Category Archives: Taxes

Dan Mitchell article “A Practical Reason to Oppose Wealth Taxation

A Practical Reason to Oppose Wealth Taxation

As an economist, I strongly oppose the wealth tax (as well as other forms of double taxation) because it’s foolish to impose additional layers of tax that penalize saving and investment.

Especially since there’s such a strong relationship between investment and worker compensation.

The politicians may tell us they’re going to “soak the rich,” but the rest of us wind up getting wet.

That being said, there are also administrative reasons why wealth taxation is a fool’s game. One of them, which I mentioned as part of a recent tax debate, is the immense headache of trying to measure wealth every single year.

Yes, that’s not difficult if someone has assets such as stock in General Motors or Amazon. Bureaucrats from the IRS can simply go to a financial website and check the value for any given day.

But the value of many assets is very subjective (patents, royalties, art, heirlooms, etc), and that will create a never-ending source of conflict between taxpayers and the IRS if that awful levy is ever imposed.

Let’s look at a recent dispute involving another form of destructive double taxation. The New York Times has an interesting story about a costly dispute involving the death tax to be imposed on Michael Jackson’s family.

Michael Jackson died in 2009… But there was another matter that has taken more than seven years to litigate: Jackson’s tax bill with the Internal Revenue Service, in which the government and the estate held vastly different views about what Jackson’s name and likeness were worth when he died.The I.R.S. thought they were worth $161 million. …Judge Mark V. Holmes of United States Tax Court ruled that Jackson’s name and likeness were worth $4.2 million, rejecting many of the I.R.S.’s arguments. The decision will significantly lower the estate’s tax burden… In a statement, John Branca and John McClain, co-executors of the Jackson estate, called the decision “a huge, unambiguous victory for Michael Jackson’s children.”

I’m glad the kids won this battle.

Michael Jackson paid tax when he first earned his money. Those earnings shouldn’t be taxed again simply because he died.

But the point I want to focus on today is that a wealth tax would require these kinds of fights every single year.

Given all the lawyers and accountants this will require, that goes well beyond adding insult to injury. Lots of time and money will need to be spent in order to (hopefully) protect households from a confiscatory tax that should never exist.

P.S. The potential administrative nightmare of wealth taxation, along with Biden’s proposal to tax unrealized capital gains at death, help to explain why the White House is proposing to turbo-charge the IRS’s budget with an additional $80 billion.

 

 

 

 

 

 

 

Five Visuals that Explain Why Higher Corporate Income Tax Rates Are Bad for America

I have a four-part series (here, here, here, and here) about the conceptual downsides of Joe Biden’s class-warfare approach to tax policy.

Now it’s time to focus on the component parts of his agenda. Today’s column will review his plan for a big increase in the corporate tax rate. But since I’ve written about corporate tax rates over and over and over again, we’re going to approach this issue is a new way.

I’m going to share five visuals that (hopefully) make a compelling case why higher tax rates on companies would be a big mistake.

Visual #1

One thing every student should learn from an introductory economics class is that corporations don’t actually pay tax. Instead, businesses collect taxes that are actually borne by workers, consumers, and investors.

There’s lots of debate in the profession, of course, about which group bears what share of the tax. But there’s universal agreement that higher taxes lead to less investment, which leads to less productivity, which leads to lower pay.

Here’s a depiction of the relationship of corporate taxes and worker pay.

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Visual #2

The previous image explains the theory. Now it’s time for some evidence.

Here’s a look at how much faster wages have grown in countries with low corporate tax rates compared to nations with high corporate tax rates.

Biden, for reasons beyond my comprehension, wants America on the red line.

And his staff economists apparently don’t understand (or don’t care about) the link between investment and wages.

Visual #3

Here’s some more evidence.

And it comes from an unexpected source, the pro-tax Organization for Economic Cooperation and Development(OECD).

Even economists at that Paris-based bureaucracy have produced studies confirming that lower tax rates lead to higher disposable income for people.

Needless to say, if lower tax rates lead to more disposable income, then higher tax rates will lead to less disposable income.

We should have learned during the Obama years that ordinary people pay the price when politicians practice class warfare.

Visual #4

It’s very bad news that Biden wants a big increase in the corporate tax rate, but let’s not forget that the IRS double-taxes corporate income (i.e., that same income is subject to a second layer of tax when shareholders receive dividends).

The combined effect, as shown in this visual, is that the United States will have the dubious honor of having the highest effective corporate tax rate in the entire developed world.

Call me crazy, but I don’t think that’s a recipe for jobs and investment in America.

Visual #5

The economic damage of higher corporate tax rates means that there is less taxable income (i.e., we need to remember the Laffer Curve).

Will the damage be so extensive, causing taxable income to fall so much, that the IRS collects less revenue with a higher tax rate?

We’ll learn the answer to that question over time, but we have some very strong evidence from the IMF that lower corporate tax rates don’t lead to less revenue. As you can see from this chart, revenues held steady as tax rates plummeted over the past few decades.

In other words, lower rates led to enough additional economic activity that governments have collected just as much money with lower tax rates. But now Biden wants to run this experiment in reverse.

It’s possible the government will collect more revenue, of course, but only at a very high cost to workers, consumers, and shareholders.

By the way, there’s OECD data showing the exact same thing.

Those pictures probably tell you everything you need to know about this issue.

But let’s add some more analysis. The Wall Street Journal opined today on Biden’s class-warfare agenda. Here are some of the key passages from the editorial.

The bill for President Biden’s agenda is coming due, starting with Wednesday’s proposal for the largest corporate tax increase in decades. …Mr. Biden’s corporate increase amounts to the restoration of the Obama-era corporate tax burden, only much more so. …Mr. Biden wants to raise the corporate rate back up to 28%, but that’s the least of his proposals. He also wants to add penalties that would make inversions punitive, and he’d impose a global minimum corporate tax of 21%. This would shoot the tax burden on U.S. companies back toward the top of the developed world list. …The larger Biden goal is to end global tax competition… “The United States can lead the world to end the race to the bottom on corporate tax rates,” says the White House fact sheet. Mr. Biden says he wants “other countries to adopt strong minimum taxes on corporations” so nations like Ireland can no longer compete for capital with lower tax rates. This has long been the dream of the French and Germans, working through the Organization for Economic Cooperation and Development. …All of this is in addition to the looming Biden tax increases on dividends, capital gains and other investment income. …Mr. Biden’s corporate tax increases will hit the middle class hard—in the value of their 401(k)s, the size of their pay packets, and what they pay for goods and services.

Amen.

Let’s conclude with some gallows humor.

This meme shows how some of our leftist friends will celebrate if the tax increase is imposed.

P.S. Here’s a depressing final observation. Decades of experience have led me to conclude that many folks on the left support class-warfare tax policy because they are primarily motivated by a spiteful desire to punish success rather than provide upward mobility for the poor.

Free-market economics meets free-market policies at The Heritage Foundation’s Tenth Anniversary dinner in 1983. Nobel Laureate Milton Friedman and his wife Rose with President Ronald Reagan and Heritage President Ed Feulner.

Free-market economics meets free-market policies at The Heritage Foundation’s Tenth Anniversary dinner in 1983. Nobel Laureate Milton Friedman and his wife Rose with President Ronald Reagan and Heritage President Ed Feulner.

Since the passing of Milton Friedman who was my favorite economist, I have been reading the works of Daniel Mitchell and he quotes Milton Friedman a lot, and you can reach Dan’s website here.

Mitchell in February 2011.
Wikipedia noted concerning Dan:

 

Mitchell’s career as an economist began in the United States Senate, working for Oregon Senator Bob Packwood and the Senate Finance Committee. He also served on the transition team of President-Elect Bush and Vice President-Elect Quayle in 1988. In 1990, he began work at the Heritage Foundation. At Heritage, Mitchell worked on tax policy issues and began advocating for income tax reform.[1]

In 2007, Mitchell left the Heritage Foundation, and joined the Cato Institute as a Senior Fellow. Mitchell continues to work in tax policy, and deals with issues such as the flat tax and international tax competition.[2]

In addition to his Cato Institute responsibilities, Mitchell co-founded the Center for Freedom and Prosperity, an organization formed to protect international tax competition.[1]

 

 

January 27, 2021

President Biden, c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

The federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation. We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. The recent scandals in our government have proved my point. In fact, the jokes you made at Ohio State about possibly auditing them are not so funny now that reality shows how the IRS was acting more like a monster out of control. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

What did we learn from the Laffer Curve in the 1980’s? Lowering top tax rate from 70% to 28% from 1980 to 1988 and those earning over $200,000 paid 99 billion in taxes instead of 19 billion!!!!

One of my frustrating missions in life is to educate policy makers on the Laffer Curve.

This means teaching folks on the left that tax policy affects incentives to earn and report taxable income. As such, I try to explain, this means it is wrong to assume a simplistic linear relationship between tax rates and tax revenue. If you double tax rates, for instance, you won’t double tax revenue.

But it also means teaching folks on the right that it is wildly wrong to claim that “all tax cuts pay for themselves” or that “tax increases always mean less revenue.” Those results occur in rare circumstances, but the real lesson of the Laffer Curve is that some types of tax policy changes will result in changes to taxable income, and those shifts in taxable income will partially offset the impact of changes in tax rates.

However, even though both sides may need some education, it seems that the folks on the left are harder to teach – probably because the Laffer Curve is more of a threat to their core beliefs.

If you explain to a conservative politician that a goofy tax cut (such as a new loophole to help housing) won’t boost the economy and that the static revenue estimate from the bureaucrats at the Joint Committee on Taxation is probably right, they usually understand.

But liberal politicians get very agitated if you tell them that higher marginal tax rates on investors, entrepreneurs, and small business owners probably won’t generate much tax revenue because of incentives (and ability) to reduce taxable income.

To be fair, though, some folks on the left are open to real-world evidence. And this IRS data from the 1980s is particularly effective at helping them understand the high cost of class-warfare taxation.

There’s lots of data here, but pay close attention to the columns on the right and see how much income tax was collected from the rich in 1980, when the top tax rate was 70 percent, and how much was collected from the rich in 1988, when the top tax rate was 28 percent.

The key takeaway is that the IRS collected fives times as much income tax from the rich when the tax rate was far lower. This isn’t just an example of the Laffer Curve. It’s the Laffer Curve on steroids and it’s one of those rare examples of a tax cut paying for itself.

Folks on the right, however, should be careful about over-interpreting this data. There were lots of factors that presumably helped generate these results, including inflation, population growth, and some of Reagan’s other policies. So we don’t know whether the lower tax rates on the rich caused revenues to double, triple, or quadruple. Ask five economists and you’ll get nine answers.

But we do know that the rich paid much more when the tax rate was much lower.

This is an important lesson because Obama wants to run this experiment in reverse. He hasn’t proposed to push the top tax rate up to 70 percent, thank goodness, but the combined effect of his class-warfare policies would mean a substantial increase in marginal tax rates.

We don’t know the revenue-maximizing point of the Laffer Curve, but Obama seems determined to push tax rates so high that the government collects less revenue. Not that we should be surprised. During the 2008 campaign, he actually said he would like higher tax rates even if the government collected less revenue.

That’s class warfare on steroids, and it definitely belong on the list of the worst things Obama has ever said.

But I don’t care about the revenue-maximizing point of the Laffer Curve. Policy makers should set tax rates so we’re at the growth-maximizing level instead.

To broaden the understanding of the Laffer Curve, share these three videos with your friends and colleagues.

This first video explains the theory of the Laffer Curve.

The Laffer Curve, Part I: Understanding the Theory

Uploaded on Jan 28, 2008

The Laffer Curve charts a relationship between tax rates and tax revenue. While the theory behind the Laffer Curve is widely accepted, the concept has become very controversial because politicians on both sides of the debate exaggerate. This video shows the middle ground between those who claim “all tax cuts pay for themselves” and those who claim tax policy has no impact on economic performance. This video, focusing on the theory of the Laffer Curve, is Part I of a three-part series. Part II reviews evidence of Laffer-Curve responses. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org

  • Category

    News & Politics

    _____________________________________

    This second video reviews some of the real-world evidence.

    The Laffer Curve, Part II: Reviewing the Evidence

    Uploaded on Feb 24, 2008

    This video reviews real-world evidence showing that changes in marginal tax rates can have a significant impact on taxable income, thus leading to substantial amounts of revenue feedback. In a few cases, tax-rate reductions even “pay for themselves,” though the key lesson is the more modest point that pro-growth changes in tax policy will have a positive impact on economic performance and that good tax cuts therefore do not “cost” the government much in terms of foregone tax revenue.

    This video is second installment of a three-part series. Part I reviews theoretical relationship between tax rates, taxable income, and tax revenue. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org.

    ___________________

    And this video exposes the biased an inaccurate “static scoring” of the Joint Committee on Taxation.

    The Laffer Curve, Part III: Dynamic Scoring

    Uploaded on May 28, 2008

    A video by CF&P Foundation that builds on the discussion of theory in Part I and evidence in Part II, this concluding video in the series on the Laffer Curve explains how the Joint Committee on Taxation’s revenue-estimating process is based on the absurd theory that changes in tax policy – even dramatic reforms such as a flat tax – do not effect economic growth. In other words, the current system assumes the Laffer Curve does not exist. Because of congressional budget rules, this leads to a bias for tax increases and against tax cuts. The video explains that “static scoring” should be replaced with “dynamic scoring” so that lawmakers will have more accurate information when making decisions about tax policy. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org.

    ________________

    And once we educate everybody about the Laffer Curve, we can then concentrate on teaching them about the equivalent relationship on the spending side of the fiscal ledger, the Rahn Curve.

_____________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733,

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Lessons about Trump and Trade by Dan Mitchell

Lessons about Trump and Trade

Like President Reagan, I believe in free trade rather than protectionism.

So you won’t be surprised that I agree with the message in this video

To elaborate, one of the big lessons of the Trump era is that he undermined his good policies – such as tax reform – by imposing higher taxes on global trade.

Sadly, he didn’t realize that a “trade deficit” is largely an irrelevant statistic. Indeed, it’s merely the flip side of having a capital surplus.

To state the obvious, it’s not a bad thing when foreigners decide they want to invest in the United States economy. Heck, it’s a good thing, a sign of economic strength.

Professor Douglas Irwin of Dartmouth made the same point, and many additional points, in a column for the Wall Street Journallate last year.

After four years, what have we learned? Many things, but especially that old economic truths still have value: Tariffs don’t reduce the trade deficit. …Economists have long pointed out that the trade deficit is driven by macroeconomic factors, particularly international capital flows. …The merchandise trade deficit was $864 billion in 2019, more than $100 billion higher than in 2016. …Tariffs are paid by consumers, destroy jobs and hurt the economy. Mr. Trump insisted that China would pay for the 15% to 25% duties that he imposed on $300 billion of its exports. In fact, the tariffs were passed on to American consumers, who paid more… Take steel. Higher prices might have saved some jobs in the steel industry, but..steel protection is a job-destroying policy. Economists at the Federal Reserve found that the steel and aluminum tariffs reduced overall employment in manufacturing by 75,000 workers.

But destroying jobs was just one negative effect of protectionism.

We also got more corruption, as the Wall Street Journal opined.

…it’s time to point out one unsightly effect of the Trump tariffs: expanding the D.C. swamp. …As Mr. Trump’s tariffs began to bite, Congress sent hundreds of letters to the USTR, supporting specific tariff exclusions. …Rep. Steny Hoyer signed a letter, “on behalf of the Congressional Fire Services Caucus,” asking for an exclusion on smoke alarms. North Carolina Senator Thom Tillis sought one for Honda’s lawn mower flywheels. For Sen. Sheldon Whitehouse, it was BedJet’s “ultra-thin adjustable bed ‘device.’” For Congressman Doug Collins, Home Depot’s light fixtures. For Sen. Patty Murray, empty coffee K-cup pods. Some of these exclusions were granted, and many weren’t. It’s difficult to know if lobbying by Congress made a difference… One substantial downside is more political interference in the economy. Pretty swampy.

We saw something very similar when President Obama was granting waivers for Obamacare. That was just one of the ways insiders got rich lobbying politicians for special treatment under government-run healthcare.

Let’s wrap this up.

Writing for the Wall Street Journal in March, Senator Pat Toomey and former Senator Phil Gramm conclude Trump’s protectionism was a failure.

In his first two years as president, Mr. Trump lifted regulatory burdens and pushed through a major tax cut, which triggered a broad-based rise in income and employment. He then turned to his protectionist agenda, which reduced economic growth and failed to deliver Michigan, Pennsylvania or Wisconsin in the 2020 election. Protectionism failed both as economic policy and political strategy. …As Mr. Trump found when he imposed tariffs on steel and aluminum, the resulting increase in jobs in those industries was small. …Jobs gained in the steel and aluminum industries after the tariffs were dwarfed by jobs lost in industries that use steel and aluminum in their manufacturing process, not to mention the jobs lost due to foreign trade retaliation. …Innovation, technological development and the capacity of a market economy to adapt to change provide our only sure path to job creation and prosperity. This is a lesson all politicians, but especially Republicans, need to learn from the economic and political failure of protectionism in the Trump era.

Amen.

Protectionism didn’t work. It didn’t create jobs, and it didn’t even buy votes.

Which is why I hope this meme is the lesson that people remember from the Trump years (also the message we should have learned from the Hoover years).

The bottom line is that “Tariff Man” hurt himself and hurt the economy.

P.S. Sadly, Biden has not reversed many of Trump’s protectionist policies. But that’s not a surprise given his support for statism.

P.P.S. Though I hold out some hope that Biden will utilize the World Trade Organization as a tool to expand trade, thus reversing one of Trump’s mistakes.

Big-Government Republicans Enable Big-Government Democrats

I get asked why I frequently criticize Republicans.

My response is easy. I care about results rather than rhetoric. And while GOP politicians often pay lip service to the principles of limited government,they usually increase spending even faster than Democrats.

Indeed, Republicans are even worse than Democrats when measuring the growth of domestic spending!

This is bad news because it means the burden of government expands when Republicans are in charge.

And, as Gary Abernathy points out in a column for the Washington Post, Republicans then don’t have the moral authority to complain when Democrats engage in spending binges.

President Biden is proposing another $3 trillion in spending… There are objections, but none that can be taken seriously. …Republicans had lost their standing as the party of fiscal responsibility when most of them succumbed to the political virus of covid fever and rubber-stamped around $4 trillion in “covid relief,”… With Trump out and Biden in, Republicans suddenly pretended that their 2020 spending spree happened in some alternate universe.But the GOP’s united opposition to Biden’s $1.9 trillion package won’t wash off the stench of the hypocrisy. …I noted a year ago that we had crossed the Rubicon, that our longtime flirtation with socialism had become a permanent relationship. Congratulations, Bernie Sanders. The GOP won’t become irrelevant because of its association with Trump, as some predict. It will diminish because it is bizarrely opposing now that which it helped make palatable just last year. Fiscal responsibility is dead, and Republicans helped bury it. Put the shovels away, there’s no digging it up now.

For what it’s worth, I hope genuine fiscal responsibility isn’t dead.

Maybe it’s been hibernating ever since Reagan left office (like Pepperidge Farm, I’m old enough to remember those wonderful years).

Subsequent Republican presidents liked to copy Reagan’s rhetoric, but they definitely didn’t copy his policies.

  • Spending restraint was hibernating during the presidency of George H.W. Bush.
  • Spending restraint also was hibernating during the presidency of George W. Bush.
  • And spending restraint was hibernating during the presidency of Donald Trump.

I’m not the only one to notice GOP hypocrisy.

Here are some excerpts from a 2019 column in the Washington Post by Fareed Zakaria.

In what Republicans used to call the core of their agenda — limited government — Trump has been profoundly unconservative. …Trump has now added more than $88 billion in taxes in the form of tariffs, according to the right-leaning Tax Foundation. (Despite what the president says, tariffs are taxes on foreign goods paid by U.S. consumers.) This has had the effect of reducing gross domestic product and denting the wages of Americans.…For decades, conservatives including Margaret Thatcher and Ronald Reagan preached to the world the virtues of free trade. But perhaps even more, they believed in the idea that governments should not pick winners and losers in the economy… Yet the Trump administration…behaved like a Central Planning Agency, granting exemptions on tariffs to favored companies and industries, while refusing them to others. …In true Soviet style, lobbyists, lawyers and corporate executives now line up to petition government officials for these treasured waivers, which are granted in an opaque process… On the core issue that used to define the GOP — economics — the party’s agenda today is state planning and crony capitalism.

Zakaria is right about Republicans going along with most of Trump’s bad policies (as illustrated by this cartoon strip).*

The bottom line is that Republicans would be much more effective arguing against Biden’s spending orgy had they also argued for spending restraint when Trump was in the White House.

P.S. It will be interesting to see what happens in the near future. Will the GOP be a small-government Reagan party or a big-government Trump party?

Or maybe it will go back to being a Nixon-type party, which would mean bigger government but without mean tweets. And there are plenty of options.

If they make the wrong choice (anything other than Reaganism), Margaret Thatcher has already warned us about the consequences.

*To be fair, Republicans also went along with Trump’s good policies. It’s just unfortunate that spending restraint wasn’t one of them.

—-

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Quadruple the Cost, 11 Years Late

It appears that only a fraction of the spending proposed in a new $3 trillion to $4 trillion bill would go toward an already too-expansive definition of infrastructure. Pictured: Engineers discuss the progress of an infrastructure construction project. (Photo: Sornranison Prakittrakoon/ Moment/Getty Images)

The media were flooded Monday with news that the Biden administration is working on a colossal new $3 trillion to $4 trillion spending plan.

While full details are not available yet, the plan appears to be another left-wing grab bag of big-government proposals. Rather than stimulating the economy, it would stimulate bigger government while funneling unprecedented amounts of power and money through the hands of politicians in Washington.

All this comes on the heels of President Joe Biden signing into law on March 11 a badly flawed $1.9 trillion legislative package that was originally marketed as a COVID-19 response, but which was more focused on left-wing pet causes, such as bailouts for union pension plans and unnecessary handouts for state governments.

Just a day later, House Speaker Nancy Pelosi, D-Calif., released a statement calling for bipartisan work on legislation that would focus on infrastructure. While there were good reasons to question how beneficial or “bipartisan” such legislation would be, there was at least a chance of finding some across-the-aisle support.

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But the potential for bipartisanship was quickly scuttled by news of the latest multitrillion-dollar plan.

It would be bad enough if the latest plan was just a big-spending infrastructure package. However, it appears that only a fraction of the new spending would go toward an already too-expansive definition of infrastructure.

Instead, most of the new spending and tax subsidies would go toward expanding the welfare state, including “free” tuition for community colleges, “free” child care, and other handouts that lack right-of-center support.

This would likely be the largest expansion of the federal government since the “Great Society” of the 1960s, even eclipsing Obamacare in scope.

Reports indicate that Democrats might attempt to split the plan into two bills—one focused on social spending that passes narrowly along party lines, the other focused on actual infrastructure aimed at winning bipartisan support.

However, it’s clear that the $3 trillion-plus total price tag is already souring prospects for bipartisan infrastructure legislation.

House Republicans boycotted the annual Ways and Means Committee “Member’s Day” hearing on Tuesday in the wake of news reports on the plan, since they indicated that Democrats have already made up their minds to pursue as much spending as possible through the legislative procedure known as reconciliation.

Coincidentally, two respected nonpartisan groups released reports this week that show why Biden and Pelosi should pause their aggressive agenda.

First, the Congressional Budget Office published a paper demonstrating what would happen if a sustained increase in federal spending were coupled with big tax increases to pay for the spending.

While the analysis points to different long-term effects from different types of taxes, any tax-and-spend approach would lead to reductions in economic growth and personal income that are larger than the size of the tax hikes.

For example, the analysis found that having 10% more federal government would mean a 12% to 19% reduction in personal consumption.

And that’s a conservative estimate. Most estimates show tax hikes shrink the economy by two to three times more than the revenues they raise.

That doesn’t mean Congress could escape the consequences of a continued spending spree by simply adding to the national debt. The CBO paper cautions that that would not only impose significant costs and divert resources away from the private sector, but it also would be unsustainable and increase the risk of a devastating financial crisis.

Along the same lines, the Government Accountability Office released a sobering reporton the nation’s poor financial health.

Now that Congress has passed a combined total of $6 trillion in legislation in the aftermath of the COVID-19 pandemic (more than $48,000 per household), it must quickly address the unsustainable growth of major benefit programs, such as Social Security, Medicare, and Medicaid.

Even before the pandemic struck, these programs were on a path to bankruptcy. Addressing these shortfalls in a way that is fair to both current retirees and future generations who will have to foot the bill is one of the greatest policy challenges facing the nation.

Unfortunately, Washington is exacerbating the problem by adding excessively to the national debt and potentially stunting economic growth with higher taxes.

While the Biden administration has repeatedly claimed that it will only seek to raise taxes on the wealthy, a government of the size that it’s seeking would require amounts of money that can only be generated through steep across-the-board tax increases on middle-class Americans.

Regardless of whether those taxes are levied tomorrow or in a few years, they would be an inevitable part of expanding the size and scope of the federal government.

Rather than continuing down the path of centralized power and socialism, lawmakers should recognize the costs associated with endless federal spending and chart a course toward financial responsibility and prosperity.

If they don’t, it will be the public’s duty to hold them accountable.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we will consider publishing your remarks in our regular “We Hear You” feature.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]



APRIL 20, 2021 1:47PM

Quadruple the Cost, 11 Years Late

By Randal O’Toole


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The California high‐​speed rail project was originally projected to cost $25 billion and is now projected to cost $100 billion. It was originally expected to be complete by 2020; now they are saying some time in the 2030s. Since they don’t have the money to complete it, it may never get done, and the part that will be finished serves the least‐​populated part of the route.

Hawaii has its own rail debacle that sounds like California’s system on a smaller scale. Honolulu decided to build a rail transit line that was originally projected to cost less than $3 billion. The latest estimates are that it will cost $12 billion including finance charges. The line was supposed to open in 2020; now they are saying 2031. But that date may be irrelevant because the transit agency building the project is $3 billion short of what is needed to finish it, and the part that will be finished serves the least‐​populated part of the route.

These two examples are a little extreme, but rail transit projects on average cost about 50 percent more than their original projections and very few end up costing less than 20 percent more than projected. While it is too soon to tell for California or Honolulu rail, ridership projections also average 70 percent more than actual ridership. A planning process that systematically overestimates benefits and underestimates costs is effectively biased towards capital intensive, high‐​cost projects.

This makes it particularly frightening that the Biden infrastructure plan calls for spending $85 billion more on transit. Transit carries only 1 percent of passenger travel in the United States and zero percent of freight, yet under Biden’s plan it would get nearly as much money as highways, which carry more than 85 percent of passenger travel and nearly 40 percent of the nation’s freight.

Biden’s proposal specifically calls for bringing “rail service to communities and neighborhoods across the country.” But rail transit was rendered obsolete by buses nearly a century ago, which is why between 1920 and 1975 around a thousand cities replaced rail lines with buses. Only when the federal government agreed to pay part of the cost of building new rail lines did many transit agencies get interested in new rail transit construction. Since then, the number of cities with rail transit has quintupled.

This is just one way in which the Biden infrastructure plan will waste money. Another is a “fix‐​it first” provision associated with Biden’s proposed highway spending. Although highways nominally get a little more money than transit ($115 billion vs. $85 billion), the “fix it first” rule means that states will not be able to build new roads until all existing roads are considered to be in good condition. No such rule will be applied to transit.

In fact, America’s state highways and bridges are already in pretty good condition. The number of bridges rated to be in “poor” condition has declined from 124,000 in 1992to 45,000 in 2020. The average roughness of pavement has also declined, meaning fewer potholes. These improvements were made without a giant infrastructure bill.

Transit infrastructure, meanwhile, is in terrible shape and deteriorating faster than agencies are maintaining it. The latest estimate is that transit needs $174 billion to get into a state of good repair. (It would cost a lot less to convert most rail transit to buses, which could be done in most cities whose initials are not NYC without harming transit systems.) If a fix‐​it first rule should be applied to anything, it would be transit.

An even more fundamental flaw with the Biden plan is that it completely ignores recent events, namely the pandemic. Even after everyone is vaccinated, it is expected that more people will work at home, fewer jobs will be located in downtowns, and more households will move to lower density areas. All of these changes hurt transit ridership, which is not likely to recover to more than about 75 percent of its pre‐​pandemic levels. This is a bad time to increasing spending on transit infrastructure.

The federal government should stop giving cities incentives to build expensive rail transit lines they don’t need. If Congress really wants to help infrastructure, it should just give money to the states based on a formula that takes population, land area, and miles of passenger travel and freight shipping (or user fees) into account and let the states decide how to spend the money.

Biden Wants America to Have the World’s Highest Tax Burden on Capital Gains by Dan Mitchell

Biden Wants America to Have the World’s Highest Tax Burden on Capital Gains

Because of the negative impact on competitiveness, productivity, and worker compensation, it’s a very bad idea to impose double taxation of saving and investment.

Which is why there should be no tax on capital gains, and a few nations sensibly take this approach.

But they’re outnumbered by countries that do impose this pernicious form of double taxation. For instance, the Tax Foundation has a new report about the level of capital gains taxation in Europe, which includes this very instructive map.

As you can see, some countries, such as Denmark (gee, what a surprise), have very punitive rates.

However, other nations (such as Switzerland, Belgium, Czech Republic, Slovakia, Luxembourg, and Slovenia) wisely don’t impose this form of double taxation.

If the United States was included, we would be in the middle of the pack. Actually, we would be a bit worse than average, especially when you include the Obamacare tax on capital gains.

But if Joe Biden succeeds, the United States soon will have the dubious honor of being the worst of the worst.

The Wall Street Journal opined this morning about the grim news.

Biden officials leaked that they will soon propose raising the federal tax on capital gains to 43.4% from a top rate of 23.8% today. …Mr. Biden will tax capital gains for taxpayers who earn more than $1 million at the personal income tax rate, which he also wants to raise to 39.6% from 37%.Add the 3.8% ObamaCare tax on investment, and you get to 43.4%. And that’s merely the federal rate. Add 13.3% in California and 11.85% in New York (plus 3.88% in New York City), which also tax capital gains as regular income, and you are heading toward the 60% rate range. Keep in mind this is on the sale of gains that are often inflated as assets are held for years without adjustment for inflation. Oh, and Mr. Biden also wants to eliminate the step-up in basis on capital gains that accrues at death.

Beating out Denmark for the highest capital gains tax rate is bad.

But it’s even worse when you realize that capital gains often occur because investors expect an asset to generate more future income. But that future income gets hit by the corporate income tax (as well as the tax on dividends) when it actually materializes.

So the most accurate way to assess the burden on new investment is to look at the combined rate of corporate taxation and capital gains (as as well as the combined rate of corporate taxation and dividend taxation).

By that measure, the United States already has one of the world’s most-punitive tax regimes, And Biden wants to increase all of those tax rates.

Sort of a class-warfare trifecta, and definitely not a recipe for good economic results.

For those interested in more details, here’s a video I narrated on the topic back in 2010.

And I also recommend these columns (here, here, and here) for additional information on why we should be eliminating the capital gains tax rather than increasing it.

P.S. Don’t forget that there’s no indexing to protect taxpayersfrom having to pay tax on gains that are due only to inflation.

P.P.S. And also keep in mind that some folks on the left want to impose tax on capital gains that only exist on paper.

March 16, 2021

President Biden c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Is our country learning from history? California keeps raising their taxes on the wealthy and people keep moving from California to Texas. What does our federal government do? They also have been raising taxes on the wealthy lately. Take a look at this excellent video below and then read a great article by Dan Mitchell of the Cato Institute on what is happening in California right now.

Will Higher Tax Rates Balance the Budget?

Published on Apr 11, 2012

As the U.S. debt and deficit grows, some politicians and economist have called for higher tax rates in order to balance the budget. The question becomes: when the government raises taxes, does it actually collect a larger portion of the US economy?

Professor Antony Davies examines 50 years of economic data and finds that regardless of tax rates, the percentage of GDP that the government collects has remained relatively constant. In other words, no matter how high government sets tax rates, the government gets about the same portion. According to Davies, if we’re concerned about balancing the budget, we should worry less about raising tax revenue and more about growing the economy. The recipe for growth? Lower tax rates and a simplified tax code.

Like most people, I’m a sucker for a heartwarming story around the holidays.

Sometimes, you get that nice feeling when good things happen to good people, like you find at the end of a classic movie like “It’s a Wonderful Life.”

But since I’m a bit of a curmudgeon, I also feel all warm and fuzzy when bad things happen to bad people.

That’s why I always smile when I read stories about taxpayers moving across borders, thus preventing greedy tax-hiking politicians from collecting more revenue.

“Where’s our tax revenue?!?”

I’m glad when that happens to French politicians. I’m glad when it happens to Italian politicians. I’m glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the point.

I’m even glad when it happens to the politicians in Washington.

I smile because I envision the moment when some budget geek tells these sleazy politicians that projected revenues aren’t materializing and they don’t have more money to spend.

So I wish I could be a fly on the wall when this moment of truth happens to California politicians. They convinced voters in the state to enact Prop 30, a huge tax increase targeting those evil, awful, bad rich people.

Governor Brown and his fellow kleptocrats in Sacramento doubtlessly are salivating at the thought of more money to waste.

But notwithstanding a satirical suggestion from Walter Williams, there aren’t guard towers and barbed-wire fences surrounding the state. Productive people can leave, and that’s happening every day. And they take their taxable income with them.

Usually in ways that don’t attract attention. But sometimes a bunch of them leave at the same times, and that is newsworthy. Here’s an example of that happening, as reported by the San Francisco Chronicle.

Chevron Corp. will move up to 800 jobs – about a quarter of its current headquarters staff – from the Bay Area to Houston over the next two years but will remain based in San Ramon, the oil company told employees Thursday. …The company already employs far more people in Houston – about 9,000 full-time employees and contractors – than it does in San Ramon.

We don’t know a lot of details, but these were positions at the company’s headquarters and they were “technical positions dealing with information and advanced energy technologies…tied to Chevron’s worldwide oil exploration and production business.”

Let’s assume these highly skilled employees earn an average of $250,000. I imagine that’s a low-ball estimate, but this is just for purposes of a thought experiment. Now multiply that average salary by 800 workers and you get $200 million of income.

And every penny of that $200 million no longer will be subject to tax by the kleptocrats in the state’s capital.

In other words, we’re seeing the Laffer Curve in action.

Politicians can raise tax rates all day long, but that doesn’t automatically translate into more tax revenue. Politicians keep forgetting that taxable income is not a fixed variable.

What’s happening in a big way with Chevron is happening in small ways every single day with investors, entrepreneurs, small business owners, and other “rich’ people.

That’s good for the people escaping. And it also will warm my heart when California’s despicable politicians discover next year that there’s an “unexpected” revenue shortfall.

P.S. It’s just an anecdote that the Chevron jobs are going to Texas. But when you add together a bunch of anecdotes, you get data. And according to the data, Texas is kicking the you-know-what out of California. Maybe there’s a lesson to be learned?

__________

___________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

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    (Emailed to White House on 12-21-12.) 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 […]

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(Emailed to White House on 12-21-12.) 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 […]

Open letter to President Obama (Part 200.1)Tea Party favorite Representative shares link on facebook

(Emailed to White House on 12-21-12) 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 […]

Open letter to President Obama (Part 199) Tea Party favorite takes on President

  The federal government has a spending problem and Milton Friedman came up with the negative income tax to help poor people get out of the welfare trap. It seems that the government screws up about everything. Then why is President Obama wanting more taxes? _______________ Milton Friedman – The Negative Income Tax Published on […]

Tea Party Heroes Rep. David Schweikert (R-AZ),Justin Amash (R-MI), Tim Huelskamp (R-KS) have been punished by Boehner

I was sad to read that the Speaker John Boehner has been involved in punishing tea  party republicans. Actually I have written letters to several of these same tea party heroes telling them that I have emailed Boehner encouraging him to listen to them. Rep. David Schweikert (R-AZ),Justin Amash (R-MI), and Tim Huelskamp (R-KS). have been contacted […]

Some Tea Party heroes (Part 10)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

Some Tea Party heroes (Part 9)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

49 posts on Tea Party heroes of mine

Some of the heroes are Mo Brooks, Martha Roby, Jeff Flake, Trent Franks, Duncan Hunter, Tom Mcclintock, Devin Nunes, Scott Tipton, Bill Posey, Steve Southerland and those others below in the following posts. THEY VOTED AGAINST THE DEBT CEILING INCREASE IN 2011 AND WE NEED THAT TYPE OF LEADERSHIP NOW SINCE PRESIDENT OBAMA HAS BEEN […]

Some Tea Party Republicans win and some lose

I hated to see that Allen West may be on the way out. ABC News reported: Nov 7, 2012 7:20am What Happened to the Tea Party (and the Blue Dogs?) Some of the Republican Party‘s most controversial House members are clinging to narrow leads in races where only a few votes are left to count. […]

Some Tea Party heroes (Part 8)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 […]

PREVENTING FISCAL MELTDOWNS WITH A SPENDING CAP by Dan Mitchell

Preventing Fiscal Meltdowns with a Spending Cap

As part of my recent interview about European economic policy with Gunther Fehlinger, I pontificated on issues such as Convergence and Wagner’s Law.

I also explained why a Swiss-style spending cap could have saved Greece and Italy from fiscal crisis. Here’s that part of the discussion.

For those not familiar with spending caps, this six-minute videotells you everything you need to know.

Simply stated, this policy requires politicians to abide by fiscal policy’s Golden Rule, meaning that – on average – government spending grows slower than the private economy.

And that’s a very effective recipe for a lower burden of spending and falling levels of red ink.

One of the points I made in the video is that spending caps would prevented the fiscal mess in Greece and Italy.

To show what I mean, I went to the International Monetary Funds World Economic Outlook database and downloaded the historical budget data for those two nations. I then created charts showing actual spending starting in 1988 compared to how much spending would have grown if there was a requirement that the budget could only increase by 2 percent each year.

Here are the shocking numbers for Greece.

The obvious takeaway is that there never would have been a fiscal crisis if Greece had a spending cap.

That also would be true even if the spending cap allowed 3-percent budget increases starting in 1998.

And it would be true if the 2-percent spending cap didn’t start until 2000.

There are all sorts of ways of adjusting the numbers. The bottom line is that any reasonable level of spending restraint could have prevented the horrible misery Greece has suffered.

Here are the numbers for Italy.

As you can see, the government budget has not increased nearly as fast in Italy as it did in Greece, but the burden of spending nonetheless has become more onerous – particularly when compared to what would have happened if there was a 2-percent spending cap.

I’ve written many times (here, here, here, and here) about Italy’s looming fiscal crisis. As I said in the interview, I don’t know when the house of cards will collapse, but it won’t be pretty.

And tax reform, while very desirable, is not going to avert that crisis. At least not unless it is combined with very serious spending restraint.

P.S. For those who want information about real-world success stories, I shared three short video presentations back in 2015 about the spending caps in Switzerland, Hong Kong, and Colorado.

P.P.S. It’s also worth noting that the United States would be in a much stronger position today if we had enacted a spending capa couple of decades ago.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

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Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

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Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

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“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell article on President Biden’s Tax Ideas

Three Reasons to Reject Biden’s Tax Harmonization Scheme for “Global Minimum Taxation”

Way back in 2007, I narrated this video to explain why tax competition is very desirable because politicians are likely to overtax and overspend (“Goldfish Government“) if they think taxpayers have no ability to escape.

The good news is that tax competition has been working.

As explained in the above video, there have been big reductions in personal tax rates and corporate tax rates. Just as important, governments have reduced various forms of double taxation, meaning lower tax rates on dividends and capital gains.

Many governments have also reduced – or even eliminated – death taxes and wealth taxes.

These pro-growth tax reforms didn’t happen because politicians read my columns (I wish!). Instead, they adopted better tax policy because they were afraid of losing jobs and investment to countries with better fiscal policy.

Now for the bad news.

There’s been an ongoing campaign by high-tax governments to replace tax competition with tax harmonization. They’ve even conscripted international bureaucracies such as the Organization for Economic Cooperation and Development (OECD) to launch attacks against low-tax jurisdictions.

And now the United States is definitely on the wrong side of this issue.

Here’s some of what the Biden Administration wants.

The United States can lead the world to end the race to the bottom on corporate tax rates. A minimum tax on U.S. corporations alone is insufficient. …President Biden is also proposing to encourage other countries to adopt strong minimum taxes on corporations, just like the United States, so that foreign corporations aren’t advantaged and foreign countries can’t try to get a competitive edge by serving as tax havens. This plan also denies deductions to foreign corporations…if they are based in a country that does not adopt a strong minimum tax. …The United States is now seeking a global agreement on a strong minimum tax through multilateral negotiations. This provision makes our commitment to a global minimum tax clear. The time has come to level the playing field and no longer allow countries to gain a competitive edge by slashing corporate tax rates.

As Charlie Brown would say, “good grief.” Those passages sound like they were written by someone in France, not America

And Heaven forbid that  countries “gain a competitive edge by slashing corporate tax rates.” Quelle horreur!

There are three things to understand about this reprehensible initiative from the Biden Administration.

  1. Tax harmonization means ever-increasing tax rates – It goes without saying that if politicians are able to create a tax cartel, it will merely be a matter of time before they ratchet up the tax rate. Simply stated, they won’t have to worry about an exodus of jobs and investment because all countries will be obliged to have the same bad approach.
  2. Corporate tax harmonization will be followed by harmonization of other taxes – If the scheme for a harmonized corporate tax is imposed, the next step will be harmonized (and higher) tax rates on personal income, dividends, capital gains, and other forms of work, saving, investment, and entrepreneurship.
  3. Tax harmonization denies poor countries the best path to prosperity – The western world became rich in the 1800s and early 1900s when there was very small government and no income taxes. That’s the path a few sensible jurisdictions want to copy today so they can bring prosperity to their people, but that won’t be possible in a world of tax harmonization.

P.S. If you want more information, here’s a three-part video series on tax havens, and even a video debunking some of Obama’s demagoguery on the topic.

March 16, 2021

President Biden c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Is our country learning from history? California keeps raising their taxes on the wealthy and people keep moving from California to Texas. What does our federal government do? They also have been raising taxes on the wealthy lately. Take a look at this excellent video below and then read a great article by Dan Mitchell of the Cato Institute on what is happening in California right now.

Will Higher Tax Rates Balance the Budget?

Published on Apr 11, 2012

As the U.S. debt and deficit grows, some politicians and economist have called for higher tax rates in order to balance the budget. The question becomes: when the government raises taxes, does it actually collect a larger portion of the US economy?

Professor Antony Davies examines 50 years of economic data and finds that regardless of tax rates, the percentage of GDP that the government collects has remained relatively constant. In other words, no matter how high government sets tax rates, the government gets about the same portion. According to Davies, if we’re concerned about balancing the budget, we should worry less about raising tax revenue and more about growing the economy. The recipe for growth? Lower tax rates and a simplified tax code.

Like most people, I’m a sucker for a heartwarming story around the holidays.

Sometimes, you get that nice feeling when good things happen to good people, like you find at the end of a classic movie like “It’s a Wonderful Life.”

But since I’m a bit of a curmudgeon, I also feel all warm and fuzzy when bad things happen to bad people.

That’s why I always smile when I read stories about taxpayers moving across borders, thus preventing greedy tax-hiking politicians from collecting more revenue.

“Where’s our tax revenue?!?”

I’m glad when that happens to French politicians. I’m glad when it happens to Italian politicians. I’m glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the point.

I’m even glad when it happens to the politicians in Washington.

I smile because I envision the moment when some budget geek tells these sleazy politicians that projected revenues aren’t materializing and they don’t have more money to spend.

So I wish I could be a fly on the wall when this moment of truth happens to California politicians. They convinced voters in the state to enact Prop 30, a huge tax increase targeting those evil, awful, bad rich people.

Governor Brown and his fellow kleptocrats in Sacramento doubtlessly are salivating at the thought of more money to waste.

But notwithstanding a satirical suggestion from Walter Williams, there aren’t guard towers and barbed-wire fences surrounding the state. Productive people can leave, and that’s happening every day. And they take their taxable income with them.

Usually in ways that don’t attract attention. But sometimes a bunch of them leave at the same times, and that is newsworthy. Here’s an example of that happening, as reported by the San Francisco Chronicle.

Chevron Corp. will move up to 800 jobs – about a quarter of its current headquarters staff – from the Bay Area to Houston over the next two years but will remain based in San Ramon, the oil company told employees Thursday. …The company already employs far more people in Houston – about 9,000 full-time employees and contractors – than it does in San Ramon.

We don’t know a lot of details, but these were positions at the company’s headquarters and they were “technical positions dealing with information and advanced energy technologies…tied to Chevron’s worldwide oil exploration and production business.”

Let’s assume these highly skilled employees earn an average of $250,000. I imagine that’s a low-ball estimate, but this is just for purposes of a thought experiment. Now multiply that average salary by 800 workers and you get $200 million of income.

And every penny of that $200 million no longer will be subject to tax by the kleptocrats in the state’s capital.

In other words, we’re seeing the Laffer Curve in action.

Politicians can raise tax rates all day long, but that doesn’t automatically translate into more tax revenue. Politicians keep forgetting that taxable income is not a fixed variable.

What’s happening in a big way with Chevron is happening in small ways every single day with investors, entrepreneurs, small business owners, and other “rich’ people.

That’s good for the people escaping. And it also will warm my heart when California’s despicable politicians discover next year that there’s an “unexpected” revenue shortfall.

P.S. It’s just an anecdote that the Chevron jobs are going to Texas. But when you add together a bunch of anecdotes, you get data. And according to the data, Texas is kicking the you-know-what out of California. Maybe there’s a lesson to be learned?

__________

___________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Open letter to President Obama (Part 201)Tea Party favorite Representative links article “Prescott and Ohanian: Taxes Are Much Higher Than You Think”

    (Emailed to White House on 12-21-12.) 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 […]

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(Emailed to White House on 12-21-12.) 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 […]

Open letter to President Obama (Part 200.1)Tea Party favorite Representative shares link on facebook

(Emailed to White House on 12-21-12) 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 […]

Open letter to President Obama (Part 199) Tea Party favorite takes on President

  The federal government has a spending problem and Milton Friedman came up with the negative income tax to help poor people get out of the welfare trap. It seems that the government screws up about everything. Then why is President Obama wanting more taxes? _______________ Milton Friedman – The Negative Income Tax Published on […]

Tea Party Heroes Rep. David Schweikert (R-AZ),Justin Amash (R-MI), Tim Huelskamp (R-KS) have been punished by Boehner

I was sad to read that the Speaker John Boehner has been involved in punishing tea  party republicans. Actually I have written letters to several of these same tea party heroes telling them that I have emailed Boehner encouraging him to listen to them. Rep. David Schweikert (R-AZ),Justin Amash (R-MI), and Tim Huelskamp (R-KS). have been contacted […]

Some Tea Party heroes (Part 10)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

Some Tea Party heroes (Part 9)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

49 posts on Tea Party heroes of mine

Some of the heroes are Mo Brooks, Martha Roby, Jeff Flake, Trent Franks, Duncan Hunter, Tom Mcclintock, Devin Nunes, Scott Tipton, Bill Posey, Steve Southerland and those others below in the following posts. THEY VOTED AGAINST THE DEBT CEILING INCREASE IN 2011 AND WE NEED THAT TYPE OF LEADERSHIP NOW SINCE PRESIDENT OBAMA HAS BEEN […]

Some Tea Party Republicans win and some lose

I hated to see that Allen West may be on the way out. ABC News reported: Nov 7, 2012 7:20am What Happened to the Tea Party (and the Blue Dogs?) Some of the Republican Party‘s most controversial House members are clinging to narrow leads in races where only a few votes are left to count. […]

Some Tea Party heroes (Part 8)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 […]

Dan Mitchell article Five Visuals that Explain Why Higher Corporate Income Tax Rates Are Bad for America

Five Visuals that Explain Why Higher Corporate Income Tax Rates Are Bad for America

I have a four-part series (here, here, here, and here) about the conceptual downsides of Joe Biden’s class-warfare approach to tax policy.

Now it’s time to focus on the component parts of his agenda. Today’s column will review his plan for a big increase in the corporate tax rate. But since I’ve written about corporate tax rates over and over and over again, we’re going to approach this issue is a new way.

I’m going to share five visuals that (hopefully) make a compelling case why higher tax rates on companies would be a big mistake.

Visual #1

One thing every student should learn from an introductory economics class is that corporations don’t actually pay tax. Instead, businesses collect taxes that are actually borne by workers, consumers, and investors.

There’s lots of debate in the profession, of course, about which group bears what share of the tax. But there’s universal agreement that higher taxes lead to less investment, which leads to less productivity, which leads to lower pay.

Here’s a depiction of the relationship of corporate taxes and worker pay.

asdf

Visual #2

The previous image explains the theory. Now it’s time for some evidence.

Here’s a look at how much faster wages have grown in countries with low corporate tax rates compared to nations with high corporate tax rates.

Biden, for reasons beyond my comprehension, wants America on the red line.

And his staff economists apparently don’t understand (or don’t care about) the link between investment and wages.

Visual #3

Here’s some more evidence.

And it comes from an unexpected source, the pro-tax Organization for Economic Cooperation and Development(OECD).

Even economists at that Paris-based bureaucracy have produced studies confirming that lower tax rates lead to higher disposable income for people.

Needless to say, if lower tax rates lead to more disposable income, then higher tax rates will lead to less disposable income.

We should have learned during the Obama years that ordinary people pay the price when politicians practice class warfare.

Visual #4

It’s very bad news that Biden wants a big increase in the corporate tax rate, but let’s not forget that the IRS double-taxes corporate income (i.e., that same income is subject to a second layer of tax when shareholders receive dividends).

The combined effect, as shown in this visual, is that the United States will have the dubious honor of having the highest effective corporate tax rate in the entire developed world.

Call me crazy, but I don’t think that’s a recipe for jobs and investment in America.

Visual #5

The economic damage of higher corporate tax rates means that there is less taxable income (i.e., we need to remember the Laffer Curve).

Will the damage be so extensive, causing taxable income to fall so much, that the IRS collects less revenue with a higher tax rate?

We’ll learn the answer to that question over time, but we have some very strong evidence from the IMF that lower corporate tax rates don’t lead to less revenue. As you can see from this chart, revenues held steady as tax rates plummeted over the past few decades.

In other words, lower rates led to enough additional economic activity that governments have collected just as much money with lower tax rates. But now Biden wants to run this experiment in reverse.

It’s possible the government will collect more revenue, of course, but only at a very high cost to workers, consumers, and shareholders.

By the way, there’s OECD data showing the exact same thing.

Those pictures probably tell you everything you need to know about this issue.

But let’s add some more analysis. The Wall Street Journal opined today on Biden’s class-warfare agenda. Here are some of the key passages from the editorial.

The bill for President Biden’s agenda is coming due, starting with Wednesday’s proposal for the largest corporate tax increase in decades. …Mr. Biden’s corporate increase amounts to the restoration of the Obama-era corporate tax burden, only much more so. …Mr. Biden wants to raise the corporate rate back up to 28%, but that’s the least of his proposals. He also wants to add penalties that would make inversions punitive, and he’d impose a global minimum corporate tax of 21%. This would shoot the tax burden on U.S. companies back toward the top of the developed world list. …The larger Biden goal is to end global tax competition… “The United States can lead the world to end the race to the bottom on corporate tax rates,” says the White House fact sheet. Mr. Biden says he wants “other countries to adopt strong minimum taxes on corporations” so nations like Ireland can no longer compete for capital with lower tax rates. This has long been the dream of the French and Germans, working through the Organization for Economic Cooperation and Development. …All of this is in addition to the looming Biden tax increases on dividends, capital gains and other investment income. …Mr. Biden’s corporate tax increases will hit the middle class hard—in the value of their 401(k)s, the size of their pay packets, and what they pay for goods and services.

Amen.

Let’s conclude with some gallows humor.

This meme shows how some of our leftist friends will celebrate if the tax increase is imposed.

P.S. Here’s a depressing final observation. Decades of experience have led me to conclude that many folks on the left support class-warfare tax policy because they are primarily motivated by a spiteful desire to punish success rather than provide upward mobility for the poor.

Free-market economics meets free-market policies at The Heritage Foundation’s Tenth Anniversary dinner in 1983. Nobel Laureate Milton Friedman and his wife Rose with President Ronald Reagan and Heritage President Ed Feulner.

Free-market economics meets free-market policies at The Heritage Foundation’s Tenth Anniversary dinner in 1983. Nobel Laureate Milton Friedman and his wife Rose with President Ronald Reagan and Heritage President Ed Feulner.

Since the passing of Milton Friedman who was my favorite economist, I have been reading the works of Daniel Mitchell and he quotes Milton Friedman a lot, and you can reach Dan’s website here.

Mitchell in February 2011.
Wikipedia noted concerning Dan:

Mitchell’s career as an economist began in the United States Senate, working for Oregon Senator Bob Packwood and the Senate Finance Committee. He also served on the transition team of President-Elect Bush and Vice President-Elect Quayle in 1988. In 1990, he began work at the Heritage Foundation. At Heritage, Mitchell worked on tax policy issues and began advocating for income tax reform.[1]

In 2007, Mitchell left the Heritage Foundation, and joined the Cato Institute as a Senior Fellow. Mitchell continues to work in tax policy, and deals with issues such as the flat tax and international tax competition.[2]

In addition to his Cato Institute responsibilities, Mitchell co-founded the Center for Freedom and Prosperity, an organization formed to protect international tax competition.[1]

 

 

January 27, 2021

President Biden, c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

The federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation. We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. The recent scandals in our government have proved my point. In fact, the jokes you made at Ohio State about possibly auditing them are not so funny now that reality shows how the IRS was acting more like a monster out of control. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

What did we learn from the Laffer Curve in the 1980’s? Lowering top tax rate from 70% to 28% from 1980 to 1988 and those earning over $200,000 paid 99 billion in taxes instead of 19 billion!!!!

One of my frustrating missions in life is to educate policy makers on the Laffer Curve.

This means teaching folks on the left that tax policy affects incentives to earn and report taxable income. As such, I try to explain, this means it is wrong to assume a simplistic linear relationship between tax rates and tax revenue. If you double tax rates, for instance, you won’t double tax revenue.

But it also means teaching folks on the right that it is wildly wrong to claim that “all tax cuts pay for themselves” or that “tax increases always mean less revenue.” Those results occur in rare circumstances, but the real lesson of the Laffer Curve is that some types of tax policy changes will result in changes to taxable income, and those shifts in taxable income will partially offset the impact of changes in tax rates.

However, even though both sides may need some education, it seems that the folks on the left are harder to teach – probably because the Laffer Curve is more of a threat to their core beliefs.

If you explain to a conservative politician that a goofy tax cut (such as a new loophole to help housing) won’t boost the economy and that the static revenue estimate from the bureaucrats at the Joint Committee on Taxation is probably right, they usually understand.

But liberal politicians get very agitated if you tell them that higher marginal tax rates on investors, entrepreneurs, and small business owners probably won’t generate much tax revenue because of incentives (and ability) to reduce taxable income.

To be fair, though, some folks on the left are open to real-world evidence. And this IRS data from the 1980s is particularly effective at helping them understand the high cost of class-warfare taxation.

There’s lots of data here, but pay close attention to the columns on the right and see how much income tax was collected from the rich in 1980, when the top tax rate was 70 percent, and how much was collected from the rich in 1988, when the top tax rate was 28 percent.

The key takeaway is that the IRS collected fives times as much income tax from the rich when the tax rate was far lower. This isn’t just an example of the Laffer Curve. It’s the Laffer Curve on steroids and it’s one of those rare examples of a tax cut paying for itself.

Folks on the right, however, should be careful about over-interpreting this data. There were lots of factors that presumably helped generate these results, including inflation, population growth, and some of Reagan’s other policies. So we don’t know whether the lower tax rates on the rich caused revenues to double, triple, or quadruple. Ask five economists and you’ll get nine answers.

But we do know that the rich paid much more when the tax rate was much lower.

This is an important lesson because Obama wants to run this experiment in reverse. He hasn’t proposed to push the top tax rate up to 70 percent, thank goodness, but the combined effect of his class-warfare policies would mean a substantial increase in marginal tax rates.

We don’t know the revenue-maximizing point of the Laffer Curve, but Obama seems determined to push tax rates so high that the government collects less revenue. Not that we should be surprised. During the 2008 campaign, he actually said he would like higher tax rates even if the government collected less revenue.

That’s class warfare on steroids, and it definitely belong on the list of the worst things Obama has ever said.

But I don’t care about the revenue-maximizing point of the Laffer Curve. Policy makers should set tax rates so we’re at the growth-maximizing level instead.

To broaden the understanding of the Laffer Curve, share these three videos with your friends and colleagues.

This first video explains the theory of the Laffer Curve.

The Laffer Curve, Part I: Understanding the Theory

Uploaded on Jan 28, 2008

The Laffer Curve charts a relationship between tax rates and tax revenue. While the theory behind the Laffer Curve is widely accepted, the concept has become very controversial because politicians on both sides of the debate exaggerate. This video shows the middle ground between those who claim “all tax cuts pay for themselves” and those who claim tax policy has no impact on economic performance. This video, focusing on the theory of the Laffer Curve, is Part I of a three-part series. Part II reviews evidence of Laffer-Curve responses. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org

  • Category

    News & Politics

    _____________________________________

    This second video reviews some of the real-world evidence.

    The Laffer Curve, Part II: Reviewing the Evidence

    Uploaded on Feb 24, 2008

    This video reviews real-world evidence showing that changes in marginal tax rates can have a significant impact on taxable income, thus leading to substantial amounts of revenue feedback. In a few cases, tax-rate reductions even “pay for themselves,” though the key lesson is the more modest point that pro-growth changes in tax policy will have a positive impact on economic performance and that good tax cuts therefore do not “cost” the government much in terms of foregone tax revenue.

    This video is second installment of a three-part series. Part I reviews theoretical relationship between tax rates, taxable income, and tax revenue. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org.

    ___________________

    And this video exposes the biased an inaccurate “static scoring” of the Joint Committee on Taxation.

    The Laffer Curve, Part III: Dynamic Scoring

    Uploaded on May 28, 2008

    A video by CF&P Foundation that builds on the discussion of theory in Part I and evidence in Part II, this concluding video in the series on the Laffer Curve explains how the Joint Committee on Taxation’s revenue-estimating process is based on the absurd theory that changes in tax policy – even dramatic reforms such as a flat tax – do not effect economic growth. In other words, the current system assumes the Laffer Curve does not exist. Because of congressional budget rules, this leads to a bias for tax increases and against tax cuts. The video explains that “static scoring” should be replaced with “dynamic scoring” so that lawmakers will have more accurate information when making decisions about tax policy. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org.

    ________________

    And once we educate everybody about the Laffer Curve, we can then concentrate on teaching them about the equivalent relationship on the spending side of the fiscal ledger, the Rahn Curve.

_____________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733,

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By Everette Hatcher III | Posted in Cato Institute, Economist Dan Mitchell, spending out of control, Taxes | Edit |

“For years, a lot of us subscribed to the notion that Milton Friedman warned us about,” that government would harm the economy if it didn’t take a light-touch approach to business, said former Connecticut Democratic Sen. Chris Dodd, a longtime Biden friend, referring to the economist who helped define the small-government neoliberal philosophy.

President Biden in the White House on March 18.

President Biden in the White House on March 18.ANDREW HARNIK/ASSOCIATED PRESS

Behind Biden’s Big Plans: Belief That Government Can Drive Growth

Multitrillion-dollar spending program would reverse Reagan-era tacit understanding that public sector is less efficient than the private in allocating resources

WASHINGTON—President Biden envisions long-term federal spending claiming its biggest share of the American economy in decades. He wants to pay for that program in part by charging the highest-earning Americans the biggest tax rates they’ve faced in years.

The Biden economic team’s ambitions go beyond size to scope. The centerpiece of their program—a multitrillion-dollar proposal to be rolled out starting Wednesday, less than a month after a $1.9 trillion stimulus—seeks to give Washington a new commercial role in matters ranging from charging stations for electric vehicles to child care, and more responsibility for underwriting education, incomes and higher-paying jobs.

The administration has also laid the groundwork for regulations aimed at empowering labor unions, restricting big businesses from dominating their markets and prodding banks to lend more to minorities and less for fossil-fuel projects. All while federal debt is currently at a level not seen since World War II.

It all marks a major turning point for economic policy. The gamble underlying the agenda is a belief that government can be a primary driver for growth. It’s an attempt to recalibrate assumptions that have shaped economic policy of both parties since the 1980s: that the public sector is inherently less efficient than the private, and bureaucrats should generally defer to markets.

The administration’s sweeping plans reflect a calculation that “the risk of doing too little outweighs the risk of doing too much,” said White House National Economic Council Director Brian Deese. “We’re going to be unapologetic about that,” he said. “Government must be a powerful force for good in the lives of Americans.”

The pandemic and lockdown measures that followed have become a Rorschach test for the new economic debate. Former President Donald Trumpargued that the booming economy of 2019 and early 2020 was proof his tax-cutting, deregulating agenda was the best for spurring broadly shared prosperity, and he portrayed the coronavirus and lockdowns as a temporary disruption. The Biden team sees the pandemic as exposing myriad flaws and fragilities that liberals had long identified in the economy, masked by prosperity.

Mr. Biden himself casts his program as a throwback to Lyndon B. Johnson’s 1960s Great Society and Franklin D. Roosevelt’s 1930s New Deal. “This is the first time we’ve been able to, since the Johnson administration and maybe even before that, to begin to change the paradigm,” he said at a White House event in mid-March. Mr. Biden recently spoke with a group of prominent American historians, and his aides have studied FDR’s presidency as they plan his economic agenda.

Mr. Biden’s big plans raise big questions, and big risks. He faces an uphill battle to win over a narrowly divided Congress, with solid Republican opposition plus hesitancy among Democratic moderates who blanch at higher taxes and more spending following nearly $5 trillion in coronavirus relief outlays over the past year.

Conservative-tilting courts, increasingly skeptical of executive authority, might block some of his initiatives. Already, a coalition of Republican state attorneys general has sued to challenge some provisions of the stimulus program and some of his executive orders.

Some economists consider the latest spending plan an overkill response to the temporary, albeit severe, hit from the pandemic and lockdowns. They call recent stirrings in the bond market a warning that the vast increase in government spending and borrowing might prompt a return to the high-inflation/high-interest-rate stagnation of the late 1970s and early 1980s—conditions that fed the long-lasting backlash to expansive FDR-LBJ policies in the first place.

“They’re creating too much demand when it’s not needed. When demand runs away from supply, you get inflation,” said Kevin Hassett, a former Trump chief economic adviser now at Stanford University’s Hoover Institution. “The laws of economics can’t be repealed,” he said.

The Biden agenda rests on the notion those laws have evolved. “There appear to have been a broad-based set of structural changes that have had a very significant effect on how the economy works,” Treasury Secretary Janet Yellen said. “There are a lot of ways in which I think our understanding of the economy has shifted.”

<img class="i-amphtml-blurry-placeholder" src="data:;base64,

She cited persistently low interest rates and low inflation, defying many conventional forecasts, as reasons to feel more relaxed than before about federal borrowing and low unemployment rates. Ms. Yellen says there’s little sign inflation is in danger of escalating, and is confident that if it does, the Federal Reserve has the tools to contain it.

The administration’s policies are rooted in economic research focused on perceived free-market flaws, much of it conducted and funded by young, left-leaning economists and activists now scattered throughout the administration. Much of the Biden economic agenda is built around the conclusion that climate change in particular is a private-sector breakdown requiring extensive government intervention.

Before joining the Biden Council of Economic Advisers, Heather Boushey ran the Washington Center for Equitable Growth, a think tank devoted to persuading economists and policy makers to take action reducing income inequality. To her and many of her colleagues, the pandemic validates their studies on market failures.

“We’ve talked about inequality—it seems like an abstract concept, but in 2020, this notion of the K-shaped economy became so real,” Ms. Boushey said. She was referring to a recovery where the fortunes of upper-income families—able to keep their jobs, work from home and enjoy gains in their stock portfolios—rose like the letter’s upward-sloping part, while lower-income families were unable to keep jobs in hard-hit service industries such as restaurants.

Plans for selling the administration proposals lean heavily on fears of losing out to China’s model of state-driven capitalism, a concern that resonates across the political spectrum. “China is out-investing us by a long shot, because their plan is to own that future,” Mr. Biden said recently in previewing his program.

In a Wednesday speech in Pittsburgh, the president is preparing to unveil the first part of an economic proposal that would cost $3 trillion or more over 10 years and might be split into multiple pieces of legislation, with more coming in April. The first measure will focus on infrastructure, climate change, domestic manufacturing and research and development. Mr. Biden will find ways to pay for the full cost of the first measure, the White House has said. The second measure will center on child care, healthcare and education.

‘There are a lot of ways in which I think our understanding of the economy has shifted,’ said Treasury Secretary Janet Yellen.

‘There are a lot of ways in which I think our understanding of the economy has shifted,’ said Treasury Secretary Janet Yellen.

PHOTO: DREW ANGERER/GETTY IMAGES

The multipart package would include higher taxes on corporations, upper-income households and investors. It will call for huge investments in infrastructure and climate programs and provide for universal prekindergarten and tuition-free community college, people familiar with the plan said.

Most Republicans are expected to oppose it, and the president’s advisers are already discussing options for continuing to move some of his proposals without GOP support, including through the process known as budget reconciliation.

Mike Donilon, one of Mr. Biden’s closest advisers, acknowledged the challenges but argued the public supports action. “I don’t think the country is in much mood for relentless obstructionism,” he said.

Critics of big-government projects have long argued that bureaucrats are less skilled than market forces in allocating resources. “What they’re trying to do is re-establish government as a major positive force in the economy, and I believe government is a massive negative force” in it, said Stephen Moore, a former Trump economic adviser. “There really is a micromanagement of the economy from the left.”

Presidents of both parties, hesitant to micromanage, have long steered away from anything smacking of an industrial policy that attempts to bolster specific industries. Biden aides are more willing to target and support certain industries such as the health and high-tech sectors. “We are committed to using the levers of government to encourage more domestic production,” Mr. Deese said.

President Biden held notes on infrastructure while speaking during a news conference in the East Room of the White House on March 25.

President Biden held notes on infrastructure while speaking during a news conference in the East Room of the White House on March 25.

PHOTO: OLIVER CONTRERAS/PRESS POOL

The president’s budget and regulatory proposals could disrupt major industries, boosting renewable-energy companies over fossil-fuel firms and expanding markets for emerging technologies. Business groups and Republicans warn that new regulations could stifle growth.

Mr. Biden’s stimulus bill added to federal debt that had already hit peacetime records under Mr. Trump. Mr. Biden has said his full agenda will ultimately be aimed at curbing government borrowing, through tax increases and savings in medical spending.

That will be a challenge. Federal debt, which reached 100% of gross domestic product last fiscal year for the first time since 1946, is expected to rise to a record 107% of economic output by 2031, according to the Congressional Budget Office, fueling concerns that future generations will get stuck with the bill. Fed Chairman Jerome Powell said in March that the federal government can manage its debt at current levels, but policy makers should seek to slow its growth once the economy is stronger.

The long-dominant paradigm Mr. Biden and aides want to change is one widely branded neoliberalism, framed by Ronald Reagan, who declared in his 1981 inaugural address that “government is not the solution to our problem; government is the problem.” He ushered in an era of tax cuts, deregulation and federal programs increasingly designed to work through market forces. That was followed by two of the longest expansions in American history, in the 1980s and the 1990s.

Ronald Reagan speaking at his inauguration on Jan. 20, 1981.

Ronald Reagan speaking at his inauguration on Jan. 20, 1981.

PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

While Democrats controlled the White House for nearly half the time since then, their policies often were constrained by the core Reagan principles, in the view of many progressives. Bill Clinton tried to juggle liberal goals with a focus on balancing the budget, expanding free trade, and deregulating the financial sector. Barack Obama created a new government health program, but to the chagrin of the left, worked through private insurers. His 2009 program to fight the recession was constrained by fears of big deficits.

“For decades now, people have talked about economics as running against government, ignoring how much we need government to be able to build out opportunities,” said Massachusetts Democratic Sen. Elizabeth Warren, who, as an Obama adviser, often tangled with his aides over how aggressively to rein in Wall Street and support homeowners slammed by the 2008-2009 financial crisis.

A confluence of forces since the turn of the century has shaken support for the market-oriented economic model. A sharp increase in income and wealth inequality, combined with longtime wage stagnation that ended just before the pandemic hit, raised questions about how broadly prosperity gets shared absent government intervention. The swift loss of manufacturing jobs undermined support for free trade. China’s success and Wall Street’s collapse in the financial crisis further sowed doubts about free markets.

Those trends animated critics on the left, fueling the 2016 presidential campaigns of self-proclaimed Democratic Socialist Sen. Bernie Sanders of Vermont and the rise to prominence of his allies such as New York Rep. Alexandria Ocasio-Cortez.

Republicans, too, have faced internal challenges to the party’s free-market orientation. Mr. Trump won the presidency in part by attacking bipartisan support for globalization. In office, he launched a trade war with China, regularly criticized big business and intervened to force domestic investments and pressure companies to relocate manufacturing to the U.S. and cut prices of drugs.

“Some establishment Republicans are too willing to do nothing at all with government. They see an all-natural, organic market having its way,” said Missouri GOP Sen. Josh Hawley. Mr. Hawley, a Trump supporter and possible presidential contender, has called for tougher antitrust laws to break up big tech companies and co-sponsored a bill last year with Mr. Sanders to give households $1,200 direct payments.

The first-term senator voted against the latest stimulus bill and opposes many of Mr. Biden’s policies, but he also says that “old-style conservatives have been too quick to wave away policies to strengthen American workers and promote competition rather than monopolies.”

Trends such as wealth disparities and wage stagnation animated the presidential candidacy of Sen. Bernie Sanders of Vermont, seen here speaking at a rally in Manchester, N.H., in August 2015.

Trends such as wealth disparities and wage stagnation animated the presidential candidacy of Sen. Bernie Sanders of Vermont, seen here speaking at a rally in Manchester, N.H., in August 2015.

PHOTO: RICK FRIEDMAN/CORBIS/GETTY IMAGES

While many of those urging an economic rethink are relatively new voices in the debate, some pillars of the establishment have evolved, including former senior economic aides in the Clinton and George W. Bush administrations. Another Washington veteran whose positions have changed: Joe Biden.

Elected to the Senate in 1972 at age 29, Mr. Biden ousted a Republican incumbent in part by casting himself as more attuned to the needs of the middle class, a theme that became a through-line of his career. He has long espoused the importance of unions, small businesses and a strong working class.

Mr. Biden juggled those causes with a belief in the need to curb government spending and cut taxes. He voted for Mr. Reagan’s historic 1981 tax cuts and backed spending ceilings for most agencies through the 1980s and a balanced-budget constitutional amendment in the 1990s. He regularly floated the idea of limiting Social Security and Medicare.

“For years, a lot of us subscribed to the notion that Milton Friedman warned us about,” that government would harm the economy if it didn’t take a light-touch approach to business, said former Connecticut Democratic Sen. Chris Dodd, a longtime Biden friend, referring to the economist who helped define the small-government neoliberal philosophy.

As Mr. Obama’s vice president during the financial crisis, Mr. Biden walked a tightrope between pushing for spending, especially on infrastructure, and taking the lead in negotiating with Republicans to limit the extent of government expansion. Toward the end of his term, the persistently slow recovery prompted the vice president and his aides to launch a study of wage stagnation, income inequality and ways the government could steer business to do more for workers. That work planted the seeds for his current program.

Joe Biden was first elected to the Senate from Delaware in 1972 after a campaign in which he cast himself as attuned to the needs of the working class.

Joe Biden was first elected to the Senate from Delaware in 1972 after a campaign in which he cast himself as attuned to the needs of the working class.

PHOTO: HENRY GRIFFIN/ASSOCIATED PRESS

Mr. Biden started his 2019 presidential bid determined to lay out more of a big-government agenda than recent Democrats had espoused. But much of the primary field had moved even farther left. He emerged once again as the fiscal scold warning of excessive spending.

The arrival of the pandemic and the killing of George Floyd marked a turning point for Mr. Biden, according to his advisers, bringing into focus what his aides describe as his longstanding desire to “go big.”

Mr. Biden tapped his longtime friend and successor as Delaware senator, Ted Kaufman, to run the transition, and in helping assemble the economic team, Mr. Kaufman said his team focused on people steeped in new economic thinking and steered away from business executives.

“I looked at people who had internalized what Joe Biden’s policy was about, and Joe Biden’s policy was not about taking care of Wall Street or people making over $400,000 a year,” Mr. Kaufman said.

The middle ranks of the administration are filled with academics and activists who have spent the past few years honing a framework for progressive economic policy-making. In March 2019, many of them gathered at a Washington conference called “Bold v. Old.” A panel on toughening antitrust enforcement was led by Jennifer Harris, an official with the Hewlett Foundation—a philanthropy created by one of the founders of Hewlett-PackardCo. —overseeing a program funding researchers seeking to replace the neoliberal paradigm. She was joined by Lina Khan, a young law professor known for laying out the case for breaking upAmazon.com Inc., and Sabeel Rahman, president of Demos, a progressive think tank.

Ms. Harris has joined the Biden National Economic Council. Ms. Khan has been nominated to the Federal Trade Commission. Mr. Rahman works at the Office of Management and Budget.

Few of those new-generation policy makers supported Mr. Biden in the primaries. One of Mr. Deese’s deputies, Bharat Ramamurti, who was Ms. Warren’s chief campaign policy adviser, says the party is now largely unified on economic policy.

President Biden at his first press conference as president on March 25.

President Biden at his first press conference as president on March 25.

PHOTO: OLIVER CONTRERAS/PRESS POOL

A change in the Biden approach to economics is a re-evaluation of the costs of government action, which his team says have receded or always been exaggerated. And on the other side of the equation: an assertion that the cost of inaction is greater than previously estimated.

Progressive economists have generated rafts of research, often contested by conservatives, challenging the links between higher tax rates and lower economic activity. “The evidence suggests that the impact of marginal tax rates on labor supply is not as big as we may have once feared,” said Cecilia Rouse, chair of the Council of Economic Advisers.

SHARE YOUR THOUGHTS

Does the government try to do too much or not enough? Join the conversation below.

Liberal academics have produced studies examining the costs to the economy’s productive capacity from inequality and long-term unemployment, work invoked by the Biden team to justify spending big and fast to try to return to full employment as soon as next year. Some critics, including former Clinton and Obama economic adviser Lawrence Summers, have said that spending too aggressively to drive down unemployment could backfire, possibly prompting the Fed to raise interest rates and trigger a recession.

This more relaxed view of previous economic limits has freed the Biden team to plan on a grand scale. They designed a two-step strategy that began with the $1.9 trillion coronavirus relief package, which provided $1,400 direct payments to many Americans, extended a $300 weekly jobless-aid supplement, expanded the child tax credit to provide periodic payments and dropped requirements that recipients work.

That was a symbolically significant shift from the Clinton-era move to tie welfare to work and a nod to the burgeoning progressive demands for a no-strings-attached guaranteed government income floor, at least for families with children.

Biden aides are also preparing an aggressive plan of new regulations and enforcement that can be implemented without Congress.

“The president campaigned on concerns about big tech, about labor market competition, about making sure small businesses can compete with the bigger guys,” Mr. Ramamurti said. “The president has a clear agenda there.”

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com

It appears that only a fraction of the spending proposed in a new $3 trillion to $4 trillion bill would go toward an already too-expansive definition of infrastructure. Pictured: Engineers discuss the progress of an infrastructure construction project. (Photo: Sornranison Prakittrakoon/ Moment/Getty Images)

The media were flooded Monday with news that the Biden administration is working on a colossal new $3 trillion to $4 trillion spending plan.

While full details are not available yet, the plan appears to be another left-wing grab bag of big-government proposals. Rather than stimulating the economy, it would stimulate bigger government while funneling unprecedented amounts of power and money through the hands of politicians in Washington.

All this comes on the heels of President Joe Biden signing into law on March 11 a badly flawed $1.9 trillion legislative package that was originally marketed as a COVID-19 response, but which was more focused on left-wing pet causes, such as bailouts for union pension plans and unnecessary handouts for state governments.

Just a day later, House Speaker Nancy Pelosi, D-Calif., released a statement calling for bipartisan work on legislation that would focus on infrastructure. While there were good reasons to question how beneficial or “bipartisan” such legislation would be, there was at least a chance of finding some across-the-aisle support.

Want to keep up with the 24/7 news cycle? Want to know the most important stories of the day for conservatives? Need news you can trust? Subscribe to The Daily Signal’s email newsletter. Learn more >>

But the potential for bipartisanship was quickly scuttled by news of the latest multitrillion-dollar plan.

It would be bad enough if the latest plan was just a big-spending infrastructure package. However, it appears that only a fraction of the new spending would go toward an already too-expansive definition of infrastructure.

Instead, most of the new spending and tax subsidies would go toward expanding the welfare state, including “free” tuition for community colleges, “free” child care, and other handouts that lack right-of-center support.

This would likely be the largest expansion of the federal government since the “Great Society” of the 1960s, even eclipsing Obamacare in scope.

Reports indicate that Democrats might attempt to split the plan into two bills—one focused on social spending that passes narrowly along party lines, the other focused on actual infrastructure aimed at winning bipartisan support.

However, it’s clear that the $3 trillion-plus total price tag is already souring prospects for bipartisan infrastructure legislation.

House Republicans boycotted the annual Ways and Means Committee “Member’s Day” hearing on Tuesday in the wake of news reports on the plan, since they indicated that Democrats have already made up their minds to pursue as much spending as possible through the legislative procedure known as reconciliation.

Coincidentally, two respected nonpartisan groups released reports this week that show why Biden and Pelosi should pause their aggressive agenda.

First, the Congressional Budget Office published a paper demonstrating what would happen if a sustained increase in federal spending were coupled with big tax increases to pay for the spending.

While the analysis points to different long-term effects from different types of taxes, any tax-and-spend approach would lead to reductions in economic growth and personal income that are larger than the size of the tax hikes.

For example, the analysis found that having 10% more federal government would mean a 12% to 19% reduction in personal consumption.

And that’s a conservative estimate. Most estimates show tax hikes shrink the economy by two to three times more than the revenues they raise.

That doesn’t mean Congress could escape the consequences of a continued spending spree by simply adding to the national debt. The CBO paper cautions that that would not only impose significant costs and divert resources away from the private sector, but it also would be unsustainable and increase the risk of a devastating financial crisis.

Along the same lines, the Government Accountability Office released a sobering reporton the nation’s poor financial health.

Now that Congress has passed a combined total of $6 trillion in legislation in the aftermath of the COVID-19 pandemic (more than $48,000 per household), it must quickly address the unsustainable growth of major benefit programs, such as Social Security, Medicare, and Medicaid.

Even before the pandemic struck, these programs were on a path to bankruptcy. Addressing these shortfalls in a way that is fair to both current retirees and future generations who will have to foot the bill is one of the greatest policy challenges facing the nation.

Unfortunately, Washington is exacerbating the problem by adding excessively to the national debt and potentially stunting economic growth with higher taxes.

While the Biden administration has repeatedly claimed that it will only seek to raise taxes on the wealthy, a government of the size that it’s seeking would require amounts of money that can only be generated through steep across-the-board tax increases on middle-class Americans.

Regardless of whether those taxes are levied tomorrow or in a few years, they would be an inevitable part of expanding the size and scope of the federal government.

Rather than continuing down the path of centralized power and socialism, lawmakers should recognize the costs associated with endless federal spending and chart a course toward financial responsibility and prosperity.

If they don’t, it will be the public’s duty to hold them accountable.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we will consider publishing your remarks in our regular “We Hear You” feature.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell article Big-Government Republicans Enable Big-Government Democrats

Big-Government Republicans Enable Big-Government Democrats

I get asked why I frequently criticize Republicans.

My response is easy. I care about results rather than rhetoric. And while GOP politicians often pay lip service to the principles of limited government,they usually increase spending even faster than Democrats.

Indeed, Republicans are even worse than Democrats when measuring the growth of domestic spending!

This is bad news because it means the burden of government expands when Republicans are in charge.

And, as Gary Abernathy points out in a column for the Washington Post, Republicans then don’t have the moral authority to complain when Democrats engage in spending binges.

President Biden is proposing another $3 trillion in spending… There are objections, but none that can be taken seriously. …Republicans had lost their standing as the party of fiscal responsibility when most of them succumbed to the political virus of covid fever and rubber-stamped around $4 trillion in “covid relief,”… With Trump out and Biden in, Republicans suddenly pretended that their 2020 spending spree happened in some alternate universe.But the GOP’s united opposition to Biden’s $1.9 trillion package won’t wash off the stench of the hypocrisy. …I noted a year ago that we had crossed the Rubicon, that our longtime flirtation with socialism had become a permanent relationship. Congratulations, Bernie Sanders. The GOP won’t become irrelevant because of its association with Trump, as some predict. It will diminish because it is bizarrely opposing now that which it helped make palatable just last year. Fiscal responsibility is dead, and Republicans helped bury it. Put the shovels away, there’s no digging it up now.

For what it’s worth, I hope genuine fiscal responsibility isn’t dead.

Maybe it’s been hibernating ever since Reagan left office (like Pepperidge Farm, I’m old enough to remember those wonderful years).

Subsequent Republican presidents liked to copy Reagan’s rhetoric, but they definitely didn’t copy his policies.

  • Spending restraint was hibernating during the presidency of George H.W. Bush.
  • Spending restraint also was hibernating during the presidency of George W. Bush.
  • And spending restraint was hibernating during the presidency of Donald Trump.

I’m not the only one to notice GOP hypocrisy.

Here are some excerpts from a 2019 column in the Washington Post by Fareed Zakaria.

In what Republicans used to call the core of their agenda — limited government — Trump has been profoundly unconservative. …Trump has now added more than $88 billion in taxes in the form of tariffs, according to the right-leaning Tax Foundation. (Despite what the president says, tariffs are taxes on foreign goods paid by U.S. consumers.) This has had the effect of reducing gross domestic product and denting the wages of Americans.…For decades, conservatives including Margaret Thatcher and Ronald Reagan preached to the world the virtues of free trade. But perhaps even more, they believed in the idea that governments should not pick winners and losers in the economy… Yet the Trump administration…behaved like a Central Planning Agency, granting exemptions on tariffs to favored companies and industries, while refusing them to others. …In true Soviet style, lobbyists, lawyers and corporate executives now line up to petition government officials for these treasured waivers, which are granted in an opaque process… On the core issue that used to define the GOP — economics — the party’s agenda today is state planning and crony capitalism.

Zakaria is right about Republicans going along with most of Trump’s bad policies (as illustrated by this cartoon strip).*

The bottom line is that Republicans would be much more effective arguing against Biden’s spending orgy had they also argued for spending restraint when Trump was in the White House.

P.S. It will be interesting to see what happens in the near future. Will the GOP be a small-government Reagan party or a big-government Trump party?

Or maybe it will go back to being a Nixon-type party, which would mean bigger government but without mean tweets. And there are plenty of options.

If they make the wrong choice (anything other than Reaganism), Margaret Thatcher has already warned us about the consequences.

*To be fair, Republicans also went along with Trump’s good policies. It’s just unfortunate that spending restraint wasn’t one of them.

—-

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]

Dan Mitchell rightly noted about Biden’s stimulus: “We’re now saddled with a bigger burden of government spending”

The Biden Stimulus was very Wasteful!
Below is a portion of a great article by Dan Mitchell:

More Stimulus Failure

According to data on jobs and growth, President Obama’s so-called stimulus was a failure.

But at least politicians and bureaucrats were able to concoct new and clever ways to waste money. Including research grants tointerview people about their sexual histories and to study erectile dysfunction.

In other words, stimulus spending on stimulus (though at least we did get some clever humor in exchange for nearly $1 trillion of wasted money).

Now we’re wasting nearly $2 trillion on Biden’s spending spree.

.But I’m a policy nerd, so I’m focused on how we’re now saddled with a bigger burden of government spending.

The problem is much bigger than the humorous/irritating example discussed above.

In a column for the Foundation for Economic Education, Brad Polumbo shares some big-picture data on how politicians have squandered our money.

Whenever the government spends money, a significant portion is lost to bureaucracy, waste, and fraud. But the…unprecedented scope of federal spending in response to the COVID-19 pandemic—an astounding $6 trillion total—has led to truly unthinkable levels of fraud. Indeed, a new report shows that the feds potentially lost $200 billion in unemployment fraud alone.…More than $200 billion of unemployment benefits distributed in the pandemic may have been pocketed by thieves… To put that $200 billion figure in context, it is equivalent to $1,400 lost to fraud per federal taxpayer. (There goes your stimmy check!) Or, comparing it to the $37 billion the federal government spent on vaccine and treatment development, it’s more than five times more lost to fraud than went to arguably the most crucial COVID initiative of all. That’s just scratching the surface. According to the American Enterprise Institute, “unemployment fraud” now ranks as the 4th biggest federal COVID expenditure out of more than 17 different categories.

If you’re a taxpayer, hundreds of billions of dollars in fraud sounds like a bad outcome.

But if you’re a Keynesian economist, it’s not a problem. All they care about is having the government borrow and spend a bunch of money. They think that making government biggerautomatically generates benefit for the economy, even if the money goes to thieves and crooks.

I’m not joking. This is why people like Paul Krugman said a fake attack by space aliens would be good for the economy because Washington would spend a bunch of money in response.

And it’s why Nancy Pelosi actually said the economy benefits if we subsidize joblessness.

Waiving PAYGO on $1.9T ‘Stimulus’ Is Reckless. There Are Better Ways to Go.

Rep. John Yarmuth, D-Ky., seen here July 10, 2019, is calling for pretending that the deficit-financed spending spree for special interests in the $1.9 trillion so-called American Rescue Plan never occurred for PAYGO purposes. (Photo: Bill Clark/CQ-Roll Call/Getty Images)

President Joe Biden’s $1.9 trillion “American Rescue Plan” was passed under the guise of responding to COVID-19. In reality, less than 10% of the bill was for public health.

The massive “stimulus” package was stuffed with partisan special-interest payoffs for liberal priorities and other wasteful spending.

Significantly, the law will spend nearly $1.9 trillion without a plan to pay for it. That means that, unless Congress passes new laws with equal or greater reductions in spending by the end of the year, statutory pay-as-you-go (aka “PAYGO”) enforcement will kick in.

The basic premise of statutory PAYGO is straightforward. In the words of former President Barack Obama, who championed the policy and signed it into law, it tells Congress: “You can’t spend a dollar unless you cut a dollar elsewhere.”

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If, over the course of a year, laws are enacted that are projected to increase the deficit, statutory PAYGO requires that deficit increase to be paid for by automatic spending reductions (known as sequestration) over the next several years.

However, most spending accounts and programs are exempt from sequestration.

The law has fairly significant flaws, and it would be better to replace it with a more robust fiscal rule that more effectively restrains excessive spending. Politicians of both parties have abused loopholes, adding higher spending without paying for it.

The Congressional Budget Office estimated that because of the large amount of spending in the stimulus law, statutory PAYGO would require a sequestration order to reduce spending by $381 billion next January.

That actually exceeds the total amount of the spending accounts that are subject to sequestration because most major programs are exempted or are capped.

Now that Democrats have enacted their $1.9 trillion spending binge, they do not want to pay for it.

Rep. John Yarmuth, D-Ky., chairman of the House Budget Committee, has introduced a bill that would declare that the stimulus bill “shall not be counted” on the PAYGO scorecard. In effect, it would attempt to pretend that the deficit-financed spending spree for special interests never occurred.

The bill is pitched as a “legislative fix to avert sequestration.” It isn’t a “fix.” It is fiscal recklessness.

Yarmuth said, “If Republicans play political games and don’t do their jobs, Medicare and the seniors that depend on it will pay the price.”

Of course, nothing could be further from the truth.

The CBO estimates that the sequestration order could reduce total Medicare payments to providers and insurance companies by just 4% of the $943 billion that will be spent on Medicarenext year.

Not a single Republican voted for the stimulus. The limited reductions in Medicare spending as a result of the Democrats’ overspending would be enforced by the terms of Obama’s statutory PAYGO law and carried out by Biden’s director of the Office of Management and Budget.

Members of Congress who voted against the irresponsible $1.9 trillion spending bill should not feel pressured to excuse that fiscal recklessness by voting to waive statutory PAYGO enforcement. Simply waiving it retroactively would be just as irresponsible as the spending bill itself.

The potential of sequestration does, however, present an opportunity to implement much-needed fiscal responsibility in a more thoughtful way.

There are a number of smart policy alternatives to achieve spending reductions of equal or greater amounts of savings over time than would the blunt instrument of a sequestration order:

It’s vital that policymakers start to turn the tide against overspending. Even before the outbreak of COVID-19, the federal budget was on an unsustainable path due to the growth of spending outpacing the growth of the economy.

The CBO’s “Long-Term Budget Outlook” showsthat even though tax revenues are projected to rise above normal historical levels, spending will continue to grow out of control.

The national debt has skyrocketed to $28 trillion, about $225,000 per American household. The public debt is already at its highest level relative to the national economy since World War II, but unlike the postwar period when spending fell back to more normal levels, spending and debt are projected to only continue rising.

The CBO says that the current fiscal trajectory would “reduce business investment and slow the growth of economic output,” and would “increase the risk of a fiscal crisis.” But more important are the negative consequences of government that grow too large and burdensome for families and communities.

When the federal government grows beyond its proper limits, and spends and taxes too much, it stifles prosperity, infringes on liberty, and makes it more difficult to live the American dream.

Given all that is at stake, pretending the $1.9 trillion spending bill never happened and retroactively waiving statutory PAYGO enforcement would be beyond irresponsible. However, Congress can and should take advantage of the opportunity to implement thoughtful fiscal responsibility.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we will consider publishing your remarks in our regular “We Hear You” feature.

March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

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