual property rules would solve much of the problem.

Feldstein is…naive. By his own acknowledgment later in his piece, the PRC routinely violates WTO rules–and international court rulings, lately seen by the PRC’s refusal to abide by a Hague ruling against them regarding the Spratly Islands. The PRC will promise to abide by the WTO’s intellectual property rules?

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