What a relief. Now that April 15 is out of the way, my tax rate is back to zero for another year.
At least that’s the way the President of the United States seems to have it figured—your tax burden, according to him, is measured by what you’re paying right this moment as opposed to what you’re obligated to pay in the future.
That’s the only possible interpretation of his statement last night that Tea Partiers (and others) should be thanking him for cutting taxes. The reality is that President Obama, like President Bush before him, has rather dramatically raised government spending and therefore has raised your taxes. To say otherwise is like saying you got your new swimming pool for free because you put it on your credit card.
Once the money is spent, the bill must eventually come due—and there’s nobody around to foot that bill except the taxpayers. We are locked into higher current spending and therefore locked into higher future taxes. The president hasn’t lowered taxes; he’s raised and then deferred them. To say otherwise is—let’s be blunt—a flat-out lie.
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Suppose that year after year, you spend more than you earn. You are worried that you’ve become fiscally irresponsible. Which of the following is not a path back to fiscal sanity for your household?
- Spend less.
- Earn more.
- Stop at the ATM more often so you’ll have more cash in your pocket.
Do we all understand why the answer is C? Good. Now let’s try another one.
Continue reading ‘How to Be Fiscally Responsible’
In a curiously unmotivated piece at the Washington Post, Anne Lowrey asks: “What if senators represented people by income or race, not by state?”.
I can’t figure out her point. I am all for identifying problems and brainstorming about radical solutions, but I have no idea what problem Lowrey thinks she’s addressing.
The primary problem with representative democracy is that our representatives are captured by special interests. My senators plot to steal from you and your senators plot to steal from me, with a lot of collateral damage along the way. (And yes, you and your neighbors do constitute a special interest, as do I and mine.) The problem is exacerbated by the fact that my neighbors and I have a lot of interests in common, making it easier to steal on all our behalves at the same time. The solution is to make each senator’s constituency more diverse, not, as Lowrey proposes, less.
Continue reading ‘Fixing Elections’
The Obama administration has its knickers all in a twist over rising health insurance premiums. As you wade through the rhetoric, here are a few things to keep in mind:
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Greed does not cause rate hikes. I’m not sure why some premiums have shot up lately, but I’m quite sure that “greed” is not the answer. That’s because I’m quite sure that the insurance companies are no greedier today than they were a year ago. To explain a change in prices, you’ve got to point to something that’s changed. Greed is pretty much a constant.
Continue reading ‘Premium Prices’
A Guest Post
by
Jamie Whyte
Last year, the British government decided to lift the top rate of income tax from 41 to 52 percent. Last month, Lord Myners, the UK Secretary of State for Financial Services, said that the policy would raise not nearly as much revenue as had been expected. People are apparently making efforts to avoid paying it. A host of politicians and commentators responded that it was always a foolish idea, a purely “political” policy.
But how can a bad policy be good politics? What defect in the electoral system can explain this?
Continue reading ‘Fewer Voters Are Better Voters’
When screenwriter Daniel Turkewitz was working on a script about astronauts struggling to survive in crisis conditions, he enlisted a veteran astronaut as a consultant. That worked so well that when Turkewitz began his new project, a script about Maine seceding from the Union to join Canada, he decided to enlist an expert on the legal niceties of secession. In other words, he decided to enlist a Supreme Court Justice.
Eight out of nine justices (plus retired Justice Sandra Day O’Connor) ignored Turkewitz’s inquiry about what would happen if a secession case were to reach the Supreme Court. Rather astonishingly, however, Justice Scalia responded with the following letter, which Turkewitz’s brother Eric posted on his blog this week:
Continue reading ‘Scalia Against Secession’
When I teach economics, I try to drive home the lesson that words are supposed to mean something coherent. If you want to be rewarded for stringing together a bunch of empty phrases, you should go take an English class.
I was therefore maximally sympathetic to the poor XM radio host (I think it was Pete Dominick but I’m not sure) who was stuck interviewing a man named John Sakowicz last Friday. Sakowicz, who hosts his own radio show in northern California, was there to warn about the dangers inherent in our growing national debt. He was very clear about this much: the debt and its associated dangers are massive, explosive, perhaps even apocalyptic. He was entire unclear, however, about exactly what those dangers are.
Continue reading ‘Debt and Taxes’
Interviews with Democratic Representative Barney Frank and Republican Senator Richard Shelby are the final installments in BigThink’s series of video interviews on “What Went Wrong?” during the financial crisis. (You’ll also find links to all the previous installments.) If you have a taste for politics, you can comment here on what you thought of them.
