Monthly Archives: July 2015

An Excess Profits Tax

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In 1917, Progressive icon Woodrow Wilson instigated an excess profits tax running from 20%-60% because, of course, the Progressive knew better how American business owners should spend their money than did the Americans who’d actually earned it through their businesses.

During the Great Depression, Democrat (and Progressive) icon Franklin Roosevelt instigated two excess profits taxes while openly slandering American businessmen as being on a capital strike: Roosevelt actually accused businesses of refusing to spend—at rates satisfactory to the Democrat (and Progressive)—the profits they’d earned.

Now we get the proud early 20th Century Progressive, Hillary Clinton, with her proposal for a “tax credit…to encourage more businesses to offer profit-sharing to their workers.”

Progressives still claim to Know Better what American business owners should do with their money than those business owners who did the work to earn that money. Progressives now also claim to Know Better what labor agreements are fit to be negotiated between employee and employer than those employees and employers—American citizens.

Now, the Progressive wants to foist tax credit onto us, to “encourage” businesses to spend their excess profits—her definition—because, of course, she Knows Better.

She also knows full well that with a tax credit, she’s intends to force all of us to pay a tax on a business’ “excess profits.” She knows full well where the money must come from in order to pay that “credit:” from higher taxes or more borrowing.

She closed her proposal with this bit:

I really think our corporations are missing a big bet. Because credible studies prove that profit-sharing with your employees is good for the employees, good for the businesses, good for the economy. I want to incentivize more companies to do just that.

Never mind that businesses are in the business to make money, not to serve as privately funded, government mandated jobs welfare programs. Never mind that in a competitive—that is to say, a free—market economy, businesses have to compete for employees as well as for customers. Never mind that the incentives are present in a free market economy for businesses to get the most out of their employees.

And so never mind that to the extent “credible studies” are right about the efficacy of profit sharing, in a competitive, free market economy businesses already would have profit-sharing plans.

Oh, wait, they’re just not set up in a way that suits this Progressive. The businesses are missing her bet. And so she demands that we all pay.

As an aside, some homework: crunch some numbers, and see whether a $750 credit for a $5,000 profit-sharing payout makes any sort of sense for a company laboring under the US’ highest corporate tax rate in the world—35%—on all profit, “excess” or not. See whether Clinton has any clue at all.

There’s Science

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…and there’s…science.

The Environmental Protection Agency for years has issued costly clean air rules based, in part, on two ’90s-era studies linking air pollution with death.

But, critics say, the same agency has stymied efforts to access the data behind them.

EPA Administrator Gina McCarthy thinks that suppression is entirely jake [emphasis added in the summary of her position].

For its part, the EPA has argued that releasing the data could compromise confidential personal information, and that it didn’t have access to all the research anyway, among other issues. The agency made an effort to contact the original institutions behind the studies in 2013, but Republicans say they again would not hand over everything.

There’s so much wrong with that, so much that’s wholly dishonest. For starters, what rule-making data has personal information among them? The data clearly were aggregated and stripped of personal information, since they were gathered by responsible researchers. The data clearly were aggregated and stripped of personal information, also, because such information is completely irrelevant to the studies for which they were collected and would only have cluttered the data.

Then, on what basis is EPA making rules when they don’t have all the underlying data? Is this another case of We Know Best, we don’t need no stinkin’ data?

To add insult to her disingenuosity, McCarthy added this to her testimony in front of the House Science Committee:

The EPA totally supports both transparency as well as a strong peer-reviewed independent science process, but the bill I’m afraid I don’t think will get us there. I don’t actually need the raw data in order to develop science, that’s not how it’s done. … I do not know of what value raw data is to the general public.

Wow. “I don’t actually need raw data….” We don’t need no stinkin’ data. And the transparency bit that McCarthy so fatuously claimed: she’ll be transparent, but only with her chosen few.

She doesn’t know the value of the data to the general public? Here’s all she needs to know about the value of raw data to the general public: her boss—that general public—wants it.

Artificial Demand

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Nearly two weeks ago, with Chinese stocks tumbling, Beijing let loose its strongest effort yet to boost the market, including extracting a pledge from 21 brokers to buy shares as long as the Shanghai Composite Index was below 4500.

With its push, the government halted the plunge and engineered a modest rebound.

What happens when that artificial demand goes away? Or its effects peter out?

Hmm….

A Court Gets it Right

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This time a State Supreme Court, in particular, Wisconsin’s. Recall that some rogue Democratic Party prosecutors in Wisconsin have been persecuting a number of Wisconsin citizens for the dastardly crime of supporting Scott Walker. Recall further, that the law under which this victims were being persecuted was claimed by those prosecutors as allowing them to silence their victims, even to the point of preventing those victims from speaking publicly about their persecution. Hence the term “John Doe statute.”

The Wisconsin Supreme Court took a dim view of such…shenanigans. Last part first: the Court ruled that the prosecutors must

cease all activities related to the investigation, return all property seized in the investigation from any individual or organization and permanently destroy all copies of information and other materials obtained through the investigation.

If it had been me, I’d have required the prosecutors to post a substantial all cash bond against their performance of this requirement, and for 10 years thereafter against their continued performance, but I’ll take this. Still, I’d like the bond in light of the Court’s evident disdain for the prosecutor’s behavior:

…the special prosecutor relies upon, leads us to the unsettling conclusion that it is left to government bureaucrats and/or individual prosecutors to determine how much coordination between campaign committees and independent groups is “too much” coordination. In essence, under his theory, every candidate, in every campaign in which an issue advocacy group participates, would get their own John Doe proceeding and their own special prosecutor to determine the extent of any coordination. This is not, and cannot, be the law in a democracy…

The special prosecutor has disregarded the vital principle that in our nation and our state political speech is a fundamental right and is afforded the highest level of protection. The special prosecutor’s theories…would assure that such political speech will be investigated with paramilitary-style home invasions conducted in the pre-dawn hours and then prosecuted and punished. In short, the special prosecutor completely ignores the command that, when seeking to regulate issue advocacy groups, such regulation must be done with “narrow specificity.”

And

It is utterly clear that the special prosecutor has employed theories of law that do not exist in order to investigate citizens who were wholly innocent of any wrongdoing. In other words, the special prosecutor was the instigator of a “perfect storm” of wrongs that was visited upon the innocent Unnamed Movants and those who dared to associate with them.

Another problem, though, is that this disregard for the law and for the speech of others isn’t limited to the Wisconsin branch of the Democratic Party.

The Court’s decision can be seen here.

More Government Interference

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The Federal Energy Regulatory Commission is suing BP (of Gulf oil spill fame) for allegedly manipulating Texas energy markets seven years ago. There are two rationales for the case: one is the $48 million fine FERC hopes to collect on trades that produced the magnificent profit of $250 thousand—because, hey we want the money.

The other reason is the government’s use of the Panic of 2008 that began shortly thereafter as a handy excuse for increasing government regulation, ostensibly for “transparency” [emphasis added]

The case represents one facet of a broader push toward greater oversight of physical and financial commodities markets in the wake of the 2008 financial crisis and scandals like the 2001 collapse of Enron Corp. The raft of new regulations brought in to increase transparency and prevent market abuse has turned up the pressure on commodities traders, including BP, one of the world’s largest traders of oil and gas. Several Wall Street banks have abandoned or significantly reduced their commodity-trading activities as a result of the increased oversight.

What’s the value of transparency regulation when it destroys the very thing government claims it wants us to be able to watch?