by André Casajus[*] and Andreas Hoffmann Estonia was the first European country to introduce a flat tax on income in 1994. Many others followed. For example, Hungary successfully introduced a flat tax in 2012. In the U.S., some of the States (e.g. Pennsylvania) have introduced a flat tax on income. As in Germany, however, the … Continue reading An Axiomatic Case for the Flat Tax
by Mario Rizzo I now favor expiration of the Bush era tax rates for everyone. Why? Because the only way to curb spending in the long run is to make as large a number of Americans as possible truly feel the consequences of the expenditures they appear to desire. If Americans saw the cost of the gigantic welfare … Continue reading Raise Middle Class Taxes Now!
by Mario Rizzo The New York Times reports today that the Democrats are searching for a way to get additional tax revenue from "the rich" in a way that might garner Republican support. So they are bringing up an idea suggested by Mitt Romney in the presidential campaign to limit deductions to a specified aggregate amount. … Continue reading A Cap for Deductions?
by Mario Rizzo The above table is from the November 8th issue of the Wall Street Journal. The figures for the fiscal cliff consequences are usefully stated for next year and not for the next nine years as those who want to suggest that the numbers are truly impressive (or want to scare children) typically use. Consider … Continue reading Fiscal Cliff: Sense and Nonsense
by Mario Rizzo Let us begin with a famous quotation from Judge Learned Hand in a decision affirmed by the Supreme Court: Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic … Continue reading Mitt Romney is Not a Tax Idiot
by Chidem Kurdas Wisconsin governor Scott Walker is in the extremely unusual position of facing a recall vote less than two years after he was elected in 2010. The recall is orchestrated by unions that have gone all out to reverse his valiant effort to contain the growth in state and local spending. This vote … Continue reading Taxpayers’ Future in Wisconsin Vote
by Mario Rizzo I wish people would perform the following intellectual experiment. Find out how much in federal taxes you have paid in the past year. Don’t worry about making any distinctions between the various payroll taxes and the income tax. It all goes into the same pot in the final analysis. Now assume that this … Continue reading How’s Your Compulsory Holiday Giving Coming Along?
by Chidem Kurdas No matter how thoroughly public policy fails, there is no end to efforts in the same area. Energy is a case in point. Reviewing the history of US energy policy in his new book, Columbia University legal scholar Michael Graetz writes: “The book is, then, in one sense a story of failure…” … Continue reading Energy Policy vs. Market
by Chidem Kurdas Neither House Republican Speaker John Boehner nor Senate Democratic Majority Leader Harry Reid propose tax increases in their competing deficit and debt-ceiling plans. Indeed, the Reid plan’s omission of tax hikes is described by Democrats as a major concession to Republicans. But even if there are no new obligations, taxes are primed … Continue reading Tax Baseline Key to Debt Fight
by Mario Rizzo President Obama and his various spokespeople are saying incessantly that deficit reduction as a requirement (thanks to the Republicans) to raise the debt limit must be done in a “balanced” manner. There must be some kind of revenue increases to go along with the spending-growth reductions. There are many ways to talk … Continue reading Taxes Are Already Scheduled To Rise
by Mario Rizzo One of the most important, but frequently ignored, aspects of the current negotiations about raising the debt ceiling is the lack of credible commitment on each side. The problem has two aspects. One is clearly analyzed by Michael McConnell in today’s Wall Street Journal. (Perhaps also here.) What exactly is “on the … Continue reading The Current Debt and Budgetary Impasse
by Chidem Kurdas Yes, a federal debt deadline is looming and, yes, it has become conventional wisdom that something needs to be done about the deficit and resulting debt. Having watched the political jockeying, I am now persuaded that the notion of a bi-partisan deal to tackle the deficit is likely a trap. To raise … Continue reading Debt Deal as Salami Strategy
by Mario Rizzo I am always amazed that when many economists give policy advice the sophistication and logical rigor that the discipline so values gets completely lost. There are many ways to interpret this. One is that the level of precision appropriate to theory and to applied economics is not appropriate to the “art” of … Continue reading Confusion Masquerading as Science? Taxes and Spending
by Chidem Kurdas Wisconsin governor Scott Walker successfully made the financial case to limit collective bargaining by public unions. Not only have the unions imposed an immense burden on taxpayers, present and future, but they create bureaucratic rigidities that cause dysfunction and, in financial crunches, layoffs of promising employees. Yet in recent weeks it has … Continue reading Public Unions vs. the Real Underdog
by Jerry O’Driscoll Actually what is triumphant is the economic model of low taxes, light regulation and economic liberty. As Michael Barone clarifies in today’s (Weekend) Wall Street Journal (p. A13) no state has implemented these policies better than Texas. In “The Great Lone Star Migration,” Barone details the winners and losers by population since … Continue reading Texas Triumphant
by Chidem Kurdas Ronald Dworkin, a well-known legal scholar, describes last month’s election results as depressing and puzzling. In a commentary in the New York Review of Books, he asks, “Why do so many Americans insist on voting against their own best interests?” The New York University law and philosophy professor is not the only … Continue reading Voters’ Best Interest
by Chidem Kurdas This may be a good time to revisit Milton Friedman’s proposal for reforming all entitlement programs and social security, in one fell swoop. His idea goes back several decades but is no less powerful in its simplicity. A serious discussion on reform may now start with the Roadmap put forth by Wisconsin … Continue reading Friedman on Social Security Reform
by Chidem Kurdas The Wall Street Journal reports that the biggest campaign spender of 2010 is a public sector union, the American Federation of State, County and Municipal Employees, which lavished $87.5 million on helping Democrats. This single union outspent the US Chamber of Commerce, which came second with $75 million. Reading the WSJ article … Continue reading Two Takes on Political Donations
by Chidem Kurdas Alan Greenspan exemplifies an inconsistency that appears to be widespread. He reportedly said that the stimulus has fallen far short of expectations and the government should get out of the way and allow businesses to power the recovery. At the same time, he’s so worried about budget deficits that he supports higher … Continue reading Greenspan Paradox on Recovery