Daily Archives: 26 March 2009

Hauser’s Law of Tax Revenue

“Kurt Hauser is a San Francisco investment economist who, 15 years ago, published fresh and eye-opening data about the federal tax system. His findings imply that there are draconian constraints on the ability of tax-rate increases to generate fresh revenues. I think his discovery deserves to be called Hauser’s Law, because it is as central to the economics of taxation as Boyle’s Law is to the physics of gases. Yet economists and policy makers are barely aware of it. . . .

[Hauser writes:] ‘No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP.'”

“As Mr. Hauser said: ‘Raising taxes encourages taxpayers to shift, hide and underreport income. . . . Higher taxes reduce the incentives to work, produce, invest and save, thereby dampening overall economic activity and job creation.’

Putting it a different way, capital migrates away from regimes in which it is treated harshly, and toward regimes in which it is free to be invested profitably and safely. In this regard, the capital controlled by our richest citizens is especially tax-intolerant.” (Read more from online.wsj.com)

Coming soon: Mandatory National Service in the U.S.S.A.

“The House passed a bill yesterday which includes disturbing language indicating young people will be forced to undertake mandatory national service programs as fears about President Barack Obama’s promised ‘civilian national security force’ intensify.

The Generations Invigorating Volunteerism and Education Act, known as the GIVE Act, was passed yesterday by a 321-105 margin and now goes to the Senate.

Under section 6104 of the bill, entitled ‘Duties,’ in subsection B6, the legislation states that a commission will be set up to investigate, ‘Whether a workable, fair, and reasonable mandatory service requirement for all able young people could be developed, and how such a requirement could be implemented in a manner that would strengthen the social fabric of the Nation and overcome civic challenges by bringing together people from diverse economic, ethnic, and educational backgrounds.’

Section 120 of the bill also discusses the ‘Youth Engagement Zone Program’ and states that ‘service learning’ will be ‘a mandatory part of the curriculum in all of the secondary schools served by the local educational agency.'” (Read more from infowars.com)

Also, see Sen. Jim DeMint’s (R-S.C.) thoughtful critique of bill. He addresses chartiy, America, Civil Society, the Constitution, the budget, the the tendency toward misdirected altruism by the government.

Political Posturing Over AIG

“I recently received an e-mail from Sen. Tom Harkin expressing outrage over the AIG bonuses and vowing to ‘pass legislation that completely taxes those bonuses away’ and ‘send a message to AIG and other companies who received bailout money.’

While I think the anger is well-founded, I fear it misses the point.

Government should never have entered the business of giving our money to failing companies. The line between government and private enterprise is now perverted. Because of the bailouts, politicians are now posturing by interfering in businesses they know little about, and businessmen (bankers in this case) now have more reason than ever to lobby and influence politics.

The whole process is outrageous. Bad companies should simply go bankrupt. There are plenty of banks here in the Midwest that have been responsible. If we lived in a free society, they would find themselves in a position to buy assets from the hugely irresponsible and incompetent New York banks. Instead, money is taken from the competent and given to the incompetent.

At the same time, politicians are pretending to have stuck it to the man. Scolding AIG over several hundred million in bonuses after handing them several hundred billion is ridiculous.

If Congress wants to scrutinize something, they should scrutinize the Federal Reserve. Instead of worrying about AIG’s millions, they should provide transparency to the Fed’s trillions.” (from press-citizen.com)