September 5, 2017

Posted by orrinj at 7:02 PM


Posted by orrinj at 6:26 PM


Tax Consumption Through a VAT, and Voilà :If the administration and Congress drop the income tax, it won't be difficult to achieve 3% growth (John H. Cochrane, 9/05/17, WSJ)

Much of the current tax mess results from taxing income. Once the government taxes income, it must tax corporate income or people would incorporate to avoid paying taxes. Yet the right corporate tax rate is zero. Every cent of corporate tax comes from people via higher prices, lower wages, or lower payments to shareholders. And a corporate tax produces an army of lawyers and lobbyists demanding exemptions. [...]

[I]f Congress and the president drop the income tax in favor of a VAT, or another simple consumption tax, they can break the political logjam and achieve a dramatic pro-growth reform.

It is essential that the VAT be uniform, and it is best to carve that in stone at the outset. Trying to transfer income or subsidize people and businesses by charging different rates for different goods or organizations will again muck up the tax system. And it is essential that the VAT replace rather than add to the current tax system, as it does in Europe.

What about progressivity? It is easy to make a value-added tax progressive: In place of current exemptions, send everyone a $10,000 check. Or people could receive a refund according to how much they spend, similar to income-tax refunds. Taxpayers could get a full refund for the first $10,000, half for the next $10,000, and so forth. Electronic record-keeping makes this straightforward--it's just a big debit or credit card reward--and everyone would have an incentive to report purchases rather than to hide income.

But the chaos in U.S. income redistribution is as great as the anarchy in the tax code. Tax discussions fall apart because the redistributive influence of each change is assessed in isolation. By measuring how the tax and transfer system work together, politicians could get better taxes and more effective redistribution.

The U.S. also needs an integrated social-insurance program: Send checks to needy people, yes, but also monitor the amount they get from all government sources, including college financial aid, health insurance, energy assistance, Medicare, Medicaid, Social Security, unemployment insurance, food stamps, farm programs, housing and so on. Even without reforming the programs, it is necessary at least to measure their total effect to calibrate accurately any tax-based redistribution.

What about the tax rate? Well, if the federal government is going to spend 20% of gross domestic product, the VAT will sooner or later have to be about 20%.

Posted by orrinj at 6:18 PM


Trump again shows he's not pro-business like he says (Paul R. La Monica, September 5, 2017, CNN Money)

President Donald Trump claims to be a business-friendly president. But how can that be true when the five largest tech companies in America all vehemently oppose his stance on immigration?

The heads of Apple (AAPL, Tech30), Google owner Alphabet (GOOGL, Tech30), Microsoft (MSFT, Tech30), Facebook (FB, Tech30) and Amazon (AMZN, Tech30) were among the more than 400 business leaders that asked Trump to keep the Deferred Action for Childhood Arrivals program, or DACA.

DACA allowed immigrants who came to the U.S. as kids, a group commonly referred to as Dreamers, to avoid deportation. U.S. Attorney General Jeff Sessions announced Tuesday that DACA was being rescinded.

U.S. lawmakers, business urge Trump not to scrap South Korea trade pact (Reuters, 9/05/17) 

U.S. lawmakers and America's biggest business lobby urged President Donald Trump on Tuesday not to scrap a free trade agreement with longstanding ally South Korea, especially at a time of heightened tensions over North Korea's nuclear missile tests.

Race trumps trade.
Posted by orrinj at 1:12 PM


Top US Jewish leader urges PM: Rethink Western Wall prayer, or risk wider chasm (DAVID HOROVITZ, September 5, 2017, Times of Israel)

The head of American Jewry's main umbrella group urged Prime Minister Benjamin Netanyahu to rethink his approach to the suspended Western Wall compromise, and move to "restore the confidence" of US Jewry or risk broadening the "chasm" between many American Jews and Israel.

Posted by orrinj at 1:10 PM


Amid US-Russia diplomatic row, Putin says Trump 'not my bride' (AP, September 5, 2017)

In comments carried by Russian news agencies, Putin said Trump is "not my bride, and I'm not his groom."

Posted by orrinj at 12:55 PM


'If they deport all of us, who will rebuild?' Undocumented workers could be key to Texas recovery. (Arelis R. Hernández and Aaron C. Davis September 4, 2017, Washington Post)

Everywhere Samuel Enríquez looks, he can see the work that needs to be done. But because he is in the United States illegally, he knows he can't earn an official paycheck in this city's recovery.

The carpenter from El Salvador sits on a curb outside a home improvement store, hoping a passer-by will offer $10 an hour to help rip out sewage-soaked carpets or rotting drywall. Having lived in the United States for a year, he believes Texas is as good a place as any to seek refuge, because that's where the work is now, even if some government officials want him and others like him to leave the country.

"If they deport all of us, who will rebuild?" says Enríquez, 36, waiting along with about two dozen other laborers seeking work. "We do more for less."

It will take an army of workers to reconstruct a vast swath of Southeast Texas, including the sprawling metropolis of Houston, that was devastated by Hurricane Harvey. Whether the region can do it without fully embracing workers like Enríquez will soon be put to the test -- with reverberations that could be felt nationwide.

If you've ever worked day labor in TX, you were the only Anglo...