Not an Iron Curtain

But it is intended to be a chain-link fence.  It’s not intended to keep folks out, though, but like its Big Brother, it is intended to “encourage” folks to stay in.

Connecticut has expanded its mansion tax on homes.  Here’s how it works.  On sale, Connecticut taxmen will exact from the seller a 2.25% tax on the value of the sale that exceeds $2.5 million.  This is an increase from the already existing “conveyance tax” of 1.25%, but it adds a fillip: if the seller stays in the State for a suitably long time after the sale (“suitable” being defined by the State’s politicians), he’ll get the money back as a tax credit.  If he leaves Connecticut for greener and friendlier pastures too soon to suit those politicians, too bad—he loses those 2.25%.

The Land of the Free

Free Stuff, that is.  Here’s the latest from Senator and Progressive-Democratic Party Presidential candidate Elizabeth Warren (D, MA).  In addition to all the other free stuff she wants us to have, now she wants free child care.

[F]amilies living below the 200% poverty threshold (roughly $51,500 for a family of four) would get free access to child care and early education….

With this, Warren wants folks who, by her own definition, are not poverty-ridden to get free child care.  Notice, too, she’s lumped in with child care her “early education”—that’s her tacit admission that our public schools no longer provide actual education; they’re just child care facilities.

You’ve Made Enough Money

The New Jersey governor says so, and he wants to raise the income tax on the rich and the not-yet rich—those making more than $1 million per annual year*—by almost a full per centage point, to 10.75%.

Because, he argues.

So far, even the Progressive-Democrat-run legislature is demurring from that move, but the governor seems poised to veto a budget that doesn’t have the tax increase.

Give it up, the Progressive-Democrat governor says. I have better uses for your money than you do, the Progressive-Democrat governor says.

 

Union “Dues”

Now the taxpayer looks to be on the hook.  At least in New York.

[O]n May 1, New York’s state Senate voted to let strikers get benefits one week after walking off the job—essentially putting them on equal footing with those who are laid off.
If Governor Andrew Cuomo signs this bill, he’ll effectively be using New York’s unemployment-insurance program to subsidize union strikes, upending the balance of power between workers and management.

Union strikes are little indistinguishable from extortion, except that they’re legal. They’re used to threaten a company’s ability to function—to survive—unless they surrender to union demands.  “Nice little business you got here. Be too bad if something was to happen to it.”

A Foolish Proposal

Senator and Progressive-Democratic Party Presidential candidate Kamala Harris has one.  She’s

proposing that large employers pay women on an equal basis with their male counterparts or face government fines, seeking a sweeping shift in the way the nation addresses pay inequity.

Modern Monetary Theory, Taxes, and Inflation

Japan is examining MMT in its debate over its upcoming sales tax increase [emphasis added].

Some members of Parliament, led by ruling conservative-party lawmakers, argue Japan doesn’t need higher taxes because the country’s inflation is less than 1%. The theory suggests tax increases are needed only when inflation is out of control.

Notice that: MMT says increasing taxes is a means of controlling inflation.  The idea is that taking money away from the citizens reduces demand and so inflationary pressure.  There are a couple of problems with this concept.  One is that government revenue gets spent so Keynes’ aggregate demand goes unchanged, except for a bit of Government-as-middle-man friction.

Puzzling Through Tax Breaks

The Progressive-Democrats, and too many Republicans, in Congress are trying to sort out what should be done about expiring tax breaks.

Here are some of the expiring or about to expire tax breaks:

  • incentives for biodiesel production
  • deductibility of private mortgage insurance
  • tax credits for investing in low-income areas
  • employers’ family-leave plans
  • expansion of the earned-income tax credit

The answer is really quite simple and straightforward, if extremely difficult politically: let them all expire. Our Federal tax code should not be used for social engineering; it should be used solely for its constitutionally mandated purpose: to fund our Federal government.

Economic Performance

…and one Progressive-Democrat’s tax proposal.  Although, the fact is that these effects aren’t unique to Senator and Progressive-Democratic Party Presidential candidate Elizabeth Warren (D, NM): the trend of effects are the outcomes of all the Progressive-Democratic Party’s proposals, differing only in detail.

Warren’s particular proposal is to tax business profits above $100 million at 7%.  Here are some outcomes of such a thing, according to the Tax Foundation, with the FoxBusiness cited.  A tax like this would

  • reduce incentives to invest, so GDP would shrink by ~1.9% over the long-term
  • reduce a firm’s capital by 3.3%

Fair Share of Taxes

Senator and Progressive-Democratic Party Presidential candidate Bernie Sanders (I, VT) says the rich should pay more taxes than they do already and that if only they paid “their fair share” Party’s socialist dream programs could all be paid for.  He repeated that demand on last Monday’s Town Hall with Fox News.

On the other hand.

According to data released recently by the Internal Revenue Service, compiled by the Tax Foundation, the bottom 50% of taxpayers paid about $43.9 billion in income taxes 2016—which accounts for roughly 3% of all income taxes paid.

Tax that Rich Man Behind the Tree

Now the Progressive-Democrats, in their fever pitch to increase taxes, want to tax phantom profits.

Oregon Senator Ron Wyden (D) [is] reviving plans to make capital gains taxes due annually….

Another Progressive-Democrat, Jon Summers (ex-Communications Director for ex-Senator Harry Reid (D, NV)) rationalized this chimera tax this way:

We’re spending way more money, billions of dollars more, a year than what we are actually bringing in in revenue. We’ve got a debt of $22 trillion, a record debt that has only skyrocketed under this administration. So, Democrats are trying to come up with a solution to bring some sanity back[.]