Friday , October 18 2019
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Tag Archives: Taxation

US Gross National Debt Jumps by $1.2 Trillion in Fiscal 2019, to $22.7 Trillion, Hits 106.5% of GDP

But what happens if there’s actually a recession? The US gross national debt jumped by $110 billion on the last two business days of Fiscal Year 2019, and by a breath-taking $1.2 trillion during the entire fiscal year, after having already jumped by $1.27 trillion in Fiscal 2018, the Treasury Department reported today. This ballooned the US gross national debt to a vertigo-inducing $22.72 trillion. These beautiful trillions whipping by are a joy to behold: so much action in so little...

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The Balance Sheet of Supply Side Economics

The major pluses of their [the supply-siders’] approach have been three. First, they came up with a way to dramatize the fact that an x percent increase in tax rates–even if it leads to higher tax revenues–will cause less than, and possibly much less than, an x percent increase in tax revenues. This was best illustrated by Arthur Laffer, with his Laffer Curve. Second, the supply-side economists’ focus on incentives made unprecedentedly prominent the harmful effects...

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Me on Andrew Yang on PBS Website

Yang’s plan for a VAT “takes us right away to European levels of government spending,” David R. Henderson, an economics professor at the Naval Postgraduate School and a research fellow at the conservative Hoover Institution, told the NewsHour. “A VAT to fund UBI (universal basic income) then gets rid of our degrees of freedom to deal with the deficit.” This is from Dan Cooney, “How would Andrew Yang give Americans $1,000 per month? With this tax,” PBS Newshour,...

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Murphy on Henderson and Carbon Taxes

There are several problems here. First, even if we agreed that government (as opposed to private) payments for tree-planting made sense, it doesn’t at all follow that the revenue should come from a carbon tax. In general, raising a dollar of revenue from a tax on carbon content hurts the economy more than raising a dollar from taxing labor or consumption. (My article on the “tax interaction effect” gives the economic intuition behind this point.) So if the government...

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Two Poems by David R. Henderson

I gave a talk last night to approximately 80 members of the local Lincoln Club, a group within the Republican Party of California. The topic was “President Trump’s Economic Policies: A Balanced Assessment.” After giving some basic background about myself, I showed them a poem that summed up my talk. I’m hereby copyrighting it. There was a president, Who had an orange curl, Right in the middle of his forehead. When he was good He was very good indeed, But when he was...

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A trade war is not a carbon tax

Tyler Cowen recently asked this question: Is the trade war with China a carbon tax? Of all the questions I’ve seen Tyler ask, this is the easiest to answer. A trade war is not a carbon tax, and indeed it’s not even close to being a carbon tax. What would be a close substitute for a carbon tax? The answer to this question is also pretty straightforward. A cap and trade system for carbon emissions, with the permits auctioned by the government, would be a fairly close...

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A Carbon Tax Is Not a Slam Dunk

Advocates of a carbon tax argue, correctly, that a tax is a much better way to reduce carbon usage than any system of regulations could be. The reason is that every use of carbon that creates carbon dioxide imposes damage, and a carbon tax based on the amount of carbon dioxide created will cause everyone who creates carbon dioxide to, indirectly, take that damage into account. The carbon tax beautifully scales the payment to the damage: those who create more damage...

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Inflation Data Shows Tariffs Are Not a Tax on Consumers but on Foreign & US Corporations

Inflation runs hot in housing, medical services, health insurance, other items that are not imported. The consumer price inflation data released today by the Bureau of Labor Statistics, which corroborates prior inflation data, says that, yes, prices are rising, but they’re rising sharply in services that are not impacted by imports and tariffs, such as rents and other housing costs, healthcare, education, and other services, and also in restaurants (where customers pay mostly for labor...

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The hardest problem in public policy

Scott Alexander is one of my favorite bloggers, combining deep insight with fair-minded analysis. This and this are a couple examples that I really enjoyed. A recent post discussing a policy of universal basic income (UBI) is less convincing: About 40 million Americans live below the poverty line, which is $12,000 for an individual and a little higher for families. Multiplying these out to get $480 billion to end poverty is too high, first because most of these people...

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Casey Mulligan on Trump versus Reagan on Trade

The Trump Administration supports a House bill known as the “US Reciprocal Trade Act.”  Before it was introduced, Peter Navarro was leading the White House effort in this area, which he called the Fair And Reciprocal Trade act.  To the amusement of the rest of the White House staff, Mr. Navarro got an “F” in marketing; this was one of several occasions that the President was understandably upset with Mr. Navarro. It seems that neither the House bill nor the FART act...

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