The Value-Added Tax Should Be Political Poison for Advocates of Limited Government

January 15, 2016

Tweeted this last night, but it’s worth its own post. There’s a lot to like about Ted Cruz, but his insistence that his new tax plan doesn’t contain a VAT, thus giving advocates of big government another revenue stream, is an annoying dodge. I wish he’d drop it, and the VAT.

International Liberty

It’s not my role to pick sides in political fights, but I am very interested in trying to make bad ideas radioactive so that politicians won’t be tempted to do the wrong thing.

This is why I’m a big fan of the no-tax-hike pledge. The folks in Washington salivate at the prospect of getting more of our money, but they are less likely to act on their desires if they’re scared that breaking their promises means they’ll lose the next election.

It’s also why I want the value-added tax (VAT) to become a third-rail issue. Simply stated, it would be a catastrophic mistake to give Washington an additional source of tax revenue. Especially since the European evidence shows that it’s a money machine to expand the welfare state.

Given my concerns, I was understandably distressed that two lawmakers (and presidential candidates) who normally support smaller government, Rand Paul

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The Value-Added Tax: A Nixonian Scheme to Fund Bigger Government

November 21, 2015

The VAT is to me an obviously bad idea, especially as long as there is also an income tax. But why Senators Cruz and Paul would support one is way beyond me.

International Liberty

In early 2013, a reader asked me the best place to go if America suffered a Greek-style economic collapse.

I suggested Australia might be the best option, even if I would be too stubborn to take my own advice.

Perhaps because of an irrational form of patriotism, I’m fairly certain that I will always live in the United States and I will be fighting to preserve (or restore) liberty until my last breath.

But while I intend to stay in America, there is one thing that would make me very pessimistic about my country’s future.

Simply stated, if politicians ever manage to impose a value-added tax on the United States, the statists will have won a giant victory and it will be much harder to restrain big government.

But you don’t have to believe me. Folks on the left openly admit that a VAT is necessary to…

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Donald Trump won’t rule out religious identification cards

November 19, 2015
Fine as long as the mouth stays shut

Fine as long as the mouth stays shut

No. Not just no, but Hell, no.

Yahoo News asked Trump whether his push for increased surveillance of American Muslims could include warrantless searches. He suggested he would consider a series of drastic measures.

“We’re going to have to do things that we never did before. And some people are going to be upset about it, but I think that now everybody is feeling that security is going to rule,” Trump said. “And certain things will be done that we never thought would happen in this country in terms of information and learning about the enemy. And so we’re going to have to do certain things that were frankly unthinkable a year ago.”

Yahoo News asked Trump whether this level of tracking might require registering Muslims in a database or giving them a form of special identification that noted their religion. He wouldn’t rule it out.

“We’re going to have to — we’re going to have to look at a lot of things very closely,” Trump said when presented with the idea. “We’re going to have to look at the mosques. We’re going to have to look very, very carefully.”

This is the kind of crap that can only come from someone either woefully ignorant of History or suffering from a painfully tin ear.

I take a backseat to no one in my dislike for Islam and my wariness of jihad infiltration; I do not think we should be admitting Syrian refugees because, among other reasons, our ability to vet them for ties to jihadist groups has significant weaknesses. Just ask the FBI Director. To let them in is to take unconscionable risk with the safety of the American people.

But religious ID cards? Even to have that tossed out without immediately dismissing it, to include it in a range of reasonable possibilities, should disqualify him as a serious candidate for dog-catcher, let alone the presidency.

Not only is the idea offensive in itself (1), but I can already imagine the Democrats making hay out of this, whether he wins the nomination or not:

“We condemn the outrageous and racist suggestion of the Republican front-runner that Muslims should carry special identification.”

And picture Clinton, Obama, Wasserman-Schultz, Schumer, and every other Democrat intoning that over and over again in every venue they could find.  Imagine every single Jewish group in the US rightfully denouncing this, even if they loathe the Democrats’ treatment of Israel. Pity the poor serious Republican candidates who will likely have to answer question after question about what this moron said, rather than focusing on the crucial issues of the campaign.

Are we sure Donald Trump isn’t a deep-cover agent provocateur for the Democrats?

Via Jonah Goldberg, to whom I give the last word:

Now, I’ll bet Trump walks some of this back in the next 48 hours, just as he did with his initial call to admit Syrian refugees and other statements that have departed his posterior before his brain could catch them. But let’s be clear, getting the federal government involved in tracking and labeling citizens’ religious affiliations is abhorrent on the merits and a huge invitation to profound mischief down the road. Creating databases on all members of any religion is a terrible idea as well.

(…)

But I have little interest in going so far … that we actually resemble the straw men the Left has been screaming about all along.

Exactly.

Footnote:
(1) What else, Donald? Shall we make them wear green crescents on their clothing?

 


#RaiseTheWage – In which Seattle Leftists gets a needed lesson in economics

March 16, 2015
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage!”

It must be nice to be a progressive; you never have to worry about the real-world consequences of your actions. Fighting for social justice? Great! Let’s raise that minimum wage in the interests of (all bow) fairness. Surely those petit bourgeois small business owners can afford it — they’re probably making more money than they should, anyway. It’s time to spread the wealth around. You, the city councilors and progressive voters of Seattle know better than any shop owner what he can afford to pay!

Strangest thing about choices: they have consequences.

Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” Seattle Magazine,

“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

“He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs). The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year.

“With the minimum wage spike, however, he says that if restaurant owners made no changes, the labor cost in quick service restaurants would rise to 42 percent and in full service restaurants to 47 percent.”

Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.”

I imagine reaction of residents must be like that of fans of a beloved local bookstore were shocked when it closed after The Special City raised its minimum wage — they cry “I had no idea!”.

Damn straight. It’s also called “magical thinking,” in which you get to do whatever you want with no blow-back. Then you wake up and realize it was all a dream.

Like I’ve written many times before, there are basic rules of economics our economically illiterate progressive compatriots need to hear. Again:

Labor is a cost, because the business owner has to provide wages and, often, benefits that cost him more money. When a government mandate increases that cost, the business owner has three choices: pass the cost along to the customer, who may decide it’s too much and stop shopping there; cut employee hours and stop hiring to save on labor costs, thus costing potential jobs and putting a burden on workers still employed; and, finally, just decide it’s not worth it anymore and close up shop. In the low-margin bookseller business, Borderlands’ owner chose the last course as the only one viable.

Do recall this mandated wage increase comes on top of any additional expenses required under Obamacare. No wonder owners in the thin-margin restaurant business are calling it quits!

Dan Mitchell calls it “Destroying Jobs with Innumerate Compassion.” Perfect.

Of course, this won’t stop the progressives who run the LA city council from making a similar mistake, here, because… magical thinking.

Via Rick Moran, who also quotes a great explanation from Reason about the connection between the value of labor and the minimum wage.

RELATED: Earlier posts on Seattle and the minimum wage.


1 million tons of pressurised CO2 stored beneath Decatur, Illinois

January 14, 2015

The enviro-Left (and Green businesses hoping for lucrative government contracts) have been pushing carbon sequestration –storing CO2 deep underground — as one way to “save the planet.” But did you know if this underground storage ruptures for any reason, the released CO2 could kill thousands? Smart. Put people at risk to fight a problem that does not exist: catastrophic man-caused climate change. Great work, Green Movement!

Watts Up With That?

It was a tenth of that, 100,000 tons, that caused the Lake Nyos disaster

Lake Nyos, a volcanic crater lake located in the Northwest Region of Cameroon Lake Nyos, a volcanic crater lake located in the Northwest Region of Cameroon

Guest essay by Eric Worrall

7000 ft below the city of Decatur, Illinois, population 74,710 people, is a high pressure reservoir which contains 1 million tons of CO2.

From the press release:

One of the largest carbon sequestration projects in the U.S., the Illinois Basin – Decatur Project (IBDP) has reached its goal of capturing 1 million metric tons of carbon dioxide and injecting it deep underground in the Mount Simon Sandstone formation beneath Decatur, Illinois. The project is designed to demonstrate the feasibility of carbon capture and storage. IBDP director Robert Finley talked about the million-ton milestone with News Bureau physical sciences editor Liz Ahlberg. Finley is director of the Advanced Energy Technology Institute at the Illinois State Geological Survey, part…

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RIP Australia’s Carbon Tax

July 16, 2014

Just as the EPA is trying to force us into a de facto carbon tax, Australia comes to its senses and repeals former-PM Gillard’s monstrosity. Well done, Tony Abbott!

Watts Up With That?

Carbontax_tombstoneUPDATE: at ~ 11:14AM local time in Australia, it was repealed!

From ABC: Legislation to scrap the carbon tax has passed the Federal Parliament in a major win for the Abbott Government.

After a lengthy debate, the Senate voted to get rid of the price on carbon, with 39 senators voting for and 32 voting against.

This was the Government’s third attempt to scrap the tax since the election – the first two were rejected by the Senate.

The Australian reports:

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Sweet! If the Euro collapses, US taxpayers could be on the hook for $1 trillion! Oh, yay!

December 15, 2011

You know what they say, don’t you? A trillion here, a trillion there, and pretty soon you’re taking about real money.

James Pethokoukis posts about the risks for the US taxpayer in the Euro crisis, pointing that, contra Fed Chairman Ben Bernanke (1), the US bailout of Europe is on. I’ll refer you to Pethokoukis’ article for the details, but the gist is this: the International Monetary Fund, to which the United States is far and away the largest contributor, has already loaned Portugal, Greece, and Ireland (three of the five PIIGS countries) roughly $100 billion, of which our share is $20 billion. Petty cash these days, you say? Hah! We’re not done yet…

If the two biggest PIIGS, Italy and Spain, come to the IMF trough, their needs may exceed the IMF’s reserves, so the EU has agreed to loan hundreds of billions to the IMF, which the IMF could then re-loan to Spain and Italy (2) — loans totaling as much as $1.3 trillion. (They don’t call them “PIIGS” for nothing.) Since this is a loan to the IMF, the US taxpayer would be on the hook to European lenders for roughly 17% of that amount in the event Italy and Spain default, or as much as $220 billion.

Makes you wince, doesn’t it? But wait, it gets better!

The Fed is hedging their bets via currency swaps with the European Central Bank. Supposedly, in the event of a default by the borrowers, the ECB could limit US exposure by buying dollars, even if it meant devaluing the Euro through printing as much needed. But that assumes the Euro and the ECB even survive a real crisis. If they don’t, we’re on the hook for it all.

I’ll let James summarize:

U.S. taxpayer exposure is $220 billion via the IMF. That’s scary enough. But then you have the Fed. Lachman notes that the counterparty to the potential $600 billion in swaps is the ECB and that “one must suppose that the European Central Bank would be able to buy whatever quantity of US dollars that it might need to repay the Federal Reserve.” Unless there is a complete euro collapse and then there might not be a ECB to repay anybody. So in addition to a global depression and 20 percent U.S. unemployment, America [‘s exposure] would be nearly $1 trillion.

The insanity of it all becomes clear when one realizes this is like nothing so much as giving an alcoholic another bottle of booze and trusting himself to go on the wagon later. Really. This time he’s serious.

European nations have loaned Greece billions time after time, and yet the Greeks continue their profligate social spending and never reform. And the problem is spreading, as Italian and Spanish finances near collapse. But, instead of recognizing the desperate need to find an orderly end to the Euro so that debtor nations can devalue national currencies as much as needed to grow their way out of debt via exports, they keep trying to save it by buying their way out of debt with more debt. This only delays and makes worse the inevitable end: massive defaults, bankruptcies at major banks, and social chaos.

Now we’re getting into the act in a potentially very big and very harmful (to us) way. And on top of our own horrendous debt.

There is no easy way out of the international debt crisis, but surely the way to start is to stop being stuck on stupid.

Footnotes:
(1) Sure, Ben, we won’t bail them out directly. We’ll just do it through our seat at the IMF. That makes all the difference in the world. And I bet you’ll respect us in the morning, too.
(2) Anyone else reminded of a shell game?

(Crossposted at Sister Toldjah)