Jun
19
2024

Also, the Jabberwock

Sometimes I need to work backwards from an intriguing post. For example, here's Ramesh Ponnuru warning his readers to Beware the Cato Tax Plan. His analysis in its entirety:

It certainly sounds attractive as described by Dominic Pino. But I think it would have to amount to a big tax increase for most middle-class parents. I don’t see how it’d be possible to avoid this result when the plan would cut taxes for high-income earners and corporations, eliminate the child tax credit, and try to raise roughly as much money as the current income tax. I don’t think this would be an improvement in tax policy. I’m quite sure it would be politically suicidal.

Well, let's see what Dominic Pino has to say: Conservatives Should Be Talking about Eliminating the Federal Income Tax.

Donald Trump has made waves by talking about eliminating the individual income tax in favor of a system of tariffs for federal revenue. This proposal — if one can even call it that, as there is no detailed plan of how it would actually happen — is, to use one of politicians’ favorite euphemisms, aspirational.

The federal government raised about $4.5 trillion in revenue last year. Total U.S. imports last year were worth about $3.5 trillion. Raising tariffs will lead to fewer imports (and exports), which would mean less to tax. And the federal budget is coming up almost $2 trillion short as it is. The numbers just aren’t there.

But phasing out the federal income tax over time should be something for conservatives to pursue. Crazy? Right now, yes, but that doesn’t mean policy can’t move in that direction, making it more possible in the future to repeal the federal income tax.

Pino notes that a number of states have moved away from progressive income taxes, some moving to a flat tax, others getting rid of income taxes altogether. (Including New Hampshire, which is in the process of phasing out its tax on interest and dividends.)

But what about that Cato plan? Pino admits:

[Cato's Adam] Michel’s plan would have no chance of passing Congress as written. Way too many special-interest groups are harmed by having their special tax privileges removed, and they would send armies of lobbyists to make sure the plan dies. But this general approach — simplifying and flattening the tax code, by increasing the tax base and cutting tax rates — should guide conservative efforts at tax reform. [Trump's 2017 Tax Cuts and Jobs Act] was a step in that direction, but there is still so much left to do.

So both Pino and Ponnuru agree there's not much chance of Cato's plan being enacted. So I'd suggest we not "beware" and look at the plan itself. (There's a 24-page PDF or the one-page HTML. Here's a bit of red meat for the libertarian angel sitting on my left shoulder:

Ideally, the federal government should shrink so much that the Sixteenth Amendment—which authorized the modern income tax—could be repealed outright. Short of repealing the Sixteenth Amendment, policymakers should continue pursuing reforms to the income tax system that alleviate double taxation and lower taxes on saving, investment, and work.

So in addition to being red meat, it's also blue-sky stuff. But the Cato plan is full of incremental ideas, low-hanging fruit that could actually happen, for example (footnotes elided):

Tax credits for the energy sector reduce revenue by $119 billion a year […]. The Inflation Reduction Act (IRA) of 2022 marked a significant shift in US energy policy, pairing costly and complicated regulatory requirements with open‐​ended tax subsidies to manipulate consumer and producer incentives toward politically popular energy sources. The tax code has included subsidies for wind and solar energy technologies for more than four decades. Instead of temporary support for nascent industries, the federal subsidies—which are larger in 2024 than any past year—create sclerotic, dependent industries reliant on perpetual public money rather than consumer demand.

So if you're into tax policy wonkery, check it out. But as Pino and Ponnuru note, it's not gonna happen, at least not in its entirety; too easy for populists on left and right to demagogue. And, as we've seen with proposals for entitlement reform, demagoguery works great in America these days.

Also of note:

  • Good question. Especially when it's asked by Kevin D. Williamson: Who Pays?

    You will have noticed Dominic Pino's drive-by debunking of Donald Trump's meandering wish to replace the Federal income tax with tariffs. KDW goes nuclear:

    If Donald Trump has a superpower, it is being so brazen and insistent in his stupidity and dishonesty that his lackeys, sycophants, and credulous marks have no choice but to adopt his stupidity and dishonesty as their own. This has happened to Sens. Ted Cruz and Marco Rubio, to the whole of Fox News, and to countless little old church ladies who want to explain to me how January 6 was a false-flag operation. As heuristics go, that’s a time-saving line in the sand: Either people actually believe it when they repeat Trump’s baloney, in which case they are too stupid for further conversation to be of any value, or they don’t believe it, in which case they are dishonest—and there’s never any point talking to a dishonest person.

    Meet today’s contestant in “Stupid Or Dishonest?”—Republic National Committee spokeswoman Anna Kelly, who claimed: “The notion that tariffs are a tax on U.S. consumers is a lie pushed by outsourcers and the Chinese Communist Party.” As a specimen of Trumpist baloney, that is just about perfect: It is a lie, it is easily disproved, and it contains a preemptive strike accusing the people who are going to point out that it is a stupid, easily disproved lie of operating in bad faith.

    Why this nonsense from the RNC right now?

    Donald Trump has put forward the idiotic suggestion that we should replace the entire federal revenue system with tariffs, which would necessitate tripling the cost (very likely, more than tripling the cost) of imported goods—meaning gasoline, diesel, crude oil, pharmaceuticals, and other leading imports—and inflating the price of domestically produced alternatives to boot. That would mean, for example, that the $320 billion a year or so we spend on imported oil and gas ends up costing U.S. consumers nearly $1 trillion, and our $170 billion annual tab for imported pharmaceuticals would go to a little more than a half-trillion dollars.

    I am sure that, assuming he still has some lucid moments, Joe Biden is saying "I Can't Believe I'm Losing To This Guy".

  • I bet readers will get this right. Stephen Green has a poser: Guess How Many High-Speed Internet Connections Biden Built With $42.45 billion.

    You've read more than once right here at PJ Media about the $7.5 billion that Presidentish Joe Biden's Infrastructure Investment and Jobs Act put on the table as an inducement to build a network of 500,000 EV charging stations up and down the nation's interstate highways. And you've read about how few have been built — eight, at last count.

    Well, that was a bargain compared to today's boondoggle.

    The same law also set aside $42.45 billion — that's three Ford-class nuclear-powered aircraft carriers — to deploy high-speed internet to millions of Americans who currently lack access. That mostly means rural folks, who are usually the last to get anything new, like drug-resistant herpes or imaginary personal pronouns. 

    This is the part of the column where I'd ask you to guess how many Americans had been wired for high-speed internet after 2.5 years and all of those billions, and then you'd say, "Zero?" and then we'd both say we need a drink.

    Because the answer truly is a big, fat zero.

    FCC commissioner Brendan Carr posted to X a few days ago, "Mostly, the $42.45B is just sitting there. Not even one shovel's worth of dirt has been turned."

    Coincidentally, my CongressCritter tweeted (Xed?) yesterday:

    Yes, readers, a plan—or at least, an "initial proposal"—has been approved. It involves "more than" $196 million!

    I assume that means less than $197 million.

    In any case, that's about 0.46% of that $42.45 billion Green quotes. And that's just approval of the initial proposal. From the press release, there is no big hurry to start stringing fiber:

    One year from Initial Proposal approval, states must submit a Final Proposal that details, among other things, the outcome of the subgrantee selection process and how the state will ensure universal coverage.

    In the meantime, apparently, judging from Pappas's cheery tweet, the "digital equity gap" will remain open; businesses will be unable to compete; communities will unthrive; Granite Staters will continue to not succeed.

  • Recycling is (still) garbage. Frank Celia points out an unclothed emperor: Recycling Plastic Is a Dangerous Waste of Time.

    By now, you probably know that plastic recycling is a scam. If not, this white paper lays out the case in devastating detail. To summarise, amid calls to reduce plastic garbage in the 1970s and ’80s, the petrochemical industry put forth recycling as a red herring to create the appearance of a solution while it continued to make as much plastic as it pleased. Multiple paper trails indicate that industry leaders knew from the start that recycling could never work at scale. And indeed, it hasn’t. Only about nine percent of plastic worldwide gets recycled, and the US manages only about six percent.

    As bad as this is, the situation might actually be much worse. According to an emerging field of study, the facilities that recycle plastic have been spewing massive amounts of toxins called microplastics into local waterways, soil, and air for decades. In other words, the very industry created to solve the plastic-waste problem has only succeeded in making it worse, possibly exponentially so. While the study that kicked off this new field received some press coverage when it appeared last year, the far-ranging import of its findings has yet to be fully integrated into environmental science. If the research is even close to accurate, and to date it has not been substantively challenged, the implications for waste management policies across the globe will be game-changing.

    I'm not a fan of the industry-blaming here. Governments (at all levels) are not blameless, helpless puppets of Big Plastic.

    I'm also not a fan of the "microplastics" alarmism.

    But, yes, recycling is pointless and stupid.