Commentary Magazine


Topic: taxes

Obama’s Budget and Our Potemkin Politics

After President Obama’s State of the Union address, I noted that even partisan-left media outlets were unwilling to play along with Obama’s self-serving framing of his foreign policy. Now Obama’s getting the same treatment on domestic policy as well. It’s a rude awakening for a president so accustomed to being treated with kid gloves by an adoring media, and a sure sign he’s officially a lame duck.

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After President Obama’s State of the Union address, I noted that even partisan-left media outlets were unwilling to play along with Obama’s self-serving framing of his foreign policy. Now Obama’s getting the same treatment on domestic policy as well. It’s a rude awakening for a president so accustomed to being treated with kid gloves by an adoring media, and a sure sign he’s officially a lame duck.

Obama has released his proposed budget, and commentators have been mostly unable to stifle their disbelief. To be fair, part of the reason Obama’s budget is so unrealistic is that the Republicans currently control Congress, so it has no chance of passing. But in truth, that probably doesn’t change its chances so much as it gives the president and his party’s populists an excuse to claim Republican intransigence. Many Democrats surely don’t want to be put in a position to vote for the taxman’s anthem that is this budget document.

Here, via the New York Times, are some of the ways it’s being received by the left. A Times reporter’s description of its content:

President Obama presented a budget on Monday that is more utopian vision than pragmatic blueprint. It proposes a politically improbable reshaping of the tax code and generous new social spending initiatives that would shift resources from the wealthy to the middle class.

The same reporter’s take on what it’s missing:

Absent from the plan is any pretense of trying to address the main drivers of the long-term debt — Social Security and Medicare — a quest that has long divided both parties and ultimately proved impossible. The document instead indicates that Mr. Obama, after years of being hemmed in on his fiscal priorities because of politics and balance sheets, feels newly free to outline an ambitious set of goals that will set the terms of a debate between Democrats and Republicans and shape the 2016 presidential election.

A former economic advisor to Vice President Biden’s opinion of it:

“It’s a visionary document and basically says, ‘You’re with me or you’re not,’ and we can have big philosophical arguments about the role of government, and perhaps in 2016 we will,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former top economic adviser to Vice President Joseph R. Biden Jr.

Back to the Times reporter on Obama the Bipartisan Healer:

Yet the budget confirms that for Mr. Obama, the era of searching for a “grand bargain” with Republicans on entitlements and spending — an exercise that alienated liberal Democrats who were loath to consider any measure to rein in Medicare and Social Security — is over.

And all this, believe it or not, is still a favorable reading of it. The Times repeats uncritically the president’s propagandistic declarations of “middle-class economics” and that the bill’s tax increases would hit “the rich” without investigating how these taxes and fees would end up on the shoulders of the “middle class”–to say nothing of the president’s own shots at confiscating middle-class cash, like his ill-fated 529 plan.

And it also takes as Gospel the idea that Obama has truly been searching, in good faith, for grand bipartisan solutions. The lesson of Obama’s first six years, with occasional exceptions, is that “bipartisan” to Obama means that Republicans vote for his policies. The Democrats have shown they can file legislation without Republican input and without Republican amendments with a clear conscience. And during the rare times when Democrats and Republicans really were negotiating in good faith for a deal, Obama showed a propensity to sabotage those talks or poison the well.

So it might be more accurate to say that the era of pretending to search for a “grand bargain” is officially over. And that, in its own way, is the one honest aspect of the budget. The rest is theater. And theater is, increasingly, what national politics has become.

There’s the State of the Union itself, which is clear pageantry made all the more intolerable by the orchestrated applause and non-applause, standing and sitting, laughing and scowling from the congressional audience. There are the presidential nominating conventions, which are devoid of drama of any kind. (Though the Democrats’ 2012 convention did have that one hectic unscripted moment when the party’s delegates angrily voted down adding pro-Israel language to the party’s platform.)

And now we have Potemkin budgets, constructed to look pretty but act as a façade to cover the ideological ruins behind it. Except by year seven the press gets tired of playing along, even for Obama.

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In Praise of Ted Cruz

In the past I’ve been critical of Texas Senator Ted Cruz, but in his questioning of President Obama’s choice for attorney general, Loretta Lynch–which occurred during her confirmation hearing before the Senate Judiciary Committee–was not just skillful but superb.

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In the past I’ve been critical of Texas Senator Ted Cruz, but in his questioning of President Obama’s choice for attorney general, Loretta Lynch–which occurred during her confirmation hearing before the Senate Judiciary Committee–was not just skillful but superb.

Senator Cruz’s tone was respectful but firm. He stayed away from theatrics and polemics. He didn’t personalize the line of inquiry. In doing so, he kept the focus right where it needed to be.

But more than that, Senator Cruz exposed the lawlessness that is at the core of President Obama’s executive amnesty, and he did so in a logical, step-by-step manner. Senator Cruz started with the fact that Ms. Lynch supports what the president did, and then probed her thinking in order to find out what limits there are on the government’s power, if any at all. What he found is that there are none–at least none that are rooted in the Constitution and anything more than arbitrary parameters and presidential whim. If the president wants to provide amnesty to five million illegal immigrants, then why not 12 million? What’s to stop him? Senator Cruz wanted to know. Ms. Lynch had no answer.

What about the Obama administration printing millions of work authorizations in direct conflict with federal law? Is that a problem? Ms. Lynch was unwilling to say. And then Senator Cruz put forward a devastating hypothetical. Assume that in 2017 President John Cornyn instructs his secretary of the treasury not to collect any taxes in excess of 25 percent, based on “prosecutorial discretion.” Or that President Cornyn broadens his ambitions and decides, using the infinitely elastic Obama-era definition of prosecutorial discretion, he won’t enforce federal labor laws and environmental laws? Once again, Ms. Lynch had nothing to say, no defense to offer.

What Senator Cruz did was to reveal Mr. Obama’s utter disdain for the Constitution and what a fundamentally lawless and capricious president he is. He showed that Mr. Obama views himself in possession of kingly powers. And he demonstrated that there are simply no checks on government power, at least according to the legal theory that is guiding the Obama administration.

This is the progressive vision–radical, unmoored, dismissive of the Constitution, and indifferent to the rule of law–and it’s being realized in the Obama presidency. It’s to his credit that Ted Cruz exposed this in his short colloquy with the woman who wants to be America’s next attorney general.

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Lame Duck? Yes. Boehner Halts Obama’s Brief Winning Streak.

The prevailing political narrative of the last few weeks has been all about how President Obama has seized the initiative back from the Republican victors in November’s midterms. But the president’s winning streak—at least as far as prevailing in the daily struggle to dominate the news cycle—may be over. Though most accounts of the State of the Union followed the White House talking points that claimed his proposals would help the middle class, the fact that one of them would have taken away a key college savings plan that helped ordinary taxpayers did not escape the attention of the public or his Republican foes. As a result of the anger the idea generated, the president waved the white flag on the idea today and withdrew his proposal to eliminate 529 college savings accounts. Though much of the rest of his Robin Hood budget that is long on left-wing populist rhetoric and short on economic sense won’t be passed either, this particular defeat demonstrated just how disingenuous the president’s pose as defender of the middle class truly was.

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The prevailing political narrative of the last few weeks has been all about how President Obama has seized the initiative back from the Republican victors in November’s midterms. But the president’s winning streak—at least as far as prevailing in the daily struggle to dominate the news cycle—may be over. Though most accounts of the State of the Union followed the White House talking points that claimed his proposals would help the middle class, the fact that one of them would have taken away a key college savings plan that helped ordinary taxpayers did not escape the attention of the public or his Republican foes. As a result of the anger the idea generated, the president waved the white flag on the idea today and withdrew his proposal to eliminate 529 college savings accounts. Though much of the rest of his Robin Hood budget that is long on left-wing populist rhetoric and short on economic sense won’t be passed either, this particular defeat demonstrated just how disingenuous the president’s pose as defender of the middle class truly was.

As Seth Mandel noted last week, the elimination of the 529 accounts had little to do with helping middle-class taxpayers or promoting education. The point of the plan was to expand the power of government and its loan racket that exploits the students it purports to help.

Obama’s apologists at the New York Times tried to spin this attack on those trying to save for college as somehow a break for them since the administration claimed that other proposals would offset this loss. But what taxpayers know is that such deals always backfire. New breaks may or may not have worked out as the president claimed. But the elimination of the 529 accounts would have been permanent. In the game of tax breaks, citizens are always playing against the house in a government casino where the house always wins.

So it was little surprise that Republicans planned to resist the plan with Speaker John Boehner demanding that the president withdraw his proposal before the House even considered the rest of the budget. But what happened in the last week is that even Democrats understood that what Obama was trying to shove down the nation’s throat was a knife in the back to those trying to save for their children’s college education. In the end, the White House had no choice but to give up.

Obama’s executive orders on immigration and boasts about recent good economic news helped fuel an aggressive approach that has given the press the impression that the president can avoid being a lame duck in the last two years of his second term. But no amount of spin or high-handed extra-constitutional actions can enable the president to impose all of his agenda on the nation. Nor can the near unanimous applause of the media allow him to sell a measure that strips taxpayers of one of their few defenses against the ravages of the Internal Revenue Service as a gift to them.

This was more than what even the Times termed a “flubbed launch.” It was a crucial moment that exposed the presidential Merry Men as mere thieves preying on the middle class, not its saviors. Conservatives who have been back on their heels this month should take heart. The Obama comeback remains what it has always been: mere smoke and mirrors designed to spin the weakest recovery since the Second World War as a time of prosperity and an excuse for more liberal looting of the Treasury and citizens’ wallets. Boehner’s successful demand shows that he’s still in charge of the budget and Obama really is a lame duck.

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Robin Hood Would Be an Improvement

Tonight, President Obama plans to announce some budget outlines in his State of the Union address. One of those goals will be to make a college education all but unaffordable to anyone but the wealthy. He won’t use those words, of course. But it puts the lie to the copycat “analysis” of the president’s cruel budget that he is somehow playing Robin Hood by taking from the rich to give to the poor. Though I generally don’t mind any analogy that correctly paints confiscatory taxes in the service of crony capitalism as theft, in this case the truth is that Robin Hood would be a vast improvement.

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Tonight, President Obama plans to announce some budget outlines in his State of the Union address. One of those goals will be to make a college education all but unaffordable to anyone but the wealthy. He won’t use those words, of course. But it puts the lie to the copycat “analysis” of the president’s cruel budget that he is somehow playing Robin Hood by taking from the rich to give to the poor. Though I generally don’t mind any analogy that correctly paints confiscatory taxes in the service of crony capitalism as theft, in this case the truth is that Robin Hood would be a vast improvement.

The court stenographers at the Washington Post played along over the weekend, “reporting” on Obama’s State of the Union proposals by parroting talking points. The lede: “President Obama plans to propose raising $320 billion over the next 10 years in new taxes targeting wealthy individuals and big financial institutions to pay for new programs designed to help lower- and middle-income families, senior administration officials said Saturday.”

As is generally the case with this administration, the actual reporting had to be done by those outside the mainstream press. Ryan Ellis at Americans for Tax Reform explained five different tax increases sought by the president. And surprise, surprise–they don’t all target those who make up the richest of the rich and are therefore the Democrats’ cash piñatas.

The taxes include an increase in the death tax, proving that Democrats still adhere to Miracle Max’s advice that the only thing to be done with a man who is “all dead” is to “go through his clothes and look for loose change.” It will also include a bank tax that will be passed along to the bank’s customers, as well as a new tax on retirement savings. But the worst among them is probably the tax on education. (Morally speaking, the death tax is probably the “worst,” since organized grave robbing is generally frowned upon in the civilized world. The education taxes are the “worst” from the standpoint of their dishonesty and their burden on those least able to shoulder it.)

Here’s Ellis:

Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college.

Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college. This was the law prior to 2001.

This is remarkably grotesque policymaking, because of how it builds on the Obama administration’s general attitude toward paying for higher education. The federal student loan bubble has artificially inflated the cost of tuition. It doesn’t lower college costs, it merely defers them after increasing them. The government’s approach to paying for college is a loan racket that sees young people taking on mountains of debt to pay for the salaries of administrators and tenured professors.

The goal is not education, either, as much as it is about selling a piece of paper that has become a prerequisite for participation in much of the economy. In other words, while students are being sent to college ostensibly to get an education, the government sees it as a licensing scheme. If and when the bubble bursts, taxpayers will be on the hook for the inevitable bailout.

So it’s already an immoral status quo, held up and protected by liberal establishment politicians, like Obama. But Obama’s tax plan would make the system even less fair. Thanks to the government’s role in ballooning tuition costs, college savings accounts can be crucial to anyone who doesn’t have the disposable income to toss off tens of thousands of dollars a year per student.

So what does Obama do? He attacks the last bastion of college affordability, the savings account. In a follow-up piece at Forbes, Ellis notes that the tax change that made college savings accounts more advantageous were part of George W. Bush’s tax relief for the middle class. Ellis writes:

The 2001 tax law change which the Obama budget repeals resulted in an explosion of mass participation in 529 plans. According to the College Savings Network, taxpayers responded to the changes virtually overnight. Assets in 529 plans doubled from 2001 to 2002 (from $13 billion to $26 billion) and began their fast march to the quarter-trillion dollar level we see today. The total number of accounts grew from 2.4 million in 2001 to 4.4 million just a year later in 2002. There’s every reason to believe that taxpayers will snap back almost as quickly.

The good news is that Obama’s financial abuse of the middle class and poor has to pass Congress (at least until Obama discovers executive authority for that too). Congress is in the hands of the Republicans, but even many Democrats will balk at further blurring the boundaries between the modern welfare state and an organized crime syndicate. But it does give the country a glimpse into the cruelty awaiting them if Congress weren’t standing in the way.

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Who’s the Real Extremist? Obama or GOP?

The prevalent narrative of Washington politics over the last two years has been one in which Republican hardliners have consistently torpedoed efforts to reconcile the two parties. The Tea Party has been the scapegoat for D.C. gridlock as efforts to derail ObamaCare and other aspects of President Obama’s agenda have been highlighted as proof of this faction’s disdain for compromise and any notion of accommodation with those across the political aisle. Their suicidal charge into the government shutdown in the fall of 2013 was treated, perhaps not unfairly, as not only evidence of a lack of political judgment but also their disdain for the notion of governance itself. But by presenting a political agenda tonight in his State of the Union speech that is as ideological and divorced from political reality as anything cooked up by bitter-end Tea Partiers like Rep. Louis Gohmert, President Obama will demonstrate that it is not just the GOP that must cope with extremists. The Democrats’ obstructionists are not their House backbenchers. Rather, it is their leader who is most determined to widen the divide between the parties and make Washington ungovernable.

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The prevalent narrative of Washington politics over the last two years has been one in which Republican hardliners have consistently torpedoed efforts to reconcile the two parties. The Tea Party has been the scapegoat for D.C. gridlock as efforts to derail ObamaCare and other aspects of President Obama’s agenda have been highlighted as proof of this faction’s disdain for compromise and any notion of accommodation with those across the political aisle. Their suicidal charge into the government shutdown in the fall of 2013 was treated, perhaps not unfairly, as not only evidence of a lack of political judgment but also their disdain for the notion of governance itself. But by presenting a political agenda tonight in his State of the Union speech that is as ideological and divorced from political reality as anything cooked up by bitter-end Tea Partiers like Rep. Louis Gohmert, President Obama will demonstrate that it is not just the GOP that must cope with extremists. The Democrats’ obstructionists are not their House backbenchers. Rather, it is their leader who is most determined to widen the divide between the parties and make Washington ungovernable.

Much will be written today and tomorrow about the president’s “Robin Hood” tax plan in which the wealthy will be taxed to supposedly benefit the middle class, even though the details of his scheme reveals that many of those who are not rich will also bear the burden of this plan. Though couched in fresh rhetoric about inequality, the entire package must be understood as nothing more than recycled class warfare and big government tax and spend policies familiar to Americans from generations of failed liberal experiments.

Some see this new populism as an attempt by the president to invest his new and more favorable poll ratings so as to put the new GOP Congress on the defensive. This will transform him from a pure lame-duck president to one who will be able to thwart the legislative branch in any effort to put forth a Republican vision for the country. Others less convincingly see it as a trial run for the ideas that could help Hillary Clinton win the 2016 presidential election, a theory that ignores Obama’s egoism, a characteristic that must be taken into account when discussing anything done by the White House.

But no matter what the reasons for this strategy or whether, as liberals hope, it will serve as the foundation for future debates in their efforts to turn back the page to the era of unabashed big government and income redistribution efforts, Obama’s decision to tack hard to the left must also be seen in the context of the ongoing discussion about how to make Washington less dysfunctional.

Let’s be frank. If Tea Partiers were bashed for prizing their ideological purity over the obligation to work for consensus and compromise, what then should we think about a president who is equally unconcerned with working with a Republican Congress?

Nobody expects Obama to present Congress with a conservative wish list or to bow down to GOP demands on issues where he disagrees. But by presenting his own wish list that is as ideologically extreme as anything uttered by Ted Cruz, it’s impossible to avoid the conclusion that he is as unconcerned with compromise as that firebrand. So why isn’t his agenda being viewed in the same light as that of the Tea Party?

First of all, he’s the president and there’s a big difference between presenting a set of proposals from the bully pulpit of the State of the Union address and one put forward by a mere representative or senator. The president is in a unique position to steer the debate and it is only natural that he be given a certain degree of deference to do that.

But the president’s proposals aren’t merely a statement of his vision for the country. They are a salvo fired in the direction of a Congress that was just elected to pursue a completely different vision. Better presidents than Barack Obama have been presented with similarly difficult positions and responded, as did Bill Clinton, with an attempt to find common ground rather than a slap in the face. Rather than laying the foundation for the election of a second President Clinton or bolstering a legacy that is mere ephemera, the only real purpose of this raft of tax and spend ideas is to win the current news cycle and discomfit his opponents. The one aspect of being president at which Barack Obama has always excelled is campaigning and pure partisan politics.

Obama made no effort to discuss his proposals with the leadership of the House or the Senate or to get their input because they are not being presented with the idea that they will get serious consideration. They are mere rhetorical aspirations, words that mean nothing.

If that is how the president wishes to spend the public’s time at the annual event, that is his privilege. But if the public disdains Republicans for being obstructionists who don’t care about working with their opponents, then the question arises as to why Obama’s speech is being presented as being any different from their efforts. The answer is that the same liberal media bias that has been an essential element to the president’s ability to survive scandal and failure is acting as his safety net again.

As much as the public blames Congress and dislikes the Republicans for their devotion to their principles, it is not unfair to ask the mainstream media that is heralding Obama’s proposals as another installment of the New Deal to ask themselves if there is any real difference between his ideological rigidity and that of his opponents. The honest answer, and one we’re not hearing or reading much about today, is that there is none. The obstructionist-in-chief’s “Robin Hood” plan for government will do as much to make compromise impossible as any Ted Cruz speech or the actions of House Tea Partiers and is as unlikely to become law as any Tea Party manifesto. The 2015 edition of the State of the Union speech is merely more evidence that Obama is guilty of the same sin for which his foes have been routinely denounced over the course of his presidency.

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End of an Error

On October 30, 2008, Barack Obama, sensing victory in the upcoming election, said with characteristic self-effacement that “We are five days away from fundamentally transforming the United States of America.” A good many people (but not enough, alas) wondered why the most successful country in the history of the world needed to be transformed at all, let alone fundamentally.

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On October 30, 2008, Barack Obama, sensing victory in the upcoming election, said with characteristic self-effacement that “We are five days away from fundamentally transforming the United States of America.” A good many people (but not enough, alas) wondered why the most successful country in the history of the world needed to be transformed at all, let alone fundamentally.

Which is not to say that the country didn’t need reform in many areas, beginning with the federal government itself. It had not been reorganized since the Truman era, which predated the electric typewriter let alone the digital revolution. The barnacles of decades of congressional piecemeal action had produced a bloated, duplicative, inefficient mess. The budget process needed to be reformed in order to get control of the government’s finances. Social Security and other entitlement programs needed to be reformed before they went broke or bankrupted the country. The tax system had metastasized over the previous century into an incoherent, arbitrary, and deeply unfair quagmire that benefited only politicians’ reelection efforts and those able to make large political contributions to them in exchange for favorable treatment.

But Barack Obama sought reform in none of these areas, instead just pushing the tired old liberal agenda and for the most part getting nowhere with it. Instead of reforming the budget process, he and his Democratic allies in Congress totally ignored it and there has been, quite literally, no budget process for the last six years, just a series of continuing resolutions. His only reform for entitlement programs was to add a new one, pushed through Congress with the very old-fashioned use of political muscle over the howls of both the opposition and the people in general. ObamaCare remains deeply unpopular.

As for taxes, his one idée fixe has been to raise taxes on the rich, an idea that goes back to the 1840s. Consider his proposal regarding inherited property, to be unveiled in the State of the Union speech this Tuesday. It calls for heirs to inherit not only the property but also the original cost basis of the property, subjecting it to far higher capital gains taxes when the heirs sell it. As it stands now, the heirs’ cost basis is the price on the date of death.

But the heirs of large estates would have already paid as much as a whopping 40 percent under the estate tax, which is nothing more nor less than a capital gains taxes triggered by death instead of sale. Obama also wants to raise the capital gains tax to 28 percent, so the total tax take might be as high as 56.8 percent. But many capital assets, such as real estate and shares in a company founded by the decedent, are held for decades and the capital gains and estates taxes are not indexed for inflation.

So much of the value taxed away would be illusory, a tax on phantom gains. An investment worth $1 million in 1970 would have to be worth $6.1 million today for there to be any real gain at all. That won’t stop the president from calling his proposal “fair” and “the right thing to do.” It is, of course, neither, just the same century-old leftist, stick-it-to-the-rich boilerplate.

Fortunately these proposals have zero chance of getting through the new Republican Congress. Still, it’s going to be a long two years until January 20, 2017, a date that will mark what my new favorite bumper sticker calls ‘The End of an Error.”

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NYT on Garner: We Should Have Bad Laws Just Not Enforce Them

To read the New York Times today on the tragic death of Eric Garner is to forget, momentarily, the ideological canyon between right and left in America. Conservatives have not been shy about expressing their outrage both at the excessive force used by police against Garner and at the seemingly bizarre grand jury decision not to indict the officer responsible, despite the video evidence, as the Times reports in its news pages today. Conservatives have also criticized the unintended–and in this case, as in others, deadly–consequences of bad laws. Liberals have pushed back on this, but conservatives got an unexpected (and, one suspects, unintentional) note of support from the New York Times editorial page.

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To read the New York Times today on the tragic death of Eric Garner is to forget, momentarily, the ideological canyon between right and left in America. Conservatives have not been shy about expressing their outrage both at the excessive force used by police against Garner and at the seemingly bizarre grand jury decision not to indict the officer responsible, despite the video evidence, as the Times reports in its news pages today. Conservatives have also criticized the unintended–and in this case, as in others, deadly–consequences of bad laws. Liberals have pushed back on this, but conservatives got an unexpected (and, one suspects, unintentional) note of support from the New York Times editorial page.

Garner was being confronted by police in the first place because he was selling “loosies”–individual cigarettes. The black market for cigarettes was created by New York’s insanely high tax on cigarettes, a so-called “sin tax” because it is meant to dissuade citizens from behavior the state considers too harmful to themselves. It is a way for the nanny state to exert more control over people and to satisfy its desire to use citizens as guinea pigs in a big-government social engineering scheme. The cigarette tax is an effectively regressive tax on low-income communities. The state then sends the police to these low-income communities to enforce it.

Liberals are quite fond of social engineering and taxing low-income communities to grow their leviathan. But liberals aren’t so fond of police. Conservatives have pointed out that this is one of the many contradictions at the heart of modern liberalism. They have used the Garner case to point out that using the state’s enforcers to hassle citizens over bad laws can be deadly. This is unquestionably true, and the Garner case is one example.

That doesn’t negate a possible racial angle–the liberals’ tax scheme, after all, means minorities will be targeted in addition to the already fraught relationship between the police and the black community. And it doesn’t exonerate the police, especially since they apparently used a banned hold on Garner which caused his death. It’s just one factor to consider, and it’s one with a clear policy angle as well.

Today, however, conservatives should read the New York Times editorial on Garner. The Times is a far-left voice, and a reflexive one at that, so you don’t usually need to read the dumbed-down DNC press releases they pass off as editorials. But today’s is interesting. The editorialists mainly focus on the use of excessive force. But then they offer this quite revealing paragraph:

The Garner killing must lead to major changes in policy, particularly in the use of “broken windows” policing — a strategy in which Officer Pantaleo specialized, according to a report in September by WNYC, which found that he had made hundreds of arrests since joining the force in 2007, leading to at least 259 criminal cases, all but a fraction of those involving petty offenses. The department must find a better way to keep communities safe than aggressively hounding the sellers of loose cigarettes.

Read that last sentence again: “The department must find a better way to keep communities safe than aggressively hounding the sellers of loose cigarettes.” In other words, this law should be on the books but cops shouldn’t enforce it.

High regulatory burdens that contradict market demands result in black markets. We don’t have quite the problem with this that some of our European friends do because we haven’t completely abandoned market economics for the administrative state. But we’re getting closer, as the Western left’s program demands. And as we get closer, the left is beginning to notice that the financial burden of a high-tax, overly regulated government is not only shouldered by “Big Oil” or Wall Street or other bogeymen.

Those burdens–especially of taxes, as everybody knows–filter down to those the New York Times’s editors write about with empathy but in whose neighborhoods they would never choose to live. So the Garner case is giving them a window into the sometimes-deadly unintended consequences of the administrative state. Conservatives want to alleviate that burden, and the left won’t speak of it.

But who sounds more compassionate, more rational, more reality-based here? The liberal position, such as that of the New York Times, is that we should have bad laws but not enforce them, undermining the rule of law and creating new classes of criminals in the process. The conservative position is that we shouldn’t have dumb laws, or else that we should reform them.

Of course, conservatives could easily troll the left here and use the left’s argument against them: “If it saves one life…” But the policy stands on its own without resorting to hyperbole: if you overburden your citizens and turn them into classes of criminals and seek to enforce those laws you will send the police after them. This isn’t complicated. And the New York Times, against its own instincts, seems to grasp that.

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Elizabeth Warren Strikes a Pose–And the Establishment Strikes Back

Thanks to a recent controversy over an Obama administration nominee to serve in a key post at the Treasury Department, two lingering questions about Elizabeth Warren’s place in the Democratic Party have been answered. Warren is the leader of the populist wing of the party, which–faced with the prospect of their party leadership going all-in on the soulless crony capitalism of the Clintons–hope to see a Warren presidential candidacy. But to gauge Warren’s appeal, two questions had to be answered: Does the Democratic establishment see her as a threat or a sideshow? And does her populism have a serious economic foundation or is it airy claptrap?

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Thanks to a recent controversy over an Obama administration nominee to serve in a key post at the Treasury Department, two lingering questions about Elizabeth Warren’s place in the Democratic Party have been answered. Warren is the leader of the populist wing of the party, which–faced with the prospect of their party leadership going all-in on the soulless crony capitalism of the Clintons–hope to see a Warren presidential candidacy. But to gauge Warren’s appeal, two questions had to be answered: Does the Democratic establishment see her as a threat or a sideshow? And does her populism have a serious economic foundation or is it airy claptrap?

Warren has given us insight into those questions with her forceful opposition to President Obama’s nomination of Antonio Weiss to serve as under secretary of Treasury for domestic finance. For this president, Weiss has the one clear credential necessary: he’s a rich Obama donor. It’s unclear whether Obama even saw the rest of the resume.

But Warren did. She saw that Weiss serves as an advisor to the investment bank Lazard. And more importantly to Warren, Weiss was apparently an advisor to the recent merger of Burger King and Tim Hortons, the latter based in Canada. The deal was initially thought to be a kind of tax “inversion,” in which a company relocates in order to escape onerous U.S. taxes. This is entirely rational behavior.

But it does not appear to be what Burger King was doing in this case. As Matt Levine explained in Bloomberg, for U.S. companies the inversion strategy “will vary in direct proportion to how much business you do in the U.S. and how much you do” elsewhere in more competitive tax environments. The majority of Burger King’s business is done in the U.S. and Canada, not tax shelters. And Burger King is not a pharmaceutical company, Levine notes: “You can’t really assemble a burger in Bermuda and then sell it in Canada.”

Levine also points out that “Tim Hortons and Burger King’s effective tax rates are basically the same.” And finally: “This inversion is not all that inverted. Tim Hortons is actually bigger than Burger King, on revenue and net income though not on stock market capitalization. This is not just an aesthetic point.” Indeed, it has important legal implications.

What became clear was that critics of the Burger King “inversion” didn’t initially understand the deal or U.S. tax law. This is understandable; the federal government and especially the IRS would prefer that Americans not understand these laws, because understanding them would result in 1.) outrage at the legalized theft and 2.) a reduction in the amount confiscated in penalties.

But it is not so forgivable for, say, a sitting U.S. senator on the banking committee not to understand it, because that has consequences. Elizabeth Warren does not understand inversion law, the economics of corporate relocation and merger, or how various business taxes are assessed. This is a problem. It also answers the second question about Warren: she is not an expert in her field. She is, rather, an uninformed bureaucrat who spouts vapid populism in a bid to gather ever more power for herself and the government.

Just ask, for example, the Washington Post editorial board:

To the extent we know anything about Mr. Weiss’s actual policy views, they seem consonant with Ms. Warren’s. For example, he is a co-author of a Center for American Progress tax reform paper that called for a more progressive system and $1.8 trillion in tax increases on upper-income Americans over 10 years.

The populists’ case against Mr. Weiss so far amounts to a grab-bag of symbolism and epithets, not a rationale.

Or the New York Times’s Andrew Ross Sorkin:

Ms. Warren’s wrath is misdirected, and her understanding of the so-called inversion deal on which she bases much of her opposition appears misinformed. On these issues, as she might say, “Enough is enough.” …

Unless Ms. Warren wants to prohibit all cross-border deals and pursue a nationalism agenda, it is hard to imagine any rule that would have stopped this one. It was not, as she contended, “a tax deal, plain and simple.”

Sorkin’s most enlightening detail was this:

Ms. Warren might have learned some of this if she had been willing to meet with Mr. Weiss, as is the customary process, especially among nominees from the same parties. An aide to Ms. Warren allowed that she would meet with him but that she had told the Treasury Department that she would still vote against him.

Warren didn’t know, but more than that, she didn’t want to know. She chose to remain ignorant of the relevant law so she could make a public show for her populist supporters. Those populist supporters don’t understand economics (in this they have much in common with their fellow Democrats) and therefore their support hinges on making an example out of someone who doesn’t deserve it built on falsifications and distortions. Remaining ignorant probably kept Warren’s conscience cleaner that it should have been while engaging in this behavior.

And it also answers the first question, this time in Warren’s favor. How much of a threat does the establishment perceive her to be? Enough of one to start pushing back on her tendency to demagogue on issues that deserve a fair hearing. The Democratic establishment sees the momentum Warren has and believes–almost surely correctly–that she’s still on her way up. That’s bad news for the American economy and the cause of limited and non-abusive government. But it’s also bad news for the Clinton wing of the party, even if it doesn’t end up posing a threat to Hillary Clinton herself.

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Why Jeb Bush Is Right and Grover Norquist Is Wrong

According to an article in Politico:

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According to an article in Politico:

Jeb Bush has a tax problem.

The former Florida governor has said he could accept tax increases in a hypothetical deficit-cutting deal. Never mind that he added that would come only in exchange for major federal spending cuts, or that he repeatedly cut taxes as governor.

Tax hikes are still apostasy in Republican circles, and the stance could be a big problem for Bush if he decides to seek the party’s presidential nomination in 2016.

Bush’s views are already pitting him against one of his party’s most influential activists, Grover Norquist, the high priest of anti-tax orthodoxy who’s convinced nearly every elected Republican to sign a pledge not to raise taxes.

“Mind-boggling,” Norquist said of Bush.

Actually, it isn’t, or at least shouldn’t be.

Set aside for the moment your view of Jeb Bush and the 2016 presidential race. Let’s instead examine this broader argument with some care, beginning with putting the story in context.

As Politico points out, during a June 2012 House Budget Committee hearing, Bush was asked about a theoretical deficit plan that would actually cut $10 in spending in exchange for a dollar in tax increases. This was a question first posed to Republican presidential candidates by Byron York and Bret Baier and was rejected by all eight of them. (I criticized that response at the time.) Governor Bush’s response was different than the Republicans running for president. “If you could bring to me a majority of people to say that we’re going to have $10 of spending cuts for $1 of revenue enhancement — put me in, Coach,” he said.

Note well what Bush didn’t say. He didn’t say he believed we as a nation are under-taxed. In fact Bush, as governor of Florida, had a sterling tax-cutting record, having cut them every year he was governor (a period covering eight years and totaling nearly $20 billion). What Bush said is that if you could actually get a 10-to-one ratio in spending cuts to tax increases–that after all was the premise of the thought experiment–he’d do it. So, I would think, would any conservative interested in limiting government.

I not only understand the case for lower taxes; I support tax cuts. But it’s not an inviolate principle. The question on these things is always context. Higher taxes in exchange for what? Which taxes are we talking about? And what else might be considered in any such deal (e.g., reforming Medicare by replacing the current fee-for-services system with a premium support one)?

People I respect believe the no-new-tax pledge has done more good than harm, that without it Republicans would be far more inclined to raise taxes. That’s not an unreasonable stance. But for conservatives to say, as many now do, that there’s no scenario in which taxes could ever be raised–and to pledge to oppose a tax increase regardless of circumstances–strikes me as misguided. Nor do I believe most Republicans, if you had a long, honest conversation, would be that absolutist. The right level of taxation is a prudential, not a theological, matter; it needs to be seen in the context of other economic conditions and possible gains in other areas.

This debate highlights a danger for conservatism, which is that certain policies are elevated to dogma, to canon. It takes a reasonable starting point in a negotiation and turns it into a non-negotiable end point. Vin Weber, a principled conservative, said Bush’s answer on the tax issue “was totally right, and if we’re ever going to deal with the long-term debt question, Republicans are going to have to come to grips with that.”

This debate also exposes a mindset that views compromise per se as unprincipled, a capitulation, a sign of weakness. This is a deeply unconservative attitude and quite at odds with what James Madison and the other Federalist founders believed. The Constitution itself was the result of a whole series of difficult, reluctant, remarkable compromises. That’s why it’s so odd that those who consider themselves “constitutional conservatives” are often the ones who react most strongly against even the idea of compromise.

One other thing. If the attitude many of those on the right have toward taxes today existed in the 1970s and 1980s, Ronald Reagan would have been considered a heretic. I say that because Reagan himself signed into law what his biographer Lou Cannon called “the largest tax hike ever proposed by any governor in the history of the United States”; and as president he signed a tax increase (TEFRA) that at the time was the largest in American history. As president Reagan, in fact, raised taxes multiple times.

Now my own view is that Reagan’s record, including his record on taxes, needs to be seen in whole–and seen in whole it was outstanding. He was responsible for cutting the top rate from 70 percent to, when he left office, 28 percent, which helped catalyze our economy; and his 1986 tax reform plan was a tremendous achievement. Yet Reagan did raise taxes.

It’s true that President Reagan came to regret his 1982 tax increase. But it’s important to keep this in mind: He agreed to it, he said, assuming he’d get $3 of spending cuts for every dollar in tax increases. (He didn’t, though the reality is somewhat complicated.) If that result had in fact come to pass, would the deal have been wrong? Would today’s anti-tax advocates torch him for his apostasy? Would he be vilified as a RINO? Would he be vulnerable to a primary challenge?

It tells us something about some currents within conservatism that a governor with a sterling tax cutting record, in expressing support for a theoretical deal far more conservative than what Ronald Reagan was willing to accept, would be the object of harsh criticisms.

My guess is that this kind of approach to politics, while still embraced in some quarters, is losing influence. At least I hope so. Not because I want higher taxes, but because I don’t think conservatism is a rigid, adamantine ideology; that the quest for political purification is fraught with danger; and because conservatives shouldn’t assume that any deal that gives you less than everything is a bad deal. Conservatives shouldn’t treat a debate about tax rates as a metaphysical matter.

We all have roles to play, and governing is different than critiquing those who do. The former certainly need to be prodded now and then by activists and commentators; I do a fair amount of that myself. But activists and commentators need to understand that while we need to strive for the ideal, the ideal can’t become the standard by which we judge politicians. Nor is every issue a hill to die on. And, as the greatest American conservative of them all warned, there’s not a lot to be won, and even a lot to be lost, by going over the cliff with our flags waving.

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Marylanders to the Rest of the Country: Beware Martin O’Malley

What does Maryland Governor Martin O’Malley have in common with self-described socialist Vermont Senator Bernie Sanders? The same percentage of Maryland Democrats want them to be the next Democratic presidential nominee. That would be 3 percent. It’s just one of the many data points to come out of the latest Washington Post/University of Maryland poll to support H.L. Mencken’s contention that “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

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What does Maryland Governor Martin O’Malley have in common with self-described socialist Vermont Senator Bernie Sanders? The same percentage of Maryland Democrats want them to be the next Democratic presidential nominee. That would be 3 percent. It’s just one of the many data points to come out of the latest Washington Post/University of Maryland poll to support H.L. Mencken’s contention that “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

Although, in the interest of basic compassion, it might be unkind to claim Maryland residents–or anyone, really–deserve to get two terms of Martin O’Malley.

And, to their immense credit, Marylanders don’t want the rest of the country to bring Martin O’Malley upon themselves. The message from Marylanders to the nation at large is: Don’t let our years governed by O’Malley be in vain; let something good come out of all of this. And that something good appears to be a national future unencumbered by Martin O’Malley as the nation’s chief executive.

But there are worse numbers in the poll for O’Malley than Democratic voters’ resounding declaration that they don’t want him representing their party in the next presidential election. That at least can be spun away. After all, if Democrats are asked to pick one politician to be their next presidential nominee, it’s no surprise that so many–63 percent–chose Hillary Clinton. (Although it is somewhat humorous that “Other/no opinion” polls nearly five times as well as O’Malley. They say you can’t beat something with nothing, and O’Malley appears to be the exception that proves the rule.)

No, the most unflattering portion of the poll is probably when registered voters are asked “Do you think Martin O’Malley would make a good president, or not?” The response: 14 percent said yes; 70 percent said no. The poll contrasts that with the result when the same question was asked in October 2012. At that time, the numbers were only slightly better–22 percent said yes; 62 percent said no–but still so far underwater as to be invisible from the surface.

There are more bad numbers–really, the whole poll is just an opportunity for Marylanders to unload on their horrendous governor. As the Post reported in an accompanying story, his “job-approval rating has fallen to an eight-year low of 41 percent, with his biggest defections coming from fellow Democrats.” What happened? The Post offers some suggestions:

Although O’Malley is not on the ballot this year, his policies in Maryland — particularly a string of tax increases during his tenure — have come under heavy fire from other candidates. Months of attacks, including some from fellow Democrats, appear to have taken their toll, some analysts say.

Other observers suggest that the time O’Malley has spent crisscrossing the country, seeking to gain national exposure, has alienated some constituents in Maryland.

Plausible. But it might be worth delving a bit more into his policies. The lesson might not be one national Democrats want to learn:

His legacy will include legalization of same-sex marriage, a sweeping gun-control bill, repeal of the death penalty, several measures expanding immigrant rights and an increase in the minimum wage. He has also overseen multiple tax hikes during his tenure, including increases in personal income taxes paid by high earners, the corporate income tax, sales tax, gas tax, tobacco tax and alcohol tax.

All politics is local (though not as local as it ought to be), so I doubt it’ll worry Democrats too much. Some of this might be personal; O’Malley is, after all, deeply unlikeable. But his agenda is also very liberal in a pretty liberal state, and voters don’t seem to love the results. It’s a common feature in American politics: there’s only so much liberalism even liberals can take.

And part of that could be the impression of the stereotype come to life. Reread that list of O’Malley tax increases, and you not only understand the O’Taxey nickname but get the sense the governor is to taxes what Bubba Blue is to shrimp.

Democrats may counter all this by pointing out that O’Malley is terrible at his job, and Democrats who aren’t terrible at their jobs will not suffer the same poll numbers. That’s true. But an element of O’Malley being terrible at his job is that, when it comes to issues like taxes, he cranks his liberalism up to eleven.

The other phenomenon here is just how “Ready for Hillary” national Democrats are. They don’t want a divisive nomination fight, and they don’t want a battle over ideas, in part because they want to nominate Hillary instead of a candidate who has ideas. So they’re not much interested in even having this conversation. And you almost can’t blame them: O’Taxey, a Vermont socialist, Joe Biden–the alternatives to Hillary aren’t exactly a sparkling A-team of Democratic leaders.

And that’s what might actually concern Democratic Party leaders more than O’Malley’s unpopularity: the prospect that there is no A-team. There’s just Clinton. They may get the nominee they want, but as far as Democrats see it, that’s not because she’s their best choice as much as that she’s their only choice.

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What’s Wrong with the American Economy?

Growth in the American economy since the year 2000 has averaged 1.7 percent per annum. That’s about half of what it averaged in the Reagan, Bush I, and Clinton years. Unemployment, especially in the broader measures, remains stubbornly high five years after the recession of 2007-2009 ended. What’s going on?

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Growth in the American economy since the year 2000 has averaged 1.7 percent per annum. That’s about half of what it averaged in the Reagan, Bush I, and Clinton years. Unemployment, especially in the broader measures, remains stubbornly high five years after the recession of 2007-2009 ended. What’s going on?

According to Peter Morici, an economics professor at the University of Maryland (and the bow-tied star of TV commercials for Kyocera office equipment) the problems lie in five key areas. 1) Poorly enforced trade agreements that allow China to manipulate its currency and export more goods to the United States, costing U.S. jobs. 2) Counterproductive energy policies that reduce domestic production, and therefore jobs, and cause more oil to be imported. 3) Burdensome regulations and taxation, such as restrictive licensing requirements and the highest corporate tax in the developed world. 4) Crony capitalism that reduces competition in the private sector in exchange for political contributions. 5) Disincentives to work, such as ever-expanding entitlements.

The good news is that, unlike the economic problems faced by many countries, all of these problems are amenable to reform. The bad news is that reforming the status quo, which always has determined defenders, requires strong presidential leadership and a Congress capable of acting in the national interest, not just in its members’ interests.

Right now, of course, we have neither. Even Democrats are beginning to notice that the Obama presidency is notably lacking in leadership. And Congress is more dysfunctional than it has been in a very long time. The latter problem can be at least partially ameliorated in a month. The former will have to wait until 2017.

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Obama and Burger King Demagoguery

Who are the biggest villains in the United States today? As much as Americans may rightly fear the rise of ISIS Islamist terrorists, to listen to some commentators, the owners of the Burger King fast-food chain aren’t just the epitome of corporate greed. They’re also being depicted as 21st century Benedict Arnolds for planning to move their corporate headquarters to Canada to evade high U.S. tax bills. But instead of joining in a cost-free demagogue fest that both left and right-wingers can enjoy, rational citizens should be blaming the tax code and a president who could reform the system if he was willing to work with Republicans rather than use them as rhetorical punching bags.

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Who are the biggest villains in the United States today? As much as Americans may rightly fear the rise of ISIS Islamist terrorists, to listen to some commentators, the owners of the Burger King fast-food chain aren’t just the epitome of corporate greed. They’re also being depicted as 21st century Benedict Arnolds for planning to move their corporate headquarters to Canada to evade high U.S. tax bills. But instead of joining in a cost-free demagogue fest that both left and right-wingers can enjoy, rational citizens should be blaming the tax code and a president who could reform the system if he was willing to work with Republicans rather than use them as rhetorical punching bags.

The manner by which Burger King is heading to the great white north is called corporate inversion and is being facilitated by the fast-food franchise purchase of Tim Horton’s, the Canadian donut chain named after an otherwise obscure hockey player. Once they own Horton’s, BK can shift its corporate operations to Canada where they will pay lower taxes than they do now. This is an eminently sensible business decision, but to listen to the likes of MSNBC’s Joe Scarborough, it’s tantamount to treason; the onetime congressman says he won’t eat there any more is encouraging others to do the same. Left-wing lawmakers like Ohio Senator Sherrod Brown agrees and also supports a boycott which would aid both White Castle and Wendy’s that are currently based in his state.

President Obama isn’t calling for a boycott. Instead he issued a call for Congress to pass corporate tax reform that would eliminate the need for American companies to flee the country over their tax bill. But he also said that the need to immediately pass a bill prohibiting such corporate moves shouldn’t have to wait until a solution to the years-long standoff about taxes that helped fuel numerous confrontations between the White House and congressional Republicans is found. Which is to say, he wants companies like Burger King compelled to stay without actually offering them tax relief.

Nobody need hold a benefit for Burger King but the hypocrisy and foolishness that form the foundation for all the demagoguery being aimed at that company seems at least equal to the venality of the fast food franchise.

First, the talk about patriotism and hamburgers is pure baloney. In the global economy trying to tie down a company that does business around the world in this fashion is silly. Americans haven’t owned Burger King since 2010 when SG Capital, a Brazilian private equity firm, purchased it when its previous proprietors dumped it because of its declining value. Expecting these stockholders who purchased a flagging company in the hope of increasing its worth and not to do their part in funding America’s out-of-control government spending is absurd. Global capitalism may not appeal to our sentimentality but it is a reality, and for supposedly smart people who are otherwise happy to profit from it to bash BK in this manner is hypocrisy on an Olympic scale.

Second, the president’s umbrage should be tempered by the fact that the person enabling this transaction is none other than his good buddy Warren Buffett. In 2012, Buffett was a major asset to Obama’s reelection because the billionaire’s support for higher taxes was seen as a definitive answer to conservatives who rightly believed Obama’s budget plans were bad for the economy and economic growth. But though he claimed to be personally in favor of higher taxes for himself, apparently Buffett doesn’t think the same principle applies to companies and it is his Berkshire Hathaway firm that is financing Burger King’s purchase of Horton’s. Hopefully, his secretary, whose higher personal tax rate than her boss (a disingenuous argument if ever there was one) became a staple of Democratic campaign rhetoric, will get a cut of the profits from the deal.

But more important than either of those facets of the story is the fact that if President Obama really wanted to reform our tax code, he could have done so years ago. While joining in the gang tackle of Burger King, Obama lamented Congress’s failure to pass reforms that would have made such moves unnecessary. Yet he torpedoed every opportunity to do so by demanding that a fairer revenue code be tied to tax increases. Rather than make cuts in the entitlements and government boondoggles he wishes to preserve, Obama preferred a continued stalemate because it enabled him to blame this failure on his congressional antagonists. That’s good politics but bad economics.

Liberals have given a lot of praise to Canada in recent years because of its government health-care program, but instead of trying to work toward the creation of a medical system that is a bad fit for Americans, they should have been studying our northern neighbor’s tax codes. Rather than jumping on the bandwagon of those wanting to boycott Burger King, the president and his supporters should stop the demagoguery and begin negotiating in good faith with Republicans in order to create a tax system that doesn’t punish success or reward failure. Kicking Burger King is easy. Protecting both citizens and corporations from the greed of the government and its permanent bureaucracy is hard.

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Walmart, Wages, and the Public Good

Who knew corporations could do snark? When New York Times columnist Timothy Egan wrote a column called “Walmart, Starbucks, and the Fight Against Inequality,” claiming that Walmart’s low wages forced many of its employees onto public assistance, such as food stamps and Medicaid, David Tovar, the communications director for Walmart, treated it as a first draft and pointed out its many factual inaccuracies. He then posted it on the Walmart website. It makes for hilarious reading.

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Who knew corporations could do snark? When New York Times columnist Timothy Egan wrote a column called “Walmart, Starbucks, and the Fight Against Inequality,” claiming that Walmart’s low wages forced many of its employees onto public assistance, such as food stamps and Medicaid, David Tovar, the communications director for Walmart, treated it as a first draft and pointed out its many factual inaccuracies. He then posted it on the Walmart website. It makes for hilarious reading.

Egan’s argument is that if Walmart paid higher wages, its employees wouldn’t need public assistance. Using very dubious math and a “study” that left-leaning Politifact.com calls “mostly false,” Egan describes Walmart as a “net drain” on taxpayers. Tovar points out that Walmart is the largest taxpayer in the country.

I doubt that Timothy Egan has ever gone into a store to buy something and, on being told the price, insisted on paying more. So if Walmart can hire a satisfactory employee at a given wage, why should it insist on paying more? For one thing, it would violate its fiduciary duty to the stockholders. For another, it would have to raise the prices its hundreds of millions of customers pay.

Egan’s column, demanding that Walmart pay higher wages, is classic modern liberalism, solving the problems of the world with other people’s money, and using junk statistics to justify it.

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Conservatism Means Adjusting to Shifting Circumstances

The American Enterprise Institute’s James Pethokoukis has written a post with a provocative headline: “Have Reagan-style tax cuts lost their political power?”

The answer, he says, is yes. “It shouldn’t be surprising that the tax issue doesn’t have the old oomph that it used to with voters,” according to Pethokoukis. And he highlights these poll results:

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The American Enterprise Institute’s James Pethokoukis has written a post with a provocative headline: “Have Reagan-style tax cuts lost their political power?”

The answer, he says, is yes. “It shouldn’t be surprising that the tax issue doesn’t have the old oomph that it used to with voters,” according to Pethokoukis. And he highlights these poll results:

1. In the early 1980s, close to 70 percent of Americans thought their taxes were too high. Today, that number is 50 percent.

2. Middle-class Americans, by 53 percent to 42 percent, think they’re paying their fair share in taxes.

3. Americans rank taxes low on their list of concerns—even below climate change.

4. In the age of online tax preparation, Americans don’t think their tax returns are hard to fill out.

5. Americans think raising the minimum wage and business deregulation are better ways to boost economic growth than cutting tax rates on businesses and the wealthy.

Now, these findings don’t tell us which tax plans might be economically best for this particular moment in time. But I do think this has some bearing on a point I’ve made before and will undoubtedly make in the future: Ronald Reagan’s policies worked fabulously well in the 1980s. But the problems we face are different now than they were then. Conditions have changed, and the task for conservatives is to change–in a responsible, principled way–with them. That is in important respects what it means to be a conservative.

This point should be so obvious that it shouldn’t need to be made, except that for some on the right, to say that what Reagan did nearly 35 years ago may not be what is required today borders on heresy. For others, I suspect what is at play here are certain habits of thought. The tax issue has worked so well for so long for Republicans, they have developed well-worn mental and public policy grooves. And those are difficult to escape from.

It’s isn’t always easy, but it is necessary, to pull back from time to time to re-examine the intellectual and political landscape, to see problems in a somewhat different light, and to periodically think anew and act anew. Reagan himself did precisely that. The Reagan who ran in 1980, embracing supply-side economics, is not identical to the Reagan who ran in 1976, when he focused less on sweeping tax cuts.

Conservatives need to learn from the past but not simply try to replicate it; to understand that our principles applied to new problems will sometimes yield new solutions. To do anything else would not be conservatism but dogmatism.

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Answering the Wall Street Journal’s Kimberley Strassel

Wall Street Journal columnist Kimberley Strassel, whose work I generally like, has written a column in which she attacks a publication to which I contributed, Room to Grow. Most of her focus is on tax policy. She is a fierce critic of child tax credits, which Rob Stein, who authored the chapter on taxes, endorses.

Bloomberg’s Ramesh Ponnuru has written a response which is largely devoted to the matter of tax policy and child credits, and I commend it to you.

I thought it might be useful is to analyze two claims made by Strassel, one of which is that “The authors are clear that politics, not principle, needs to drive conservative policy.”

Really, now? Ms. Strassel need only have read the opening paragraph of the introductory essay (written by me) to refute this assertion. Here’s what it says (the italics are mine):

Policy is problem solving. It answers to principles and ideals, to a vision of the human good and the nature of society, to priorities and preferences; but at the end of the day it must also answer to real needs and concerns. And public policy today is clearly failing to address the problems that most trouble the American people.

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Wall Street Journal columnist Kimberley Strassel, whose work I generally like, has written a column in which she attacks a publication to which I contributed, Room to Grow. Most of her focus is on tax policy. She is a fierce critic of child tax credits, which Rob Stein, who authored the chapter on taxes, endorses.

Bloomberg’s Ramesh Ponnuru has written a response which is largely devoted to the matter of tax policy and child credits, and I commend it to you.

I thought it might be useful is to analyze two claims made by Strassel, one of which is that “The authors are clear that politics, not principle, needs to drive conservative policy.”

Really, now? Ms. Strassel need only have read the opening paragraph of the introductory essay (written by me) to refute this assertion. Here’s what it says (the italics are mine):

Policy is problem solving. It answers to principles and ideals, to a vision of the human good and the nature of society, to priorities and preferences; but at the end of the day it must also answer to real needs and concerns. And public policy today is clearly failing to address the problems that most trouble the American people.

If she had read only a bit further into the chapter, she would have stumbled across this:

conservatives in American politics need to understand constituents’ concerns, speak to those aspirations and worries, and help people see how applying conservative principles and deploying conservative policies could help make their lives better.

And this:

Conservatives today need to show Americans how the principles that led to successful solutions when applied to the problems of that era [the 1980s] can do the same when applied to the rather different problems of this one. The same principles applied to new problems will yield new solutions.

The point of Room to Grow–which is explicitly stated in the book–is to (a) elucidate how a conservative vision of government could speak to today’s public concerns; (b) suggest how such a vision would translate into concrete policy reforms; and (c) explain how that vision and those reforms embody the spirit of our constitutional system. That hardly amounts to arguing that principles need not drive conservative policy. In fact, it amounts to the opposite.

We of course take political realities into account, as any sane person, and certainly any true conservative, must; but that is done in order to make it more, not less, likely that a conservative governing agenda actually be translated into law.

Now let me turn to Strassel’s claim that Room to Grow’s central premise is “That conservatives need to embrace government to better endear themselves to the ‘middle class.'”

This charge, like the first one, is wildly wrong. In the book’s second chapter, by my Ethics and Public Policy Center colleague Yuval Levin, he explains with some care why the proposals in the book would result in a government that “would no doubt be much smaller, more restrained, and less expensive than the one we have today.”

Yet Levin goes further than that. He also argues that conservatives should not be satisfied with accepting less of the same: the liberal welfare state at a lower cost. A bolder and more far-reaching goal is to change the underlying structure, the basic architecture, of much of the liberal welfare state, in order to advance the conservative vision of society.

The argument over which approach to tax cuts conservatives should take–tax credits for families v. cutting taxes on capital, and which are most appropriate at any given moment–is a serious and long-standing one. Ms. Strassel, an intelligent writer, is certainly able to present her substantive case. What is somewhat surprising is that her column so clearly misrepresents the book and the views of the various authors, to ascribe to them views and motivations that are quite obviously false.

She can do better than this, and usually she does.

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Paying the Corporate Income Tax

Who actually pays the corporate income tax has long been a problem for economists. Depending on the particular competitive circumstances in an industry, the tax is paid through some combination of lower wages for workers, lower capital gains for investors, and higher prices for consumers. 

A new study from Ben Southwood of the Adam Smith Institute calculates that, on average, workers pay 57.6 percent of the corporate income tax. In other words, a tax that was instituted under President William Howard Taft in order to tax the rich, who owned almost all corporate stock in the early 20th century, now taxes mostly the average guy.

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Who actually pays the corporate income tax has long been a problem for economists. Depending on the particular competitive circumstances in an industry, the tax is paid through some combination of lower wages for workers, lower capital gains for investors, and higher prices for consumers. 

A new study from Ben Southwood of the Adam Smith Institute calculates that, on average, workers pay 57.6 percent of the corporate income tax. In other words, a tax that was instituted under President William Howard Taft in order to tax the rich, who owned almost all corporate stock in the early 20th century, now taxes mostly the average guy.

In 2013 the corporate income tax yielded $273 billion in revenue to the federal government, a little less than 10 percent of all federal revenues. Because it was never coordinated with the personal income tax that was instituted after the adoption of the 16th Amendment in 1913, it has been one of the main drivers of the ever greater complexity of the tax code as taxpayers have sought to legally avoid taxes by playing one tax off against the other.

While, heaven knows, the whole tax code needs to be junked and completely rethought, a good place to start would be by abolishing the corporate income tax.

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Obama Budget: Dems Still Status Quo Party

While Democrats have spent the last few months trying in vain to engender a public outcry about income inequality, the greatest challenge facing the country remains the same: a long-term budget and debt crisis fueled by the rising cost of entitlements that can’t be fixed with token spending cuts or higher taxes on the rich. But the 2015 budget that President Obama will propose this year will ignore it. Instead of building on the discussions that he has had with Republicans in recent years in which he has at least contemplated a form of entitlement reform, there will be no mention of indexing cost-of-living increases for Social Security recipients or any other measure intended to check the growth of expenditures by the government. Instead, the president is proposing $56 billion more in federal spending on pet projects.

This means nothing in terms of what the legislative branch will actually wind up passing—if indeed both the House and the Senate are actually able to pass a budget before the current Congress is adjourned and replaced by a new one next January—since the Republican majority in the House will not even consider the president’s proposal. What he will be giving the country is not so much an economic blueprint as a political manifesto of Democratic beliefs. As such, it is a useful guide to how Democrats will run in November’s midterm elections. Though liberals are fond of chiding the GOP for being a prisoner of the Tea Party rather than a party of ideas, the Obama budget makes it clear that the Democrats intend to face the people in the fall as a brain-dead status quo party that is addicted to taxes and spending. This may please a liberal base that is flexing its muscles after the victories of ideologues such as Elizabeth Warren and Bill de Blasio. But it’s hard to imagine how they think they can hold the Senate or avoid losing more seats in the House running to the hard left in the wake of the ObamaCare disaster that has soured the public on the big-government paradigm.

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While Democrats have spent the last few months trying in vain to engender a public outcry about income inequality, the greatest challenge facing the country remains the same: a long-term budget and debt crisis fueled by the rising cost of entitlements that can’t be fixed with token spending cuts or higher taxes on the rich. But the 2015 budget that President Obama will propose this year will ignore it. Instead of building on the discussions that he has had with Republicans in recent years in which he has at least contemplated a form of entitlement reform, there will be no mention of indexing cost-of-living increases for Social Security recipients or any other measure intended to check the growth of expenditures by the government. Instead, the president is proposing $56 billion more in federal spending on pet projects.

This means nothing in terms of what the legislative branch will actually wind up passing—if indeed both the House and the Senate are actually able to pass a budget before the current Congress is adjourned and replaced by a new one next January—since the Republican majority in the House will not even consider the president’s proposal. What he will be giving the country is not so much an economic blueprint as a political manifesto of Democratic beliefs. As such, it is a useful guide to how Democrats will run in November’s midterm elections. Though liberals are fond of chiding the GOP for being a prisoner of the Tea Party rather than a party of ideas, the Obama budget makes it clear that the Democrats intend to face the people in the fall as a brain-dead status quo party that is addicted to taxes and spending. This may please a liberal base that is flexing its muscles after the victories of ideologues such as Elizabeth Warren and Bill de Blasio. But it’s hard to imagine how they think they can hold the Senate or avoid losing more seats in the House running to the hard left in the wake of the ObamaCare disaster that has soured the public on the big-government paradigm.

While the president has charted a hard-left approach, the White House is still pretending that he is a moderate facing off against right-wing extremists. That was the spin today coming from the president’s spokesman who claimed it was the GOP’s fault that entitlement reform was absent from the budget. The administration line is that since Republicans still oppose raising taxes, Obama feels empowered to drop his willingness to confront entitlements. But this is a lame excuse that won’t be believed even by his most loyal supporters.

By proposing a budget that refuses to contemplate any fix for the crisis that threatens to ultimately bankrupt the government, the president is seeking to enable Democrats to run to the left this year by defending entitlements and accusing Republicans of planning to throw grandmothers in wheelchairs over the cliff. He seems to believe that Americans are so addicted to government benefits and so fearful of any talk of reform that Democrats can blithely ignore fiscal reality and win big.

But if this strategy sounds familiar, it should. This was the same approach Democrats tried in 2010 when they blasted the GOP as radicals who wanted to take away Social Security and Medicare from senior citizens and further impoverish the poor. Just as in that midterm vote, Democrats are ignoring the specter of ObamaCare and hewing to their belief that only wingnut Tea Partiers care about the debt. In 2010 voters showed Democrats you didn’t have to be a fringe right-winger to care about restraining the growth of government. But since worries about the impact of the president’s signature health-care legislation are, if anything, even greater in 2014 than they were then, the president’s strategy may turn out to be a colossal mistake.

The growing number of ObamaCare losers who are being hurt by the new law may well outnumber those who benefit from it. Moreover, most of the swing seats that are up for grabs this year are in states where the president’s big-government manifesto will not only fall flat but also be a handicap to Democratic candidates. The liberal base never liked the idea of cutting spending no matter what tax increases the GOP might have proposed. All they want to hear from the president is a rigorous defense of more “investment”—government lingo for spending money plucked from the wallets of taxpayers on various federal projects and Obama boondoggles—and no reform of entitlements. That’s what the president has given them. But embattled Democrats in danger of losing this November will not thank him for drawing such a stark distinction between the parties on this seminal issue. Running on the status quo is always a political loser.

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No Wonder Obama Was so Desperate to Pack the D.C. Circuit

The D.C. Circuit Court of Appeals struck down another Obama administration power grab yesterday. It ruled unanimously that the IRS did not have the statutory authority, under the so-called Horse Act of 1884 (passed 29 years before the income tax existed), to license tax preparers, require them to pay annual fees, and attend at least 15 hours of continuing education a year.

The Horse Act was passed to bring an end to a rash of fraudulent claims stemming from the Civil War, where people would claim compensation from the government for horses and other property taken or killed in the war. They would often claim that some broken-down plow horse was actually a magnificent beast worth many times more. (That’s not at all dissimilar to the rash of allegedly fraudulent claims against BP for the Gulf oil spill of 2010 that’s going on right now.) It authorized the treasury secretary to establish standards for people representing claimants before the Treasury.

In 2011, rather than asking Congress for the power to license tax preparers, the Obama administration just went ahead and took the power, using the fig leaf of the Horse Act. But tax preparers, of course, don’t represent their clients before the IRS. They simply fill out the incredibly complicated forms. The clients, not the preparers, are representing that the information on the forms is correct. That was the opinion of the IRS itself up until the Obama administration came into being. In 2009 it wrote, “Just preparing a tax return [or] furnishing information at the request of the IRS … is not practice before the IRS ….”

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The D.C. Circuit Court of Appeals struck down another Obama administration power grab yesterday. It ruled unanimously that the IRS did not have the statutory authority, under the so-called Horse Act of 1884 (passed 29 years before the income tax existed), to license tax preparers, require them to pay annual fees, and attend at least 15 hours of continuing education a year.

The Horse Act was passed to bring an end to a rash of fraudulent claims stemming from the Civil War, where people would claim compensation from the government for horses and other property taken or killed in the war. They would often claim that some broken-down plow horse was actually a magnificent beast worth many times more. (That’s not at all dissimilar to the rash of allegedly fraudulent claims against BP for the Gulf oil spill of 2010 that’s going on right now.) It authorized the treasury secretary to establish standards for people representing claimants before the Treasury.

In 2011, rather than asking Congress for the power to license tax preparers, the Obama administration just went ahead and took the power, using the fig leaf of the Horse Act. But tax preparers, of course, don’t represent their clients before the IRS. They simply fill out the incredibly complicated forms. The clients, not the preparers, are representing that the information on the forms is correct. That was the opinion of the IRS itself up until the Obama administration came into being. In 2009 it wrote, “Just preparing a tax return [or] furnishing information at the request of the IRS … is not practice before the IRS ….”

The Circuit Court ruling was unequivocal: “If we were to accept the IRS’s interpretation of Section 330 [of the United States Code, where the Horse Act is enshrined today], the IRS would be empowered for the first time to regulate hundreds of thousands of individuals in the multi-billion dollar tax-preparation industry. Yet nothing in the statute’s text or the legislative record contemplates that vast expansion of the IRS’s authority.”

Why did the Obama IRS try to get away with this? Simple: to help out the big guys at the expense of the small guys, which is to say crony capitalism. Obeying the new regulations would have been no problem for, say, H&R Block or even full-time accountants. It was aimed at forcing out of the market the mom-and-pop operations who earn a few thousand dollars each spring helping friends and neighbors to file their income-tax returns.

The giveaway here is that the deputy IRS commissioner who crafted the new rules was none other than Mark Ernst, former CEO of—wait for it!—H&R Block. H&R Block, of course, was all in favor of the new rules that would have axed a considerable portion of their competition. Giving Ernst a political appointment to deal with matters directly concerning a former employer would have been flatly illegal, so he was given a “civil service” appointment instead, as though he were nothing more than one more bureaucrat moving up the ladder. His civil service career lasted less than two years.

President Obama presents himself as the champion of the poor and downtrodden. But that’s only the poor and downtrodden who are happy to be, effectively, wards of the state. The ordinary Joe who is just trying to make his own independent living is of no concern to Obama. Indeed Obama cares far more about the big guy who can attend $30,000-a-plate dinners and expects favors in return.

Despite frequent attribution, Commodore Cornelius Vanderbilt never said it, but President Obama should: “Law? What do I care about the law? I got the power ain’t I?”

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Ideologues Shouldn’t Torpedo Budget Truce

The first reviews are in on the budget deal agreed to by Republican House Budget Committee Chair Paul Ryan and Democratic Senate Budget Committee Chair Patty Murray, and people on both the left and the right have found plenty not to like about it. This is no grand bargain or long-term settlement of the great divide over how to achieve fiscal sanity.  It neither reins in spending nor does it provide for what Ryan has always said was most needed for the government to get its fiscal house in order: fundamental entitlement reform. That’s more than enough reason for many conservatives and Tea Partiers to reject it out of hand as an inadequate compromise that merely keeps feeding the government leviathan that they rightly believe needs to be cut back rather than maintained.

But, if, like the those on the left who will vote against it because it makes some cuts and doesn’t give them their wish list items like an expansion of unemployment benefits, conservatives manage to torpedo Ryan’s efforts, they will be making a huge mistake. After a three-year standoff between the parties on the budget, it was time for a truce. The modest deal restores certainty to the economy and eliminates some of the most painful sequester cuts, including those involving defense. Though it falls far short of anything that might be called reform, it does establish a principle that is necessary to it: any discretionary spending increases are offset by mandatory spending cuts. That is a step toward fiscal sanity that should be taken.

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The first reviews are in on the budget deal agreed to by Republican House Budget Committee Chair Paul Ryan and Democratic Senate Budget Committee Chair Patty Murray, and people on both the left and the right have found plenty not to like about it. This is no grand bargain or long-term settlement of the great divide over how to achieve fiscal sanity.  It neither reins in spending nor does it provide for what Ryan has always said was most needed for the government to get its fiscal house in order: fundamental entitlement reform. That’s more than enough reason for many conservatives and Tea Partiers to reject it out of hand as an inadequate compromise that merely keeps feeding the government leviathan that they rightly believe needs to be cut back rather than maintained.

But, if, like the those on the left who will vote against it because it makes some cuts and doesn’t give them their wish list items like an expansion of unemployment benefits, conservatives manage to torpedo Ryan’s efforts, they will be making a huge mistake. After a three-year standoff between the parties on the budget, it was time for a truce. The modest deal restores certainty to the economy and eliminates some of the most painful sequester cuts, including those involving defense. Though it falls far short of anything that might be called reform, it does establish a principle that is necessary to it: any discretionary spending increases are offset by mandatory spending cuts. That is a step toward fiscal sanity that should be taken.

Those on the right who are dismayed about the abandonment of the sequester have a point. Only by insisting on mandatory and draconian across-the-board cuts have Republicans been able to make any kind of an impact on the fiscal debate. But as useful as the sequester has been, it is too imprecise an instrument to become a permanent part of the process. As our Max Boot has repeatedly pointed out, the cuts that have been imposed on defense are damaging national security and must, sooner or later, be eliminated.

Many on the right are also denouncing Ryan’s deal not just because it doesn’t give them what they want on taxes and spending but because they don’t see the need to compromise at this moment. They see President Obama’s poll numbers falling and think the time is right to push hard again for the kind of reform that is needed, not an agreement that merely kicks the can down the road. But this is the same kind of faulty thinking from groups like Heritage Action and Freedom Works that led conservatives to shut down the government as part of a vain effort to defund ObamaCare. Apparently they’ve learned nothing from that debacle.

This is exactly the wrong time for the GOP to go back to a scenario where they can be depicted as impeding efforts to keep the government working. Doing so would distract the country from the ongoing worries about the devastating impact of ObamaCare on individuals and the economy.

Tactics aside, the deal is necessary because it reflects the reality of divided government that both President Obama and the Tea Party have been butting heads over ever since the 2010 midterms. Under the current circumstances there is simply no way for either the Republicans in charge of the House of Representatives or the Democrats running the White House and the Senate to get their way. The accord reached between Ryan and Murray is simply an acknowledgement of this fact and an effort to keep the nation on an even keel until we can have another election to try and resolve this mess next November.

Avoiding compromise and setting off another cataclysmic fight over the budget or the debt ceiling (the latter is not part of this deal, leaving both parties free to set off another confrontation sometime in 2014 if they wish) satisfies the conservative impulse to draw a line in the sand over an ever-expanding government. But, as Ryan has said, Congress must deal with the world as it is rather than merely operate on the basis of how they’d like it to be. The only hope of getting closer to real entitlement reform is for the GOP to win the 2014 midterms. Some on the right are still laboring under the delusion that staging another shutdown or threatening a default is the right way to make their case to the country. But only someone utterly insensitive to the mood of the country would think that is either good politics or good public policy. If they go back to those tactics, Republicans will be forfeiting any chance of winning back the Senate in the coming year.

There’s little doubt that Republicans worried about primary challenges from the right or thinking about running for president in 2016 will be inclined to eschew any such compromise. But passing this budget will give their party a shot at winning in the midterms and take the wind out of the Democratic effort to paint them as irresponsible. Compromise is often the coward’s way out and leads to more trouble. But in this case, it is simply good sense. Though the cuts it imposes are no more than a rounding error, Republicans will do well to take what they can rather than to seek the impossible and thus render more progress less likely.

A truce is something you embrace when it will enable you to go back into the fray better prepared to prevail. Ryan is smart enough to know this, even if some of his colleagues don’t. It’s time for the GOP to keep its powder dry and come back to the table when they’ve got the votes and the seats to pass the kind of reform budget that Ryan and the rest of his party would prefer.

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Happy Birthday to the Income Tax

Income inequality has long been a bugaboo of the left. There is just something wrong, liberals think, with X earning much more than Y. They never explain why it’s wrong, of course, apparently regarding it as self-evident. What it is, actually, is a modern echo of the medieval notion of the “just price,” the idea that everything has a proper price for which it should be bought or sold and the authorities (the Church in the Middle Ages, the federal government today) should see that everything is.

In the early Clinton era, Democrats passed and the president signed a bill limiting the deductibility of executive salaries over $1 million from corporate income taxes. Naturally, they didn’t limit the deductibility of the enormous incomes of their Hollywood pals, but intellectual consistency is seldom a political virtue.

The level of inequality diminished, briefly, during the financial crisis of 2008, as stock prices crashed and dividends were cut. But it is now increasing again, as CBS news reported recently. Some economists recommend a top income tax rate of 73 percent in order to foster more equality. But this fails to take into account the ample evidence that as income-tax rates rise, so does tax avoidance.

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Income inequality has long been a bugaboo of the left. There is just something wrong, liberals think, with X earning much more than Y. They never explain why it’s wrong, of course, apparently regarding it as self-evident. What it is, actually, is a modern echo of the medieval notion of the “just price,” the idea that everything has a proper price for which it should be bought or sold and the authorities (the Church in the Middle Ages, the federal government today) should see that everything is.

In the early Clinton era, Democrats passed and the president signed a bill limiting the deductibility of executive salaries over $1 million from corporate income taxes. Naturally, they didn’t limit the deductibility of the enormous incomes of their Hollywood pals, but intellectual consistency is seldom a political virtue.

The level of inequality diminished, briefly, during the financial crisis of 2008, as stock prices crashed and dividends were cut. But it is now increasing again, as CBS news reported recently. Some economists recommend a top income tax rate of 73 percent in order to foster more equality. But this fails to take into account the ample evidence that as income-tax rates rise, so does tax avoidance.

Others argue that income inequality and growth are inextricably linked and trying to limit one will, necessarily, limit the other.

Still others argue, what income inequality? They say it is mostly a statistical illusion that results from how the “poverty rate” is determined and how income is measured. For instance, the CBO counts realized capital gains as income but not unrealized capital gains. So if two people buy houses the same year for the same price and one sells his 30 years later for a gain of $500,000, he’s in the one percent, but his neighbor who didn’t sell is not. Next year, of course, the seller will be back among the hoi polloi.

And transfer payments, such as Social Security, Medicare, and food stamps, are not counted as income by the CBO in determining the poverty rate. So an elderly couple might be considered below the poverty line, despite receiving a check for $1,700 every month from the government and having most of their medical bills picked up. The elderly couple regard the $1,700 as income (it buys stuff, after all), so why shouldn’t the CBO count it as income?

As so often, statistics are being wielded as political weapons, not as a means to understanding the human universe. And meanwhile, the real measure of prosperity—consumption—is often ignored. For instance, while “wages,” as defined by the Bureau of Labor Statistics, have been relatively flat since the 1980s, consumption by the less affluent has increased briskly. In 2001, only 19.8 percent of low-income households owned a computer. By 2009, it was 47.7 percent. In 2001 21.9 percent of these families had living space of more than six rooms (not counting bathrooms), by 2009 that had risen to 30 percent.

Meanwhile, the No. 1 tool that politicians use to play politics with income inequality, the income tax, turned 100 last Friday. How much has it been used for political purposes? As John Fund points out, in 1913, the tax code was 400 pages long. Today it is 73,954 pages long.

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