Tag Archives: economics

Increase Spending, Taxes?

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Americans seem to favor that, according to a Fox News poll released last Thursday and discussed on Fox Business Online.

[T]here is broad support for increasing taxes on the wealthiest families. Voters support tax increases on families making over $10 million annually by a 46-point margin (70% favor-24% oppose), and support a hike on those making over $1 million by 36 points (65-29%).
There is less support for a broader tax increase: 44% favor raising rates on those with income over $250,000, and a small minority, 13%, approves of an increase on all Americans.

What would have been interesting, though, and which Fox News chose not to do, would have been to break those preferences out by age group (the poll had only two categories: under/over 45), by income level (again, the poll only had two categories: under/over $50k), by income taxes actually paid in the prior year, and by welfare payments/tax credits received in the prior year.

Trends in those categories might seem too obvious to bother collecting data for, and trends indicated in the last two categories would have been skewed by willingness of respondents to divulge that information, but until data actually are collected, that “obvious” can only be speculative.

The poll itself can be seen here.

“Proper Tax Rates”

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According to the EU.  Or at least the European Parliament’s Green Party.

An investigation by the Greens in the European Parliament has shown big companies throughout the bloc are failing to pay their statutory taxes. The party has called for more social responsibility.

I’m always amused by claims that studies—statistics—show anything.  At most, they can indicate, even strongly indicate, something, but showing—proving?  Not so much.

Be that as it may, and it really is more sloppy elocution than it is factual error in this sort of context, what really interests me is that “failure to pay,” and “social responsibility.”

The Greens presume to be the arbiters of what is social responsibility.  Not the citizens, not their aggregate as the society at large.  No, it’s these Green Know Betters who will define the term and set the criteria for its satisfaction—for our own benefit, of course.

And that statutory claim?

Luxembourg stood out in the study, where the official tax rate is 29 percent, but corporations paid only 2 percent on average.
Hungary, the Netherlands and Austria were also highlighted as states where actual taxes paid were significantly lower than the official rates.

The study’s authors, at least as summarized by Deutsche Welle, which was citing Süddeutsche Zeitung, show a broad misunderstanding of anyone’s tax code.  It’s easy enough to get the total tax paid below a statutory rate, and do so entirely legally.

That’s what deductions, tax credits, tax subsidies, and the like do.  What starts out as top line taxable income—before deductions, credits, etc—also does not include some forms of income—income not earned within the taxing jurisdiction, for instance, which is the big player in Luxembourg’s code.  All the nations of the EU have their own suite of these, but in essence, these all reduce the income actually subject to tax by large amounts, and then the subsidies pay back into the tax payer other monies—like, for instance, subsidies for setting up “green” energy facilities.

And we arrive at a realized tax rate substantially less than the official yet mythical statutory rate.

Maybe the Greens will reach the point where financial success is socially irresponsible, too.

The Teachers Union Strike in LA

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The subhead on Monday’s Wall Street Journal article on the United Teachers Los Angeles union strike against the Los Angeles Unified School District says it all.

Nearly one in five LA public school students attends charters unaffected by the strike; union wants a cap on them

Herein lies one more proof of the disingenuousness of the UTLA. While the UTLA is striking, demanding a cap on the number of charter schools (and money, money, money), all the while holding Los Angeles’ public school students hostage to their demand, the charters are open and actually educating their students.

With its strike demand, the UTLA is ignoring the enormous opportunity that should be available for the children of LA: the two systems of schools could complement each other.  Instead, the union has chosen to present the situation as a zero-sum game. The contrast couldn’t be sharper.

It’s no wonder the union wants to eliminate what it sees as its competition; it can’t stand the clarity the charters’ existence and performance provide in the union’s zero sum.

Cynically, the union’s demand for money, is nothing more than what unions do; although, here it’s also a smoke screen.

***

In the end, the LAUSD caved completely. In addition to a 6% pay raise and more than $400 million in additional money to be spent on the union, there’s this:

Union President Alex Caputo-Pearl said the agreement goes beyond contractual issues and addresses “having accountability and regulations on charter schools,” including how to give traditional schools a bigger say when charters are given space on their campuses.

Never mind that that space was available to the charters because the union’s schools weren’t using it. No, contract matters, as Caputo-Pearl just confessed, had little to do with the union’s strike. Now they have near-veto say on what their competition will be allowed to do. That’s to the great harm of the children this union has pretended to want to protect.

California Has Banned Insurance for Car Drivers

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As everyone (apparently except the California Insurance Commission members) knows, insurance is the transfer of risk and fiscal responsibility for its realization from one party to another for an agreed fee that’s commensurate with the risk and expected cost being transferred.  The California Insurance Commission has eliminated that for California drivers, mandating that driving coverage be provided independently of the risk transferred.

California has banned auto insurance companies from considering gender when setting insurance rates for private passenger cars.
The Gender Non-Discrimination in Automobile Insurance Rating Regulation went into effect on Jan 1, 2019.

Never mind that men and women drive differently and represent different risks while driving.  This move makes differing risk irrelevant, and so it cancels the risk aspect of coverage for events occurring while driving.

Commissioner Dave Jones claims that the move will

ensure that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control.

He’s being disingenuous or ignorant.  Again: what was being insured was actual driving performance, not gender.  That that performance is measurably different between women and men has been actuarially understood for decades.

One outcome of the Commission’s move will be to drive up coverage rates for women—who had enjoyed lower rates because they are lower risks, safer drivers.

Arrogance of the Left

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This is made blatantly, nakedly clear by New York City’s mayor, Bill de Blasio.  In his State of the City speech last week, he laid bare the premier goal of the Progressive-Democratic Party, even above doing away with ICE and with our borders generally.  He said—and he meant every word of it:

Here’s the truth. Brothers and sisters, there’s plenty of money in the world. There’s plenty of money in this city. It’s just in the wrong hands.

His first sister is Alexandria Ocasio-Cortez (D, NY) who wants to raise taxes on those wrong hands to 70%—or more; she, like her fellow Party apparatchiks, have articulated no limiting principle to such raisings, they’ve carefully declined to say how much is one’s “fair share.”

After that, de Blasio’s brothers and sisters of the Party want free education and free, single-payer medical care for all, including illegal aliens (remember their open border demand).

How to pay for all of this Party largesse?  The first goal: by taking all that money that’s in the wrong hands and giving to the correct, deserving holders of the money.

Mind you, who are the correct holders, who are the deserving holders, will be defined by those members of the Progressive-Democratic Party.  They’re the ones who Know Better than those with the money, those who’ve earned the money, how that money should be used.

It isn’t their money, anyway.  It’s the Party’s money.  Party generously will let us have some of it for a period of time, though.