March 17, 2009

More regressive taxes from the progressives

Posted by Dr. Roy Cordato at 3:00 PM

First, we have the Governor of our now solidly blue state calling for a $600 million annual tax increase in the form of new levies on the sale of cigarettes and alcohol products. It is hardly controversial to point out that these hundreds of millions are going to come right from those who can least afford them. And now the feds--also solidly blue--are about to get in on the soak the poor band wagon. What progressives want, and have wanted since the 1970s, are massive new energy taxes. (Can you say BTU tax?) It is certainly not controversial to point out that energy taxes fall heaviest on the poor. Well, the environmentalist left may get their way in the form of a new energy rationing scheme called cap and trade program. This new study from the Tax Foundation gives us a heads up on who will pay and how much. (Oh, we can here the progressive social engineers now---"The Tax Foundation is right wing, they're market fundamentalists, they're funded by big oil, they're deniers and, oh yeah, their mother wears combat. Who among us can't write the script?)



Here's the abstract from the Tax Foundation Study.



Many U.S. lawmakers view cap and trade as a politically superior
non-tax approach to climate policy. However, cap and trade imposes
identical economic burdens on households to a similarly designed carbon
tax. Using the newly-released 2002 input-output accounts we present new
estimates of the distributional impact of a typical cap-and-trade
system by income, age, U.S. region and family type. In total,
households would face an annual burden of roughly $144.8 billion per
year with costs disproportionately borne by low-income households,
those under age 25 and over 75 years, those in Southern states, and
single parents with dependent children. Using RIMS II multipliers we
estimate the broader economic impact of cap and trade. Depending on how
the system is structured, cap and trade could reduce U.S. employment by
965,000 jobs, household earnings by $37.8 billion, and economic output
by $136 billion per year or roughly $1,145 per household. Lawmakers
weighing the costs and benefits of climate policy should be aware that
cap and trade would impose a significant and regressive annual burden
on U.S. households, and would not represent a "tax free" way to reduce
greenhouse gas emissions.

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Perdue's Budget, Extreme Education Edition

Posted by Dr. Terry Stoops at 2:31 PM

The $139 increase in per pupil spending is more than I thought the increase would be.

Anyway, legislators should eliminate some of the spending items immediately, including $6.7 million for unproven dropout prevention programs and $4.7 million for more diagnostic testing of students. (I thought the education establishment wanted fewer tests.) The $3.5 million that Perdue wants to give to underperforming schools will be spread pretty thin because there are many, many underperforming schools in North Carolina.

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How to minimize systemic risk

Posted by George Leef at 1:46 PM

Responding to an article in today's Wall Street Journal -- an article written in response to Barney Frank's idea that we need a new federal regulator to control systemic risk -- George Mason University Economics Department Chairman Don Boudreaux writes this spot-on letter:


To the Editor:

Peter Wallison masterfully exposes the pitfalls in Rep. Barney Frank's proposal
to create a "systemic risk regulator" ("Congress Is the Real Systemic Risk,"
March 17). But it's worth emphasizing that we already have an excellent
regulator of systemic risks: the market. Because participation in any aspect of
the market is voluntary, each individual - risking only his or her own assets -
chooses how, and how much, to participate. The competition, personal
responsibility, and inherent decentralization characteristic of the market keep
systemic risks small.

Large systemic risks are created only when competition is replaced by monopoly
power, when decentralization is supplanted by centralized decision-making, and
when personal responsibility gives way to socialized 'sharing' of costs and
benefits. Government is the one institution capable of achieving this troika of
troublesomeness. The state's control over the money supply is only the most
devious of the countless ways that government dangerously intrudes itself
systemically, and with no competition, into market transactions.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

Exactly! There would be no need to worry about risk in the aggregate if it weren't for the fact that the federal government has done so much to lower people's natural risk aversion.

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Taxpayer Financing: House Members to Ignore Oaths?

Posted by Daren Bakst at 1:30 PM

Today, the NC House was expected to vote on HB 120, a bill that would expand taxpayer financing of elections to municipalities.  It appears the vote may have been pushed back.

Taxpayer financing programs almost certainly are unconstitutional after the United States Supreme Court decision in Davis v. FEC.  Despite this, many House members don't seem to care.  They would rather violate the First Amendment rights of North Carolinians and let a court strike down the law, than uphold their oath to the Constitution and not pass unconstitutional laws in the first place.

As far as I know, House members haven't even asked research staff to provide legal analysis of the issue.  Unless the staff member is incompetent, which I know most staff members are not, he will tell the legislators that what they are doing is unconstitutional.

The House supporters of taxpayer financing apparently don't want to receive a memo like the NJ legislative staff just provided its legislature: Explaining the constitutional defects with a proposed taxpayer financing bill.

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Health care for all--except veterans.

Posted by Daren Bakst at 12:00 AM

Rationing health care to everyone: -$634 billion (in round one)
Reneging on promises to veterans: +$540 million
Fulfilling fundamental moral obligations: too high for Obama to bear

I always thought Obama was for universal healthcare. From his campaign trail rhetoric (health care is a right!) to his $634-billion "down payment" on nationalized health insurance, I sort of gathered that he favored, y'know, putting as many people as possible on the government dole.

And he is. Okay, mostly he is. The exception? If you're a veteran.

To save $540 million, Obama proposes that private insurance companies now pay for treatment of veterans' "service-connected disabilities and injuries." Get injured serving your country? Kthxbai (as the internet meme goes), enjoy the paperwork! The government will no longer foot the bill. Private companies will instead be refunding the VA.

Government and its bureaucracy rarely (if ever) do things well. But covering the health care costs of a soldier injured while defending and protecting that same government and bureaucracy should be a straight-forward proposition: yes, we should.

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Republicans tout school choice legislation

Posted by Mitch Kokai at 11:09 AM

In their weekly news conference, Republican legislative leaders touted bills that would "bridge the gap in private school funding in the years between preschool and college."

House Bill 335, dubbed "Tax Fairness in Education," would provide a $2,500 annual tax credit for K-12 education.

Another bill to be introduced soon would offer a tax credit to parents of children with special education needs.

Click play below to see *18:22 of today's news conference:

*Due to your intrepid reporter's late arrival, an opening statement from Sen. Eddie Goodall, R-Union, is omitted from the video.

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Other appeals court rulings this morning

Posted by Mitch Kokai at 10:55 AM

The N.C. Court of Appeals has upheld the first-degree murder conviction of Todd Boggess in a well-publicized Durham murder case.

In a pair of cases, the appeals court reversed lower-court rulings in challenges to Buncombe County's countywide zoning ordinance and multi-family dwelling ordinance. The appeals court ruling renders the ordinance invalid.  

In another zoning dispute, the court upheld a lower-court ruling in favor of Pinebluff.

The court upheld a lower court ruling granting N.C. Baptist Hospital an injunction against Novant and Forsyth Memorial Hospital in a certificate-of-need dispute.

An appellate panel upheld a lower-court ruling in favor of the N.C. Department of Transportation in a dispute over condemnation connected with the widening of U.S. 23 Business in Haywood County.

The appeals court upheld a lower court ruling that continues a years-old legal battle between a Granville County property owner and the authorities over a biannual pigeon shoot called "The Dogwood Invitational."

The appeals court  reversed a lower-court ruling that stopped a family from recovering interest in a dispute with the Nash-Rocky Mount schools over a playground swingset injury. 

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Audit the Fed

Posted by David N. Bass at 09:29 AM

Imagine a a full audit of the Federal Reserve. If you think that would unearth some rather unorthodox financial tactics, you're probably right.

Congressman Ron Paul, R-Texas, has introduced a bill that would require the Comptroller General to audit the Fed before the end of 2010.

Two representatives from North Carolina -- Virginia Foxx and Walter Jones, both Republicans -- have signed on as co-sponsors of the legislation.

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Legal fight over the 2000 attorney general's race yields another court ruling

Posted by Mitch Kokai at 09:04 AM

Attorney General Roy Cooper wins the latest round in the long-running legal battle over his 2000 election campaign against Republican opponent Dan Boyce. 

Boyce and his law firm contend Cooper ran a "false and fraudulent" television ad during the campaign, in which Cooper won his first term as attorney general.

A three-judge panel of the N.C. Court of Appeals unanimously ruled in Cooper's favor this morning in a procedural dispute. The ruling does not cover the substance of Boyce's charge.

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Sundry reflections on Perdue's education spending plan

Posted by Dr. Terry Stoops at 07:48 AM

Perdue's budget proposal for K-12 education includes the following:

1. More money for the state's "virtual high school"

This is not the worst of the group. Virtual high schools save taxpayers money and provide educational options to parents and kids. Bev has always had a thing for educational technology, so we expected some kind of funding increase in this area.

The best course of action would be to freeze expansion of the early college schools for a year or two and complete an evaluation of their performance. After all, the Gates Foundation recently admitted, "Many of the small [redesigned and early college] schools that we invested in did not improve students' achievement in any significant way."

It is not clear how this money will be spent, but an increase in the Disadvantaged Student Supplemental Fund would not be the best use of taxpayer money.

Oh, yeah. DPI is a pretty bloated agency, and local school administrative staff, particularly central office staff, will not be missed. Sen. Phil Berger nails it, "What we need to do is put folks in the classroom. I don't know that there's just that much added value to the education we offer our students for what you get out of DPI."

Cecil Banks, a lobbyist for the N.C. Association of Educators, said he was pleased with Perdue's statements and appreciated her urging local school boards use their federal stimulus money to pay teachers and assistant principals.

"It sounds like she's going to continue the investment in public education," and recognizes that it is the "underpinning of the kind of society that we want," Banks said.

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We wouldn't want to go back to the days when gold was money

Posted by George Leef at 07:41 AM

So opined a clueless Bloomberg writer. Robert Murphy destroys his arguments here.

A book I'd like to see (or write myself if I ever find the time) would be The Top 10 Blunders in American History. Allowing the government to monopolize the monetary system makes the list.

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In case you missed him …

Posted by Mitch Kokai at 06:51 AM

Click play below to hear Joe’s brief comment.

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Worth a chuckle

Posted by Mitch Kokai at 06:50 AM

Tim Geithner, Treasury Secretary.

What they [sic] did? Failed to pay enough Social Security and Medicare taxes.

Might happen if … You’re self-employed.

Fair enough. Being self-employed can lead to issues of paying the appropriate level of Social Security and Medicare taxes.

But you have no good excuse if you are employed, if your employer structures your compensation in a way that prevents your tax burden from eating into your expected take-home pay, and if your employer warns you that you’re being paid additional salary with the expressed intent that you’ll use that additional salary to pay your tax bills. In other words, Geithner had no good excuse for his misdeeds.

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Why not listen to the economists who’ve been right?

Posted by Mitch Kokai at 06:47 AM

If you’re trying to determine which economists’ views to believe, perhaps you could start with the ones who predicted our current economic woes.

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Today's Carolina Journal Online features

Posted by Mitch Kokai at 06:44 AM

Today's Carolina Journal Online exclusive features Joe Coletti's alternative "Back to Basics" state budget plan.

John Hood's Daily Journal focuses on the importance of teacher quality and the links between quality and education spending.

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St. Patrick's Day fun

Posted by Dr. Terry Stoops at 00:01 AM

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