Tag Archives: taxes

Internal Tariffs

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Mercantilist tariffs (as opposed to tariffs as foreign policy tools) are purely protectionist, designed to punish competitors for competing. They’re not only aimed at foreign competition, either, as Europe’s auto industry is demonstrating [emphasis added].

Auto makers in Europe eager to boost sales of their electric vehicles have a new strategy: demanding higher taxes on conventional vehicles that burn gas and diesel fuel.
The top executives at several car and truck makers are calling on European governments to introduce the new taxes on carbon-dioxide emissions from gasoline- and diesel-powered cars and trucks as a way to help their EVs better compete.

And there’s this bit of disingenuosity [emphasis added]:

Taxing emissions from polluting vehicles, he [Volkswagen AG Chairman of the Board of Management and VW Group CEO Herbert Diess] and other executives say, would help ensure electric vehicles remain attractive for buyers after the expiration of subsidies that are now sustaining sales.

But don’t you dare think about taxing the EVs’ pollution from mining the materials needed for the batteries, the pollution from manufacturing those batteries, or the pollution from disposing of those batteries when they’re spent.

Once again, if a company’s product is unable to compete in a free market without subsidies for their own products or artificial burdens—those internal protectionist tariffs—laid on competing products, the company’s product is not viable and not ready for market.

Full stop.

Facilitation

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Recall that the Progressive-Democrat-controlled Congress and President Joe Biden (D) enacted a $1.9 trillion Wuhan Virus Relief bill that contained a sliver of money for actual virus-related relief. The bill also included $12 billion in transfer payments for New York to “assist” that State with its budget.

This is what that bill and those $12 billion in transfers also facilitated.

The Democrat-controlled New York legislature has passed a budget deal that includes a $2.1 billion fund for illegal immigrants—including a one-time, $15,600 payment for those who lost their job during the pandemic.

Fully 17% of that Federal largesse—of average American‘ generosity—went to illegal aliens (whether us citizens agree with that or not). It’s plain that the State, at bottom, had no need for those $12 billion, since it has no need to spend the money on the citizens of New York.

Corporate Taxes

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Treasury Secretary and ex-Federal Reserve Chairman Janet Yellen opened her Wednesday Wall Street Journal op-ed with this:

When Congress enacted the Tax Cut and Jobs Act of 2017, the result was a dramatic reduction in corporate tax revenue. Over the past three years, corporate tax collections have fallen to their lowest level since World War II: 1% of gross domestic product.

Amazingly—shockingly—Yellen wrote that as if it were a Bad Thing.

Then she partially rationalized her disparagement with this:

Proponents of the TCJA said the US would get something in return for these tax cuts. Lower rates, the argument went, would lure production and investment to our shores, but that hasn’t happened—and for an obvious reason: other countries see what we’re doing and respond. When they see us lower our rates, they lower theirs to undercut us. In the end, no nation ends up more competitive. The result is a global race to the bottom….

Some of this is plain wrong. We did get trillions of dollars of corporate cash repatriated. We did get production and investment returned. And that spurred the outcome that Yellen so breathtakingly mistakes as a further Bad Thing. Other nations were spurred to compete on tax rates in order to retain their own businesses and to attract foreign investment.

Which drives the race to Yellen’s so-feared bottom.

But what is that bottom? Our Constitution specifies that the only things our Federal government is allowed, legitimately, to raise revenues for are three: to pay the Debts and provide for the common Defence and general Welfare of the United States. Those, with the general Welfare further specified by the remaining clauses of that Article I, Section 8, also, are the only things on which our Federal government may spend our taxpayer money. The other nations, particularly those competing with us on tax rates, have their own taxing (and spending) floors.

Racing to those bottoms may be bad for Government bureaucrats like Yellen, but they’re unalloyed Goods for the citizens of all of our nations, as we get to keep more of our money and make our own spending, saving, investing, and other allocating decisions with our money—and our decisions will be far better and far more efficiently done than any of our Governments can ever hope to do.

And at that natural bottom, nations can stop trying to compete on tax policy and focus on Adam Smith’s competition—providing better quality goods and services. Which is even better for us citizens, if not for the power of Government personages.

Only a Leftist or an entrenched bureaucrat can misunderstand that.

“Don’t Tax You…”

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“…Don’t tax me;
Tax that rich guy
Behind the tree.”

With (not too) many apologies to Russell Long.

New York’s Progressive-Democrats are on the move, again.

New York Governor Andrew Cuomo and state legislators are close to reaching a budget agreement that would raise taxes on residents earning over $1 million.
If approved by the Democratic governor and Democrat-controlled legislature, New York would become the state with the highest personal income tax rate in the country.
The budget measure also includes increasing the state’s corporate tax rates….

And

The proposed changes would increase tax rate from 8.82% to 9.65% for individuals making over $1 million or those joint-filing making more than $2 million.
Two new additional tax brackets would also be created –10.3% for those making $5 million to $25 million, and 10.9% for those making over $25 million.
New York City high-income earners could be paying the highest in the country in personal income taxes. By adding New York City’s additional top-earner tax rate, those making over $1 million could pay as high as a 14.8% tax rate, surpassing California’s 13.3% tax rate, the highest in the country.

The State’s Progressive-Democrats already tax the hell out of all the yous and mes in that State, also, though, so Long’s plea is being implemented much more broadly.

It’s important to recall, also, another of Long’s aphorisms:

I have become convinced you’re going to have to have capital if you’re going to have capitalism.

New York’s Progressive-Democrats are bent on denying precisely that to the State’s private economy. That says volumes about Party’s ultimate goal.

Infrastructure Biden-Style

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That’s what his latest tax-and-spend multi-trillion dollar bill that he’s masquerading as an infrastructure bill is—a misleading mess of profligacy. Here’s some of what’s in it besides actual infrastructure monies.

  • $174 billion for electric vehicles
  • $400 billion on home-based care for the elderly and disabled
  • $25 billion on child care facilities
  • $50 billion on “research infrastructure” at the National Science Foundation
  • $213 billion for home sustainability and public housing
  • $35 billion+ for climate change R&D
  • $50 billion to create a new office at the Department of Commerce to “dedicated to monitoring domestic industrial capacity and funding investments to support production of critical goods”
  • $30 billion to prepare for future pandemics
  • $45 billion so the Feds can buy “clean energy goods”
  • $14 billion “to bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness”

That’s more than $1 trillion out of Biden’s $2 trillion demand for his bill. Many of these things might actually be worthy projects—depending on pesky details—but they have no place in a real, legitimate infrastructure program.

And there’s this non sequitur that has no immediate cost, but it will reduce take-home pay of non-union members to no useful purpose and greatly limit our economy and drive up prices through greatly increased union costs:

[T]he PRO Act, which would essentially override right-to-work laws in states across the country, allowing unions to extract dues from workers who do not want to be members.

Senate Minority Leader Mitch McConnell (R, KY):

It’s like a Trojan horse. Its called infrastructure, but inside the Trojan horse it’s going to be more borrowed money, and massive tax increases on all the productive parts of our economy.

Indeed. Dollars—trillions of dollars—out of our economy immediately and trillions more for the foreseeable future.