Monthly Archives: August 2014

Federal Strings

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…and Federal arrogance.

No police department should get federal funds unless they put cameras on officers, Senator Claire McCaskill (D, MO) said today.

“It seems to me that before we give federal funds to police departments, we ought to mandate that they have body cams,” McCaskill said.

Body cameras on cops may, in fact, be a good idea. However, that’s a thing to be determined by the locals for themselves. This is another example of how the Federal government seeks to control State and local governments in the place of the State’s citizens and the local community members.

Police departments and the communities that employ them would be well served to reject these Federal funds and all other Federal funds that come with strings attached. They would be well served to do so even if they already meet, of their own accord, the criteria mandated by any Federal string—accepting such funds would be nothing less than the camel’s nose in their tent.

Another Look at Tax Inversion Mergers

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Burger King Worldwide Inc is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc, a deal that would be structured as a so-called tax inversion and move the hamburger seller’s base to Canada.

After all, Canada’s corporate tax rate is competitive even with Ireland’s 12.5% rate, at least from the lofty perspective of our own 35% top corporate rate: Canada’s rate is 15%. This inversion isn’t just the fiscally sound thing to do, it satisfies the company management’s fiduciary duty to control costs and maximize profits for the company’s owners.

BK isn’t alone in moving to Canada:

Valeant Pharmaceuticals International Inc, which had been based in California, combined with Canada’s Biovail Corp in 2010 and redomiciled in Canada. The company now has a tax rate less than 5%.

And there are others.

Naturally, the Progressives in Congress and the White House—and no few captured Republicans—are demanding a stop to the inversions. Not in any sensible way, though. Treasury, for instance, is looking at a range of “options to deter or prevent” inversions.

No, BK’s pursuit of an inversion deal only illustrates the distorting, anti-competitive nature of our current tax code, and Treasury’s “options” will only make the thing worse. The right answer is to lower US corporate tax rates to competitive levels. When it becomes more attractive to be in the United States, to invest in the United States, to have a chance actually to turn a profit in the United States, not only will the BKs, the Valeants, and the AbbVies and Covidiens, et al., stay, foreign companies will look to come to the United States, bringing their ideas, their money, and their jobs here.

Even Canada, right next door (the convenience…), is becoming host to these things. But (even) Canada has been improving its tax structure for some years, lowering its corporate tax rate since 2005 from over 22% (still lower than the US’ then) to just 15%. Indeed, here’s a hint:

Tim Hortons [originally a Canadian company until its acquisition by Wendy’s] initially kept its headquarters in Delaware after it was spun off by Wendy’s in 2006. The chain moved back to Canada in 2009, shortly after the Conservative government in Canada lowered the nation’s corporate tax rate.

YGTBSM

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This is what happens when you have a motor boat skipper for a Secretary of State. John Kerry, speaking through his spokeswoman, Marie Harf, had this to say about whether ISIS is at war with the United States:

(Unnamed) Reporter: I mean, even they are announcing, ISIL people in their message, whatever, the recorded message, other messages, that now we are in a war with America.
Kerry/Harf: This is not about ISIL versus the United States. They are killing anyone who gets in their way….
(Unnamed) Reporter: But they are announcing that it’s a war against America. Right or wrong, that’s what they are saying.
Kerry/Harf: Well, they can say whatever they’d like, but what I am making clear is that’s not what ISIL represents. And they don’t represent any religion. They are at war with everybody they come into contact with.

If our professional and chief diplomat can’t even understand when an enemy declares its war against us, how are we supposed to be able to fight back, much less crush that enemy?

The Administration’s Considerations Regarding Resurgent Terrorism

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Here we are, with the terrorist gang, ISIS, butchering American journalists, doing their best to exterminate Yezidis, Christians, fellow Muslims who don’t think like these thugs do, et al. Here we are with ISIS continuing to make significant military gains after their blitz through Iraq to the outskirts of Baghdad. Here we are with ISIS having successfully seized a military airfield in Syria.

And here we are with President Barack Obama still…dithering…about what to do about these terrorists. After all, despite these terrorists having announced that they intend to fly their flag over the White House—our White House—despite these terrorists continuing their butchery of the innocents of other nations, the innocents of nations who would be our allies were we to allow them, the innocents of nations who would be our friends were we to allow them, American innocents, he’s still…not doing anything. And his military chief is assuring him—and us—that these terrorists, who’re sworn to do us harm, are not a direct threat to our nation.

With this background, Colleen McCain Nelson and Adam Entous in The Wall Street Journal, argued in all seriousness that

President Barack Obama faces pressure at home and in the Middle East to quickly step up strikes at Islamic State militants….

They also trotted out a roster of politicians applying that purported pressure: Senator Lindsey Graham (R, SC), Congressman Adam Schiff (D, CA), even Defense Secretary Chuck Hagel all saying that the US needs to do “something more” about ISIS.

But Obama feels none of this pressure. This is amply demonstrated by his behavior surrounding his (actually quite stirring) speech condemning the butchery of James Foley, that journalist mentioned above. He reluctantly interrupted his Martha’s Vineyard vacation to make the speech, and within the hour following that speech, he was back on the golf course, yokking it up with his capitalist and lobbyist cronies.

This unpressured president also is unlikely to allow any meaningful action because, after all, the war in Iraq is ended, al-Qaeda is on the run, and Osama bin Laden is dead. And ISIS is just junior varsity, anyway.

And all of it is of a piece with this guy, who occasionally sits in the President’s chair, putting the Palestinian Authority terrorists on the same moral plain as Israel.

No, this administration is unlikely to do anything beyond idle chit-chat about terrorism.

Obamacare and Jobs

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The results are starting to come in, via three independently done polls by three separate Federal Reserve Banks.

The Federal Reserve Bank of Philadelphia:

  • 78.8% of businesses in the district have made no change to the number of workers they employ as the specific result of ObamaCare
  • 3% are hiring more
  • 18.2% are cutting jobs and employees
  • 18% shifted the composition of their workforce to a higher proportion of part-time labor
  • 88.2% of the roughly half of businesses that modified their health plans as a result of ObamaCare passed along the costs through increasing the employee contribution to premiums, an effective cut in wages

The Federal Reserve Bank of New York asked about the “number of workers you employ.”

  • 21% of Empire State manufacturers and 16.9% of service firms answered “reducing.”

The Federal Reserve Bank of Atlanta:

  • 34% of businesses planned to hire more part-time workers than in the past, mostly because of a rise in the relative costs of their full-time colleagues

And the pièce de résistance:

  • ObamaCare’s labor effects would be concentrated in some industries with relatively low-wage or marginal workers.

Hmm….