Tag Archives: economics

Democrats and Tax Reform

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They’re plainly not interested in real tax reform, and so they’ll move to block all attempts to achieve reform that would benefit all Americans and so our economy.  This is illustrated by Senator Ben Cardin’s (D, MD) position on the matter.

Tax reform’s got to be responsible and it’s got to be progressive[.]

Pick one; these are mutually exclusive goals.  Punishing particular Democrat-disfavored groups of Americans for their success is the height of irresponsibility in a taxing venue.

On the other hand, a responsible tax reform package would lower corporate tax rates sharply enroute to an eventual elimination of corporate taxes, lower income taxes to the neighborhood of 10%-15% on all income, regardless of type or source, and eliminate most or all subsidies, credits, transfers, and other loopholes—which would have little value to the beneficiary of such distortions anyway at the lower rates.

Here’s the IRS’ (Internal Revenue Bureau then) Form 1040 from 1913, the first year of an income tax exaction after ratification of the 16th Amendment.  Not quite a post card, but it’s still pretty simple, and it’s the level of complexity we could expect for the form necessary to collect income taxes after a responsible tax reform today.

Until Democrats agree to stop using our tax code for their social engineering goals, though, don’t expect any serious effort toward bipartisanship to originate from them.

Obamacare

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As The Wall Street Journal rightly pointed out, regarding the failed Obamacare repeal and replacement effort and the failing renewed discussions between the House Republican Conference and the Freedom Caucus of No,

The fury…suggests that some Freedom Caucus opposition is more cynical than sincere. Do its members want to appear to negotiate in good faith but insist on changes that centrists can’t accept, so they can then accuse centrists of killing the reform revival?

And

…perhaps there’s still hope for health-care reform. But first Republicans have to decide if they can accept progress that is short of perfection. If they can’t, then they’ll blow their best, and maybe only, shot at repealing and replacing a failing entitlement.

Here’s the problem, though: the Freedom Caucus of No already has betrayed their constituents once through that first failure by inflicting on them continued Obamacare instead of an improved system because the improvements weren’t perfection.

For how long will the No-ers continue to betray their employers? The No-ers are carefully eliding the back half of Reagan’s remark about half a loaf: come back tomorrow for the rest. Of course, that requires accepting the first half first….

Trade Barriers

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Since the meeting between PRC President Xi Jinping and President Donald Trump is a matter of concern these days, and the trade negotiations that are part of that meeting also are a matter of concern, herewith a concern of my own.

Maybe this is the right time for the two leaders to cut a deal to slash Chinese trade barriers.

The three biggest PRC trade barriers are these:

  • the PRC’s demand for government backdoors into American foundational software used by companies wanting to do business in the PRC
  • the PRC’s demand that American companies “partner” with PRC companies as a condition of doing business in the PRC
  • the PRC’s parallel demand that American companies transfer American technology to those “partners”

Absent removal of these barriers, no other barrier removal matters.  Absent removal of these barriers, no deal with the PRC should be concluded.

Robot Employment Acts

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That’s what Andy Puzder, the ex-CEO of CKE Restaurants, calls minimum wage laws.

In a survey released last month, the publication Nation’s Restaurant News asked 319 restaurant operators to name their biggest challenge for 2017. Nearly a quarter of them, 24%, said rising minimum wages.

And so we get:

McDonald’s said last November that it would install self-order kiosks in all 14,000 of its US restaurants. Wendy’s announced in February it would add kiosks at about 1,000 locations to “appeal to younger customers and reduce labor costs.”

The trend toward automation is particularly pronounced in areas where the local minimum wage is high. Eatsa, a 21st-century version of the automat, now lists seven locations in four cities, each of which will be subject to a $15 minimum wage within the next 36 months.

And

Taking automation to the next step, Miso Robotics and the owner of CaliBurger announced in March they have developed a robotic arm, called Flippy, that can turn burgers and place them on buns. CaliBurger plans to install them over the next two years in 50 restaurants world-wide.

And so we get the Americans over whom the Progressive-Democratic Party cries such copious crocodile tears and about whom this Party pretends to care so much—our youth, our first-time job seekers, our single moms trying to augment their incomes, our two-earner families trying to augment family income, in short, the poorest and the least among us—as the ones the most and the most immediately harmed by their precious minimum wage laws.

I haven’t even gotten to the fundamentally racist nature of minimum wage laws, born as they were as a Democratic Party Depression-era naked ploy to trap black Americans on the plantation so they couldn’t compete with white unions for jobs in the American industrial heartland.  Or the plain racist nature of today’s outcomes: the disproportionate impact on black and Hispanic teenagers who are denied entry-level jobs by the same pricing mechanism, an outcome well known to these Progressive-Democrats.  But: more welfare handout voters, they hope, raised in government dependency from their childhood.

I don’t agree that the Progressive-Democrats pushing these laws don’t understand this.  They know full well the outcomes, just as they know full well what follows from those outcomes: unemployed government dependents trapped in the Progressive-Democrats’ welfare cages, and so Progressive-Democrat (they hope) voters.

Our poor are just pawns in a cynical play for political power.

NATO and Mutual Defense Alliances

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Secretary of State Rex Tillerson was in Europe at the end of the week, and among other things, he pushed for NATO member states to honor their decades-old commitment to spend 2% of their GDP on defense.

Germany, among other members, insisted that honoring their commitment was “unrealistic.”

German Foreign Minister Sigmar Gabriel said demands for 2% of GDP spending were “totally unrealistic.” He said that to meet the US target, Germany would have to increase spending by some €35 billion ($37 billion).

After all, Gabriel has argued,

…a strong defense isn’t enough to ensure security.

That’s a cynically offered straw man, though; no one is arguing that a strong defense is sufficient, only that it’s necessary.  Gabriel will have to play with his dolly without me.

There are others who agree that the nations need to boost their own spending—Germany’s Chancellor Angela Merkel, for instance, and NATO Secretary-General Jens Stoltenberg.  But it isn’t sufficient.

We need to be developing a mutual defense alliance that includes eastern European nations, anyway.  Maybe the result of that development should be a separate alliance, not an expansion of NATO.  Perhaps even the result should replace NATO, or at least our role in the new alliance should replace our role in NATO, since so many of the nations of NATO have so little interest in their own treaty responsibilities.