If you’ve been having trouble finding someone to walk your dog, don’t worry. Any day now, Elizabeth Warren will announce “a plan for that.” It will undoubtedly be comprehensive, detailed, and replete with subsidies for lower- and middle-class dog walkers and underserved breeds. It will cost tens of billions of dollars and will receive widespread positive notice from the media. However, to judge by her other recent plans, the one thing it won’t include is any discussion of how she plans to pay for it.
The Massachusetts senator has challenged and possibly overtaken former vice president Joe Biden as the front-runner for the Democratic nomination, largely based on having a plan for the government to tackle every problem facing this country, no matter how big or how small, from issues with military housing to Puerto Rican debt to climate change.
The price tag for this massive expansion of government is enormous. Much of the attention in recent weeks has been focused on Warren’s embrace of Medicare for All, which she refuses to admit would require an increase in middle-class taxes. Even Vermont senator Bernie Sanders has conceded that such proposals, which would cost $30–40 trillion over 10 years, cannot be financed without tax hikes. Warren’s refusal to address this obvious fact makes her look less like a would-be policy wonk and more like a typical politician.
But even setting aside Medicare for All, Warren’s plans are likely to dump oceans of red ink onto our growing national debt. Her non-health-care spending proposals already total some $7.5 trillion per year over the next 10 years. Although these are not quite Bernie levels of government largesse, her proposals would still require nearly double our current levels of spending.
To pay for all this, Warren proposes a variety of tax hikes, mostly designed to hit corporations or high-earners: higher payroll taxes for those earning more than $250,000 per year; a 7 percent profits tax on companies earning more than $100 million; a 60 percent lobbying tax on firms that spend a million or more on lobbying, and so forth. But the biggest chunk of money would come from Warren’s proposed “wealth tax,” a 2 to 3 percent levy on net worth above $50 million. Warren estimates that this wealth tax will pull in more than $2.75 trillion over ten years. It won’t.
First, there is the slight problem that a wealth tax is probably unconstitutional. Of course, constitutional constraints are quaint notions in the Age of Trump. Regardless, it is worth noting that the Constitution permits the federal government to impose only “direct taxes,” such as a property tax. That’s why it required a constitutional amendment to enact the federal income tax. Many constitutional scholars warn that a wealth tax is neither a direct tax nor income tax.
Even if Warren can find a way around the constitutional guardrails — perhaps by something such as a retrospective wealth tax in which you wait until a taxpayer sells assets or passes away — a wealth tax is unlikely to raise anywhere near the amount of money she predicts.
Simply look at Europe’s experiments with wealth taxes. At one time, a dozen European countries imposed wealth taxes. Today, all but three have abandoned those levies. Among those repealing their wealth tax are the Scandinavian social democracies that Warren admires, Denmark, Finland, and Sweden. Norway retains a wealth tax but has significantly reduced it in recent years. Additional countries abandoning the tax include Austria, France, Germany, Iceland, Ireland, Luxembourg, and the Netherlands. Other countries, such as Great Britain, have considered wealth taxes and rejected them.
They did so because wealth taxes are administratively complex and difficult to enforce. Also, they significantly reduce investment, entrepreneurship, and, ultimately, economic growth. According to the Organization for Economic Cooperation and Development, European wealth taxes raised, on average, only about 0.2 percent of GDP in revenues. By comparison, the U.S. federal income tax raises 8 percent of GDP.
Two groups, however, would benefit substantially from a wealth tax. The tax would be a full-employment opportunity for the tax-preparation industry and for lawyers. After all, we would now have to determine fair market value for everything from homes and vehicles to artwork and jewelry to family pension rights and intellectual property. The other big winner would be lobbyists, who could be expected to descend on Washington en masse seeking exemptions and exceptions for their clients. If you think the tax code is a mess today, just wait until D.C. is done with Warren’s plan.
There is an old Yiddish proverb that goes “Mann tracht, un Gott Lacht,” or “Man plans, and God laughs.” It is all well and good that Senator Warren has a plan for everything. But until she actually figures out how to pay for everything without crippling our economy, such plans really don’t add up
By Christopher Jacobs • The Federalist
Unless you’re a procrastinator, tax filing season officially ended Monday. That milestone means a likely reprise of the political battles from earlier this year about tax refunds and the effects of the Republican Tax Cuts and Jobs Act.
Early in the filing season, Democrats argued that smaller refunds for filers demonstrated the legislation’s ineffectiveness. (As of March 29, the Internal Revenue Service has processed $6 billion less in refunds than during last year’s filing season.) Republicans counter that, under the new law, most individuals will have smaller tax liabilities overall, meaning that individuals receiving smaller refunds this spring benefited from fatter paychecks throughout 2018.
By and large, Republicans have the better argument. Even the liberal Tax Policy Center concedes that most households will benefit from the tax legislation. Under their estimates, more than four in five tax filing units (80.4 percent) received a net tax cut, with fewer than one in twenty (4.8 percent) paying a net tax increase. (About 15 percent of households won’t see a major change, one way or the other.) As a result, most families with smaller refunds received larger net pay during the year, due to smaller tax withholding in their paychecks every month.
But the political back-and-forth misses the bigger point: Continue reading
By Vicki Alger • The Federalist
A new report raises questions about how the U.S. Department of Education monitors the performance of its wide-ranging elementary and secondary education programs.
The department currently receives $38 billion for its major K-12 education programs. Yet the assessment says those programs are plagued by “complex and persistent” challenges, many of which have been identified previously, according to the U.S. Government Accountability Office (GAO), the official “congressional watchdog” charged with ensuring taxpayer dollars are spent efficiently.
Specifically, the GAO identified four key shortcomings in the department: oversight and monitoring, data quality, capacity, and evaluation methodologies. As the GAO makes clear, it is not the only oversight agency raising concerns about the department’s program management. What’s more, such problems have plagued our federal education departments since the first one took form back in 1867. Continue reading
In their constant search for shutdown-related disasters, the media are now fixated on airport screeners. The shutdown is wreaking havoc on airports, they say. Except that it isn’t. The shutdown does, however, present an opportunity to re-privatize the troublesome TSA.
News reports focus on the fact that TSA worker no-shows are up from a year ago. But the TSA’s own data show that wait times haven’t changed. Its latest report finds that “99.9% of passengers waited less than 30 minutes and 95.4% of passengers waited less than 15 minutes.”
That’s in line with normal operations. TSA reported in 2017, for example, that 99.9% of passengers waited less than 30 minutes during summer months. Continue reading
Americans now rank “gridlock” as their top concern when it comes to the economy. We are reluctant to disparage the wisdom of the masses, but in this case they’re wrong. Gridlock, for lack of a better word, is good.
The new IBD/TIPP Poll asked “Which of the following poses the greatest risk to the current U.S. economy?”
At the top of the list was “gridlock in Washington” which 41% named as the greatest risk. Coming in second a good distance back was “trade disputes” at 26%. “Higher interest rates” came next at 12%, followed by “rising prices,” 9%, and “Special Counsel investigation” at 8%.
“Gridlock” came in first place among Democrats, Republicans and independents. Among the young and old. Men and women. North, South, East and West. Rural and urban. Wealthy and working class. Investors and non-investors. Continue reading
The media and the left are playing up the economic damage from the shutdown. No doubt, there will be some disruption. But it won’t be economic armageddon, not by a long shot.
Fears of shutdowns at airports and national parks have been prominent in media coverage. No doubt, some will be inconvenienced.
But will it lead to an economic meltdown, as some have suggested? Not likely.
Let’s start with a few facts. Shutdowns have occurred before, most recently in 1995 and 1996, and in 2013. In each case, these relatively short shutdowns had minimal economic impacts. Continue reading
By Inez Feltscher Stepman • The Federalist
Most Americans are still under the illusion that when they elect a president, he takes control over the executive branch and proceeds to implement his agenda by working with Congress. Sadly, “School House Rock” is out of date.
An enormous amount of policymaking these days goes through the administrative state – the alphabet soup of agencies that have been proliferating like weeds since Franklin Delano Roosevelt’s New Deal. The outsourcing of legislative and adjudicatory powers to agencies is bad enough, and cannot square with the separation of powers between legislation, judiciary, and executive that is delineated in the Constitution. To make matters worse, these agencies and the employees who staff them are also politically unaccountable to the elected representatives of the people, violating not just the wise guardrails of our Constitution, but also the very idea of self-government.
Today, it is nearly impossible to fire the 2.8 million federal bureaucrats who staff the executive agencies, from which they issue regulations and policy guidance that directly affect the lives of Americans every day. Continue reading
By Terry Jones • Investor’s Business Daily
Cutting Rules: Baseball season is winding down and, as it does, so is another grueling annual event: The U.S. government’s fiscal year. But this year, with just two months to go, something remarkable is happening: Regulations are being slashed at a record rate.
A new report by the American Action Forum (AAF) says that not only is President Trump meeting his deregulation goals, he’s exceeding them — in some cases, by a large amount.
“Collectively, executive agencies subject to regulatory budget remain on pace to double the administration’s overall saving goal,” wrote the AAF’s Dan Bosch. “On an individual basis, 12 of 22 agencies have already met or surpassed their savings target.”
“The Department of Labor enjoys the largest total savings of covered agencies with $417.2 million,” Bosch wrote. “The Department of Health and Human Services comes in second in savings … at Continue reading
By Betsy McCaughey • Real Clear Politics
Rank and file government workers won big over union bosses Wednesday, when the U.S. Supreme Court ruled 5-4 in favor of Mark Janus, an Illinois state worker who refused to join the American Federation of State, County, and Municipal Employees. The court struck down an Illinois law that allowed the union to deduct fees from Janus’s paycheck despite his refusal to join.
The Janus ruling smashes laws in 22 states — including New York, Connecticut, New Jersey and California — that compel nonmembers to support unions. Until now, if you wanted a government job in these states, you had to pay up. But now firefighters, teachers and other public employees won’t have to fork over a penny to a union if they choose not to join. For the average worker who opts out, it will mean hundreds of dollars more in take-home pay a year.
More in workers’ pockets, less in union coffers. Nationwide, unions are expected to forfeit Continue reading
By Joy Pullmann • The Federalist
In 2015, President Obama told America he only learned that his secretary of state Hillary Clinton was illegally using a private email server to conduct public business after The New York Times published a story saying so. Today’s release of a Department of Justice inspector general report shows that was a lie.
“FBI analysts and Prosecutor 2 told us that former President Barack Obama was one of the 13 individuals with whom Clinton had direct contact using her clintonemail.com account,” the report says in a footnote on page 89. “Obama, like other high level government officials, used a pseudonym for his username on his official government email account.”
The report also says Obama Federal Bureau of Investigation Director James Comey knew that Obama had lied. It was in 2015 that Obama had disclaimed knowledge that Clinton used a private, rather than government, email address. In 2016 Continue reading
One of Barack Obama’s proudest boasts was his claim he’d “saved” the American auto industry during the first year of his presidency. Maybe. He certainly did a lot, some of which might have actually been helpful, to keep the doors open at General Motors and to bridge the sale of Chrysler to Fiat, but it’s not clear he did much to help Ford or any of the foreign manufacturers who build so many vehicles here in the U.S.
What he and his cohort didn’t want to talk about, then or now, is all the policies they advocated that had helped put U.S.-owned manufacturers in the fix they found themselves in. This is particularly true in the environmental arena, where rules governing the corporate average fuel economy standards did so much to compel the production of cars people didn’t want.
Requiring the auto companies to build more cars that got more miles to the gallon may seem like a good idea. In fact, it may Continue reading
By Chuck DeVore • The Federalist
A California lawmaker recently came up with the bright idea that waiters who serve unrequested straws should go to jail for six months because … the environment. Another duo of lawmakers have proposed more than doubling California’s business tax under the theory that employers wouldn’t miss the cash, because the tax increase would only take about half of President Trump’s recent tax cut.
Lawmakers all over the nation introduce weird or controversial legislation. Most of these bills are harmless, as they’d never make it out of the legislature, much less be signed into law by a governor. In California, however, many such legislative proposals are taken seriously and often do get signed into law.
Why is this? Sure, California is a liberal state. But, one key governmental structural factor likely contributes to Golden State lawmakers’ seeming isolation from common sense: California lawmakers often make a career of full-time politics. Continue reading
There appears to be a dark money campaign seeking to influence public comment on the FCC's Restoring Internet Freedom order.
By US News•
Despite the Federal Communications Commission’s repeal of the doctrine known as “Net Neutrality,” the fight over control of the internet continues. Chairman Ajit Pai’s courageous leadership has been met with sustained resistance from those who would rather see the world’s most ambitious electronic commercial and communications platform regulated like it were Ma Bell.
Pai has been subjected to continuous abuse. Pickets have been mounted outside his home. The safety of his wife and children have been implicitly threatened. He’s been subjected to a campaign of constant harassment and yet he has persisted because of his firm belief he is in the right. That campaign of harassment is now headed to Capitol Hill, which unsurprisingly has been flooded with letters in anticipation of the FCC’s publication of its order Restoring Internet Freedom which finally appeared Thursday in the Federal Register.
The letters claim the Congressional Review Act would protect net neutrality – generally understood as the principle that internet service providers should not be allowed to block, throttle or censor lawful web traffic on their networks.
For reasons that therefore should be obvious, the Restoring Internet Freedom order isn’t popular among the coalition of Silicon Valley tech giants and far-left pressure groups that lobbied the Obama administration to regulate the Continue reading