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Veronique De Rugy

Veronique De Rugy

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Her primary research interests include the U.S. economy, the federal budget, homeland security, taxation, tax competition, and financial privacy. Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies. She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.

Articles by Veronique De Rugy

Paid-Leave Lobbying Efforts by Meghan Markle | National Review's "The Corner"

21 days ago

California. In California, 38 percent of the workforce has wages below $20,000, and yet only 1 percent of those low-wage workers use the state’s paid family leave program. Workers in the highest income bracket (above $84,000) were five times more likely to file paid family leave claims with the state as those in the lowest income bracket (below $12,000). Even in San Francisco, which has its own paid family leave law that provides 100 percent benefits to new mothers, low-income mothers (below $32,000) were only half as likely as higher-income mothers (above $97,000) to receive paid family leave benefits from the government.
Canada. Government paid family leave programs have exacerbated class inequality: “Despite proportionate and obligatory contributions of all employers and employees to

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Here Comes the Hypocritical Global Minimum Tax | Creators

21 days ago

There is a certain irony to a group of rich countries pushing for policies that will disadvantage poorer countries. Yet this is exactly what the leaders of the world’s biggest economies did by endorsing a global minimum tax rate of 15% on the profits of large businesses, a deal that has since gained momentum and pledges from leaders in 136 countries.
The deal’s objectives are simple. It creates a tax cartel, and high-tax nations believe this will limit competition from countries with lower and simpler taxes. It also benefits wealthier, higher-tax nations by shifting revenues from countries where companies are headquartered to countries where companies make their sales. At the heart of these two objectives is the need to feed wealthy nations’ enormous budgets.
Here’s the skinny

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Global Minimum Corporate Tax | The John Batchelor Radio Show

21 days ago

Photo:  In 2009, the UN Millennium Development Goals programme was a proposed beneficiary of the Tobin Tax.Global Minimum Tax Cartel and France.  Veronique de Rugy, @veroderugy,  @GeorgeMasonU, @Mercatus Center lthVeronique de Rugy, @veroderugy,  @GeorgeMasonU, @Mercatus Center, Senior Research Fellow, Mercatus Center, George Mason University & NRO Online.

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Savings and Incentives | National Review's "The Corner"

November 2, 2021

Yesterday, the New York Times had a piece that included this paragraph about why inflation should be cooling down soon:
They point to calculations by Mark Zandi, a Moody’s Analytics economist, that suggest Americans who have left the labor force will begin flocking back into the job market by December or January, because they will likely have exhausted their savings by then.
Isn’t that a round about way to admit that inflation was in part the product of COVID-relief packages? Another way to say this: Isn’t this a soft admission that the decrease in aggregate supply, which most blame for the current inflation, may also be partly caused by the policy responses to COVID? I will point to this post by Tyler Cowen that asked a question about

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The Gender Gap, Paid Leave Programs, and the Soviet Union

October 18, 2021

The Biden administration intends to nominate for Comptroller of the Currency a candidate who makes Senator Bernie Sanders looks like former Senator Barry Goldwater. The nominee’s name is Saule Omarova, a professor at the Cornell University Law School. Apart from wanting to regulate banks out of existence, Ms. Omarova tweets stuff like this:

Until I came to the US, I couldn’t imagine that things like gender pay gap still existed in today’s world. Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best’.

This quotation is neither a joke nor taken out of context. The Wall Street Journal explains:

She graduated from Moscow State University in 1989 on the Lenin Personal Academic Scholarship. Thirty years later, she

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For Some Politicians, Enough Spending Will Never Be Enough

October 12, 2021

Back in 2005, I wrote that when it comes to spending, "Congressional Republicans Make French Socialists Look Like Ronald Reagan." Looking back now, from the perspective of fiscal prudence, those were the good old days. Yet, as irresponsible as Republicans have been with our finances since then, today’s Democrats seem committed to making the spendaholic GOP look like Uncle Scrooge.
Let’s recap: The worst of the COVID-19 emergency is hopefully behind us, meaning the country should focus on recovery, fully reopening the economy and returning to work. Government should focus on scaling back emergency programs and reducing the deficit. It’s not just the prudent thing to do, it’s also what Americans want. According to a recent Pew Research Center poll, 72% of Americans view the

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New Evidence: The Expanded Child Tax Credit’s Disincentives

October 10, 2021

In my previous post, I described how budget gimmicks prevent politicians from having to explain whether or not the policies they push are pushing desirable social and financial objectives. Here is a good example. Two weeks ago, I wrote about the serious problem with Congress’s attempt to expand the child tax credit. Well, new evidence suggests that opponents of the programs are correct about its short and long term consequences, which go beyond its $1.6 trillion cost over a decade. This new working paper is by Kevin Corinth, Bruce Meyer, Matthew Stadnicki, and Derek Wu and was published by the University of Chicago’s Becker Friedman Institute. The authors find that the behavioral effects of the expanded CTC, such as creating incentives for some parents to work less

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Bad Timing and Budget Gimmicks

October 8, 2021

I wrote a column for Creators yesterday where I noted that while for me more spending is always too much, for some politicians, it will never be enough. In fact, to pass a gigantic $3.5 trillion spending bill, which is facing opposition from Senators Manchin and Sinema, some legislators are ready to resort to budget gimmicks. In fact, they are quite open about it. But now I am thinking that I underplayed the budget gimmick part of the argument.
For some backgrounds, Mr. Manchin has said for months that he wouldn’t vote for a reconciliation bill that’s more than $1.5 trillion. Incidentally, I hope that people manage to keep some perspective here: $1.5 trillion is called a compromise, but it is still a massive and oversized amount of spending.
Back to budget

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Cronyism's Critics Continue to Miss the Point

October 5, 2021

How to best ensure substantial long-run economic growth should be a question on everyone’s mind. Its benefits can’t be overstated, and it’s undeniable that the lack of growth is a root contributor to many seemingly disconnected economic and social problems. That’s the central theme of a recent podcast discussion between The New York Times’ Ezra Klein and George Mason University economist Tyler Cowen.
They both expressed support for reforms to make government less bureaucratic and more agile. For example, Cowen cited the Food and Drug Administration’s recent failure to approve COVID-19 treatments quickly enough, while also getting in the way of COVID-19 tests’ development and distribution. In an ideal world, Cowen’s sensible observation should lead to serious reform of the FDA

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Poverty Isn’t Just About Money: Expanding the Child Tax Credit

September 27, 2021

The Wall Street Journal’s editors have written another great editorial, this time on the expansion of the child tax credit into an UBI [Universal Basic Income] for children. Parents can now claim a maximum of $3,000 for those ages 6 to 17 and up and $3,600 for children under age 6, up from its previous $2,000 level. The expanded part of the credit begins to decrease as income rises above $75,000 for individuals, $112,500 for heads of household, and $150,000 for married couples. The $2,000 credit starts phasing out when income reaches $200,000 for individuals and $400,000 for married couples.
The credit isn’t just bigger, it is also fully refundable, meaning that parents who don’t make enough money to pay the income tax will receive cash from the government in the

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Should Paid Leave Programs be Public or Private?

September 23, 2021

The Wall Street Journal had a very good and rather comprehensive Review and Outlook piece yesterday about what’s wrong with the Democrats’ push to create a federal paid leave program.

The piece makes some important points, not least of which is that the absence in the U.S. of a federal paid leave program doesn’t mean that workers in the U.S. have no access to paid leave. In fact, although we may be the only industrialized country without a national paid leave program, we are also the only country with a vast and expanding network of companies that provide paid leave and other fringe benefits that are flexible, accommodating, and often more generous than is the program being pushed for in the Democrats’ massive $3.5 trillion bill.
In fact, in countries where

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Misplaced Outrage About the Debt Ceiling

September 14, 2021

It is irksome to read pieces like the recent one in the Wall Street Journal by Alan Blinder – who was on President Bill Clinton‘s Council of Economic Advisers from January 1993 to June 1994 –  lecturing proponents of using the debt ceiling, i.e., Republicans, as a means of slowing the growth of government spending and indebtedness. Their action, Blinder claims, puts us at risk of a US government default.
I think the risk is dramatically overstated, even though it goes without saying that no one wants the federal government to default on its debt obligations. The consequences would indeed be nasty and, as always, those who would suffer the greatest pains would be America’s most vulnerable. If pushed to an extreme, the strategy of using the debt ceiling to extract

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Extending the Danish-Hungarian Empire

September 14, 2021

Ideologues at both political extremes, like Sen. Bernie Sanders, I-Vt, on the left and Fox News host Tucker Carlson on the right, have recently pointed to pet foreign countries as exemplars of what America should strive to be. Yet Sanders and Carlson are each misled by a superficial understanding of what these countries are really about.
As a proud, self-described socialist, Sanders thinks Denmark is a socialist paradise. But in reality, it’s far more free-market oriented than most people give it credit for. As a dyed-in-the-tweed conservative, Carlson has let his enchantment with Hungarian President Viktor Orban’s tough talk against "the libs" blind him to that "leader’s" cruel authoritarianism.
Let’s look more closely at Denmark: Yes, the country has some big-government

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Climate Change: Compared to What?

September 10, 2021

While in my car last week, I heard a story on NPR about how climate change makes storms like Ida even worse. I am no climate expert, and I am of the belief that the climate is changing due to both natural and manmade factors; but I know when a story sounds credible or not. This one didn’t, like many others I hear or read.
During the whole thing, I kept thinking of Thomas Sowell who said: “There are three questions that would destroy most of the arguments on the left:
Compared to what?
At what cost?
What hard evidence do you have?”
Actually, I think no matter what side of the climate policy debate you favor, you should ask yourself those questions. The NPR reporters clearly didn’t do so. The piece completely ignores the “compared to what” question, nor did it

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Taxes? What Taxes?

September 8, 2021

Per the Tax Foundation, the chart below shows that since 1980, the share, each year, of tax filers who owe no income tax.

This chart of nonpayers who file taxes appears in an excellent article by Garrett Watson. But the author also highlights the data from the Tax Policy Center based on tax units, which is interesting too. Watson writes that:

“the Tax Policy Center (TPC) released estimates on the portion of households with no federal income tax liability, finding that in 2020, about 60.6 percent of households did not pay income tax, up from 43.6 percent of households in 2019. Much of the 2020 increase was due to pandemic-related factors, but the growing share of households paying no income tax should be kept in mind when evaluating the progressivity of the

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Misplaced Outrage About the Debt Ceiling

August 31, 2021

It is irksome to read pieces like the recent one in the Wall Street Journal by Alan Blinder – who was on President Bill Clinton‘s Council of Economic Advisers from January 1993 to June 1994 –  lecturing proponents of using the debt ceiling, i.e., Republicans, as a means of slowing the growth of government spending and indebtedness. Their action, Blinder claims, puts us at risk of a US government default.
I think the risk is dramatically overstated, even though it goes without saying that no one wants the federal government to default on its debt obligations. The consequences would indeed be nasty and, as always, those who would suffer the greatest pains would be America’s most vulnerable. If pushed to an extreme, the strategy of using the debt ceiling to extract

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The United Federal Administrative Units of America?

August 24, 2021

Warnings that state and local governments faced a fiscal calamity were predictably plentiful when it became clear in early 2020 that COVID-19 would cause major social and economic disruptions. Predictable because it has become gospel that the solution to an economic downturn is to have the federal government suck money out of the private sector, redistribute it to state and local governments minus a cut for all three levels of bureaucracy and then spend the remainder — often wastefully — according to political desires and special-interest dreams.
There were a few of us who argued that federal bailouts for state and local governments were both unnecessary and unwarranted. As it turns out, state and local tax revenues hardly collapsed. In fact, state and local tax revenues are up

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Why Spending Matters in Times of Inflation and High Debt

July 29, 2021

A lot of people don’t care about the nation’s growing debt. Some believe that low interest rates for the foreseeable future essentially means a free lunch for the government. Others believe that no matter what the cost of this debt, it is all worth it because of the purported higher returns on government spending. But there is an argument that may convince them otherwise: If inflation ever gets out of control, it’s easier to deal with it in a lower-debt environment.
I believe that high levels of debt are problematic. First, growing debt means growing spending, along with government expanding in size and scope. I like my government small and as unintrusive as possible, so I am not happy about the current spending situation. Second, a review of the literature about the impact of

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The Return of the Tax Gap Hype

July 20, 2021

Every policy wonk will tell you that after you live in Washington long enough, you start seeing the same issues reemerge on a regular basis. Common ones are praise for the magical ability of government spending to help pay for itself during recessions and handwringing over the myth of middle-class stagnation. And when Uncle Sam’s coffers are empty, everyone suddenly remembers the so-called tax gap — the difference between the tax revenues Congress expects versus those it actually collects.
So right on cue, calls to reduce the tax gap are back.
After the COVID-19 spending spree, the U.S. budget deficit is even higher than what we’ve become accustomed to. Meanwhile, President Joe Biden and his band of congressional superspenders are eager to extend many emergency programs, such as

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Infrastructure Insanity

July 8, 2021

In the event that a group of U.S. senators cannot agree on committing enough money to a bipartisan infrastructure plan, Democrats are reportedly considering a $6 trillion plan of their own. It would probably be best described as a package full of progressive items wrapped in magical thinking paper.
Most people would consider $6 trillion a lot of money to drop on infrastructure. That’s because most of us still have an outdated notion of what infrastructure is. In fact, for most people, the word infrastructure conjures up images of roads, bridges, dams and waterways. However, as we’ve discovered during the last few weeks of discussions, for elected Democrats, infrastructure can be so much more than that.
Not long ago, for instance, Sen. Kirsten Gillibrand, D-N.Y., tweeted: "Paid

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Special-Interest Politics Is a Lot of What Infrastructure Is About

July 8, 2021

Cars drive in Union City, N.J., March 31, 2021.
(Eduardo Munoz/Reuters)

Opinion polls show that increases in infrastructure spending are usually popular. I assume that’s because people have no clue about what are in the bills or the distortions that federal intervention creates. I am thinking that most people also hear the word infrastructure and think it’s about roads and bridges. Who doesn’t want well-maintained roads, especially when we are constantly and incorrectly told that our infrastructure is crumbling?
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Because of the way politicians talk about federal involvement in infrastructure, people tend to assume that without it there would be no infrastructure or poor infrastructure. It is, of course, nonsense, since

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Veronique de Rugy on Stacy on the Right – Family Policy

June 8, 2021

Veronique de Rugy critiques President Biden’s proposed "anti-poverty" Child Tax Credit expansion, which is actually a massive handout that will benefit rich and poor alike, has no strings attached, and hearkens back to the pre-reform welfare regime of the early 90s. Listen on Soundcloud.

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