Supply Side Taxes

This is from Henderson's Review of Melloan's new book, Free People, Free Markets:

Supply-side economics, as he [Barkley] and other Journal writers describe it, is the idea that high marginal tax rates discourage work, saving, and investment.

...

Reagan and Congress cut the tax rate paid by the highest-income people from 70% to 28%. For that, those of us who believe in giving people incentives to produce and those of us who believe that people should keep more of their income should thank the Journal.

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But there was a downside to this advocacy. First, many of the Journal's unsigned editorials (under the heading "Review and Outlook") and guest op-eds during the Bartley era suggested that the economic growth sparked by tax cuts would result in higher federal tax revenues than if tax rates weren't cut. Reasonable back-of-the-envelope calculations showed that this was highly unlikely. As economist Lawrence Lindsey demonstrated with a careful examination of the data, more taxes were paid by the highest-income people, whose marginal tax rates were cut in the early 1980s from 70% to 50%. But it was not true for taxpayers overall.

Second, because the Journal's editors did not worry much about the revenue effects of large cuts in tax rates, they didn't put much emphasis on proposals for reining in federal government spending. Imagine, for example, that the editors had advocated in 1972 that federal spending rise by 0.5 percentage points less per year than it actually did rise. In 1972, federal government spending was $244.3 billion. In 2016, it was $3,852.6 billion. That's a compounded annual growth rate of 6.5%. If our imaginary editors had gotten their way and federal spending had instead risen by "only" 6% annually, it would have been $3,172.4 billion in 2016. The result, with taxes the same as they are, would have been a federal budget surplus of $95.6 billion rather than the actual budget deficit of $584.7 billion.

Reverie

For practical questions, standard procedure is to acquire evidence before you form a strong opinion, match your confidence to the quality and quantity of your evidence, and remain open to criticism. For political questions, we routinely override these procedural safeguards.--Caplan

There is no sugarcoating today’s reality. Public-sector unions are conveyor belts that move a portion of government employees’ salaries — some of the amount paid in union dues — into political campaigns, almost always Democrats’, to elect the people with whom the unions “negotiate” for taxpayers’ money. Progressives who are theatrically distraught about there being “too much money in politics” are now theatrically distraught that the court has ended coercing contributions that have flowed to progressive candidates.--Will on the recent court decision

Grape juice left in its natural state and without cooling of any kind will begin to ferment by the actions of naturally occurring yeasts. This is probably how the first wine was created; it was a surprise. Then, rather quickly, the wine would spoil and turn to vinegar with the intervention of other yeasts and bacteria. Another surprise. A process in a world thought static. The basic process is still used today in the sense that ambient yeasts found on grapes and winery surfaces are favored by some winemakers.



California is toying with a state-run single payer system and had a blue ribbon committee evaluate the idea. The committee heard more than 30 hours of testimony before releasing a report authored by an independent healthcare consultant and professors from the University of California, San Francisco, and the University of California, San Diego. That report essentially concluded that implementing single-payer would be impossible in the short term. Among the reasons? It'd cost about $400 billion. That's more than double California's entire annual budget. Even if Democrats retake the White House in 2020 and grant California a waiver, the state would still have to come up with $200 billion to fund the single-payer system. Senate leaders have floated a 15 percent payroll tax. Or an additional 2.3 percent sales tax. On the other side of the equation, they could cut costs by cutting wages.

Raising taxes will discourage employers, decreasing pay will discourage employees. What's a busybody to do?






The push “for health systems to ditch fee-for-service payment in favor of value-based models were downright urgent at this year’s Healthcare Financial Management Association conference in Las Vegas.” For instance, David Hammer, “a principal in Healthcare Performance Management Consultants’ revenue cycle and managed-care practice in Fort Lauderdale, Fla.,” told attendees, “We can’t afford not to make the change.” The article says that while this issue has been debated for several years, “this year, conversations seemed to indicate a breaking point” mainly because skyrocketing healthcare costs are unsustainable.

Kafkaesque means “having a disorienting, confusing, nightmarish quality; feeling surreal and threatening,” as, for instance, a form letter from the IRS. Franz Kafka (1883-1924) was a German-speaking Jew born in Prague, Bohemia (now the capital of the Czech Republic). Kafka received a rigorous secular education: he wrote in both German and Czech and spoke German with a Czech accent but never thought himself fluent in Czech. He began publishing his artistic prose in 1908.

Beyond, moreover, its material benefits, it is clear that for Adam Smith laissez faire had ethical or moral value in that it left to the individual unimpaired “liberty” to which he had a natural right. It is quite probable, therefore, that Adam Smith would have rejected an extensive program of state regulation of economic enterprise even if he had believed that the wealth of nations could thereby be augmented." This is a funny line by Viner that questions the State's efforts, even when successful.

Who are...Watson and Crick?

Some interesting stats on income transfer payments: The bottom quintile, which earned only 2.2% of all earned income, had virtually the same share of spendable income as the second quintile, lower-middle-income Americans. This equality is despite the fact that lower-middle-income workers earned more than three times the share of income and worked 21/2 times as much, measured by comparing each group’s number of full-time workers relative to its working-age population. Middle-income workers earned almost six times the share of income and worked almost four times as much compared with the bottom quintile, but they enjoyed only about 20% more spendable income.

That is a very negative lesson to teach a guy who wants to work.

The Pirates have a reliever named Crick. Too bad Watson is gone.
 

If the Koreans come to an agreement and the North backs off their nuclear threats, who is more reasonable a Nobel Peace Prize recipient, Obama or Trump?

So the new royal baby is Louis Arthur. Arthur for the Celtic history, I guess. And Louis? It seems to be related to Mountbatten, killed by the lunatic IRA. And, of course, there is the Calypso nonsense song "Louis, Louis," by, appropriately, The Kingsmen.

I took this test. I scored with The Pope and Lady Gaga: https://quiz.thisisnewpower.com/

What Kind of Leader are You? quiz.thisisnewpower.com Could you make it as a 21st Century 'new power' leader?

There is one moral failing that is devastating to the future of our nation. That failing, which has wide acceptance by the American people, is the idea that Congress has the authority to forcibly use one American to serve the purposes of another American. --Williams

Since 2008, oil companies have paid over 2.2 trillion dollars in taxes (2004 dollars), three times more than their profits for the same period. (If you end a sentence like this, "period.", spell check flags it as a repeating word.)

Hhhhmmmmm.. According to the WSJ, banks and credit-card companies are discussing how they could track gun purchases in their payment systems.

So, sometime invasion of privacy is a really good thing, right?

"In the 1970s, the (U.S.) government ran four random control experiments across six states to try the negative income tax, a similar policy proposal (to the basic income) that was popular at the time. In each test, the work disincentive effect was disastrous. For every $1,000 in added benefits to a family, there was an average reduction in $660 of wages from work."--Texiera

Golden oldie:

http://steeleydock.blogspot.com/2015/05/chasing-amazons.html

Chasing Amazons steeleydock.blogspot.com Adrienne Mayor has written a number of books investigating the mist of myth, creativity and history. The First Fossil Hunters (2000), was...

A recent survey in the United Kingdom found that 55% of Muslims harbored anti-Semitic attitudes, compared with 12% of the overall population. Asked whether they agreed that Jewish people "are responsible for most of the world's wars," 6% of Britons said yes, while 26% of British Muslims agreed.

About 80 percent of the Catholic Diocese of Pittsburgh's 200 priests will be assigned to different churches starting in October, part of the six-county diocese's biggest reorganization in nearly three decades.

Bishop David Zubik announced the diocesan-wide clergy reassignments Saturday as he unveiled the next phase of a plan to merge 188 individual parishes into 57 final multi-church groupings. 

John Comly is the first known writer to issue a ban on the split infinitive, saying in 1803 that: “An adverb should not be placed between a verb of the infinitive mood and the preposition ‘to’ which governs it.” At the time this practice was not common, even though such splits had arisen in English almost as soon as “to” started appearing with infinitives. They crop up, for example, in “Sir Gawain and the Green Knight” in the 14th century.

AAAAaaaaannnnndddddd.....a cartoon:
 

Equality and Choice

The question of equality does not look as if it going to go away. The enemies of individuality and liberty never sleep--like greed.

A question on the topic worth considering is the complicated "choice question." Many feel that how one lives depends less on what your intellect is and more on the choice of your lifestyle. Shortstops and nuclear science jobs are very exclusive and pay well but are not in high demand. But if you choose to be a teacher, it is unlikely you will become rich. Ditto nursing. Or fiction writing.

Indeed there are few real jobs in the world that lead to wealth. But millionaires in the U.S.--who are generally not extraordinary people-- have some distinguishing characteristics. First, they usually do not live like millionaires; they are scrupulously frugal. For them, work is their enjoyment; life is otherwise not much fun. Second, they work several jobs or areas; over one third are immigrants whose first language is other than English and many own mundane businesses that they work like crazy on. (A common business is fast food, like pizza shops. Millionaires--and there are a lot that do this--own four or five such shops and are constantly working long hours at multiple sites.)

The casual office worker may admire the guy's earnings but not his life style. I know a guy who works as a military contractor in Africa. He makes a lot of money but I am not sure many people would think his paycheck would be worth it. Everyone will tell you there is a lot of financial opportunity owning rental property but one must accept a risk and an incredible hassle. The lower paid general practitioner had the same option to become a high paid neurosurgeon, but chose not to.

So how much of one's tax bracket is his own choice?

Federal Debt

At 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, CBO projects growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade and 152 percent by 2048. That amount would be the highest in the nation’s history by far.

 

In total, deficits would rise from 3.9 percent of GDP in 2018 to 9.5 percent in 2048. (Adjusted to exclude the effects of timing shifts that occur because fiscal year 2018 began on a weekend, the budget deficit in 2018 would be higher, at 4.2 percent of GDP). Those large budget deficits would arise because spending would grow steadily under current law, and revenues would not keep pace with that spending growth.

In particular, over the next 30 years, spending as a share of GDP would increase for Social Security, the major health care programs (primarily Medicare), and interest on the government’s debt. In CBO’s projections, most of the spending growth for Social Security and Medicare results from the aging of the population: As members of the baby-boom generation (people born between 1946 and 1964) age and as life expectancy continues to rise, the percentage of the population age 65 or older will grow sharply, boosting the number of beneficiaries of those programs. Growth in spending on Medicare and the other major health care programs is also driven by rising health care costs per person. In addition, the federal government’s net interest costs are projected to climb sharply as a percentage of GDP as interest rates rise from their currently low levels and as debt accumulates.

CBO also anticipates that if current laws generally did not change, real GDP—that is, GDP with the effects of inflation removed—would increase by 1.9 percent per year, on average, over the next 30 years. That rate is nearly 1 percentage point lower than the annual average growth rate of real GDP over the past 50 years.

If lawmakers wanted to reduce the amount of debt in 2048 to 41 percent of GDP (its average over the past 50 years), they might cut noninterest spending, increase revenues, or take a combination of both approaches to make changes that equaled 3.0 percent of GDP each year starting in 2019. (In dollar terms, that amount would total about $630 billion in 2019.) If, instead, policymakers wanted debt in 2048 to equal its current share of GDP (78 percent), the necessary changes would be smaller (although still substantial), totaling 1.9 percent of GDP per year (or about $400 billion in 2019). The longer lawmakers waited to act, the larger the policy changes would need to be to reach any particular goal for federal debt.

(This is from the recent report by CBO)

So, the easy promises made earlier governments will have to be broken. Or taxes raised to a crippling level. Or default. Or--the new trial balloon--a wealth tax, that is the confiscation of citizens' properties as is done now under American Asset Forfeiture Law. That assumption of state power typically applies to the alleged proceeds or instruments of crime. This applies, but is not limited, to terrorist activities, drug related crimes, and other criminal and even civil offenses.

No reason it could not be applied to the average working guy.

The Fourth of July

Jay Leno had a recurring skit where he asked questions to passers-by on the street--questions most people think are rather simple and obvious. He asked several people what the Fourth of July celebrated, when independence was declared and who the country separated from. Of course the results were embarrassing to most of those interviewed. One was particularly interesting. A college instructor knew nothing about the Revolution at all, thought it occurred in the 1920's and thought China might have been involved.

A survey published recently said that 27% of people questioned did not know the American Revolution was waged against the British.

When I was a child in the 50's, the Fourth of July was a great event. The kids decorated their bikes, small local parades were held--every community had some commemoration and the larger communities had fireworks. It was unlike other secular events like Thanksgiving which were delightfully family oriented; this was a commonly held social event. It was a birthday party. And it was heartfelt. Everyone felt that years ago something of value had been accomplished, something special in the world created. There was a glow.

When Obama was first campaigning he was asked about American Exceptionalism. (The phrase was de Tocqueville's, from Democracy in America, 1835: "The position of the Americans is therefore quite exceptional, and it may be believed that no democratic people will ever be placed in a similar one. Their strictly Puritanical origin, their exclusively commercial habits, even the country they inhabit, which seems to divert their minds from the pursuit of science, literature, and the arts, the proximity of Europe, which allows them to neglect these pursuits without relapsing into barbarism, a thousand special causes, of which I have only been able to point out the most important, have singularly concurred to fix the mind of the American upon purely practical objects. His passions, his wants, his education, and everything about him seem to unite in drawing the native of the United States earthward; his religion alone bids him turn, from time to time, a transient and distracted glance to heaven. Let us cease, then, to view all democratic nations under the example of the American people.")

The phrase has been used since by those who saw America as a point of reference in man's search for freedom and liberty. (It was also used by Stalin as a slur, decrying America's self-held belief that it was somehow excluded from the Marxian class warfare generality.) Obama saw a trap--it would not do to talk of "exceptionalism" when we want all people to be the same, all nations indistinguishable. So he hedged and said, "I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism." He, unlike those Americans of just a generation or two ago, does not think that America is unique.

Unique. If that element is lost in this country a lot has been lost. So, buy a small flag. Decorate your bike.

The Sequence To Independence

The Declaration of Independence came 442 days after the first volleys of the American Revolution were fired at Lexington and Concord in Massachusetts. It was a long time coming.

The first major colonial opposition to British policy came in 1765 after Parliament passed the Stamp Act, a measure to raise revenues for a standing British army in America. Under the banner of “no taxation without representation,” colonists convened the Stamp Act Congress in October 1765 to vocalize their opposition to the tax. With its enactment in November, most colonists called for a boycott of British goods, and some organized attacks on the customhouses and homes of tax collectors. After months of protest in the colonies, Parliament voted to repeal the Stamp Act in March 1766.

It was a while before the next problem, the result of the British effort to aid the faltering East India Company.  Parliament enacted the Tea Act in 1773 which greatly lowered its tea tax and granting the Company a monopoly on the American tea trade. Many colonists viewed the act as another example of taxation tyranny. In response, militant Patriots in Massachusetts organized the “Boston Tea Party,” which saw British tea valued at some 18,000 pounds dumped into Boston Harbor.

Parliament, outraged by the Boston Tea Party and other blatant acts of destruction of British property, enacted the Coercive Acts, also known as the Intolerable Acts, in 1774. The Coercive Acts closed Boston to merchant shipping, established formal British military rule in Massachusetts, made British officials immune to criminal prosecution in America, and required colonists to quarter British troops in their homes. The colonists subsequently called the first Continental Congress to consider a united American resistance to the British.

In April 1775, Thomas Gage, the British governor of Massachusetts, ordered British troops to march to Concord, Massachusetts, where a Patriot arsenal was known to be located. On April 19, 1775, the British regulars encountered a group of American militiamen at Lexington, and the first shots of the American Revolution were fired.

June 17, 1775 Major General William Howe defeated the Americans at Bunker Hill, the first time the Americans stood and fought. It was a Pyrrhic victory. 140 colonists were killed and 271 wounded. 226 British were dead and 828 wounded. The vast majority of Rebel deaths came from bayoneting the wounded in the field by British soldiers, furious at their losses. The behavior of the British soldiers enraged the colonists and tipped most away from reconciliation with the crown and into separation. Historian Richard Ellis says that the Battle at Bunker Hill scarred Gen. Howe, one of the crown's elite generals. Never again would he be comfortable with assaulting rebel fixed positions and he yearned for reconciliation--a feeling many believe hampered his generalship, especially in the siege of New York.

In January 1776, Thomas Paine published Common Sense, an influential political pamphlet that convincingly argued for American independence and sold more than 500,000 copies in a few months. In the spring of 1776, support for independence swept the colonies, the Continental Congress called for states to form their own governments, and a five-man committee was assigned to draft a declaration.

On July 2, 1776, the Continental Congress voted to approve a Virginia motion calling for separation from Britain. The dramatic words of this resolution were added to the closing of the Declaration of Independence. Two days later, on July 4, the declaration was formally adopted by 12 colonies after minor revision. New York approved it on July 19. On August 2, the declaration was signed.

The American War for Independence would last for five more years. Yet to come were the Patriot triumphs at Saratoga, the bitter winter at Valley Forge, the intervention of the French, and the final victory at Yorktown in 1781. In 1783, with the signing of the Treaty of Paris with Britain, the United States formally became a free and independent nation.

Under America’s first governing document, the Articles of Confederation, the national government was weak and states operated like independent countries. The debate over the power of a unifying federal government went on until 1787 when a convention was held in Philadelphia presided over by George Washington. There delegates devised a plan for a stronger federal government with three branches–executive, legislative and judicial–along with a system of checks and balances to ensure no single branch would have too much power. It was signed on September 17, 1787. The Bill of Rights–10 amendments guaranteeing basic individual protections such as freedom of speech and religion–became part of the Constitution in 1791.

The first presidential election electing Washington was held from Monday, December 15, 1788 to Saturday, January 10, 1789, five years after the Treaty of Paris.

Equality, Diversity and Family

The aspirations of the modern world--at least those propagandized--include "Equality." This is a tricky word because it means many different things and, as a battle cry, can attract quite diverse devotees to its flag. Is it the equality of opportunity? Of results? Are we content giving everyone the same chance for success in life--and, as an aside, how is that success measured? In some cases the equality desired seems to be a floor from which everyone may progress, in others a desired ceiling that will eliminate many from the anxiety of competition with their fellows.

One wonders about these ideals when looking at the outcome within families. Here individuals with very close genetic makeup and raised in the same environment emerge into adulthood in very different personalities and pathways. From the point of view of controlled circumstances, nothing could be better except for identical twins or triplets. In many ways this is a tribute to the inevitability of diversity, an engine of selection and change. On the other hand it is overwhelming evidence against the our ability to control outcomes. An adherent of equality could respond to this only by raising the strictures of upbringing, of narrowing the choices and experiences, in hopes of creating more uniformity, of taking individuality off the table. With uniformity, of course, there is less diversity. And, hence, less genetic creativity.

One wonders if this bland uniformity is at the core of the fascination our intelligentsia has with AI.