Tag Archives: political economy

Raise Those Taxes

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Progressive-Democrat-run States are looking at ways to cover putative budgetary shortfalls.

  • Minnesota State Representative Aisha Gomez, a Democrat…sponsored legislation that would implement a higher tax rate for joint filers in Minnesota making over $1 million a year if federal Medicaid cuts take effect
  • Connecticut legislators have proposed a bill that would raise income-tax rates on couples making at least $500,000 and individuals making at least $250,000
  • Washington Governor Bob Ferguson, a Democrat, in May signed into law a budget that includes an increase in the capital-gains tax, among other things
  • Maryland Governor Wes Moore, a Democrat, in May signed into law his tax proposal, which includes higher income-tax rates for state residents making more than $500,000 a year
  • Rhode Island in June imposed a new tax on certain vacation homes valued at $1 million or more

And this:

Many states face projected budget deficits after increasing spending and cutting taxes in the flush postpandemic years….

Notice that. Profligate spending leads to revenue shortfalls, so—raise those taxes, especially on the rich, who Owe Us. That’s akin to a business losing money, so it raises the prices it charges for its products.

Nowhere in there is any Progressive-Democrat-run State reallocating its spending to stay within existing revenues, much less cutting spending to do so.

I repeat a long-standing challenge of mine: can any Progressive-Democratic Party politician even say the words, “Cut spending?”

State and Party Affiliation and Comings and Goings

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The following two tables show U-Haul‘s annual report on one-way interstate rentals, coupled with the party that runs the State. The first shows top 10 most favored destination States according to U-Haul‘s report, the second the 10 most departed-from States. In both cases, the number following the State is the State’s rank in U-Haul‘s preceding year ranking. 

Rank State Party Control
1. SOUTH CAROLINA (4) Republican
2. TEXAS (1) Republican
3. NORTH CAROLINA (3) Democrat Governor, Republican Legislature
4. FLORIDA (2) Republican
5. TENNESSEE (5) Republican
6. ARIZONA (8) Democrat Governor, Republican Legislature
7. WASHINGTON (7) Democrat
8. INDIANA (27) Republican
9. UTAH (13) Republican
10. IDAHO (6) Republican

 

Rank State Party Control
41. CONNECTICUT (42) Democrat
42. MARYLAND (44) Democrat
43. MICHIGAN (46) Democrat
44. LOUISIANA (45) Republican
45. ILLINOIS (48) Democrat
46. PENNSYLVANIA (38) Democrat Governor and House, Republican Senate
47. NEW YORK (43) Democrat
48. NEW JERSEY (47) Democrat
49. MASSACHUSETTS (49) Democrat
50. CALIFORNIA (50) Democrat

There would seem to be a hint here.

 

H/t Ricochet and Ekosj.

School Choice and a Teachers Union

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In Wyoming, the State’s legislature passed and the governor signed legislation to create school choice for the State’s parents and children.

Wyoming lawmakers created the state’s first K-12 education savings account (ESA) program in 2024, effective in the coming school year. This spring they expanded eligibility to families of any income. The $7,000 accounts can be used for private-school tuition, tutors, homeschooling, or other education expenses. Nearly 4,000 students applied for them this fall.

In the first year, those 4,000 students amount to about 3.5% of the State’s K-12 population (some arithmetic involved), a pretty rapid start to the take-up. The main teachers union in the State, the Wyoming Education Association, is busily objecting and hailing the State into court to get that legislation overturned. The union is claiming that the State’s constitution requires the Legislature to maintain a “complete and uniform” public school system, the State cannot fund “private education that is not uniform.”

This is a distortion of the facts, including of what the State’s constitution says. This is that constitution’s Art 7, Sect 1, in its entirety:

Legislature to provide for public schools. The legislature shall provide for the establishment and maintenance of a complete and uniform system of public instruction, embracing free elementary schools of every needed kind and grade, a university with such technical and professional departments as the public good may require and the means of the state allow, and such other institutions as may be necessary.

That’s the short and sweet of it. There’s nothing in there that would preclude the State from establishing, supporting, or merely funding alternative means of education. Indeed, that last clause, and such other institutions as may be necessary, being separate from the clause mandating a system of public instruction, explicitly authorizes alternative means of education structured entirely differently from, or the same as, the public system.

This is just another example of a teachers union trying to deny parents their right to see to their children’s education in their own way. It’s the union way or nothing. That’s just union abuse of education and of the students in it out of its own greed: those alternative means would not be controlled by the union.

The Wyoming constitution can be read here.

Juicing 401(k)s

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President Donald Trump (R) is loosening the restrictions on what 401(k)s are allowed to contain in their investment options. His EO has directed the Labor Department, which oversees the rules governing business’ 401(k) offerings, to consider additional, non-traditional investment vehicles, things like private equity, real estate, and digital assets such as bitcoin.

Hal Scott and John Gulliver, Committee on Capital Markets Regulation President and Executive Director, respectively, argue in favor of this move on the grounds that

investment opportunities in public markets are shrinking. In 1996 there were roughly 8,000 public companies, but that number has since declined by half. Why? Because public companies are subject to increasingly burdensome disclosure obligations, compliance costs, and litigation risk, while private companies aren’t.

They’re right in the sense that overregulation by an ever more intrusive government keeps tying increasing numbers of hobbles onto our investment opportunities, and they need to be rolled back. They’re right, also, in that Trump’s EO moves to sidestep some of those regulations; although workarounds always are suboptimal. Better to eliminate the hobbles.

I say they’re right, though, on an additional ground: more opportunities for and flexibilities in investment are intrinsically good and should occupy a central place in a free market economy.

However.

These added opportunities bring with them added, and harder to measure or even to estimate, risks inherent in those opportunities, especially for retail investors. These things also are not as liquid as the more traditional 401(k) investment vehicles, and that carries its own added risk. Then, too, some of those vehicles carry added tax complexities. See Master Limited Partnerships and Real Estate Investment Trusts, for instance.

None of that is an argument for not getting into these investment vehicles, nor is any of it an argument for a nanny state to “look out for us little guys” by telling us we can’t use them. It is an argument for added caution and more careful vetting—especially by us unwashed retailers—of those opportunities before jumping onto them with both feet and our elbows, too.

I’m Down with That

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George Will wants a clear and present example of the wonders of socialism, so he’s pushing for the Progressive-Democratic Party’s most prominent socialist (yes, even more so than Bernie Sanders (D, VT) to become mayor of New York City.

I want him to win. I think every 20 years or so, we need a conspicuous, confined experiment with socialism so we can crack it up again.

That works out to about once a generation, which I think overstates the need. Every three generations—every 60-ish years—I think would be about right; the grandfathers would still be around to help the grandchildren with the empirical outcomes of their own dabbling in socialism.

I agree with Will’s basic premise, though: let New Yorkers get the socialism they want. Let the outcome of that serve as an object lesson of the destructive and life-shortening nature of that ideology. New York City is large enough and nearby enough that the results will not be able to be ignored.

Nevertheless, to paraphrase HL Mencken, give New Yorkers what they want, good and hard.