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Four Major Problems with Senator Romney’s Plan for Universal Child Allowances

My late friend Walter Williams was a first-rate economist, an important public intellectual, and a truly great American. He also was an amazing communicator, with an unparalleled ability to make important points in a succinct and easy-to-understand manner.

My favorite Walter quote is about how capitalism enabled positive-sum wealth creation.

Today, though, I want to share Walter’s quote about the simple rules for life that basically eliminate poverty.

Sadly, the current welfare state undermines those rules and instead lures many people into self-destructive behaviors. Choices that are bad for them and bad for society.

• Have kids out of wedlock? No problem, Uncle Sam will take care of you with a plethora of handouts.
• Watch TV on the sofa all day rather than work? No problem, Washington will provide you with benefits.

As an economist, I’m especially concerned that redistribution programs discourage employment. That’s bad for the economy. Even more important, it’s very bad for people who get trapped in lives of dependency.

Oh, and let’s not forget that the welfare state also is a big burden on taxpayers.

The reason for highlighting these problems is that Senator Mitt Romney has unveiled a plan (the “Family Security Act”) to have the federal government provide universal child allowances.

The good news is that his plan will mitigate some of the problems with the current system. The bad news is that his proposal will exacerbate other problems.

Here are some excerpts from the Senator’s summary of the proposal.

The Family Security Act would provide a monthly cash benefit for families, amounting to $350 a month for each young child, and $250 a month for each school-aged child. …Promoting marriage; Providing equal treatment for both working and stay-at-home parents; and Reforming and consolidating outmoded federal programs, including by fully paying for the new proposal….a new national commitment to American families by modernizing and streamlining antiquated federal policies into a monthly cash benefit. …The bill consolidates overlapping and often duplicative federal policies into direct support for families. …deficit-neutral.

That description sounds nice, and the proposal would be beneficial in some ways.

Most notably, there would not be high implicit marginal tax rates on work (a big problem in the current system) since people would get the child allowances regardless of employment status.

But there are some serious drawbacks to the plan. Here are four things that cause concern.

First, it increases the burden of government.

Senator Romney (as well as proponents of the plan such as the Niskanen Center) highlight the fact that the plan is “deficit neutral.” But that doesn’t tell us whether the plan increases or reduces the size and scope of the federal government.

Unfortunately, if you take a close look at the Senator’s summary, it’s clear the proposal would be a net increase in the burden of spending.

Here’s the relevant table, which ostensibly shows Romney’s new spending along with the “spending offsets” that make the plan deficit neutral.

For what it’s worth, I’m disappointed that the Senator (his staff?) chose to be dishonest. Three of the “spending offsets” are actually measures that would increase tax revenue (circled in red).

And when you fix that dodgy bit of accounting, Romney’s plan would add more than $45 billion per year to America’s fiscal burden.

Second, why would anyone think it’s a good idea to copy Europe?

According to an article from HuffPost, “The U.S. is one of the only developed countries that doesn’t pay parents a child benefit or child allowance. Romney’s proposal shows there is bipartisan support for the policy.”

This is an accurate observation, but it’s hardly persuasive. Yes, European nations generally send people money simply because they have children.

But why on earth would we want to copy nations where living standards are far below American levels? Heck, poor people in America tend to be more prosperous than middle-class people in Europe.

By the way, some like Romney’s plan because they think it will boost marriage rates and fertility rates (i.e., lure people into having more children). Seems like that might be theoretically true, but the data show that European birth rates are very low, significantly below American levels.

In other words, don’t hold your breath waiting for more marriages and more children.

Third, it undermines federalism by giving Washington a bigger role rather than smaller role.

I’ve argued that the so-called War on Poverty has been very bad news. We have a Byzantine system of handoutsthat require an army of bureaucrats to administer dozens of handouts that subsidize bad behavior.

It’s created dependency and the data show it actually has had a negative impact on the trend of poverty reduction and self sufficiency (same thing has happened in other nations as well).

The right approach is to get Washington out of the business of income redistribution. We’re far more likely to get good outcomes if we let states decide (and learn from each other on) how best to reduce poverty.

Fourth, it is akin to a “basic income” that may have a very corrosive impact on societal capital.

I was very opposed to Andrew Yang’s plan to provide universal handouts, in large part because I feared it would undermine personal independence, the work ethic, the spirit of self reliance, and other traits that are critical for a successful society. And I also didn’t trust (for good reason) Yang’s claim that his scheme would replace other redistribution programs.

Well, Romney’s proposal is like a starter version of a basic income, but with the handouts based on the number of children.

I fear this will enable some people to decide they can drop out of the labor force.

Scott Winship of the American Enterprise Institute shares my concerns.

The Romney proposal would take us back to the bad old days in key ways, and policymakers are playing Russian roulette with low-income families’ wellbeing. …some people (including future people) who would choose single parenthood or non-work except that the current safety net makes it unaffordable would be able to afford these choices under child allowances. For them, child allowances are allowances for behavior that would be expected to hurt their own long-term prospects and, more importantly, the wellbeing of their children.

I’ll conclude by observing that Romney’s plan is nowhere near as bad as Congresswoman Ocasio-Cortez’s scheme for universal handouts.

But that’s hardly the test for good legislation. For those who prefer smaller government, less dependency, and less centralization, Romney’s plan is bad news.

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Milton Friedman in 2004

Power of the Market – Immigration

MILTON FRIEDMAN ON IMMIGRATION

MILTON FRIEDMAN ON IMMIGRATION PART 2

January 15, 2021

Office of Barack and Michelle Obama
P.O. Box 91000
Washington, DC 20066

Dear President Obama,

I wrote you over 700 letters while you were President and I mailed them to the White House and also published them on my blog http://www.thedailyhatch.org .I received several letters back from your staff and I wanted to thank you for those letters. 

There are several issues raised in your book that I would like to discuss with you such as the minimum wage law, the liberal press, the cause of 2007 financial meltdown, and especially your pro-choice (what I call pro-abortion) view which I strongly object to on both religious and scientific grounds, Two of the most impressive things in your book were your dedication to both the National Prayer Breakfast (which spoke at 8 times and your many visits to the sides of wounded warriors!!

I have been reading your autobiography A PROMISED LAND and I have been enjoying it. 

Let me make a few comments on it, and here is the first quote of yours I want to comment on:

WHEN IT CAME to immigration, everyone agreed that the system was broken. The process of immigrating legally to the United States could take a decade or longer, often depending on what country you were coming from and how much money you had.Meanwhile, the economic gulf between us and our southern neighbors drove hundreds of thousands of people to illegally cross the 1,933-mile U.S.-Mexico border each year, searching for work and a better life. Congress had spent billions to harden the border, with fencing, cameras, drones, and an expanded and increasingly militarized border patrol. But rather than stop the flow of immigrants, these steps had spurred an industry of smugglers—coyotes—who made big money transporting human cargo in barbaric and sometimes deadly fashion. And although border crossings by poor Mexican and Central American migrants received most of the attention from politicians and the press, about 40 percent of America’s unauthorized immigrants arrived through airports or other legal ports of entry and then overstayed their visas.
By 2010, an estimated eleven million undocumented persons were living in the United States, in large part thoroughly woven into the fabric of American life.Many were longtime residents, with children who either were U.S. citizens by virtue of having been born on American soil or had been brought to the United States at such an early age that they were American in every respect except for a piece of paper. Entire sectors of the U.S. economy relied on their labor, as undocumented immigrants were often willing to do the toughest, dirtiest work for meager pay—picking the fruits and vegetables that stocked our grocery stores, mopping the floors of offices, washing dishes at restaurants, and providing care to the elderly. But although American consumers benefited from this invisible workforce, many feared that immigrants were taking jobs from citizens, burdening social services programs, and changing the nation’s racial and cultural makeup, which led to demands for the government to crack down on illegal immigration. This sentiment was strongest among Republican constituencies, egged on by an increasingly nativist right-wing press. However, the politics didn’t fall neatly along partisan lines: The traditionally Democratic trade union rank and file, for example, saw the growing presence of undocumented workers on co
    nstruction sites as threatening their livelihoods, while Republican-leaning business groups interested in maintaining a steady supply of cheap labor (or, in the case of Silicon Valley, foreign-born computer programmers and engineers) often took pro-immigration positions.
     Back in 2007, the maverick version of John McCain, along with his sidekick Lindsey Graham, had actually joined Ted Kennedy to put together a comprehensive reform bill that offered citizenship to millions of undocumented immigrants while more tightly securing our borders. Despite strong support from President Bush, it had failed to clear the Senate. The bill did, however, receive twelve Republican votes, indicating the real possibility of a future bipartisan accord. I’d pledged during the campaign to resurrect similar legislation once elected, and I’d appointed former Arizona governor Janet Napolitano as head of the Department of Homeland Security—the agency that oversaw U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection—partly because of her knowledge of border issues and her reputation for having previously managed immigration in a way that was both compassionate and tough.
My hopes for a bill had thus far been dashed. With the economy in crisis and Americans losing jobs,few in Congress had any appetite to take on a hot-button issue like immigration. Kennedy was gone. McCain, having been criticized by the right flank for his relatively moderate immigration stance, showed little interest in taking up the banner again. Worse yet, my administration was deporting undocumented workers at an accelerating rate. This wasn’t a result of any directive from me, but rather it stemmed from a 2008 congressional mandate that both expanded ICE’s budget and increased collaboration between ICE and local law enforcement departments in an effort to deport more undocumented immigrants with criminal records. My team and I had made a strategic choice not to immediately try to reverse the policies we’d inherited in large part because we didn’t want to provide ammunition to critics who claimed that Democrats weren’t willing to enforce existing immigration laws—a perception that we thought could torpedo our chances of passing a future reform bill. But by 2010, immigrant-rights and Latino advocacy groups were criticizing our lack of progress..And although I continued to urge Congress to pass immigration reform, I had no realistic path for delivering a new comprehensive law before the midterms.

Milton Friedman wisely noted,  “It’s just obvious you can’t have free immigration and a welfare state,” 
Is it prudent to allow illegal immigrants (60 percent of whom are high-school dropouts) access to Social Security, Medicare, and, over time, to 60 federal means-tested welfare programs? I don’t think so either!

Walter Williams on Immigration

I have mixed feelings about the right response to illegal immigration. I don´t favor amnesty because of my respect for the rule of law and because it would encourage more illegal immigration. On the other hand, I certainly do not want law enforcement resources diverted to hassling people who are in America solely in search of a better life based on hard and honest work. Walter Williams has a good column on the issue which concludes with a call for more legal immigration:

I believe most people, even my open-borders libertarian friends, would not say that everyone on the planet had a right to live in the U.S. That being the case suggests there will be conditions that a person must meet to live in the U.S. …most Americans would recoil at the suggestion that somebody other than Americans should be allowed to set the conditions for people to live in the U.S. …Probably, the overwhelming majority of Mexican illegal immigrants are hardworking, honest and otherwise law-abiding members of the communities in which they reside. It would surely be a heart-wrenching scenario for such a person to be stopped for a driving infraction, have his illegal immigrant status discovered and face deportation proceedings. Regardless of the hardship suffered, being in the U.S. without authorization is a crime. …Various estimates put the illegal immigrant population in the U.S. between 10 and 20 million. One argument says we can’t round up and deport all those people. That argument differs little from one that says since we can’t catch every burglar, we should grant burglars amnesty. Catching and imprisoning some burglars sends a message to would-be burglars that there might be a price to pay. Similarly, imprisoning some illegal immigrants and then deporting them after their sentences were served would send a signal to others who are here illegally or who are contemplating illegal entry that there’s a price to pay. …Start strict enforcement of immigration law, as Arizona has begun. Strictly enforce border security. Most importantly, modernize and streamline our cumbersome immigration laws so that people can more easily migrate to our country.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733 everettehatcher@gmail.com

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President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here. There have […]By Everette Hatcher III | Posted in David Barton, Founding Fathers, President Obama | Edit |Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 5, John Hancock)

May 8, 2012 – 1:48 am

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The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 4, Elbridge Gerry)

May 7, 2012 – 1:46 am

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The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 3, Samuel Adams)

May 4, 2012 – 1:45 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 2, John Quincy Adams)

May 3, 2012 – 1:42 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 1, John Adams)

May 2, 2012 – 1:13 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in Founding Fathers | Edit | Comments (0)

President Obama and the Founding Fathers

May 8, 2013 – 9:20 am

President Obama Speaks at The Ohio State University Commencement Ceremony Published on May 5, 2013 President Obama delivers the commencement address at The Ohio State University. May 5, 2013. You can learn a lot about what President Obama thinks the founding fathers were all about from his recent speech at Ohio State. May 7, 2013, […]By Everette Hatcher III | Posted in Founding Fathers, President Obama | Edit | Comments (0)

Francis Schaeffer’s own words concerning the founding fathers and their belief in inalienable rights

December 5, 2012 – 12:38 am

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David Barton: In their words, did the Founding Fathers put their faith in Christ? (Part 4)

May 30, 2012 – 1:35 am

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Were the founding fathers christian?

May 23, 2012 – 7:04 am

3 Of 5 / The Bible’s Influence In America / American Heritage Series / David Barton There were 55 gentlemen who put together the constitution and their church affliation is of public record. Greg Koukl notes: Members of the Constitutional Convention, the most influential group of men shaping the political foundations of our nation, were […]By Everette Hatcher III | Posted in Founding Fathers | Edit | Comments (0)

John Quincy Adams a founding father?

June 29, 2011 – 3:58 pm

I do  not think that John Quincy Adams was a founding father in the same sense that his  father was. However, I do think he was involved in the  early days of our government working with many of the founding fathers. Michele Bachmann got into another history-related tussle on ABC’s “Good  Morning America” today, standing […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

“Sanctity of Life Saturday” Taking on Ark Times Bloggers on various issues Part E “Moral absolutes and abortion” Francis Schaeffer Quotes part 5(includes the film SLAUGHTER OF THE INNOCENTS) (editorial cartoon)

July 6, 2013 – 1:26 am

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Article from Adrian Rogers, “Bring back the glory”

June 11, 2013 – 12:34 am

I truly believe that many of the problems we have today in the USA are due to the advancement of humanism in the last few decades in our society. Ronald Reagan appointed the evangelical Dr. C. Everett Koop to the position of Surgeon General in his administration. He partnered with Dr. Francis Schaeffer in making the […]By Everette Hatcher III | Posted in Adrian Rogers, Francis Schaeffer | Edit | Comments (0)

“Schaeffer Sundays” Francis Schaeffer’s own words concerning the possibility that minorities may be mistreated under 51% rule

June 9, 2013 – 1:21 am

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President Obama Speaks at the Wounded Warrior Project Soldier Ride Event

Former President George W. Bush gives a tour of his gallery of Warrior Warrir paintings

https://youtu.be/34mx9lRXobk

President surprises wounded warrior

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February 5, 2021

Office of Barack and Michelle Obama
P.O. Box 91000
Washington, DC 20066

Dear President Obama,

I wrote you over 700 letters while you were President and I mailed them to the White House and also published them on my blog http://www.thedailyhatch.org .I received several letters back from your staff and I wanted to thank you for those letters. 

There are several issues raised in your book that I would like to discuss with you such as the minimum wage law, the liberal press, the cause of 2007 financial meltdown, and especially your pro-choice (what I call pro-abortion) view which I strongly object to on both religious and scientific grounds, Two of the most impressive things in your book were your dedication to both the National Prayer Breakfast (which spoke at 8 times and your many visits to the sides of wounded warriors!!

I have been reading your autobiography A PROMISED LAND and I have been enjoying it. 

Let me make a few comments on it, and here is the first quote of yours I want to comment on:

ONE AFTERNOON a couple of months after the Af-Pak announcement, I walked alone across the South Lawn—trailed by a military aide carrying the football and my veterans affairs staffer, Matt Flavin—to board the Marine One helicopter and make the brief flight to Maryland for the first of what would be regular visits to Bethesda Naval Hospital and Walter Reed Army Medical Center. On arrival, I was greeted by commanders of the facility, who gave me a quick overview of the number and condition of wounded warriors on-site before leading me through a maze of stairs, elevators, and corridors to the main patients’ ward.
     For the next hour, I proceeded from room to room, sanitizing my hands and donning scrubs and surgical gloves where necessary, stopping in the hallway to get some background on the recovering service member from hospital staffers before knocking softly on the door.
     Though patients at the hospitals came from every branch of the military, many who were there during my first few years in office were members of the U.S. Army and Marine Corps that patrolled the insurgent-dominated areas of Iraq and Afghanistan and had been injured by gunfire or IEDs. Almost all were male and working-class: whites from small rural towns or fading manufacturing hubs, Blacks and Hispanics from cities like Houston or Trenton, Asian Americans and Pacific Islanders from California. Usually they had family members sitting with them—mostly parents, grandparents, and siblings, though if the service member was older, there would be a wife and kids too—toddlers squirming in laps, five-year-olds with toy cars, teenagers playing video games. As soon as I entered the room, everyone would shift around, smiling shyly, appearing not quite sure what to do. For me, this was one of the vagaries of the job, the fact that my presence reliably caused a disruption and a bout of nervousness among those I was meeting. I tried always to lighten the mood, doing what I could to put people at ease.
     Unless fully incapacitated, the service members would usually raise their bed upright, sometimes pulling themselves to a seated position by reaching for the sturdy metal handle on the bedpost. Several insisted on hopping out of bed, often balancing on their good leg to salute and shake my hand. I‘d ask them about their hometown and how long they’d been in the service. I’d ask them how they got their injury and how soon they might be starting rehab or be getting fitted for a prosthetic. We often talked sports, and some would ask me to sign a unit flag hung on the wall, and I’d give each service member a commemorative challenge coin. Then we’d all position ourselves around the bed as Pete Souza took pictures with his camera and with their phones, and Matt would give out business cards so they could call him personally at the White House if they needed anything at all.
     How those men inspired me! Their courage and determination, their insistence that they’d be back at it in no time, their general lack of fuss. It made so much of what passes for patriotism—the gaudy rituals at football games, the desultory flag waving at parades, the blather of politicians—seem empty and trite. The patients I met had nothing but praise for the hospital teams responsible for their treatment—the doctors, nurses, and orderlies, most of them service members themselves but some of them civilians, a surprising number of them foreign-born, originally from places like Nigeria, El Salvador, or the Philippines. Indeed, it was heartening to see how well these wounded warriors were cared for, beginning with the seamless, fast-moving chain that allowed a Marine injured in a dusty Afghan village to be medevaced to the closest base, stabilized, then transported to Germany and onward to Bethesda or Walter Reed for state-of-the-art surgery, all in a matter of days.
     Because of that system—a melding of advanced technology, logistical precision, and highly trained and dedicated people, the kind of thing that the U.S. military does better than any other organization on earth—many soldiers who would have died from similar wounds during the Vietnam era were now able to sit with me at their bedside, debating the merits of the Bears versus the Packers. Still, no level of precision or care could erase the brutal, life-changing nature of the injuries these men had suffered. Those who had lost a single leg, especially if the amputation was below the knee, often described themselves as being lucky. Double or even triple amputees were not uncommon, nor were severe cranial trauma, spinal injuries, disfiguring facial wounds, or the loss of eyesight, hearing, or any number of basic bodily functions. The service members I met were adamant that they had no regrets about sacrificing so much for their country and were understandably offended by anyone who viewed them with even a modicum of pity. Taking their cues from their wounded sons, the parents I met were careful to express only the certainty of their child’s recovery, along with their deep wells of pride.
     And yet each time I entered a room, each time I shook a hand, I could not ignore how incredibly young most of these service members were, many of them barely out of high school. I couldn’t help but notice the rims of anguish around the eyes of the parents, who themselves were often younger than me. I wouldn’t forget the barely suppressed anger in the voice of a father I met at one point, as he explained that his handsome son, who lay before us likely paralyzed for life, was celebrating his twenty-first birthday that day, or the vacant expression on the face of a young mother who sat with a baby cheerfully gurgling in her arms, pondering a life with a husband who was probably going to survive but would no longer be capable of conscious thought.
     Later, toward the end of my presidency, The New York Times would run an article about my visits to the military hospitals. In it, a national security official from a previous administration opined that the practice, no matter how well intentioned, was not something a commander in chief should do—that visits with the wounded inevitably clouded a president’s capacity to make clear-eyed, strategic decisions. I was tempted to call that man and explain that I was never more clear-eyed than on the flights back from Walter Reed and Bethesda. Clear about the true costs of war, and who bore those costs. Clear about war’s folly, the sorry tales we humans collectively store in our heads and pass on from generation to generation—abstractions that fan hate and justify cruelty and force even the righteous among us to participate in carnage. Clear that by virtue of my office, I could not avoid responsibility for lives lost or shattered, even if I somehow justified my decisions by what I perceived to be some larger good.
     Looking through the helicopter window at the tidy green landscape below, I thought about Lincoln during the Civil War, his habit of wandering through makeshift infirmaries not so far from where we were flying, talking softly to soldiers who lay on flimsy cots, bereft of antiseptics to stanch infections or drugs to manage pain, the stench of gangrene everywhere, the clattering and wheezing of impending death.
     I wondered how Lincoln had managed it, what prayers he said afterward. He must have known it was a necessary penance. A penance I, too, had to pay.

President Obama threw a shaka sign at the Wounded Warrior Project bike ride

By Katie ZezimaReporterApril 17, 2014 at 3:04 p.m. EDT

President Obama, Vice President Biden and Veterans Affairs Secretary Eric Shinsheki welcomed participants of the annual soldier ride, a nearly 60-mile bike ride that benefits the Wounded Warrior Project, to the White House on Thursday. “Biking nearly 60 miles in three days would be a challenge for anybody, but for all of you this is a lot more than a bike ride — this is a mark of how far you’ve come,” Obama said.Support our journalism. Subscribe today.

The Soldier Ride was started by Chris Carney, a civilian bartender from Long Island, NY, who wanted to raise awareness about troops returning from Afghanistan and Iraq. Carney couldn’t make it to the White House Thursday. He now owns a gym. “I think you all inspired him to trade the bar in for some barbells,” Obama said. Soldier Rides now take place nationwide.

“Many of you are recovering from devastating injuries, Obama said. “Some of you have had to learn the basics all over again — how to stand again, how to walk again, how to run again.  And now you’re here today because that’s what Soldier Ride is all about — seeing each other through the finish line.”

Obama singled out a number of riders this year, including Master Sgt. Louis Alfonso Ramirez, who lost friends in an ambush in Afghanistan and was later diagnosed with post-traumatic stress disorder. He is doing his fourth ride and credits the Wounded Warriors Project with helping him heal. Lt. Commander John Jae Terry lost his leg after being hit by an IED on patrol in Afghanistan. He was participating in his first ride.

“Every day I have the honor of serving as this country’s Commander-in-Chief,” Obama said. “And as long as I have that honor, I will keep fighting to make sure you and your families get the care and treatment and benefits that you have earned and deserve.”

And Obama threw a shaka. Hang loose, man.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733 everettehatcher@gmail.com

Lt. Cmdr. John Terry doing lunges with President Obama at Walter Reed National Military Medical Center. Commander Terry, who provided the image, said, “I will remember that day until I die.”

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Open letter to President Obama (Part 293) (Founding Fathers’ view on Christianity, Elbridge Gerry of MA)

April 10, 2013 – 7:02 am

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here. There have […]By Everette Hatcher III | Posted in David Barton, Founding Fathers, President Obama | Edit |Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 5, John Hancock)

May 8, 2012 – 1:48 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 4, Elbridge Gerry)

May 7, 2012 – 1:46 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 3, Samuel Adams)

May 4, 2012 – 1:45 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 2, John Quincy Adams)

May 3, 2012 – 1:42 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

The Founding Fathers views concerning Jesus, Christianity and the Bible (Part 1, John Adams)

May 2, 2012 – 1:13 am

There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at war with religion in our public life. Lillian Kwon quoted somebody […]By Everette Hatcher III | Posted in Founding Fathers | Edit | Comments (0)

President Obama and the Founding Fathers

May 8, 2013 – 9:20 am

President Obama Speaks at The Ohio State University Commencement Ceremony Published on May 5, 2013 President Obama delivers the commencement address at The Ohio State University. May 5, 2013. You can learn a lot about what President Obama thinks the founding fathers were all about from his recent speech at Ohio State. May 7, 2013, […]By Everette Hatcher III | Posted in Founding Fathers, President Obama | Edit | Comments (0)

Francis Schaeffer’s own words concerning the founding fathers and their belief in inalienable rights

December 5, 2012 – 12:38 am

Dr. C. Everett Koop with Bill Graham. Francis Schaeffer: “Whatever Happened to the Human Race” (Episode 4) THE BASIS FOR HUMAN DIGNITY Published on Oct 7, 2012 by AdamMetropolis The 45 minute video above is from the film series created from Francis Schaeffer’s book “Whatever Happened to the Human Race?” with Dr. C. Everett Koop. This […]By Everette Hatcher III | Posted in Founding Fathers, Francis Schaeffer, Prolife | Edit |Comments (1)

David Barton: In their words, did the Founding Fathers put their faith in Christ? (Part 4)

May 30, 2012 – 1:35 am

America’s Founding Fathers Deist or Christian? – David Barton 4/6 There have been many articles written by evangelicals like me who fear that our founding fathers would not recognize our country today because secular humanism has rid our nation of spiritual roots. I am deeply troubled by the secular agenda of those who are at […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Tagged governor of connecticut, john witherspoon, jonathan trumbull | Edit | Comments (1)

Were the founding fathers christian?

May 23, 2012 – 7:04 am

3 Of 5 / The Bible’s Influence In America / American Heritage Series / David Barton There were 55 gentlemen who put together the constitution and their church affliation is of public record. Greg Koukl notes: Members of the Constitutional Convention, the most influential group of men shaping the political foundations of our nation, were […]By Everette Hatcher III | Posted in Founding Fathers | Edit | Comments (0)

John Quincy Adams a founding father?

June 29, 2011 – 3:58 pm

I do  not think that John Quincy Adams was a founding father in the same sense that his  father was. However, I do think he was involved in the  early days of our government working with many of the founding fathers. Michele Bachmann got into another history-related tussle on ABC’s “Good  Morning America” today, standing […]By Everette Hatcher III | Posted in David Barton, Founding Fathers | Edit | Comments (0)

“Sanctity of Life Saturday” Taking on Ark Times Bloggers on various issues Part E “Moral absolutes and abortion” Francis Schaeffer Quotes part 5(includes the film SLAUGHTER OF THE INNOCENTS) (editorial cartoon)

July 6, 2013 – 1:26 am

I have gone back and forth and back and forth with many liberals on the Arkansas Times Blog on many issues such as abortion, human rights, welfare, poverty, gun control  and issues dealing with popular culture. Here is another exchange I had with them a while back. My username at the Ark Times Blog is Saline […]By Everette Hatcher III | Posted in Arkansas Times, Francis Schaeffer, Prolife | Edit |Comments (0)

Article from Adrian Rogers, “Bring back the glory”

June 11, 2013 – 12:34 am

I truly believe that many of the problems we have today in the USA are due to the advancement of humanism in the last few decades in our society. Ronald Reagan appointed the evangelical Dr. C. Everett Koop to the position of Surgeon General in his administration. He partnered with Dr. Francis Schaeffer in making the […]By Everette Hatcher III | Posted in Adrian Rogers, Francis Schaeffer | Edit | Comments (0)

“Schaeffer Sundays” Francis Schaeffer’s own words concerning the possibility that minorities may be mistreated under 51% rule

June 9, 2013 – 1:21 am

Francis Schaeffer: “Whatever Happened to the Human Race” (Episode 4) THE BASIS FOR HUMAN DIGNITY Published on Oct 7, 2012 by AdamMetropolis ____________ The 45 minute video above is from the film series created from Francis Schaeffer’s book “Whatever Happened to the Human Race?” with Dr. C. Everett Koop. This book  really helped develop my political […]By Everette Hatcher III | Posted in Francis Schaeffer | Edit | Comments (0)

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A Case Study of Sloppy Research and Media Bias

I periodically criticize pro-statism stories and columns in outlets such as the New York Times and Washington Post.

But I’ve only written one column specifically on the topic of whether the press is slanted. In that article, I pointed out that media bias rarely is based on lies.

Even when stories are overtly misleading (as is often the case with reports about poverty, for instance), journalists almost always are clever enough to avoid crossing a line to outright dishonesty.

In practice, media bias is largely about what gets covered and what doesn’t.

Media bias very rarely involves dishonesty. Deception yes, but not inaccuracies. It’s almost always about story selection and what gets emphasized.

Today, I want to share an example of this phenomenon.

A left-leaning group called the International Equalities Instituterecently published a report claiming that lower tax rates on upper-income taxpayers don’t lead to faster growth.

The London-based group isn’t well known and neither are the two authors (David Hope and Julian Limberg), yet this study received a massive amount of attention.

To cite just a few examples, it got major coverage from the Washington Post.

It received a fawning write-up from CBS.

It was featured by Bloomberg.

Bloomberg liked it so much that there was a second story.

Many other news outlets also publicized the story, in many cases by simply republishing the stories from the above outlets.

Here’s the report from Al Jazeera.

Esquire even ran a puff piece on the study.

Here’s the headline from MSN.

Various CBS local stations recycled the network report.

Here’s an example from Oklahoma.

And an example from North Carolina.

The Gulf News wrote about the study.

And Business Insider also gave it lots of attention.

Even the New York Post featured the study.

The reason this report got so all this attention, in my humble opinion, is that it gave reporters an excuse to advance a pro-statism message.

And that meant writing press releases about the report rather than practicing real journalism. They praised the study as “comprehensive” and “sophisticated,” though presumably none of them know anything about its methodology.

And they certainly didn’t seek out any contrary views.

So allow me to point out a few problems with the Hope-Limberg report. Feel free to read the entire study, but I think these passages fairly summarize the two main arguments (tax cuts help the rich and tax cuts don’t help the economy) in the publication.

…it remains an open empirical question how cutting taxes on the rich affects economic outcomes. In this paper, we use data from 18 OECD countries covering the last fifty years to investigate the effects of major tax cuts for the richon income inequality, economic growth, and unemployment. …Our results show that…major tax cuts for the rich increase the top 1% share of pre-tax national income in the years following the reform… The magnitude of the effect is sizeable; on average, each major reform leads to a rise in top 1% share of pre-tax national income of 0.8 percentage points. The results also show that economic performance, as measured by real GDP per capita and the unemployment rate, is not significantly affected by major tax cuts for the rich.

Regarding the two arguments, I’m not sure what point Hope and Limberg think they’re making with their first point about lower tax rates leading the rich to earn more income.

At the risk of stating the obvious, that’s one of the main selling points for better tax policy. Supporters of lower tax rates explicitly want entrepreneurs, investors, business owners, and other successful people to have better incentives to earn and report taxable income.

So the Hope-Limberg data actually confirm that lower tax rates on upper-income taxpayers are a great way of getting them to be more productive. Art Laffer would give them an A+ if they were students.

But what about the second argument? Is it true that there’s no positive impact when tax rates are reduced on work, saving, investment, risk-taking, and entrepreneurship?

Let’s examine their conclusions. Here’s the chart showing when selected nations reduced tax rates (in red). Hope and Limberg then calculated whether those countries enjoyed a bump in jobs and growth over the following five years and want us to accept their argument that there was no positive impact.

Since the report doesn’t include the underlying data or the model used to generate the results, we’re supposed to accept their results at face value.

At the risk of being the skunk at the garden party, I’m unconvinced. Hope and Limberg are political scientists rather than economists, but it seems like they overlooked some very important issues.

Most important, why didn’t they factor in the impact of other government policies (trade, regulation, government spending, monetary policy, etc)? Taxation is just one small piece of the economic policy puzzle. Maybe they covered these concerns in their undisclosed model and data, but estimating economic performance by looking solely at tax policy is like trying to figure out the score of a baseball game by just comparing the performance of shortstops.

And there are a couple of other concerns I have, such as why did they pick these 18 countries and ignore other nations? And why not examine economic performance beyond five years?

I’ll conclude by also noting that their study doesn’t pass the smell test.

• Are we really supposed to believe Thatcher’s tax-rate reductions played no role in the U.K.’s impressive recovery?
• Are we really supposed to believe the Reagan tax cutsplayed no role in America’s economic renaissance?
• Are we really supposed to believe that Ireland’s lower tax rates didn’t help turn the “Sick man of Europe” into the Celtic Tiger?
• Are we really supposed to believe that New Zealand’s tax cuts didn’t contribute to that nation’s remarkable turnaround?
• Are we really supposed to believe that countries such as Italy, Finland, Belgium, etc, are examples of supply-side reform?

The bottom line is that better tax policy isn’t some sort of elixir that guarantees prosperity. Especially if other policies in a nation are misguided.

That being said, lower tax rates are better for prosperity than higher tax rates (as illustrated by academic studies from economists). And since even small differences in economic performance can lead to big long-run benefits, the main takeaway is that it’s a good idea to enact policies to expand the economic pie.

The Case Against Biden’s Class-Warfare Tax Policy, Part IV

I’ve shared three reasons why Biden’s tax plan is misguided (the tax code is biased against rich taxpayers, the tax hike would have Laffer-Curve implications, and it would saddle America with the world’s highest corporate tax burden).

For Part IV of the series, let’s explain why every piece of his plan will backfire.

There are three main arguments for higher taxes, though I don’t find any of them convincing.

1. Spite and envy against successful entrepreneurs, investors, innovators, and business owners.
2. Bringing more money to Washington to finance a larger burden of government spending.
3. Bringing more money to Washington to ostensibly lower the burden of deficits and debt.

For what it’s worth, Biden’s proposed spending increases are far larger than his proposed tax increases, so we can rule out reason #3.

So we have to ask ourselves whether reasons #1 and #2 are compelling.

And when considering those two arguments, we also should ask whether those reasons are sufficiently compelling to justify throwing millions of Americans into unemployment and reducing the nation’s competitiveness.

The answer should be a resounding no.

In a column in the Wall Street Journal from last July, Philip DeMuth elaborated on the damage that would be inflicted by Biden’s class-warfare agenda.

Mr. Biden has proposed to reinstate the Obama tax rates for top earners while simultaneously imposing an unlimited 12.4% Social Security payroll tax on earnings over $400,000. …Mr. Biden proposes to eliminate the capital gains reset to fair market value at death. For long-term holdings, much of that gain is merely inflation, created by the government’s failure to maintain price stability, so this is effectively a tax on a tax.The remaining gains are usually from corporate earnings, which were already taxed once, when they came in the door. It will be difficult to keep your business or farm in the family if the Biden scheme forces it to be liquidated to pay the death taxes. …If a President Biden has his way, the top capital-gains tax rate will be 39.6%—the same as for ordinary income. This could be a triple whammy: cutting the estate tax exemption in half, eliminating the capital gains reset to fair market value, and then doubling the capital-gains tax rate. A small step for the government, a giant loss for the American family. …The former vice president’s ambitious spending programs would more than offset any new revenue from his tax proposals. …This isn’t a debate between growing the pie vs. redistributing the pie; it is about everyone settling for a smaller pie.

The final two sentences deserve extra attention.

First, nobody should be deluded that tax increases will be used to reduce red ink. Yes, Biden is proposing to collect a lot more money, but he’s proposing about $2 of new spending for every $1 of projected tax revenue.

Brian Riedl’s Chartbook has the grim details on Biden’s spending agenda.

Second, the point about “growing the pie” is critically important since even a very small reduction in long-run growth will have a surprisingly large impact on household finances within a few decades.

The bottom line is that living standards in the United States are significantly higher than living standards in Europe, in large part because fiscal burdens are not as onerous in America.

Biden’s plan to make America more like France, Italy, and Greece is not a good idea.

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The Case Against Biden’s Class-Warfare Tax Policy, Part III

In Part I of this series, I explained that President-Elect Biden’s soak-the-rich agenda didn’t make sense because the internal revenue code already is very biased against upper-income taxpayers. Indeed, the U.S. tax system is even more weighted against the rich than the tax codes of nations such as France and Sweden.

In Part II of this series, I explained that Biden’s proposed reincarnation of Obamanomics would not be a recipe for increased federal revenues. Simply stated, higher tax rates on productive behavior will lead to macro-economic and micro-economic responses that have the effect of producing lower-than-expected revenues.

For today’s addition to the series, I want to focus on how Biden’s tax agenda will discourage investment and undermine competitiveness by saddling the United States with the developed world’s highest effective tax rate on corporate income – as measured by the combined burden of the corporate income tax and the additional layer of tax when dividends are paid to shareholders.

Everything you need to know is captured by this new data from the Tax Foundation.

Needless to say, American policy makers should be striving to make our business tax system more like the one in Estonia.

Instead, Biden wants to go from America being worse than average to America being the absolute worst.

When faced with this data, my friends on the left usually respond in one of two ways.

Some of them simply assert that there is no double taxation. I don’t know if they are ignorant or if they are dishonest.

The others (either more honest or more knowledgeable) will agree with the numbers but assert it is okay because any economic damage will be modest and the benefits of new spending will be significant.

But if higher taxes and more spending are somehow beneficial, why is the United States so much more prosperous than the nations that do have higher taxes and more spending?

P.S. While Biden’s proposals, if enacted, will result in the United States having a very bad tax system for companies, the U.S. will still have some big fiscal advantages over other nations.

• No value-added tax.
• Lower-than-average payroll taxes.
• Less-onerous personal income tax.
• Lower-than-average spending burden.

P.P.S. Adding everything together, the biggest differencebetween the United States and other developed nations is that lower-income and middle-class taxpayers in America enjoy far lower tax burdens.

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The Case Against Biden’s Class-Warfare Tax Policy, Part II

In Part I of this series, I expressed some optimism that Joe Biden would not aggressively push his class-warfare tax plan, particularly since Republicans almost certainly will wind up controlling the Senate.

But the main goal of that column was to explain that the internal revenue code already is heavily weighted against investors, entrepreneurs, business owners and other upper-income taxpayers.

And to underscore that point, I shared two charts from Brian Riedl’s chartbook to show that the “rich” are now paying a much larger share of the tax burden – notwithstanding the Reagan tax cuts, Bush tax cuts, and Trump tax cuts – than they were 40 years ago.

Not only that, but the United States has a tax system that is more “progressive” than all other developed nations (all of whom also impose heavy tax burdens on upper-income taxpayers, but differ from the United States in that they also pillage lower-income and middle-class residents).

In other words, Biden’s class-warfare tax plan is bad policy.

Today’s column, by contrast, will point out that his tax increases are impractical. Simply stated, they won’t collect much revenue because people change their behavior when incentives to earn and report income are altered.

This is especially true when looking at upper-income taxpayers who – compared to the rest of us – have much greater ability to change the timing, level, and composition of their income.

This helps to explain why rich people paid five times as much tax to the IRS during the 1980s when Reagan slashed the top tax rate from 70 percent to 28 percent.

When writing about this topic, I normally use the Laffer Curve to help people understand why simplistic assumptions about tax policy are wrong (that you can double tax revenue by doubling tax rates, for instance). And I point out that even folks way on the left, such as Paul Krugman, agree with this common-sense view (though it’s also worth noting that some people on the right discredit the concept by making silly assertions that “all tax cuts pay for themselves”).

But instead of showing the curve again, I want to go back to Brian Riedl’s chartbook and review his data on of revenue changes during the eight years of the Obama Administration.

It shows that Obama technically cut taxes by $822 billion (as further explained in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the Obamacare legislation).

If we do the math, that means Obama imposed a cumulative net tax increase of about $510 billion during his eight years in office

But, if you look at the red bar on the chart, you’ll see that the government didn’t wind up with more money because of what the number crunchers refer to as “economic and technical reestimates.”

Indeed, those reestimates resulted in more than $3.1 trillion of lost revenue during the Obama years.

I don’t want the politicians and bureaucrats in Washington to have more tax revenue, but I obviously don’t like it when tax revenues shrink simply because the economy is stagnant and people have less taxable income.

Yet that’s precisely what we got during the Obama years.

To be sure, it would be inaccurate to assert that revenues declined solely because of Obama’s tax increase. There were many other bad policies that also contributed to taxable income falling short of projections.

Heck, maybe there was simply some bad luck as well.

But even if we add lots of caveats, the inescapable conclusion is that it’s not a good idea to adopt policies – such as class-warfare tax rates – that discourage people from earning and reporting taxable income.

The bottom line is that we should hope Biden’s proposed tax increases die a quick death.

P.S. The “fiscal cliff” was the term used to describe the scheduled expiration of the 2001 and 2003 Bush tax cuts. According to the way budget data is measured in Washington, extending some of those provisions counted as a tax cut even though the practical impact was to protect people from a tax increase.

P.P.S. Even though Biden absurdly asserted that paying higher taxes is “patriotic,” it’s worth pointing out that he engaged in very aggressive tax avoidance to protect his family’s money.

President Joe Biden Will Be Bad, but a President Kamala Harris Would Be Worse

Joe Biden has a very misguided economic agenda. I’m especially disturbed by his class-warfare tax agenda, which will be bad news for American workers and American competitiveness.

The good news, as I wrote earlier this year, is that he probably isn’t serious about some of his worst ideas.

Biden is a statist, but not overly ideological. His support for bigger government is largely a strategy of catering to the various interest groups that dominate the Democratic Party. The good news is that he’s an incrementalist and won’t aggressively push for a horrifying FDR-style agenda if he gets to the White House.

But what if Joe Biden’s health deteriorates and Kamala Harris – sooner or later – winds up in charge?

That’s rather troubling since her agenda was far to the left of Biden’s when they were competing for the Democratic nomination.

And it doesn’t appear that being Biden’s choice for Vice President has led her to moderate her views. Consider this campaign ad, where she openly asserted that “equitable treatment means we all end up at the same place.”

The notion that we should strive for equality of outcomes rather than equality of opportunity is horrifying.

For all intents and purposes,Harris has embraced a harsh version of redistributionism where everyone above average is punished and everyone below average is rewarded.

This goes way beyond a safety net and it’s definitely a recipe for economic misery since people on both sides of the equationhave less incentive to be productive.

I’m not the only one to be taken aback by Harris’ dogmatic leftism.

Robby Soave, writing for Reason, is very critical of her radical outlook.

Harris gives voice to a leftist-progressive narrative about the importance of equity—equal outcomes—rather than mere equality before the law. …Harris contrasted equal treatment—all people getting the same thing—with equitable treatment,which means “we all end up at the same place.” …This may seem like a trivial difference, but when it comes to public policy, the difference matters. A government shouldbe obligated to treat all citizens equally, giving them the same access to civil rights and liberties like voting, marriage, religious freedom, and gun ownership. …A mandate to foster equity, though, would give the government power to violate these rights in order to achieve identical social results for all people. 

And, in a column for National Review, Brad Polumbo expresses similar reservations about her views.

Whether she embraces the label “socialist” or not, Harris’s stated agenda and Senate record both reveal her to be positioned a long way to the left on matters of economic policy. From health care to the environment to housing, Harris thinks the answer to almost every problem we face is simply more government and more taxpayer money — raising taxes and further indebting future generations in the process.…Harris…supports an astounding $40 trillion in new spending over the next decade. In a sign of just how far left the Democratic Party has shifted on economics, Harris backs more than 20 times as much spending as Hillary Clinton proposed in 2016. …And this is not just a matter of spending. During her failed presidential campaign, Harris supported a federal-government takeover of health care… The senator jumped on the “Green New Deal” bandwagon as well. She co-sponsored the Green New Deal resolution in the Senate that called for a “new national, social, industrial, and economic mobilization on a scale not seen since World War II and the New Deal era.” …she supports enacting price controls on housing across the country. …The left-wing group Progressive Punch analyzed Harris’s voting record and found that she is the fourth-most liberal senator, more liberal even than Massachusetts senator Elizabeth Warren. Similarly, the nonpartisan organization GovTrack.us deemed Harris the furthest-left member of the Senate for the 2019 legislative year. (Spoiler alert: If your voting record is to the left of Bernie Sanders, you might be a socialist.)

To be fair, Harris is simply a politician, so we have no idea what she really believes. Her hard-left agenda might simply be her way of appealing to Democratic voters, much as Republicans who run for president suddenly decide they support big tax cuts and sweeping tax reform.

But whether she’s sincere or insincere, it’s troubling that she actually says it’s the role of government to make sure we all “end up at the same place.”

Let’s close with a video clip from Milton Friedman. At the risk of understatement, he has a different perspective than Ms. Harris.

Since we highlighted Harris’ key quote, let’s also highlight the key quote from Friedman.

Amen.

P.S. It appears Republicans will hold the Senate, which presumably (hopefully?) means that any radical proposals would be dead on arrival, regardless of whether they’re proposed by Biden or Harris.

P.P.S. Harris may win the prize for the most economically illiterate proposal of the 2020 campaign.

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Will Biden’s Class-Warfare Tax Plan Lead to an Exodus of Job Creators?

After Barack Obama took office (and especially after he was reelected), there was a big uptick in the number of rich people who chose to emigrate from the United States. 

There are many reasons wealthy people choose to move from one nation to another, but Obama’s embrace of class-warfare tax policy (including FATCA) was seen as a big factor.

Joe Biden’s tax agenda is significantly more punitive than Obama’s, so we may see something similar happen if he wins the 2020 election.

Given the economic importance of innovators, entrepreneurs, and inventors, this would be not be good news for the American economy.

The New York Times reported late last year that the United States could be shooting itself in the foot by discouraging wealthy residents.

…a different group of Americans say they are considering leaving — people of both parties who would be hit by the wealth tax… Wealthy Americans often leave high-tax states like New York and California for lower-tax ones like Florida and Texas. But renouncing citizenship is a far more permanent, costly and complicated proposition. …“America’s the most attractive destination for capital, entrepreneurs and people wanting to get a great education,” said Reaz H. Jafri, a partner and head of the immigration practice at Withers, an international law firm. “But in today’s world, when you have other economic centers of excellence — like Singapore, Switzerland and London — people don’t view the U.S. as the only place to be.” …now, the price may be right to leave. While the cost of expatriating varies depending on a person’s assets, the wealthiest are betting that if a Democrat wins…, leaving now means a lower exit tax. …The wealthy who are considering renouncing their citizenship fear a wealth tax less than the possibility that the tax on capital gains could be raised to the ordinary income tax rate, effectively doubling what a wealthy person would pay… When Eduardo Saverin, a founder of Facebook…renounced his United States citizenship shortly before the social network went public, …several estimates said that renouncing his citizenship…saved him $700 million in taxes.

The migratory habits of rich people make a difference in the global economy.

Here are some excerpts from a 2017 Bloomberg story.

Australia is luring increasing numbers of global millionaires, helping make it one of the fastest growing wealthy nations in the world… Over the past decade, total wealth held in Australia has risen by 85 percent compared to 30 percent in the U.S. and 28 percent in the U.K… As a result, the average Australian is now significantly wealthier than the average American or Briton. …Given its relatively small population, Australia also makes an appearance on a list of average wealth per person. This one is, however, dominated by small tax havens.

Here’s one of the charts from the story.

As you can see, Australia is doing very well, though the small tax havens like Monaco are world leaders.

I’m mystified, however, that the Cayman Islands isn’t listed.

But I’m digressing.

Let’s get back to our main topic. It’s worth noting that even Greece is seeking to attract rich foreigners.

The new tax law is aimed at attracting fresh revenues into the country’s state coffers – mainly from foreigners as well as Greeks who are taxed abroad – by relocating their tax domicile to Greece, as it tries to woo “high-net-worth individuals” to the Greek tax register.The non-dom model provides for revenues obtained abroad to be taxed at a flat amount… Having these foreigners stay in Greece for at least 183 days a year, as the law requires, will also entail expenditure on accommodation and everyday costs that will be added to the Greek economy. …most eligible foreigners will be able to considerably lighten their tax burden if they relocate to Greece…nevertheless, the amount of 500,000 euros’ worth of investment in Greece required of foreigners and the annual flat tax of 100,000 euros demanded (plus 20,000 euros per family member) may keep many of them away.

The system is too restrictive, but it will make the beleaguered nation an attractive destination for some rich people. After all, they don’t even have to pay a flat tax, just a flat fee.

Italy has enjoyed some success with a similar regime to entice millionaires.

Last but not least, an article published last year has some fascinating details on the where rich people move and why they move.

The world’s wealthiest people are also the most mobile. High net worth individuals (HNWIs) – persons with wealth over US$1 million – may decide to pick up and move for a number of reasons. In some cases they are attracted by jurisdictions with more favorable tax laws… Unlike the middle class, wealthy citizens have the means to pick up and leave when things start to sideways in their home country. An uptick in HNWI migration from a country can often be a signal of negative economic or societal factors influencing a country. …Time-honored locations – such as Switzerland and the Cayman Islands – continue to attract the world’s wealthy, but no country is experiencing HNWI inflows quite like Australia. …The country has a robust economy, and is perceived as being a safe place to raise a family. Even better, Australia has no inheritance tax

Here’s a map from the article.

The good news is that the United States is attracting more millionaires than it’s losing (perhaps because of the EB-5 program).

The bad news is that this ratio could flip after the election. Indeed, it may already be happening even though recent data on expatriation paints a rosy picture.

The bottom line is that the United States should be competing to attract millionaires, not repel them. Assuming, of course, politicians care about jobs and prosperity for the rest of the population.

P.S. American politicians, copying laws normally imposed by the world’s most loathsome regimes, have imposed an “exit tax” so they can grab extra cash from rich people who choose to become citizens elsewhere.

P.P.S. I’ve argued that Australia is a good place to emigrate even for those of us who aren’t rich.

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Question of the Week: Which Department of the Federal Government Should Be the First to Be Abolished?

I was asked last week which entitlement program is most deserving of reform.

While acknowledging that Social Security and Medicare also are in desperate need of modernization, I wrote that Medicaid reformshould be the first priority.

But I’d be happy if we made progress on any type of entitlement reform, so I don’t think there are right or wrong answers to this kind of question.

We have the same type of question this week. A reader sent an email to ask “Which federal department should be abolished first?”

I guess this is what is meant when people talk about a target-rich environment. We have an abundance of candidates:

• Department of Education
• Department of Agriculture
• Department of Energy
• Department of Veterans Affairs
• Department of Transportation

But if I have to choose, I think the Department of Housing and Urban Development should be first on the chopping block.

Raze the building and put a layer of salt over the earth to make sure it can never spring back to life

I’ve already argued that there should be no federal government involvement in the housing sector and made the same argument on TV. And I’ve also shared some horror stories about HUD waste and incompetence.

• HUD engages in racism and social engineering.
• Urban renewal projects destroy neighborhoods and foment corruption.
• HUD subsidies are grotesquely wasteful.
• There are epidemic levels of waste, fraud, and abuse at HUD.

Heck, I even made HUD the background image for my video on the bloated and overpaid bureaucracy in Washington.

It’s also worth noting that there’s nothing about housing in Article I, Section VIII, of the Constitution. For those of us who have old-fashioned values about playing by the rules, that means much of what takes place in Washington – including housing handouts – is unconstitutional.

Simply stated, there is no legitimate argument for HUD. And I think there would be the least political resistance.

As with the answer to the question about entitlements, this is a judgment call. I’d be happy to be proven wrong if it meant that politicians were aggressively going after another department. Anything that reduces the burden of government spending is a step in the right direction

Milton Friedman on Spending

October 3, 2020 by Dan Mitchell

I identified four heroes from the “Battle of Ideas” video I shared in late August – Friedrich Hayek, Milton Friedman, Ronald Reagan, and Margaret Thatcher. Here’s one of those heroes, Milton Friedman, explaining what’s needed to control big government.

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Why Milton Friedman Saw School Choice as a First Step, Not a Final One

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

Wednesday, July 31, 2019

Kerry McDonald

EducationMilton FriedmanSchool ChoiceSchooling

Libertarians and others are often torn about school choice. They may wish to see the government schooling monopoly weakened, but they may resist supporting choice mechanisms, like vouchers and education savings accounts, because they don’t go far enough. Indeed, most current choice programs continue to rely on taxpayer funding of education and don’t address the underlying compulsory nature of elementary and secondary schooling.

Skeptics may also have legitimate fears that taxpayer-funded education choice programs will lead to over-regulation of previously independent and parochial schooling options, making all schooling mirror compulsory mass schooling, with no substantive variation.

Friedman Challenged Compulsory Schooling Laws

Milton Friedman had these same concerns. The Nobel prize-winning economist is widely considered to be the one to popularize the idea of vouchers and school choice beginning with his 1955 paper, “The Role of Government in Education.” His vision continues to be realized through the important work of EdChoice, formerly the Friedman Foundation for Education Choice, that Friedman and his economist wife, Rose, founded in 1996.

July 31 is Milton Friedman’s birthday. He died in 2006 at the age of 94, but his ideas continue to have an impact, particularly in education policy.

Friedman saw vouchers and other choice programs as half-measures. He recognized the larger problems of taxpayer funding and compulsion, but saw vouchers as an important starting point in allowing parents to regain control of their children’s education. In their popular book, Free To Choose, first published in 1980, the Friedmans wrote:

We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws. We favor going much farther. (p.161)

They continued:

The compulsory attendance laws are the justification for government control over the standards of private schools. But it is far from clear that there is any justification for the compulsory attendance laws themselves. (p. 162)

The Friedmans admitted that their “own views on this have changed over time,” as they realized that “compulsory attendance at schools is not necessary to achieve that minimum standard of literacy and knowledge,” and that “schooling was well-nigh universal in the United States before either compulsory attendance or government financing of schooling existed. Like most laws, compulsory attendance laws have costs as well as benefits. We no longer believe the benefits justify the costs.” (pp. 162-3)

Still, they felt that vouchers would be the essential starting point toward chipping away at monopoly mass schooling by putting parents back in charge. School choice, in other words, would be a necessary but not sufficient policy approach toward addressing the underlying issue of government control of education.

Vouchers as a First Step

In their book, the Friedmans presented the potential outcomes of their proposed voucher plan, which would give parents access to some or all of the average per-pupil expenditures of a child enrolled in public school. They believed that vouchers would help create a more competitive education market, encouraging education entrepreneurship. They felt that parents would be more empowered with greater control over their children’s education and have a stronger desire to contribute some of their own money toward education. They asserted that in many places “the public school has fostered residential stratification, by tying the kind and cost of schooling to residential location” and suggested that voucher programs would lead to increased integration and heterogeneity. (pp. 166-7)

To the critics who said, and still say, that school choice programs would destroy the public schools, the Friedmans replied that these critics fail to

explain why, if the public school system is doing such a splendid job, it needs to fear competition from nongovernmental, competitive schools or, if it isn’t, why anyone should object to its “destruction.” (p. 170)

What I appreciate most about the Friedmans discussion of vouchers and the promise of school choice is their unrelenting support of parents. They believed that parents, not government bureaucrats and intellectuals, know what is best for their children’s education and well-being and are fully capable of choosing wisely for their children—when they have the opportunity to do so.

They wrote:

Parents generally have both greater interest in their children’s schooling and more intimate knowledge of their capacities and needs than anyone else. Social reformers, and educational reformers in particular, often self-righteously take for granted that parents, especially those who are poor and have little education themselves, have little interest in their children’s education and no competence to choose for them. That is a gratuitous insult. Such parents have frequently had limited opportunity to choose. However, U.S. history has demonstrated that, given the opportunity, they have often been willing to sacrifice a great deal, and have done so wisely, for their children’s welfare. (p. 160).

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Voucher Programs Today

Today, school voucher programs exist in 15 states plus the District of Columbia. These programs have consistently shown that when parents are given the choice to opt-out of an assigned district school, many will take advantage of the opportunity. In Washington, D.C., low-income parents who win a voucher lottery send their children to private schools.

The most recent three-year federal evaluationof voucher program participants found that while student academic achievement was comparable to achievement for non-voucher students remaining in public schools, there were statistically significant improvements in other important areas. For instance, voucher participants had lower rates of chronic absenteeism than the control groups, as well as higher student satisfaction scores. There were also tremendous cost-savings.

In Wisconsin, the Milwaukee Parental Choice Program has served over 28,000 low-income students attending 129 participating private schools.

According to Corey DeAngelis, Director of School Choice at the Reason Foundation and a prolific researcher on the topic, the recent analysis of the D.C. voucher program “reveals that private schools produce the same academic outcomes for only a third of the cost of the public schools. In other words, school choice is a great investment.”

In Wisconsin, the Milwaukee Parental Choice Program was created in 1990 and is the nation’s oldest voucher program. It currently serves over 28,000 low-income students attending 129 participating private schools. Like the D.C. voucher program, data on test scores of Milwaukee voucher students show similar results to public school students, but non-academic results are promising.

Increased Access and Decreased Crime

Recent research found voucher recipients had lower crime rates and lower incidences of unplanned pregnancies in young adulthood. On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

According to Howard Fuller, an education professor at Marquette University, founder of the Black Alliance for Educational Options, and one of the developers of the Milwaukee voucher program, the key is parent empowerment—particularly for low-income minority families.

In an interview with NPR, Fuller said: “What I’m saying to you is that there are thousands of black children whose lives are much better today because of the Milwaukee parental choice program,” he says. 
“They were able to access better schools than they would have without a voucher.”

Putting parents back in charge of their child’s education through school choice measures was Milton Friedman’s goal. It was not his ultimate goal, as it would not fully address the funding and compulsion components of government schooling; but it was, and remains, an important first step. As the Friedmans wrote in Free To Choose:

The strong American tradition of voluntary action has provided many excellent examples that demonstrate what can be done when parents have greater choice. (p. 159).

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

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