Tag Archives: political economy

Those…1%-ers

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Those evil 1%-ers.  Congresswoman Alexandria Ocasio-Cortez (D, NY) hates them.  Senator Elizabeth Warren (D, MA) hates them.  Senator Cory Booker (D, NJ) hates them.  Speaker Nancy Pelosi (D, CA) hates them, even though she’s one of them.  The list goes on and on and on of Progressive-Democrats and Modern Liberals in general who hate them.

Charlie Munger, Vice MFWIC of Warren Buffet’s Berkshire Hathaway and 1%-er, thinks otherwise.

I think it’s really stupid for a state to drive the rich people out[.]
…
It’s been serious. Driving the rich people out is pretty dumb if you’re a state or a city.

And

They’re old. They keep your hospitals busy. They don’t burden your schools, the police department, your prisons. They give a lot. Who wouldn’t want rich people?

Indeed.

Notice who the envious haters are, too.  The rest of us—politically in the center, right of center, and right, and ideologically middle of the road or conservative—might be jealous of those wealthy ones, but far from hating them, we want to be like them, we want the same success, prosperity, and wealth.  And we’re willing to work for it, rather than claiming “our fair share” of their money or demanding their trappings of success for ourselves.

Fines and Negotiations

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The FTC and Facebook seem to agree that Facebook messed up with the way it handles user personal and private data; now they’re dickering over the fine to be assessed.

It [that fine, rumored to be in the multiple billions of dollars] would be the largest fine the FTC has ever imposed on a technology company, although the two have yet to settle on the exact number….

What is there to negotiate, though? Assess the fine, and if Facebook wants to negotiate argue the matter, let it do so in open court in an appeal of the fine.  That, unlike these kinds of “negotiations,” will occur in public, in front of customers and potential customers, with all that’s implied by the implications of pre-trial discovery results and public testimony.

Isn’t Zuckerberg all about transparency these days?

“Goosed” Paychecks

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Senator Ron Wyden (D, OR), Finance Committee Ranking Member, had this bit:

It looks like the Trump Treasury Department spent 2018, an election year, goosing people’s paychecks by under-withholding, and it should have been obvious that the bill would come due eventually[.]

Never mind that the IRS also warned taxpayers—and their employers—to carefully check their existing withholding arrangements, especially in this period of large changes to the tax code.

Senate Minority Leader Chuck Schumer (D, NY) was just as disingenuous:

Many Americans depend on their tax refund to pay bills and make ends meet….

Never mind that large tax refunds, far from being a savings account (that pays even less interest than a bank savings account), is an interest free loan to the government.  Leave it to a Progressive-Democrat, with his constant demands for OPM, to insist that this interest free loan to Government of a citizen’s money is entirely appropriate.

Keep in mind, too, that these are the same politicians who will work to prevent the tax reform’s current personal income tax cuts from becoming permanent.  Because the money in those paychecks isn’t the citizen’s; it belongs to Government.

Goosed paychecks?  Those could be permanently increased paychecks—because of the so far lowered income tax rates—but for those Progressive-Democrats.

You Need to Pay my Taxes

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No.  No way in H E Double Toothpicks.

New York Governor Andrew Cuomo [D] visited the White House on Tuesday to urge President Donald Trump to rethink a provision in the 2017 tax overhaul that Cuomo says is prompting a sharp decline in state revenues.
The Democratic governor met with the Republican president to discuss the $10,000 cap on the federal deduction for state and local taxes—known as SALT.
Cuomo said the cap is prompting wealthy residents to flee New York and contributing to a recent drop of more than $2 billion in tax receipts.

If there’s a drop in State tax receipts from this, there are two intertwined parts to the obvious solution, and they don’t include raising the Federal taxes on everyone else so New York (and New Jersey and California) can continue their profligate ways.  Those two parts are reducing the States’ current usurious tax rates to more reasonable levels and reducing spending to fit within those collection levels.

Then step back and watch the increased economic activity that will result increase the prosperity of all the citizens of the State—and enjoy the increased revenues to the State that will result from the increased economic activity.

Aside: the AP‘s own distortion: Residents in high-tax states such as New York, New Jersey and California could see substantial increases in their federal tax bills this year because of the deduction cap. No, they won’t.  They may well see their total Federal and State tax bill go up, but that’s due entirely to the increase taxes owed the States from their high tax structure.

More Government Intervention

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Shades of FDR, and a betrayal from the putative right of center.  Senator Marco Rubio (R, FL) wants Government to dictate to private enterprises what they must do with company profit.

The plan backed by Rubio encourages domestic investment by making full and immediate expensing permanent “as a way to discourage companies from pursuing share repurchases.”

Right move, wrong reason.  Immediate expensing ought to be a permanent item in tax code reform on its own right.  Delaying expensing or stringing it out is just another aspect of using our tax code for social engineering, which bastardizes our tax collections and distorts our market away from the most efficient use of our money—whether business money or personal.  And that most efficient use might well include stock buybacks; that’s a business decision with which Government has no business interfering.

“Discourage” companies?  That’s a fiction.  What Government starts as “discouraging,” it very quickly converts to barring.  Senate Minority Leader Chuck Schumer (D, NY) and Senator Bernie Sanders (I, VT) are pushing for precisely this sort barring of legislation,

to curtail the ability of companies to purchase stock buybacks[,]

and Rubio is just as enthusiastically joining with them on this.  A report released by Rubio’s Small Business and Entrepreneurship Committee had this in it:

Cash spent on share repurchases is not cash spent on capital investment, though the degree to which a relationship exists may vary by sector and firm type[.]

That’s not strictly true.  Money spent on buybacks is money not spent on that business‘ capital investment.  But do Rubio, Schumer, and Sanders really think that money goes under the mattresses of those now ex-shareholders?

Of course that money does not. It goes into one of three places, each beneficial to our economy. One is investments in other companies, facilitating those companies’ capital investments.

Another is spending on consumer and business goods, which enhances market demand, which increases cash flow into those producers’ coffers—which facilitates their capital investments.

The third is savings.  As anyone who didn’t sleep through their high school econ course knows, savings are banks’ and other lenders’ source of funds which they loan out—to businesses so they can carry out their capital investments.

Hence the need to let businesses make their own decisions without Government diktat.  It’s disappointing that a nominally Republican Senator doesn’t understand any of this.