Tag Archives: economics

Tax Breaks

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In particular, child tax credits and their proposed expansion, but the principle below applies across the board.

…pair the expansion of the child tax credit with extensions of expiring business-tax provisions, some of which have Democratic support.

Pairing in order to get the credit passed, one being a bell for the other’s whistle.  Refundable credits, too, so those who don’t pay much, if any, income tax can get their own taste. Here’s Progressive-Democratic Party Presidential candidate Joe Biden’s offer on the credit:

…a temporary expansion of the child tax credit that would bump the $2,000-per-child credit to $3,000 for most children and to $3,600 for those under age 6. He would expand the credit to include 17-year-olds and allow monthly payments, so families wouldn’t need to wait for lump sums at tax-filing time.
Mr Biden’s proposal would cost more than $100 billion a year.

Leave aside the fact that refundability is spending increase, not taxing cut.

Here’s a better idea: lower income tax rates (permanently) across the board, for both businesses and individuals.

Leaving all that money in the private economy, which is to say in the hands of the businesses and individuals who are earning the money, pays far more benefits far more quickly, running from the folks more efficiently spending their money than can any government spend it for them through businesses having more—again, of their own—money for capital improvement, product/service development, R&D, wages, hiring.

All that increased economic activity—real activity, not the fiction of government spending as economic activity—is what will help families with children. And if Government—or rather the politicians populating Government—take the additional step of not singling out particularly favored groups of Americans for special treatment, that increased economic activity will particularly help minority families, who are the ones most needful of access to that increasing prosperity.

Another Reason

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…why neither the People’s Republic of China nor the World Health Organization can be trusted.

Opposition from the Chinese government is preventing participants in a World Health Organization meeting on the Covid-19 pandemic from learning directly about one of the world’s biggest coronavirus success stories.
Taiwan hasn’t recorded a locally transmitted coronavirus infection in about seven months but has been blocked from participating in a virtual gathering this week [last week as this is posted] of the WHO’s 194-member World Health Assembly because of objections from Beijing, which considers the self-ruled island part of its territory.

WHO was carefully silent on the shunning, mindful of its master’s requirements.

Never mind that the Republic of China just might have some ideas on how to control the Wuhan Virus.

This is the WHO that Joe Biden wants us to cozy up to.

This is the PRC that Joe Biden wants us to trust so.

Foreign Takeovers of Domestic Companies

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Great Britain is concerned with

strik[ing] a middle ground between welcoming foreign investment and protecting strategic industries from takeover, particularly amid concerns around acquisitions by Chinese state-backed companies.

Thus,

Under…proposed rules, investors would have to notify the government about transactions involving 17 sectors including nuclear, artificial intelligence, transport, energy, and defense.

That would seem to make a foreign investment law unnecessarily byzantine, and require revisiting at some aperiodic intervals.  After all, what’s not strategic today might turn out strategic tomorrow. This is illustrated by the timing of this proposal.

The rules update a takeover regime dating back 20 years that the government says is no longer adequate.

Well, NSS.

I have a better idea (also because I don’t lack for hubris). Don’t worry about strategic sectors. Bar all foreign takeover transactions unless and until they’re approved by a CFIUS-like facility. It would work for us, too.

Joe Biden’s Agenda

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Assuming the unofficial results of the election become official. Here’s the nutshell:

Tax hikes for the rich, broadened health care coverage, and student loan forgiveness were some of the projects on candidate Biden’s to-do list.

Tax hikes on the rich will be tax hikes on the middle class and poor as well. Biden has promised to sharply increase Trump’s tax cuts on America’s businesses—which will result in higher prices to consumers, and those price increases will especially attack our poor. Biden has promised to increase personal income taxes on Americans making over $400,000, but he’s chosen not to index that to inflation, which means that more and more folks will face this tax. What’s not being talked about overmuch is his tax hike promise includes cutting back on the child care tax credit/subsidy—which hits our poor especially hard. Biden’s tax plan also includes vast increases on capital gains we have on our investments—which will badly hit our 401(k)s and IRAs. It’s true enough that taxes on investments inside those instruments go tax deferred until withdrawn, and then they’re taxed at ordinary income tax rates, which might make capital gains tax increases irrelevant. However, there are lots of stock investments outside of those tax deferred instruments, and that cap gains tax hike will deprecate those investment targets—which will deprecate the identical investment targets in otherwise tax deferred accounts.

Broadened health care coverage is the Medicare for All promise he made during the Progressive-Democrat primaries, which he now claims he doesn’t want, but which he signed up to in his Biden-Sanders Unity Platform. Even the watered down version that he now claims would, like his Medicare for All plan, throw millions of Americans off the private- or employer-provided health coverage plans that they currently have and prefer to have. Whether we want that or not. Keep in mind, too, the health care rationing and the loss of usefully timed access to specialized care that centrally controlled national health care systems universally devolve into.

Student loan forgiveness will just drive up the cost of future student loans as lenders are left high and dry. Unless they’re made whole from the forgiveness by…us taxpayers in the form of Federal make-whole payments—which is another tax on all of us, including those of us who make less than $400,000.

This makes Republican control of the Senate a Critical Item, and that control is by no means a done deal, for two reasons. Or maybe one-and-a-half reasons….

One reason is that North Carolina Senator Thom Tillis (R) only holds a 95,600 vote lead over the Progressive-Democrat rival in a race too close to call (as of Sunday). The two Georgia Senate races are going to a 5 Jan run-off, and the two Progressive-Democrat candidates are well positioned to pull out victories. Three wins would flip the Senate outright to Progressive-Democrat control. Two wins would flip the Senate to Progressive-Democrat control via the tie-breaking vote of the Progressive-Democrat Vice President.

The half reason is this: two Republican wins would leave the Senate with a Republican nominal majority of 51-49. Nominal because that would leave Utah Senator Mitt Romney (R) in a too-important position. While he’s usually a Republican vote, his animus toward President Donald Trump is such that he’ll be an unreliable Republican vote on Progressive-Democrat matters that would undermine or altogether undo a Trump policy.

City Pensions

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They’re in trouble. You knew that, though, as city budgets have long favored spending more than revenue, especially spending on public union pensions and other retirement benefits, and so debts piled up—and continue to amass.

One particular arena where that’s having potentially deleterious effect is in pensions with benefits like paid (or mostly paid) health plans.

Cities and states can’t afford to keep the same medical benefits they promised government retirees.
For all 50 states combined, revenue declines for 2020 and 2021 could reach 13% cumulatively, according to Moody’s Analytics projections, while the average cost of an employer health-care plan for an individual increased 4% in 2020 to $7,470, according to the Kaiser Family Foundation nonprofit.

The current excuse is the Wuhan Virus situation having crushed sales-tax income and tourism dollars. In the end, though, the specific crisis du jour isn’t important: there always will be a crisis that will crush city revenues. An example of the reach of any crisis is this:

The Ohio Police and Fire Pension Fund sponsored a self-insured health-care plan for its retirees from 1975 to 2018, said fund spokesman David Graham.
“With no dedicated funding source for this plan, it eventually became unsustainable,” Mr Graham said in a written statement, adding that retirees would have had to increase their contributions to keep the health-care fund solvent.

There’s a hint, in that “dedicated funding source.” There needn’t be one could retiree pension health “benefits” be structured differently.

That brings me to the “potentially deleterious” bit. Deleteriosity is only potential because the overall situation presents opportunity: privatizing health plan provision, returning the provisioning to true health insurance—premiums based on the risks being transferred to the coverage provider—and using the free market and its intrinsically competitive nature to govern both customer costs—those premiums—and product quality.  Quality especially would include the breadth of insurance products offered: single or a very few health matters insured; suites of preventive health care insurance for standard items like colds and flu, annual checkups; a broad range of other coverage offerings that might be relatively specific or relatively broad.

That opportunity often will be beyond an individual city’s capability to implement, but aggregations of cities might approach the capacity, and certainly at the national level, the health coverage industry can be privatized and included in the nation’s free market economy. At that point, cities would be able to step out of the health coverage business altogether beyond—perhaps—providing a cafeteria of market plans purchased on the open, free market for their city employee retirees.

More opportunity: with retirees responsible for choosing their own plans with which to satisfy their own needs and desires and paying for those plans with their own money—as grown adults, they really are capable of that without Big Brother Government or overreaching unions “helping”—they’ll take both their health and their insurance costs seriously.