- Income tax vs. national sales tax—Wednesday, March 25th, 2015
“Politicians love hidden taxes. When they raise the taxes on corporations and those corporations raise their prices as a result, the politicians get to preen about the ‘greedy corporations’ instead of looking in the mirror to see who is truly greedy.”—Larry J (Economics for Dummies or Presidents (But I Repeat Myself))
I prefer the income tax over the sales tax on the federal level because, conceptually, it’s simple.1 If we are going to have a tax, it must be simple. The things that you are given by your employer are taxable; the only issue comes in determining their worth. And it has to be done once.
A sales tax, however, not so much. Do trade-ins count? Bartering? How do sales prices figure? Yard sales? If yard sales are exempt, what is a yard sale? These are decisions that have to be made several times a week, if not several times over the course of every day. And the more complex or vague, the more you discourage new people from selling: from creating new businesses with new jobs producing new products and keeping prices low.
Because sales taxes are heavily regressive without some additional complication—they will affect people who spend most of their income more than people who spend smaller parts of their income—they almost always come with an additional complication. The national sales tax usually comes with some complex scheme to rebate money to the poor to cover their expected taxes. Why not set a simple, low threshold, below which the tax does not apply? If the tax is so onerous that it would break a person’s wallet, they can choose to break their purchases over multiple days. Families could break up their groceries into multiple carts. But the rich didn’t get rich by wasting their time like that—unless of course the sales tax were so onerous that it became worthwhile to hire people to make smaller purchases for them.
Now, I can see that the national sales tax as it’s described is a huge improvement over the national income tax as it’s currently implemented, but that’s because the national sales tax hasn’t met the real world yet. As long as we are overhauling the tax system, making a straight percentage all the way across, no deductions, will mean that everyone pays X% and income taxes will be simple, too.
- Othering reduced spending—Friday, March 6th, 2015
Our local Community Impact recently ran a feature article about the Federal government’s Highway Trust Fund and the loss of revenue due mainly to people not driving as much during the great recession.
On their editorial page, they included a poll:
“What do you think is the best way to fix the Highway Trust Fund revenue problem?”
These are the pre-listed choices on top of “Other”:
- Increase the gas tax and index it to inflation.
- Continue to borrow from the general fund.
- Give back more existing gas tax revenue to states.
- Implement and increase various registration fees.
- I do not think there is a problem with HTF revenue
I’m guessing that, as close to Austin as we are, the Impact doesn’t endorse less spending but… even given that bias is “reduce spending to match revenue” really a worse answer than the punctuation-challenged “I do not think there is a problem with HTF revenue”?1
I don’t think it should come as a surprise that “Other” is currently third, and nearly tied with the second-highest choice, “Give back more existing gas tax revenue to states.”
The federal fuel tax is already 18.3 cents per gallon. That’s a 9.7% tax going by what I last paid for gas (yes, I’m one of those who doesn’t fill up their tank as often as the government would like) and about 8% against current prices. Those are high rates of sales tax,2 but the preferred option in Washington and Austin is to increase that percentage.
I’m almost tempted to support the option to index the gas tax to inflation, just to see how the government both denies that inflation is happening and uses inflation to increase the tax.
Wikipedia has a similarly odd statement, “As of 2015, despite a sharp drop in gas prices, strong resistance remained by both the American public and Congress to raising the gas tax.”
- World Chancelleries—Friday, March 6th, 2015
“… Heavy wars disarm peoples in their minds; only the abolition of the teachings of war and of the objective symbols of war can keep peoples disarmed in their minds. If we are to abolish war we must forget war. If we are to abolish war we must fill the minds and souls of our young with the gospel, the emotions and the images of peace.”
“Your feeling is that the world’s supreme need is peace?”
“That certainly is my feeling.”
“Do you know of a better way than through a League of Nations to get peace?”
Throughout the book, Bell asks everyone about the efficacy of the League in ways that telegraph what he wants the answer to be. And the opening statement in the above quote, about abolishing the teachings of war, is reproduced as the frontispiece quote to this interview. Similarly, the Italy interview has Mussolini’s quote about creating a new Italian pulled out for emphasis:
“Fascismo is the Greatest Experiment in Our History in Making Italians.”
And in the China interview, Dr. Tang Shao-Yi argues that…
“Education is the specific for the disease of war, and education works slowly. We must teach our children that to kill in war is precisely as criminal an act as to kill in civil life. Murder is murder. We loathe murderers. People must understand that war killers are murderers.”
The importance of education by the right people is affirmed in Bell’s introduction:
Not only statesmen, but specialists and thinkers of every calling, have a natural allegiance with the interviewer for the education of mankind. Fame is power. Fame is responsibility. Names with hypnotic properties are obligated to kindle, enlighten, and direct an attentive world.
This is an odd book all around. I first found it at a library book sale. I used to work at the University of San Diego, and saw it at their Copley Library discards sale for seventy-five cents. It appears to have arrived there after having been presented by the Chicago Daily News to a Mr. M.L. Hallett.
- Stop the rot—with sunlight and sunset—Tuesday, March 3rd, 2015
Jay Cost talks a good description of the problem of soft corruption in Stop the Rot. The checks and balances meant to pit special special interests against each other and so produce good government are failing as more power converges on DC and the steady accumulation of complex laws encourages soft corruption: the shaping of tiny parts of complex laws to benefit campaign contributors or home-district interests. There appears no limit on the pork that can be funneled back home or the special treatment that can be hidden in wordy laws.
Costs’s solution: add more laws on top of our existing laws, increase the size of the civil service bureaucracy in congress, and increase the the control Washington has over party leadership, further blurring the line between parties and the government. His advice seems designed in direct opposition to his advice that we "begin by recognizing that previous attempts to fix it have failed" and that "the rules of the game be adjusted so that selfish interests will combine to produce socially beneficial results”.
Whereas once parties were themselves independent interests, their status as just another arm of the federal government will be further cemented; and his increase in the number of staff members provided to representatives is specifically designed, he says, to decreased the influence of private citizens (of course, he calls them special interests) in providing information to their representatives.
Go read the article—while I disagree with his conclusions, his summation of the problem is good. As Cost says, “reform conservatism must admit the connection between policies needing reform and the process that created them.”
I’d argue for a zero-based budget: special interests are not pitted against one another today because we pretend that the font of public funds is some limitless magical well rather than dependent on taxes. A zero-based budget process would force interests to compete for tax money.1
I’d also argue for a simplification of existing laws, and some mechanism for keeping them simple. It’s the massive size of our current laws, of cruft upon cruft, that make it easy for those who can afford lawyers and lobbyists to find loopholes and carve out hidden special treatment. For example:
- Republicans and America must provide an alternative—Saturday, February 28th, 2015
I’ve often complained that politicians sometimes grow in office to desire compromise solely for the sake of compromise and not to further some underlying policy or principle.
While there are certainly opportunities for compromise in the 2015–2016 congress, there are also things that Republicans should simply vote correctly on and pass to the President’s desk despite the short term hit from a guaranteed veto. During the 2013 shutdown Republicans took a short-term hit for holding up government funds in a futile attempt to delay the ACA. But when the ACA turned out to be an expensive boondoggle a few months later in 2014, it was impossible for the press, having shouted Republican opposition to it only months previously, to claim that the ACA was a bipartisan fiasco.
The same is likely the case with releasing the terrorists at Guantanamo: the president will oppose any bill blocking their release. But if Republicans believe that Guantanamo is protecting the U.S. from terrorist attack by those prisoners, they should send him the doomed bill to maintain Guantanamo anyway. They should pass what is right and not allow the press to tie Democrats’ failures to bipartisanship.
This requires, of course, that Republicans not only have principles but believe in them strongly enough to know that they are right even in the face of failure.
Even more critical is Iran. Republicans must provide a loud alternative to President Obama’s appeasement. And it’s important that their alternative be loud. It isn’t enough to oppose bad policies quietly, as Bush and McCain did when trying to reform Fannie Mae/Freddie Mac before the 2008 housing meltdown. It is very difficult for a politician to say “I told you so” without being condescending; it is necessary that they not have to say “I told you so” because everyone knows—as everyone did after the shutdown over the ACA—what they said.
Providing an alternative is important in all areas of politics and world relations. America itself has been an alternative for the oppressed masses yearning to breathe free since its founding, and it should remain so.
- Liberal Fascism—Wednesday, February 25th, 2015
My friends on the left who post on Facebook asking that we import Christian values into government policy would be right at home among the fascists in Italy and Germany, according to Jonah Goldberg. Fascism is, among other things, supplanting religion with government, a “religion of the state”. This is similar to the definition used by early progressives who talked of the “social gospel”.
Progressives like to tout Christian values at the point of a gun for things that sound nice, like forced charity. The first time I ran across this, I thought it was because they hadn’t thought the implications through. But if progressivism is “applied Christianity”, as early progressive William Gladden described it, perhaps they have thought it through and enjoy the thought of aligning religion with the government.
Goldberg’s Liberal Fascism is the story of how the National Socialist German Workers Party and the fascist government takeover of businesses became defined as a conservative movement by socialists, progressives, and leftists who believe governments should control businesses.
Several years ago at a library book sale I stumbled across an old book of interviews by the progressive Chicago Daily News. The interviewer, Edward Price Bell, “Dean of the Foreign Staff of the Chicago Daily News”, openly praised Mussolini. At the time I found it a humorous example of the media getting things very wrong in their quest to suck up to power.
They call him dictator. To the unpatriotic, to the anti-social and anti-civilized, to the lawless, to the bolshevists, he is dictator. To Italy—full of sterling human worth—to Italy, in my judgement, Mussolini is liberator.—Edward Price Bell (World Chancelleries)
- Progressive taxation static analysis—Sunday, February 22nd, 2015
Static analysis is the hallmark of progressives. They suggest massive changes, usually involving multiple rules, and then assume that nothing else will change. The big example, of course, is taxation, where there are so many rules targeting big companies and high-earners that it makes financial sense for big companies and high earners to hire experts—tax lawyers—to help them navigate those complex rules. The end result is that it’s the small companies and moderate-earners who have to pay for compliance.
Therefore, please consider changing the App Store 70% / 30% revenue split to a tiered rate, where Apple takes less of the developer’s first revenues. For example, perhaps Apple could take nothing from the first $100K in annual revenue for a developer, and 30% after that. Or maybe Apple could take 10% from the first $100K, 20% from the next $100K, and 30% after that.
The cost to Apple should be relatively low, I believe. The tier thresholds can be set low enough that all of the top grossing apps in the App Store are still effectively at a 70% / 30% split.
But the cost to Apple isn’t going to be in the loss of that 30%. It’s going to be in the policing of those tiers. When it comes to taxes, it costs 20% of taxes to pay for taxes. Apple is not going to want to have to create an Apple Revenue Service to police people looking for loopholes. The Apple app ecosystem is completed automated. If a $200,000 company can make $30,000 more simply by splitting their company into a single company per app, it may very well be cost-effective to do this. Will that be a violation? If not, Apple will lose a lot more than Hunter’s analysis shows; if it is, then Apple will end up spending money policing those looking for loopholes. But just as with taxes, the people who can afford to pay for experts will be better able to take advantage of the complex revenue rules. Apple, after all, won’t know who is or isn’t trying to break the rules until after they investigate. This means that developers making under $100,000 will also have to pay the costs of compliance, proving to Apple that they are not breaking the rules. Just as we do today with taxes.
Hunter’s analysis is also very oblivious:
- The End of the Internet, Film at 11… Again—Wednesday, February 11th, 2015
Whenever someone starts telling me it’s the end of the world if we don’t TAKE ACtION NOW!!!!! DON’T STOP TO THINK!!! I immediately… slow down and stop to think. I don’t trust that.1
Now, I don’t have any strong opinions one way or another regarding net neutrality. I am, however, far more inclined to oppose it now that I’ve started listening to one of its more vocal partisans.
A few days ago, an acquaintance on Google+ posted a link to James J. Heaney’s Why Free Marketeers Want To Regulate the Internet. It doesn’t teach much of anything new about net neutrality, but it does seem to be a bit disingenuous in its arguments in favor of it. It’s a bit telling that he uses the breakup of AT&T (“Ma Bell”) as an example of when the government should exercise strong restrictions on businesses, but he didn’t go into the reasons why AT&T was a monopoly in the first place: AT&T was originally a government-created monopoly.
Similarly, he alludes to but does not address what is likely the major driver of high ISP costs: local cable monopolies granted by local governments. It is often the case that problems caused by government result in government officials telling us that we need more government regulation to solve those problems.
It’s also often a lie.
Later in the article, he writes “Because—as Republican free marketeers know—an unregulated natural monopoly is far worse than even a government takeover.” He may be right about Republican free marketeers, but conservatives are likely to disagree. A “natural monopoly” can be overthrown when technology advances to the point that it is no longer a natural monopoly. But a government takeover can use laws to overtax or even make illegal innovations that would disrupt their control. Sometimes even inadvertently (for example, requiring emissions testing on all-electric vehicles). This is not to say that Heaney is wrong in his conclusion. But there does seem to be a bit of a disconnect in his logic, as well:
- Net Neutrality was the law until a few years ago.
- ISPs have been able to charge exorbitant prices all throughout Net Neutrality.
- Therefore, we need to reinstate Net Neutrality.