Big Government vs Free Market

An economist says Apple isn’t paying its fair share of taxes. There is many things about which to criticize Apple, but this isn’t one of them.

Davos lights insist that companies are responsible to and for their employees, their suppliers, and their communities. Indeed. And the way to execute that responsibility is to be responsible first to companies’ owners. That’s what helps companies thrive so they can have, and have more, employees and suppliers—which money rotation funds those local communities.

What is Apple’s “fair share?” This economist declined to say—just that it ought to pay more.

Medicaid Block Grants

The Trump administration is planning to set up procedures for allowing States to convert the Medicaid funding they receive from the Federal government from matching funds to block grants.

The new procedures would represent a large change.

Medicaid funding is open-ended, meaning the federal government matches state spending. If that funding is converted to a block grant, a state could get a limited, lump sum of federal money instead.

There are two key differences here. One is that the funding would go from strings-attached matches to no-strings block grants. The other is that the decision to go to block grants would be each requesting State’s, resulting in less Federal control over that State’s internal affairs.

Universal Basic Income

It’s creeping ever more deeply into the Progressive-Democratic Party’s psyche and ideology. It’s an idea that was first dreamed up in the ’70s, and it remains an idea that can only fail were it to be implemented.

Giving everyone a basic income won’t improve anyone’s income; it’ll only incentivize employers to pay a wage diminished by the amount of the guaranteed government payment.  But the failure runs much deeper than that.

Such a scheme is inflationary: the outcome can only be a spike in inflation followed by price stabilization at a higher price level.

Population and Income Redistribution

People are moving from politically blue States to politically red ones, and they’re taking their money with them.

Four states have lost population since 2010 including West Virginia (-3.3%), Illinois (-1.2%), Vermont (-0.3%) and Connecticut (-0.2%), but 10 experienced declines last year. New York was the biggest loser as a net 180,000 people left for better climes. Over the last decade New York has lost more of its population to other states (7.2%) than any other save Alaska (8%), followed by Illinois (6.8%), Connecticut (5.6%) and New Jersey (5.5%).

And

Great Britain’s Socialist Party

Nominally, it’s the Labour Party, but its MFWIC, Jeremy Corbyn is moving to make it overtly socialist.  He’s jumped onto the Free Stuff, Higher Taxes, and Pay Raises for Government bandwagon with both feet. Sure, these things have been staples of Labour for generations, but Corbyn really intends to outdo his forebears. Corbyn intends to nationalize enormous sectors of the British economy:

  • fixed line network of telecoms provider BT [British Telecom] to provide free broadband
  • rail
  • water
  • mail delivery services.

Having taken over the economy, Corbyn then would raise taxes even higher than they are already, reorganize what would remain of private enterprises, and increase spending:

Financial Transaction Tax

The Progressive-Democratic Party Presidential candidates (with, for now, the lonely exception of Joe Biden) all want one.  Fred Hatfield, once a (Democrat) commissioner on the Commodity Futures Trading Commission, correctly identified one downside of such a thing.

The tax would be bad for farmers, whose support is critical in the Feb 3 Iowa caucuses.  Farmers manage risk by entering into futures contracts, a type of derivative. Under Mr [Progressive-Democratic Party Presidential candidate and Senator Bernie (I, VT)] Sanders’s proposal, trades of corn and soybeans futures would be taxed at a rate of 0.5 basis point [0.5%].

Raise the Price

…of a product, and with that, lower demand for it.  This is the sort of thing taught in high school introductory economics courses.  One way to raise the price is to raise taxes related to it, and to reduce tax deductions related to it.

The Manhattan real estate market [a generally hgh-end market] stumbled in the third quarter of 2019, new reports show, as prices plunged and fewer buyers were willing to purchase higher-priced properties in the wake of two recent tax increases.
The median sales price for properties fell 17% from the same quarter last year…. The average sales price dropped 12%….
Condo sales fell 8%….

Wealth Taxes

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.

A Price for Stability

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.

One-Upping Elizabeth

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.