California Congresswoman Rosa DeLauro, the Progressive-Democratic Party member who chairs the House Appropriations Committee, claims she’s open to a tax cut deal.
Our ask is simple: if we can provide tax cuts for America’s corporations, we can certainly provide a tax cut for America’s kids[.]
I agree, and it is a simple ask. Provide the tax cut for America’s kids by reducing the personal income tax rates their parents have to pay.
Sadly, DeLauro isn’t at all serious.
Allied and friendly governments object to the Biden administration’s battery-operated car tax subsidy requirements that these vehicles be assembled substantially in the US or they’re not eligible for the subsidy. That puts battery-operated cars assembled in Europe, Japan, and the Republic of Korea at a substantial disadvantage in the competition for sales in the US.
They’re right, but for a different reason than they think.
The Biden administration should get rid of the battery-operated car subsidies altogether. If battery-operated cars truly were ready for market, they’d need no subsidy: Americans would buy them on the merits of the cars. If we don’t want them, or don’t want them in large numbers, government intervention (via subsidies here) is no more appropriate than is government intervention in any other section of our free market marketplace.
Full stop.
And other tax credits. Scott Hodge was one of the developers of the Child Tax Credit more than 25 years ago, and today he thinks the idea—well intended as it was—turns out to be bad tax and social policy (did I hear a sotto voce “unintended consequences?”).
His Monday Wall Street Journal op-ed went into detail on how the child tax credit, along with the subsequent proliferation of tax credits, turned out to be heavily counterproductive, reducing family prosperity through reducing the number of workers—who are family members—in the work force and thereby reducing overall GDP.
But the kicker of his piece was his closer.
No wonder the IRS is dysfunctional—it’s not equipped to be a social-service agency.
The “put money in people’s pockets” approach of the child tax credit might have been good politics, but 25 years’ experience shows it was bad policy. The country needs a tax agenda that promotes growth and opportunity, not handouts and redistribution.
Indeed.
The best tax agenda for growth and opportunity promotion begins with taking our tax code, and so the IRS, out of the social engineering milieu altogether. Tax collections should be limited (at the Federal level at least; although State tax codes would benefit from similar changes) to the Constitutionally mandated purposes of pay[ing] the Debts and provid[ing] for the common Defence and general Welfare of the United States. Keeping in mind, too, that the general Welfare of the United States is itself limited to the items enumerated in our Constitution’s Article I, Section 8.
That tax agenda concludes with enacting a tax code that eliminates business income taxes altogether (keeping in mind that it’s the business’ customers who pay the lion’s share of those taxes, anyway, in the form of higher prices, while the rest of us pay in the form of reduced innovation and fewer jobs). That adjustment needs to go along with setting a single flat tax rate on all personal income from any source, with no deductions, credits, subsidies, surcharges, or any of the other froo-froo currently extant in our existing byzantine and mendacious tax code.
It’s not the tax collection agency it’s made out to be. We all recall, for instance, the IRS’ Lois Lerner-run Exempt Organizations Unit targeting Conservative tax-exempt organizations, slow-walking or outright denying those organizations tax-exempt status purely for political reasons, without consideration of how well they met statutory criteria for the status.
It’s also been well-publicized that the IRS has been funded for next year to hire 87,000 agents for the ostensible purpose of increasing audits of the Evil Rich, and the agency is buying ammunition and hiring agents who are willing to use lethal force in the course of their “duties.”
This is not unique to the Progressive-Democrat administrations of ex-President Barack Obama and current President Joe Biden. As far back as Lyndon Johnson’s (D) and Richard Nixon’s (R) administrations, the IRS was used to interfere with government-disapproved organizations and citizens.
Today’s IRS is just as bad across a range of…matters.
The solution to this isn’t more legislation for the IRS to ignore, with or without the tacit approval of the administration then in power. IRS history and current behavior means the agency needs to be vastly shrunk.
But shrinking the IRS would be difficult as a practical matter with the current byzantine and heavily biased against some economic strata Federal tax code. IRS size and performance, then, is an argument for greatly simplifying our tax code.
Eliminate the business revenue-centric taxes. Businesses don’t pay much of those taxes, anyway; their customers pay the taxes in the form of higher prices and reduced innovation rates, and business employees and potential employees pay the taxes in the form of slower wage increases and lessened hirings.
Eliminate the personal income tax as currently constructed and have only a single, flat tax rate charged on all income from any source. Do away with subsidies, credits, exemptions, social engineering gerrymandering altogether. The new 1040 could be reduced to the current taxpayer identifying information, a line for totting up all income and reporting the total, a line for calculating the [10%] tax on that total as the total tax due, and a line for the taxpayer’s [sic] signature.
That could fit on a postcard, but with the personally identifying and income data present, I wouldn’t recommend anything less than a sealed envelope. Such a tax regime, though, would allow an IRS-like function to exist with about 14 employees (I exaggerate, but not by much).
Tough to be a political tool with that reduced function and personnel complement, too.
This fall, the good citizens of Arizona will be voting on, among other things, a State constitutional amendment that would make it more difficult to increase State taxes.
If passed it would amend the state constitution to require a 60% majority to raise taxes through any future referendum. Current law requires a two-thirds majority to raise taxes through legislation but only a simple majority to do so by plebiscite.
State Representative Tim Dunn (R), who led the effort to get this onto November’s ballot:
When you have something that you can’t change without going back to the voters, I think we should have overwhelming support.
Yewbetcha.
As The Wall Street Journal put it,
A 60% threshold ensures broad consensus before rates can be raised by referendum.
…
The point is to make it harder for Arizona to join states that raise taxes as a first fiscal resort rather than examine spending.