June 20, 2013

Posts Comments

You are here: Home / Archives for Economics

The absurdities of the income tax

April 15, 2013 By 1 Comment

TAMPA, April 15, 2013 – Being a libertarian, I agree that all taxation is theft. I hope that someday the human race “progresses” to the point where coercion, even to purchase “protection” from the official mafia, is held in contempt. But of all of the possible ways to rob us, the income tax is by far the most insidious. Consider some of its absurd stepchildren.

There is some finite cost to defending the borders, running a court system, and administering “justice.” For those who believe that government should do more (like conservatives and liberals), there is likewise a finite cost for building roads, running healthcare programs and taking care of the poor. That cost doesn’t change significantly overnight or even from year to year.

But the income tax doesn’t reflect this. If productivity and therefore incomes double due to some new technology, the amount of money owed to the government doubles, even though there are less poor people, more private sector “infrastructure” projects and less crime (crime goes up during recessions, down during booms). The more productive Americans are, the bigger and more oppressive a government they get.

Talk about a bad incentive.

It also discourages productivity in general and encourages wasteful consumption. Anyone who has had any business success knows that at a certain point, additional income costs you money. You would rather stop producing more than allow the additional income to put you at the low end of a higher tax bracket. So you produce less to keep more.

The flipside of that is frivolous consumption. If you’re showing too much profit near the end of the fiscal year, you look for things to buy that you don’t really need so that you can write them off as business expenses. You’d rather purchase something that you’ll get some use out of rather than give that money to the government. If not for the income tax, you might have reinvested that money in producing even more goods or services and making society richer.

Read the rest of the article at Communities@ Washington Times…

Filed Under: Constitution, Economics, Featured, History, Libertarianism, Natural Law, Political Philosophy, Property Rights Tagged With: , , ,

More anti-libertarian nonsense: libertarianism failed African-Americans

April 6, 2013 By 6 Comments

TAMPA, April 6, 2013 ― If my colleague Chris Ladd had written the usual, libertarians-are-racists screed, it would be unworthy of a response. But he didn’t. In fact, his piece “How Libertarianism failed African Americans” is a thoughtful and philosophically consistent argument that clearly disclaims any accusation that libertarianism is inherently racist.

But it’s still nonsense. That it is eloquently stated makes it all the more harmful.

Ladd’s premise is that racism and Jim Crow presented libertarianism with a dilemma. Libertarians oppose all government interference with freedom of association and free markets, but blacks were being “oppressed” by the voluntary choices of white people not to serve them. Therefore, libertarians had to choose between staying true to their principles or supporting the Civil Rights Act of 1964, which meant granting the federal government the power to override private decisions.

Most libertarians don’t oppose most sections of the Act, which prohibit governments from discriminating. They oppose those sections which allow the federal government to prohibit private decisions based upon race. Ladd recognizes this distinction, claiming “African Americans repression rose not only from government, but from the culture and personal choices of their white neighbors.”

First, Ladd’s history is completely wrong. Like many conservatives and liberals, Ladd sees libertarianism as a subset of conservatism, an “extreme” version of the conservative philosophy which supposedly advocates a market economy. For him, libertarianism traces back only as far as Barry Goldwater and became an independent movement in the early 1970’s when anti-war conservatives formed the Libertarian Party.

Libertarianism does not follow at all from conservatism. It is the philosophical child of classical liberalism, which struck an uneasy alliance with conservatism during a few, short periods in the 20th century, after the liberal movement completely abandoned individual liberty. The so-called “Old Right” should really be called the “Middle Right,” because conservatism has meant bigger, more interventionist government for most of American (and world) history.

Read the rest of the article at Communities@ Washington Times…

Filed Under: Alexander Hamilton, American History, Constitution, Economics, Featured, Founding Fathers, History, Libertarianism, Natural Law, Non-Aggression Principle, Political Philosophy, Property Rights, Thomas Jefferson Tagged With: , , , , ,

Even libertarians wrong on Monsanto Protection Act

April 4, 2013 By Leave a Comment

TAMPA, April 3, 2013 ― While the high priests in black robes were hearing arguments on gay marriage, President Obama quietly signed the continuing resolutions act that keeps the federal government operating in the absence of a budget. Buried inside the bill was language that has become notoriously known as “the Monsanto Protection Act.” The blogosphere exploded with cries of conspiracy, crony capitalism and corruption.

Liberals oppose the provision for the usual reasons: It lets a big corporation “run wild” without appropriate government oversight, free to (gasp!) make bigger profits on food. More thoughtful liberal arguments have suggested it may threaten the separation of powers by allowing the executive branch to override a decision by the judicial.

The lunatic fringe believes that Monsanto will control the world’s food supply through intellectual property laws and enslave us all, like the evil corporation did with oxygen in Total Recall. Of course, let’s not forget that old saying. “Just because I’m paranoid, it doesn’t mean they’re not out to get me.”

The liberal reaction to this bill and Monsanto’s activities in general is not surprising. It’s the libertarian reaction that’s surprising and disappointing. Even the Ron Paul crowd sounds like New Deal Democrats when it comes to this corporate farming giant.

They say that regardless of how much he supports the free market, everyone has that one issue that he is hopelessly socialist on. For some, it’s roads and so-called “infrastructure.” For others, it’s intellectual property. For Thomas Jefferson, it was education. Apparently, for libertarians it’s farming.

Now, if libertarians want to argue that corporations shouldn’t exist at all, that the privilege of limited liability violates individual rights and leads to market distortions, that regulating the markets only insulates large corporations from competition, that’s one thing. I’ve been there, written that.

Read the rest of the article at Communities@ Washington Times…

Filed Under: American History, Constitution, Corporations, Economics, Featured, Founding Fathers, History, Libertarianism, Liberty, Natural Law, Political Philosophy, Progressivism, Property Rights, Regulation, The New Deal, Thomas Jefferson Tagged With: , , , , ,

Anti-libertarian nonsense: Those government roads

March 24, 2013 By Leave a Comment

TAMPA, March 22, 2013 — Libertarians have to deal with a lot of nonsense when making their case. Invariably, if a libertarian suggests any reduction in the power of the state, he is regaled with this supposedly devastating rejoinder:

“So, I suppose I won’t see you driving on any of those government roads.”

There are many reasons to stomp on the stupid button. Here are just a few.

First, there is the implication that the libertarian is disingenuous or even ungrateful. He seeks to reduce the power and influence of the state, perhaps even (gasp!) lower taxes, yet still has the audacity to drive on the roads that the government provides.

This argument holds no water. After being forced to purchase a road whether he wishes to or not and being virtually prohibited from building his own, exactly why should the libertarian not use the road he has paid for? Where is the contradiction in pointing out that the government road he was forced to buy would have been cheaper and of higher quality if it were produced by the market? Exactly why is he disingenuous or ungrateful by suggesting that the next road be financed the same way as houses and factories?

Of course, if the government didn’t build the roads, they wouldn’t exist, right? The proponents of this farcical idea should read some American history. For much our first century, the chief domestic policy debate was over whether the government should be allowed to subsidize roads, and the government side lost. As Tom Dilorenzo writes in How Capitalism Saved America,

“But the fact is, most roads and canals were privately financed in the nineteenth century. Moreover, in virtually every instance in which state, local or federal government got involved in building roads and canals, the result was a financial debacle in which little or nothing was actually built and huge sums of taxpayer dollars were squandered or simply stolen.”

All of the heroes of that century were on the private road side. Jefferson, Madison, Monroe, and Jackson argued against government-subsidized roads. Alexander Hamilton, Henry Clay and finally Abraham Lincoln – the proponents of state capitalism and privileges for the wealthy – argued for them.

Read the rest of the article at Communities@ Washington Times…

Filed Under: Alexander Hamilton, American History, Constitution, Economics, Featured, Founding Fathers, History, James Madison, Libertarianism, Natural Law, Political Philosophy, Property Rights, Thomas Jefferson Tagged With: , , , ,

Obama has state of the delusion speech shovel ready

February 12, 2013 By Leave a Comment

TAMPA, February 12, 2013 — Pundits are already atwitter over tonight’s annual exercise in political posturing. The question many are asking is whether Obama will stay on the attack against his Republican opponents or attempt to use the speech to identify areas where he can work with them.

The real question is whether the president will make a single remark that bears any resemblance to reality.

The State of the Union address (SOU) has always been little more than a nationally televised stump speech. As all presidents believe that anything happening anywhere in the country is a direct result of their policies, none have ever wanted to paint a less than rosy picture about the supposed “state of the union.” After all, if it’s in a bad state, it must be their fault.

However, with the U.S. now in full-fledged collapse, the speeches have become so detached from reality that they should be called “state of the delusion” addresses.

The speech is interminably long, but let’s look ahead to the main areas it will cover and try to separate fantasy from reality.

The president will remind us that he inherited an economy in shambles, which is true. He will hope that listeners draw the inference that his predecessor was wholly at fault for this, but that isn’t close to true. Every president since at least Teddy Roosevelt contributed to the problem, with the largest contributions coming from Democrats.

It will really turn bizarre when Obama starts talking about “the recovery” that’s underway. We’ll be told that while we’re not out of the woods and there is still “a lot of work to do (i.e., more government meddling to accomplish),” new jobs are being created, new industries are flourishing and things are generally looking up.

In reality, the United States is in a depression, just like the one in the 1930’s, and it’s being prolonged for all of the same reasons. The official numbers say that unemployment has been hovering around 8 percent, but that’s only because they’ve changed the way unemployment is measured. If they measured it the same way that they did in the 1930’s, unemployment would be the same as it was in the 1930’s.

As an aside, there isn’t any substantive economic distinction between “recession” and “depression.” Politicians just decided to stop calling them depressions to con the public. After a while, they started believing their own bovine waste products.

Read the rest of the article at Communities@ Washington Times…

Filed Under: Constitution, Economics, Featured, Foreign Policy, Libertarianism, Natural Law, Non-Aggression Principle, Obama, Political Philosophy, Politics Tagged With: , , , , , , , ,

But aren’t right-to-work laws also unjust?

December 13, 2012 By Leave a Comment

TAMPA, December 13, 2012 ― As expected, the reaction to Monday’s column about Michigan’s right-to-work legislation inspired spirited discussion.

Weeding out both praise and invective that were unresponsive to my argument, there was a dissent that had merit. It was the libertarian argument that right-to-work laws also violate the rights of employers and employees to make a voluntary contract. An employer should be free to require membership in the union and/or payment of dues as a condition of employment.

Like most libertarians, I agree with that argument in principle, but one cannot evaluate right-to-work laws in a vacuum.

Right-to-work laws and the Taft-Hartley Act from which they proceed are wholly a reaction to the Wagner Act. The proponents of Taft-Hartley first tried to get the Wagner Act repealed. When the Supreme Court ruled Wagner constitutional, conservatives passed Taft-Hartley. If the Wagner Act were not already law, Taft-Hartley would be both unnecessary and unjust.

However, in the context of the Wagner act, neither is necessarily true. A brief allegory will illustrate.

Employer Smith sits down at the bargaining table with Union Jones. The two discuss potential terms of an employment contract, but are unable to reach an agreement. Jones wants more than Smith is willing or able to pay. Smith gets up to walk away.

Just then, Luca Brasi walks up and makes Smith “an offer he can’t refuse.” Brasi puts a gun to Smith’s head and invites him to sit back down, assuring him that at the end of the meeting, either his brains or his signature will be on a collective bargaining agreement.

Brasi is the Wagner Act.

Read the rest of the article…

Filed Under: Economics, Featured, Labor Unions, Libertarianism, Liberty, Natural Law, Non-Aggression Principle, Property Rights, The New Deal Tagged With: , , , , , ,

Michigan unions say no right to work

December 11, 2012 By Leave a Comment

TAMPA, December 10, 2012 – Lansing, Michigan is bracing for an onslaught of protestors following Republican Governor Rick Snyder’s indication that he would sign “Right to Work” legislation currently making its way through the state legislature. President Obama and Harry Reid have both joined Michigan Democrats in denouncing the bill.

As usual, both liberals and conservatives are already demonstrating their skewed perception of reality in weighing in on this debate. President Obama told workers at an engine plant outside Detroit that “what we shouldn’t be doing is trying to take away your rights to bargain for better wages,” as if the law would do any such thing.

However, Harry Reid surpassed all in obtuseness when he called the legislation a “blatant attempt by Michigan Republicans to assault the collective bargaining process and undermine the standard of living it has helped foster.”

Perhaps the senator should ask the residents of Detroit, an entire city laid waste by New Deal union legislation, how they are enjoying the standard of living it has produced.

Libertarians haven’t been able to say this in quite a while, but the conservatives are mostly right on this one, although perhaps for the wrong reasons.

The only troubling sentiment coming from grassroots conservatives is the animosity towards labor unions themselves. Many seem to believe that the mere existence of labor unions causes economic distortions. Nothing could be further from the truth. Labor unions themselves are not the problem.

Like virtually all human misery, labor market distortions are caused by the government. Specifically in this case, they are rooted in the National Labor Relations Act of 1935 (a.k.a. the Wagner Act).

Read the rest of the article…

 

Filed Under: Constitution, Corporations, Economics, Featured, Labor Unions, Libertarianism, Liberty, Natural Law, Non-Aggression Principle, Political Philosophy, Property Rights, Regulation, Socialism, The New Deal Tagged With: , , , , , , , ,

Mitt Romney did not pay less in taxes than his secretary (and raising capital gains tax will destroy the economy)

December 1, 2012 By 1 Comment

TAMPA, December 1, 2012 ― President Obama and the Democrats were successful in 2012 largely on the strength of some rather outlandish demagoguery. “Billionaires pay fewer taxes than their secretaries” was one slogan that was particularly successful.

The Obama campaign successfully made an issue out of Mitt Romney’s taxes, finally getting Romney to admit that he paid around 13% of his earnings in taxes over the past several years. The “fair share” crowd contrasted this with the higher percentage that would have been paid by a secretary in the 28% bracket, for example, who would still pay more than 13% even after deductions.

That Americans bought this specious argument is more worrisome than that the Democrats made it.

Romney’s tax percentage was low because most of earnings came from capital gains, not income. Capital gains are just what they sound like. They are the appreciation in the value of one’s capital. If you buy a stock at $5 per share and its price goes up to $7 dollars per share, you have realized $2 in capital gains. If you sell that stock at a $2 dollar profit, the government wants a percentage.

Right now, Mitt Romney would pay 35% income tax and 15% on capital gains. The average secretary would pay 15% income tax and 15% on capital gains. So, Romney’s tax liability as a percentage of income is more than double the average secretary’s. His tax liability on capital gains is the same. Obviously, Romney’s nominal tax payments in both categories would exceed the secretary’s by orders of magnitude.

That’s how things actually are out here in the real world.

So why is the tax rate on capital gains lower than on income? Because “capital,” by definition, comes from previously taxed income.

Read the rest of the article…

Filed Under: Economics, Featured, Mitt Romney, Monetary Policy, Natural Law, Obama, Politics, Property Rights Tagged With: , , , , , ,

The fiscal cliff: Another phony emergency to give the government more power

November 27, 2012 By 2 Comments

TAMPA, November 27, 2012 – The 24-hour news cycle is dominated with frantic warnings about the “fiscal cliff.” If you merely listen to the sound bites, there is another “emergency” facing the United States of America and only some drastic action by Congress can avert it.

What nonsense. Don’t Americans ever learn anything from even the recent past?

Just four years ago, we were told that if we didn’t allow Congress to give Wall Street almost a trillion dollars of our money, the end of the world would occur. The “bold” legislation was necessary to “save the financial system.” Other than preventing a lot of billionaires who made bad investments from losing their money, I’m not sure what that was supposed to mean.

It didn’t prevent millions of borrowers from losing their homes. That happened anyway.

We were told after 911 that “the world changed” and the 4th, 5th and 6th amendments to the Constitution would have to be trashed. Americans now subject themselves to unreasonable searches without warrant merely for the “privilege” of getting on a plane. They allow presidents to arrest American citizens without a warrant or charges and hold them indefinitely without recourse to a writ of habeas corpus.

The president can even kill American citizens without due process.

It was all supposedly necessary to protect us from…the shoe bomber and the underwear bomber. Both defeated the new government security apparatus and were subdued by private citizens.

Both initiatives were accompanied by a non-stop barrage of media propaganda trumpeting impending doom if the government wasn’t given more power.

The fiscal cliff scam is playing out exactly the same way. Day and night, Americans are bombarded with the same message. If Congress doesn’t do something, the world will end.

There are two components to this supposed disaster. The first is the “draconian cuts” to government spending built into the Budget Control Act of 2011. Supposedly, they will “gut the military,” while plunging the economy back into recession.

There is only one problem. Even if Congress fails to make a deal, nothing is being cut from the federal budget.

Let me repeat that. Nothing is being cut.

Read the rest of the article…

Filed Under: Constitution, Economics, Featured, Liberty, Media, Natural Law, Political Philosophy, Politics, Property Rights Tagged With: , , , , ,

Libertarians vs. Conseratives on the welfare state

October 26, 2012 By Leave a Comment

TAMPA, October 26, 2012 – Many people think of libertarianism as a subset of conservatism, but that’s not true. Libertarianism and conservatism are completely separate philosophies with distinct and separate philosophical traditions. The philosophical differences result in very different positions on issues, from domestic to foreign policy. Their differences on the welfare state provide a perfect example.

Most Americans believe that President Obama and the liberals believe in wealth redistribution and that Republicans/conservatives are against it. That just doesn’t line up with the facts.

While Republicans make general statements against the welfare state, they actually support 95% of the actual spending. A key plank of the Romney/Ryan campaign is “preserving and protecting Social Security and Medicare.” That’s more than half of welfare spending alone. They also support government subsidization of housing, agriculture, energy and other “job-creating” programs. They are willing to support corporate welfare if they believe it will be good for the overall economy.

The only criticisms Republicans generally make are for social safety nets like TANF. This illustrates a key difference between conservatives and libertarians on welfare.

Libertarians object to the welfare state on this basis: Any taxes collected from citizens are collected under a threat of violence. You pay or you get kidnapped at best, killed resisting at worst. Therefore, libertarians object to using the taxing power to take money from one person or group and give it to another. When individuals do this, it is called “armed robbery.” For libertarians, it is no different when the government does it. It is the crime itself that libertarians object to.

Conservatives see it differently. They don’t object to the crime itself. Rather, they formulate their positions based upon who will receive the benefits. Redistribution to certain types of people is acceptable, to others it is not. That is why they will excoriate the “welfare queen,” whose impact upon the budget is minimal, while fully supporting Social Security and Medicare, which will eventually bankrupt the entire government.

Continue at Communities@ Washington Times…

Filed Under: Conservativsm, Constitution, Economics, Featured, Gary Johnson, Libertarianism, Mitt Romney, Natural Law, Non-Aggression Principle, Obama, Political Philosophy, Politics, Property Rights Tagged With: , , , , , , , ,
« Older Posts