Corporate Welfare

No More Corporate Welfare

Selective, complicated exceptions to the law do not reduce the burden of government

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When Congress and President Obama came up with their beyond-the-last-minute deal to put off addressing the coming fiscal crisis, The Wall Street Journal turned the spotlight on a little-noticed, yet too typical aspect of Washington's machinations: "The bill's seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout," the Journal reported.  

So a bill that was represented as the first steps toward fiscal responsibility (try not to laugh too hard) contained billions of dollars in corporate welfare. And it was a bipartisan affair.

How sad. How Washington!  

Beneficiaries of the various special tax treatments and exceptions includes owners of NASCAR speedways, companies in American Samoa, rum producers, businesses on Indian reservations, railroads, Hollywood moviemakers, and green-energy firms, including wind-power equipment producers.

As the Journal commented, "The great joke here is that Washington pretends to want to pass 'comprehensive tax reform,' even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be." 

Corporate welfare is nothing new, of course, and according to Cato Institute budget analyst Tad DeHaven, in "Corporate Welfare in the Federal Budget," fiscal 2012 saw $98 billion in "pro­grams that provide payments or unique ben­efits and advantages to specific companies or industries." (DeHaven acknowledges that defining and calculating corporate welfare is "not an exact science." Indeed, not. To the extent the U.S. military safeguards access to, say, Middle East oil fields, that portion of the Pentagon budget can be regarded as corporate welfare, but it's not usually thought of that way. Similarly, highway subsidies to commercial shippers may give certain firms advantages over firms that don't engage in long-distance shipping.) 

Manipulating the tax code to benefit particular interests has obvious appeal for politicians—it's a source of power and influence—and a code that did not permit such manipulation would be much less attractive to them. Outright cash subsidies from the taxpayers, while not unheard of, smacks too much of cronyism and is more likely to alienate taxpayers. But complicated exceptions written into the tax laws can be presented as creative governance on behalf of the public interest. But it is cronyism as offensive as outright subsidies.

The benefits of a market economy lie in free competition. When the market is rigged by politics, benefits are diverted from consumers to politically chosen producers (who can be counted on to reward their patrons). This is what corporate welfare accomplishes. In a freely functioning market economy, all products compete with one another, and producers compete not only for customers, but also for scarce factors of production, including labor, land, and materials. Remember: We live in a world of scarcity. Factors used for one purpose cannot be used for another. Tradeoffs are necessary. The price system, which is ultimately configured by consumer preferences, guides the competitive process by which the factors of production are employed in their various purposes. For example, an entrepreneur who expects her product to be more profitable than a rival's product will be in a better position to bid factors away from the rival, and if the entrepreneur's forecast is correct, consumers will have been well served.  

But if the government intervenes with corporate welfare to lower the rival's costs, whether by specially reducing taxes or some other manipulative method, consumers will be defied because products they prefer will not be produced or not produced in the quantities desired. The politically connected businessperson will profit at their expense, as well as the expense of the competitors who were treated discriminately by the tax code, especially if the government buys the favored product.  

Corporate welfare is not primarily about lowering taxes. That would be a worthwhile goal, of course, and could be achieved simply by slashing tax rates and simplifying the code. But when taxes are lowered selectively by writing complicated exceptions into the law, the goal is to bestow privileges on cronies, not to reduce the burden of government on all. Corporate welfare, among its many sins, violates equal protection under the law.

Essential to a free society is people's ability to go about their peaceful business unmolested by government. A good part of that activity includes producing goods and services for consumers, who in turn are free to say yes or no to the offerings. Corporate welfare is a way for politicians to maintain the façade of a free economy while rewarding some activities and punishing others. The politicians substitute their preferences for the preferences of consumers, distorting relative prices in the process. Thus if government artificially makes it more profitable to produce wind turbines than washing machines, political judgments replace economic judgments. This is not something to be welcomed. Such political judgments are made by men and women who never face the market test and who risk no capital of their own. The failures of their schemes will not be easily traceable to their decisions (what politician or bureaucrat suffered because of the Solyndra fiasco?), and much of the cost of those policies will be in the form of goods and services not produced because of the diversion of resources. Thus voters will be in a poor condition to assess the performance of politicians, making officeholders largely unaccountable for their economic meddling. Inevitably, the authors of corporate-welfare schemes will blame the nonexistent "free market."  

Even if a particular citizen were to understand the source of the problem, it would take a herculean effort to unseat the politician(s) responsible, and if even that exceeded, it would not necessarily change anything. That citizen would still be forced to support the meddlesome system.

Contrast this with the free-functioning market economy. If entrepreneurs err and destroy value by misusing scarce resources, consumers' retribution may be swift: They can simply withhold their money and reject the ill-conceived products, forcing the entrepreneur out of business and shifting resources to more able hands. Ironically, it is the free market that puts control into the hands of the people. Political democracy is only the palest approximation of the "true democracy" of the marketplace.

As we can see, consumer clout far exceeds voter clout, and therefore economic producers—when they have no access to government privilege or shelter from competition—are far more responsive to the people than are politicians. Officeholders create theatrical effects to impress voters. Entrepreneurs have to produce results.  

Tax benefits directed at particular interests are often defended on grounds of "market failure." It's said that under some circumstances rational individual behavior in the market yields a less-than-optimal outcome for the whole public. This can be answered in several ways. First, if such failures truly exist, they represent profit opportunities to entrepreneurs. There's a general principle here that is often overlooked. The case for competitive markets is not that they are perfect—how could they be when they are filled with fallible human beings? Rather, the case is that discovery and correction of errors produces entrepreneurial profit. No lure is more powerful than the prospect of profit.  

Moreover, even in the unlikely event a market failure couldn't be corrected, it would not follow that a government solution would be better than adapting to the situation. Why assume politicians won't make things worse, particularly in light of the perverse incentive system described earlier? There is simply no reason to believe that political operatives can have the incentives or information needed for ameliorating undesired market outcomes. One cannot invoke market failure without coming to grips with government failure.

This article originally appeared at The Project to Restore America.

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  1. Manipulating the tax code to benefit particular interests has obvious appeal for politicians?it’s a source of power and influence?and a code that did not permit such manipulation would be much less attractive to them.

    There’s your campaign finance reform. Limit the power of government over your money, throw in a little lack of regulatory overreach, and who’s going to want to donate huge sums of cash to politicians who can’t do specific dick for them?

    1. Yep.

      But it’ll never happen. They have no incentive to give their power away. In the Senate that vote would be something along the lines of 98-2 against, and 415-20 against in the house.

      The problem is not the money. It’s that the incentive to buy politicians is there because they can, and willingly do, use every bit of station they have to hook up their friends.

      1. Of course we could pass a Constitutional Amendment…without Congress.

        1. But that would be like hard work and stuff.

  2. just as Ryan replied I cant believe that a person able to earn $5167 in 1 month on the internet. did you look at this web link… http://www.Snag4.com

    1. Spammers are up early this morning.

      1. And they always seem to be posting in the wrong thread; WIH is Ryan?

    2. If your life is so great what the fuck were you doing up at 8:38 on a Sunday morning? You are financially trapped in a pyramid scheme consisting of a cult of comet riders, aren’t you?

  3. Footage of the attempted point-blank assisnation of a Bulgarian politician yesterday, foiled only because the gun failed to fire.

    http://www.dailymail.co.uk/new…..ead_module

    The monkey stomping the would-be assassin receives is pretty awesome.

    1. I still bet he forgot to chamber a round or take a safety off.

    2. It probably would have been smart to put a little more effort into first securing the guy.

      1. We’re talking about Europeans here, Fist.

        1. And you are presumably an expert on the subject?

          1. If I got touchy every time someone took an unholy rhetorical shit on anything Russian, I’d have committed suicide by fire ant years ago. Relax.

            1. Piss off ya damn Russki. I don’t have a problem with people shitting on individual countries or even on Europe in general depending on the situation. But I reserve the right to get my hackles up with overgeneralization when I feel like it is warranted. Lord knows I’ve wasted enough time laying into Europeans who make such blanket statements about Americans.

              1. I’m with you on this one, PS, for precisely the reasons you cite; on the flip side, many of the critiques of “The Ugly and Impatient American” are warranted, PS. Particularly an allergy to polyglottism.

                That said, fuck The Limeys and The Frogs…a nice come-uppance if you ask me.

                1. I beg to differ, Pane Doktor.

                  I grew up in NM with a passing knowledge of TexMex Spanish, and I later acquired a more than passing knowledge of Czech, although nothing to write home about.

                  But the number of times I’ve encountered monoglot people in Europe who live within (metaphorical) spitting distance of a border is really astounding.

                  The language thing is bullshit.

                  1. But the number of times I’ve encountered monoglot people in Europe who live within (metaphorical) spitting distance of a border is really astounding

                    Huh. My experience here so far has shown otherwise, but I don’t disbelieve you (I’ll need to travel more over the next couple of years).

                    When I lived in GER for the summer before I started undergrad, I found that most of The Krauts spoke at least one other language passably, and most common were French (fuck The Frogs) and English.

                    1. There’s only two things I hate in this world. People who are intolerant of other people’s cultures, and the Dutch.

                    2. Germans in college, and Germans in general speak good English. I did have to once mime when asking how to fill the tires because I forgot the obvious luft and the cashier either didn’t understand or didn’t want to understand. It wasn’t a pretty sight.

                      Lots of Europeans speak several languages but it was surprising to me how many Europeans speak no languages other than their mother tongue.

                    3. the cashier either didn’t understand or didn’t want to understand

                      My money is on, “didn’t want to understand”.

                      I have encountered this in medicine actually, on my ER duty weekends, and with Spanish speakers in particular. I know medical and a decent amount of Spanish, and the first time I busted a patient claiming an inability to understand English, I happened to be around the corner of the exam room and they didn’t see me behind the curtain, and I specifically heard them say, in English, “Remember, we don’t understand Ingles!

                      I went into orbit, but managed to calm down before I went into the room.

                      I firmly, 100% believe with all my fibre and being, if one is going to a foreign land, LEARN THE DAMN LANGUAGE! ESPECIALLY if you are going to LIVE there.

                      If I was going to live in Thailand or Iran, I would kidnap HM and stash him in my basement and make him teach me Thai and/or Urdu before I travel to either (or both) destinations.

                    4. Hey, doc. Our pediatrician wants us to get a second opinion on the surgeon’s plan. If we go ahead and do so, I’m sure we’ll piss her off and I don’t want to do that.

                      I told the pediatrician to go ahead and seek one on his on and he said he’d be fine with that. We should get word back from another team in the next few days. I’ll let you know what they say.

                    5. Hey, doc. Our pediatrician wants us to get a second opinion on the surgeon’s plan. If we go ahead and do so, I’m sure we’ll piss her off and I don’t want to do that.

                      TOUGH SHIT! She can deal with a second opinion. I am never offended with a patient getting a second opinion; it’s your, Banjos and Baby Reason’s right.

                      I have found professionally I have lost very few patients to the second opinion, and your surgeon is probably no different. Patients in most cases won’t changed horses in midstream, but I always encourage a second opinion.

                      Yes, do keep us posted, please.

                    6. Farsi and Urdu are not mutually intelligible, except for the term “marg bar Amrika“. 🙂

                    7. Farsi and Urdu are not mutually intelligible

                      I meant Farsi, the language of Xerxes.-D

                      Most of the Arabic folk here and in my experience in The States with Arabic docs has shown a fluency in Arabic, Urdu, and Farsi. Mostly Arabic and Urdu.

                  2. There’s a difference between “knowing” a language, and just being able to say “Which way to the discotheque” in several dialects of Neo-Latin, which is what many Euros confuse with being “multi-lingual”. That having been said, overall, American foreign language education is abysmal, for several reasons. However, Euros often overestimate their language skills.

                    You want to meet true polyglots? Go to sub-Saharan Africa.

                    1. There’s a difference between “knowing” a language, and just being able to say “Which way to the discotheque” in several dialects of Neo-Latin, which is what many Euros confuse with being “multi-lingual”.

                      Americans make the same mistake, HM. I blame Rosetta Stone and Taco Bell, myself.-)

                      You want to meet true polyglots? Go to sub-Saharan Africa.

                      Let me get my VAX first. Seriously though, you are a professional linguist, and know more about languages than all of us put together, HM. Give us a small break, ok?-D

                    2. I feel othered for only speaking broken spanish.

                    3. I feel othered for only speaking broken spanish.

                      Feh. It’s either “use it or lose it”. I used to know French really well, as Sibling Maximus speaks French, but it’s rusty now, and I don’t much care for The Frogs. German has atrophied, but I took to immersion quickly, and could fake my way though it if necessary. Spanish I studied in HS, so I had some knowledge base, and Greek and Latin roots are a necessary part of medical terminology and education.

                      Russian was an interesting case, as I had a med school prof who was fluent and I needed to learn for a trip to Ivanovo whilst in residency. Though that trip was somewhat disappointing, it made me a Russkij-phile.-)

                      And now very, very much a Rukrainian-phile.-D

                    4. Heh. I remember when I had to get VAX-ed up for Thailand. The only place that had the required serums was this sketchy-looking clinic in a strip mall on the outskirts of town. For some bizarre reason the waiting room actually smelled a little like cigarette smoke. The whole atmosphere actually added to the adventure.

                    5. However, Euros often overestimate their language skills.

                      Agreed.

                      That said, when I was in Europe this past summer, nearly everyone I came in contact with spoke at least English. The only exception were the Palestinian immigrants in Norway who spoke their native language and broken Norwegian. They did make a mean kabob e pita, however.

                      But EVERYONE in Norway spoke English, oftentimes better than many of those here in Central KY. Ditto with Amsterdam. Everyone, everywhere spoke English. The signs were in both Dutch and English, and those that weren’t were in JUST English.

                      Western Europeans (Greece, Italy, France, Germany, Spain, Portugal, England), however, HIGHLY over estimate their language skills.

                      Hispanics are the same way about their ability to understand other Romance languages, particularly Italian or Portuguese. My wife, a native Brazilian who is fully fluent in 5 languages (Portuguese, Greek, Spanish, English, French), loves to put that claim to the test when a hispanic claims to understand Portuguese. She quickly proves them false. Every single time.

                2. 6cm? Fucking pussies!

    3. Bulgaria is a great addition to the European Union.

    4. The guy may be an ex-communist era piece of shit informer, but he handled himself pretty damn well, not running the opposite way, crouching or cringing.

      1. The guy may be an ex-communist era piece of shit informer, but he handled himself pretty damn well, not running the opposite way, crouching or cringing.

        That’s what really stood out to me too. He even batted at the gun, then went at the guy. You get the feeling this guy has seen some shit in his lifetime.

        1. Eastern-bloc, bro. Eastern-bloc.

        2. This might not even be the first time he’s had to fight off a would be assassin.

          1. The BBC is reporting that the gun was actually a “gas pistol”:

            http://www.bbc.co.uk/news/world-21103987

        3. I agree, although I’ve seen people react surprisingly well or badly to life-threatening situations without a strong correlation to previous experience.

  4. That capitalists love to cry “free market”, except when it comes to corporate welfare.

    1. Cut out all welfare. Kill the complex tax structure and replace it with a single retail sales tax collected by the retailers. That kills 90% of the bookkeeping, encourages savings and cuts the power of the political class.
      It’ll never happen.

    2. That’s retarded. Businesses have to exploit the state, because their competition is going to if they don’t. They have no choice. It’s no different than libertarians driving on the roads or taking social security. You don’t have to sacrifice yourself because the system is corrupt.

    3. That capitalists love to cry “free market”

      What ‘capitalist’ has every done any such thing?

      They love fascism as much the proggies do.

      1. Dude, he’s got it right. Donald Trump is a brash example of this… Warren Buffett is a quieter example of this.

        1. I’ve never heard either one advocate anything close to free markets.

          1. Then you haven’t been paying attention, because they will talk about how wonderful the free market is in principle, before explaining why they need their subsidies.

            1. Yeah, I’ve listened carefully and never heard either, or any other billionaire public figure sing the praises of free markets.

              It’s all about government supporting businesses by making the right investments, blah blah blah.

              Trump, for example, thinks real estate regs are great and wants a trade war with China.

              1. Yes, but in Trump’s defense, he is retarded.

              2. “or any other billionaire public figure sing the praises of free markets.”

                I can think of two billionaire brothers who run a magazine called Reason that sings the praises of free markets. For some reason, out of all the many billionaires out there that benefit from government corruption and largesse, these two get singled out for criticism, often by so-called “left-libertarians”. It’s almost as if these “left-libertarians” don’t genuinely give a shit about the corruption they wail on and on about, and really just hate free markets.

                1. I seriously doubt that even the ignoble Koch brothers operate completely sans subsidies.

    4. sonofloud| 1.20.13 @ 8:47AM |#
      “That capitalists love to cry “free market”, except when it comes to corporate welfare.”

      Uh, great sound-bite; got any evidence?

      1. If I had time, I’d dig up this utterly infuriating interview Donald Trump gave in the aftermath of Hurricane Katrina, where he started off explaining how businessmen would rebuild New Orleans if only the government would get out of the way, and then went on to say that thanks to the subsidies he was getting from the feds, the boondogle du jour he was ‘investing’ in (it happened to be in New Orleans) was now going to be even more profitable.

        The examples are legion. Hell, Ayn Rand makes the phenomenon the central theme of one of her essays in “Capitalism: The Unknown Ideal.”

        I really don’t understand why there is any controversy about sonofloud’s comment. It’s like getting upset when someone says “Republicans are for smaller government except when it comes to cutting anything.”

        1. It implies hypocrisy where none exists. There’s nothing hypocritical about playing by the rules while at the same time wanting the rules to be different.

          Look at Trump’s two comments…

          “They shouldn’t be subsidizing XYZ”
          “I took XYZ subsidies and did this or that with it.”

          What’s infuriating about that? What do you think, he should have turned down the subsidy? What would that have done? The subsidy would have just gone to somebody else.

          1. I think you need to reread what I wrote, because trump never said they shouldn’t be subsidizing something.

            Rather Trump seems to think the free market involves the government giving him shit and letting him do what he wants with it.

            1. OK, well, I’ll still give Trump a break, since like somebody else said, he’s retarded.

        2. Didn’t Rand take gubmint money when she was dying?

          KPres is right. Ya gotta fix the system.

          1. Saint Ron Paul put earmarks in for his district and voted against the bill. It’s the right thing to do – change what you can, but don’t sacrifice for ‘the greater good.’

  5. The market isn’t distorted by one player paying fewer taxes. It’s distorted by any players paying any taxes. Tax exemptions are ALWAYS a good thing, regardless of who gets them.

    1. Except that exempting one payer almost always means another payer pays more.

    2. Except that exempting one payer almost always means another payer pays more.

      I don’t think that’s the case. If it were, we might not have a $12T debt.

      Even if it were, the blame lies with the taxers, not with taxpayers who’ve managed to reduce their own burden.

      1. The debt is going to be payed back, one way or another, even if it’s via an inflation tax.

        1. The debt is going to be payed back, one way or another,…

          No it won’t.

          …even if it’s via an inflation tax.

          The inflation already happened.

          1. Well the monetary inflation already happened, but the price inflation doesn’t happen until all those overseas dollars come rushing home or the dollars sitting on bank balance sheets are introduced into the economy.

            It’s really about interest rates. Any move up in interest rates spells game over.

            1. Well the monetary inflation already happened, but the price inflation doesn’t happen until…

              Assuming of course that falling prices aren’t the natural result of free markets, technology, industrialization and the popping of a credit bubble.

              Consumer prices should have fallen by 25%+ in the immediate aftermath of the ‘financial crisis’ of Oct ’08. The fact that they didn’t is indicative of inflation.

              And yes, much of the inflation was exported and will rebound on us at some point in the future.

      2. The debt is a matter between the government and its creditors. Whether the government chooses to repay has no bearing on the morality of forcibly extracting money from a third party.

        You wouldn’t judge one victim for fighting off a rapist who compensated by raping a second victim twice.

        1. Default is a possibility, which is why I said “almost always”. But it isn’t realistic.

          And I’m not judging anybody. My point is that, in the aggregate, one victim fighting off the rapist isn’t any better when it just means the rapist moves on to another.

      3. You’re neglecting the fact that a person whose taxes are arbitrarily lowered has more incentive to vote for more spending, since he/she isn’t paying as much for it. And is also incentivized to preserve a system in which tax exceptions are common and unremarkable.

        Think of it this way – all those beneficiaries of indirect subsidies via the tax code form a coalition of interests that all share a common interest in preserving a complex and unfair tax code. None of these people have ANY interest reducing the power of government or cutting the overall tax rates. They have a direct interest in making is more complex and more opaque, the better to obscure the ways in which they are able to manipulate it to their advantage.

    3. It’s always a good thing when the government chooses winners and losers?

      1. There are no winners.

        1. Boeing would like a word.

        2. Boeing is one of many Olympic class swimmers trying to fight the Niagara Falls of government. They’ll never “win”. They might be good at weakening the falls they’re facing, but that’s not the same as pushing their opponents under.

          1. They’ll have fun when the airlines are nationalized a la Amtrak.

            Mark my words, it’s coming…

            1. I believe you are right, HM.

              Too many of the airlines are either near bankrupt, emerging from bankruptcy, and almost all of them have customer service ratings in the loo.

              Passengers are pissed and tired of all the little fees continuously being tacked on. They are ripe for a hostile take-over by govt. under the guise of “compascism”*

              *H/T EAP

              1. I don’t get the customer service thing. Some (most?) major airlines incredibly difficult to work with but they seem to go out of their way to make the experience as painful as possible. The airlines have to know how people feel about them yet they don’t seem to care.

                1. That just means they’re already most of the way towards adopting the culture of federal agencies.

                2. They care, RBS. But with so many different types and cultures of people (and not to mention how many really DON’T know how to act on a flight, much less dress properly for one), it is very difficult for airlines to accommodate every single want and need that passengers expect.

                  Passengers expect Business Class service in Coach with Coach pricing (and I, for one, do NOT fly Coach). People want their ass kissed just because they are on a flight.

                  That and Unions (Pilot’s Union, I’m looking at you) have made it exceptionally difficult for airlines to streamline their business models.

                  1. Unions AND Regulation GM. The airline industry is the most over regulated industry there is. In the name of safety, of course.

                    And having a national energy policy designed to keep the price of fuel unnaturally high doesn’t help either.

                    Airlines are the poster children for government control.

                    1. The airline industry is the most over regulated industry there is.

                      I disagree. I would give that title to either Big Pharma or Big Insurance (I personally lean towards insurance, both at the fedgov and stategov levels).

                      And having a national energy policy designed to keep the price of fuel unnaturally high doesn’t help either.

                      I agree. It also affects the price of foodstuffs as well, not including discrete farm subsidies.

                      Airlines are the poster children for government control.

                      At this point in time, medical care and insurance disagrees.

                    2. I yield. Should have said “one of”.

                3. The airlines have to know how people feel about them yet they don’t seem to care.

                  When your entire workforce that interacts with customers is unionized, this is what you end up with.

                4. Back in the mid-90’s I worked on several major price auditing systems for major airlines and the figure that was thrown around then was that 10% of the fliers produced 80% of the revenue.

                  The frequent business flier is the guy who is coveted by the airlines. They still treat these guys very well. Ask anyone you know who flys all the time. They get frequent upgrades, they get access to vip lounges.

                  The economy travelers are there simply to fill up space. Most airlines would gladly lose market share with the coachies if it meant they could get more of the business travelers.

                  Not sure how accurate that number still is, but I think it is still close. That is why airlines really don’t give a shit about most of the travelers.

              2. The conspiracy theorist in me has always thought that the TSA’s security theater is a conspiracy to make the airlines unprofitable so they could be nationalized. Not that America’s stubborn refusal to adopt “open skies” policies haven’t harmed domestic air travel enough.

                1. Not that America’s stubborn refusal to adopt “open skies” policies haven’t harmed domestic air travel enough.

                  Most of the big airlines make their money on international flights, HM. You’ve flown enough to know this. Between fuel costs and, as sloopy said, labor overhead, has made international flights pretty fucking expensive. Southwest doesn’t make international flights, and has a firm lock on its domestic routes.

                  1. Absolutely. However, the N.A. market is the most profitable, with Asia a close second, and several foreign companies (e.g. Lufthansa, Emirates, or Cathay Pacific) would kill for a chance to break into that market.

    4. The market isn’t distorted by one player paying fewer taxes. It’s distorted by any players paying any taxes.

      True, but non uniform taxation inherently involves the government picking winners and loser, which is market distorting.

      Not that I blame people for minimizing their taxes in any way possible.

    5. Wrong. Libertarianism has to start with laws that are uniform for everyone. The power to carve out exceptions to the rules for some players is power, period. It is power wielded by government to favor some market participants over others. It is power wielded to attract rent-seeking clients. (Which incidentally is EXACTLY what is going on with the tax extender going on).

      Moreover, if the tax code was uniform for everyone it would be much easier to lobby for lower spending, sicne everyone’s tax bill would be directly proportional to the spending level. If you start carvine out exceptions, you make it a game to see who can pay the lowest taxes while getting the most free shit. Make the tax code uniform and you make it harder for people to escape from the costs of the spendign they are voting for.

      1. Hazel, you are so adorable when you are being internally and ideologically consistent…and TOTALLY ignoring this little thing called “Human Nature”…

        Chris Rock famously said, “No matter what the stripper says, there ain’t no sex…in the Champagne Room!”

        The better statement to make is: “Not everyone gets to be in the club, much less The Champagne Room.”

        And envy, being what it is, will prevent the uniform system which most of us endorse. It’s inescapable, Hazel. Even UKR recent started graduating progressively the 15% flat tax on citizens and temp/perm tax residents in the later part of last year (it’s now 17% for those making 10x the yearly living income level), and UKR is not known for it’s ease in tax compliance, especially on small and medium business owners.

        1. If we’re going to give up on a uniform tax code, why don’t we give up on deregulation and everything else?

          What difference does it make whether the government favors some people using tax break or using regulatory loopholes? Everything translates into money at some point. Everything can be measured in terms of dollars.

          1. If we’re going to give up on a uniform tax code, why don’t we give up on deregulation and everything else?

            Because the tax code, as bastardized as it is, is too easily demonized and any, and I mean any group that it affects, be it EITC, mortgage interest deduction, or even raising taxes on a select group (and I am still a little upset with you for cavalierly wanting to raise my taxes, though I do understand your rationale behind it) will immediately reject it as “unfair” even though the scheme is unfair on its face.

            What difference does it make whether the government favors some people using tax break or using regulatory loopholes? Everything translates into money at some point.

            Mathematically, it doesn’t. However, perception is everything. To successfully get The Masses off The Dole, something else has to be offered in its place, like The Ryan Budget Plan, for example. When people get the idea that something will be “stolen” from them, they will go Full Metal Rousseau and reject any changes.

            Deregulation is a much easier sell than tinkering with the tax code, and overall better for business and investment if business owners and investors know with certainty what their rates are going to be. People get the idea with deregulation that they are “getting something for nothing” in terms of their disposable income.

            This is why I referenced the intangible, but economically demonstrable, concept of “envy”.

            1. You give them a single large standard deduction. Like $50,000 a year. And tax everything aove that at a flat rate.

              Strategically …
              Make the standard deduction high enough that nobody below a certain point pays any more in taxes. Then let inflation eat away at it until you get to a fair level.

      2. Libertarianism has to start with laws that are uniform for everyone.

        Libertarianism and taxes are incompatible.

        The power to carve out exceptions to the rules for some players is power, period. It is power wielded by government to favor some market participants over others.

        You’re making a more subtle version of an argument that T o n y often uses: that refraining from coercing one group is identical to coercing another. Those who don’t receive exemptions are not hurt by the exemptions of others. They’re hurt by the lack of their own exemptions.

        Moreover, if the tax code was uniform for everyone it would be much easier to lobby for lower spending..

        Possibly. But you also have to take into account the difficulty of getting to that uniform tax code.

        I think it would be easier to stop demonizing those with exemptions and encourage them to support exemptions for all. Fighting them clearly doesn’t work well.

        1. I have a POS cousin that lives at home, has 2 illegitimate kids and is usually unemployed (but fully supported by her parents). She gets federal subsidies, free health care and at tax time she gets exemptions for her kids. After the paperwork, she gets refunded any pittance in taxes she paid and then another couple thousand on top of that.

          I am finding it increasingly difficult to not demonize the way this tax bs works.

        2. Subsidies and free health care are very different from tax exemptions.

          1. Very true. I was painting a broader picture.

        3. Libertarianism and taxes are incompatible.

          I disagree. Maybe anarchism and taxes are incompatible, but not libertarianism. At least my version, in which taxes are a necessity.

          Two tenets:

          1. A person may do as they wish, PROVIDED, in doing so, do not infringe upon the rights of others.

          And the one pertinent to this discussion…

          2. The ONLY legitimate function of government is to protect the rights of the individual.

          To accomplish 2, the government needs revenue. And since the government furnishes said services equally among the constituents, each individual should pay an equal dollar amount for said services.

          Such a tax would be completely in line with libertarianism and would not redistribute wealth.

          1. Taxation conflicts with your first tenet.

            1. The alternative is slavery.

            2. Stealing from A to prevent B from enslaving C isn’t moral.

              1. Again, sir, your alternative?

                1. Again, sir, your alternative?

                  I too am curious what the alternative to equal taxation is.

              2. Yes, agreed. A necessary evil.

            3. Evil is never necessary.

              1. ALTERNATIVE?????

            4. An alternative? Don’t steal.

              1. How do you propose such a system would work?

                To deny my system means you have an idea of your own. Why are you being evasive? Is it that you know I’m baiting you? I freely admit it. I am! Why do you not want to debate anarchism? (I’m assuming, that’s where you’re going, or not going, with this.)

              2. An alternative? Don’t steal.

                And when someone does? Or when someone murders or rapes or defrauds?

            5. I’m merely pointing out the immorality of your position. The application of morality requires no goal by which to measure whether it “works”.

              1. So governance is immoral. Got it. Don’t necessarily disagree. That’s why you minimize it.

                When you have another workable solution, please feel free to share.

                1. When you have another workable solution, please feel free to share.

                  I think the workable solution involves having a lot of people already on the anarchism bandwagon. Something like a 1776 revolution that specifically wishes to avoid creating a federal government after tossing the current one. Then, creating voluntary, decentralized, private systems to perform the same functions as were performed by governments.

                  While people debate big vs. small government, practically everyone thinks some government is a necessary evil. So, an abandonment of government isn’t happening anytime soon.

                  Still, labeling it a “necessary evil” makes it impossible to abandon, since it deems a functioning government as a requirement. Thus, having a ruling class becomes a self-fulfilling prophecy.

                  Also, people are very quick to label a necessary evil as good, because anything necessary must be legitimate. If stealing from you to fund the military it great without your consent, why not fund retirements the same way?

        4. In an ideal world we might not have taxes but what’s more libertarian:

          A) a tax code where everyone pays the same rate so that nobody is incentivized to use the government as a lever to gain an advantage in the market?

          B) a tax code where people are encouraged to lobby to carve out tax breaks for only themselves – because hey, lower taxes are always better, no matter who gets them?

          I’ll point out again that in system B people are more focused on how they can use the state (i.e. force) to advance their position in society.

          If our goal is to move towards libertarianism, it’s both a moral and strategic imperatve to remove the incentives to use the government to benefit oneself. Championing tax loopholes for some is a trap.

          1. There’s no objective way to compare the two in terms of liberty. The first three words of both options are inherently anti-liberty. Lower taxes are better, no matter who gets them.

            I disagree with your strategic evaluation (and admit that I could be wrong), but any approach that raises even a single person’s taxes (even in the name of fairness) is morally bankrupt.

            1. Yeah, but you keep assuming that tax breaks result in lower taxes, which isn’t the case unless it’s accompanied by a spending reduction.

              What’s better (Ceteris paribus):

              System 1:
              Person A pays 50%
              Person B pays 50%

              System 2:
              Person A pays 75%
              Person B pays 25%

              I can’t get around thinking system 1 is more fair. And beyond that, I think a system of use taxes is the most fair, because it more closely resembles the outcome of voluntary association.

              1. More fair:

                Person A pays $3225.81
                Person B pays $3225.81

              2. Also, in System 2, B is incentivized to vote for more spending, or any sort of spending that he gets more than a 25% benefit from. He will be incentivized to keep voting for more spending until spending reaches a level of inefficiency such that the benefit to him is worth less than his 25% share of the cost.

            2. Neither is objectively more fair, as evidenced by Francisco’s support for flat dollar amounts.

    6. Tax exemptions are ALWAYS a good thing, regardless of who gets them.

      Nope. If your competitor doesn’t get one, you’ve gained unfair advantage and that distorts the market.

      1. No game == 1, FdA. There will be distortions in the market. However, the market will ultimately compensate for this, via so-called “grey” and “black” markets.

        1. And there always be costs associated with those distortions. Which means some people will benefit and others will not.

          If you want people to believe in the basic fairness of a true free market, you don’t start by endorsing a blatantly unfair tax code.

          1. See my answer here.

            And there always be costs associated with those distortions. Which means some people will benefit and others will not.

            Which is no different even in an unfettered market, as liability for products and services are inherent, and to suggest that every business will carry the same level of liability is laughable.

            For example, do you really think that surgery is going to carry the same liability as a Subway sandwich artiste?

      2. You’re too concerned with the initial conditions of the scenario. What if we started with a scenario in which neither of two groups paid taxes, and then one group started being forced to pay? We’d be in the same situation we have now. Would you argue that the untaxed group should start paying taxes?

        1. Yes.
          The problem is that if A is paying all the taxes and B is not, B is going to vote to keep spending, and thus necessitate the continued taxation of A.

          If you make B and A pay taxes equally, neither of them disproportionately benefits from spending and thus both of them are incentivized to compare the benefits from spending directly against the cost, which is proportional. Which makes the inefficiency of government spending more apparent. B will realize that he’s better off making his own decisions with the money since he can no longer use taxes to rob A.

  6. Soudns like a pretty solid plan to me dude. Wow.

    http://www.AnonBoss.tk

  7. Clearly something must be done. We should ban politicians and taxes. For the children.

    1. What if we just banned children?

      Get to the root of this thing.

      1. Well, it would eliminate politicians (eventually), certain tax breaks, school shootings, and the entire Occupy movement…..you may be on to something here.

    2. Politicians should be taxed at 90% of their incomes and property.

      Public service is its own reward. And its for the children.

  8. Sigh.

    “5 people hurt in accidental shootings at gun shows in Ohio, Ind., NC on day of US gun rallies.”

    1. Fucking people messing around at security entrances and with new guns, loaded. You load your damn carry piece at home an leave it in your fucking holster. Don’t take it out to show the cop at the door, or to show off to your fucking buddy. And who are these dumb fucks buying and selling guns not safety checked?

      It’s a shame these retards always end up shooting other people ’cause the gene pool could do without them.

      1. Ugggh, I know. And these are the assholes that make the news and make responsible, non retarded gun owners look bad.

        1. “And these are the assholes that the news selects to make responsible, non retarded gun owners look bad.”

          Fixed.

    2. Like I said yesterday, there were 29,600 car accidents causing 98 deaths on the same day, and we focus on this almost non-event?

      Our priorities are fucked up.

  9. Meet the Press, Reader’s Digest edition:

    “Obama is super awesome, and we’re lucky to have another four years of him.”

    1. Holy shit, is his coronation today?

      1. Dude, check out the video from the inauguration, he messed up the oath, again!

        [It’s funny, every time!]

          1. Yes, the role of Zazu/Biden should have gone to a White man.

            1. Hahaha. Well, now I’m going to be disappointed when Obama doesn’t bust into a song and dance routine… wait, I think that might be racist.

              1. It’s clear that he got his voice from his father, and his moves from his mother

                Jus’ sayin’

                1. CocaMochaFenty 2 months ago

                  Omg Obama is tha cutest!? Love him to pieces ?

                  1. hlm sutcliffe 2 months ago

                    Best? president of all history seriously

                    The stupid, it hurts.

    2. See, I can’t even understand what they’re trying to say with all that Obama cock in their mouths. It’s like having a conversation with a Scotsman.

      1. You obviously have never had the pleasure of an alleged “conversation” with a cockneyed West Ender.

  10. Can we just make this the football playoffs thread?

    SF 38-34 Atlanta
    NE 35-21 Baltimore

    1. Yes. Next time reason has a pledge drive we should demand a weekend sports open thread. Of course people like Mike M. will show up and chastise us for not caring enough about the coming apocalypse.

    2. That was surprisingly accurate for SF & Atlanta. Off by exactly 10 points for each score.

      1. Completely wrong for Baltimore/NE, though, although the difference between the scores was only off by 1 point.

    3. Football? Is that the one with the hoop or the bat?

  11. Now David Pfluffer is on ABC; “all the things we want are sensible and reasonable gun safety* measures, and nobody who isn’t a nihilistic baby slaughtering monster would object to them.’

    *This is, apparently, the Newspeak recharacterization of “gun CONTROL”

    1. Well, now I know how to begin any gun control conversations on girls’ night. “Hi ladies, I am a nihilistic baby slaughtering monster and a mother of four.”

      1. They’ll just sympathize with you and say, “When I was younger, I had an abortion too…”

    2. Legislation that takes away the rights of millions because of 20 children? What could be more “reasonable” or “sensible” then that? Especially when said legislation wouldn’t have even prevented the harm to those 20 children. It’s just so sensible all the way around.

      1. Why can not this massacre be used to justify the involuntary euthanasia of the mentally ill? The political and constitutional barriers to such a thing are far lower than they are for implementing new legal restrictions on guns?

  12. “I vow to preserve, protect, and defend the Constitution as I interpret it. I’m a Constitutional scholar, you know.”

  13. Granholm is on. Now we will get some truly thoughtful commentary on the issues of the day.

  14. Oh no!! Teh ARMOR PIERCING BULLITZ!!

    They’re everywhere.

    1. Gotta love the comments on that article. My favorite was the one who said they should deny medical attention and throw him in a hole to rot. I wonder what they would have suggested if the perp had actually killed the dog?

      1. Summary execution. I guess you’ve never met dunphy?

      2. Let’s hope no crazed gunman breaks into a pet store and summarily executes animals- the 2A would be repealed immediately.

        1. Some animals are more equal than others. Pet store “civilian” animals are not the same as police hero dogs. You know, those dogs put their lives on the line every day, not knowing if they’ll return home to their families at night.

    2. Interesting, though not surprising, that no mention is made of prosecution for the alleged crime leading to the chase.

      Who wants to bet that the jurors were told nothing that would let them decide whether he should have been running?

  15. When the market is rigged by politics, benefits are diverted from consumers to politically chosen producers (who can be counted on to reward their patrons).

    Only one fix for this. Eliminate the career politician.

    A Constitutional Amendment limiting our Congressmen to a single term (length TBD) with votes of confidence every year or two.

    The career politician is THE GREATEST threat to this nation. Of course, convincing people of this is problematic.

    1. “A Constitutional Amendment limiting our Congressmen to a single term (length TBD) with votes of confidence every year or two.”

      What happens when they determine a single term is for life?

      1. WE, determine the length and write it into the amendment. TBD in the sense that I’d be willing to debate how long such a term should be.

        I’d go 8 years Senate and 4 years Rep.

        1. Gotcha. 8/4 is fine. I think yearly votes of confidence would work but should be set up in way that discourages campaigning/fundraising.

          1. Yep. 2/3 of the voters required to oust him early. That way he’s only running against his record and he doesn’t get bumped for being just a “little bad”, as he DOES have a mandate. But if 2/3 think he’s a shitbag, out he goes.

            1. As much as 2/3rds?

              My feeling is that we would be better off if 25% of the electorate could fire politicians. The resulting paralysis would prevent them from doing much of anything.

              1. A politician should be elected with a 1-vote margin the first time, then a 1%+1 vote margin the second time, then 2%+1 vote the third time etc. really effective, popular politicians would stay, marginal ones disappear. Higher turnover, advantage to the underdog.

    2. I agree. Forcing politicians to pursue a modern-day cursus honorum would be a good thing.

    3. But that eliminates my choice for who I want to represent me. No, we just need to make the job pay enough to attract decent people as opposed to the already wealthy scum that can afford to run for a job that really doesn’t pay a ton.

      That and we need to make it illegal for them to invest in anything more than a savings account while in office and to forbid them from proposing/establishing any earmarks or subsidies that disproportionately effect their district.

      Or we need to put a clock on their hand that says once they serve 10 years in any governmental capacity they have to go on carousel and hope for renewal if they want another term.

      1. I was really hoping your clock idea was going in a different, more deadly direction.

      2. YOU don’t have a choice. Voters notoriously reelect the guy bringing home the bacon. They are rewarded for the very behavior that is ruining the nation.

        1. I forgot the tag for my first sentence.

          1. I’m a little slow

    4. The career politician is THE GREATEST threat to this nation. Of course, convincing people of this is problematic.

      Once again, proving the overall thesis and wisdom of Dune: “Those who seek power are the most unfit to wield it.”

      “All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible.”

      Dune

    5. I don’t think that would actually solve anything, because the parties would respond by developing a system of “heir apparents” where power (and policies) are inherited from one office holder to the next. they wpould find a way to main continuity and a sense a of obligation.

      What we really need are a series of constitutional amendments that forbid the government from drafting laws that target specific narrow interests for benefits or punishments. Just as we outlaw bills of attainder, we should outlaw bills that direct benefits towards any named entity or any narrow class of interests.

      “Equal justice under law” should imply uniformity of the law towards all citizens. And that should include the tax code.

      1. It seems to me like they would just find every possible loophole to circumvent the amendments.

  16. Matthew Dowd suggests the president take on a humble demeanor for his coronation.

    Other panelists politely refrain from laughing out loud.

  17. The more power government has to pick winners and losers, the more power the rich (including the politicians) will have relative to the rest of us.

    It’s Orwellian that Obama rails against the 1%, then gives our money to his billionaire campaign cash bundlers. George Kaiser, the billionaire owner of Solyndra is just one of many examples. He gave slightly over $100,000 to Obama, and got $500 million in return, then put the company in bankruptcy after paying himself first.

    1. He rails against the 1% striving to become wealthy, not the .01% that are already ultra-rich

  18. You have a good point, Sheldon, but I wouldn’t go as far as you with it. I don’t consider even the most selective breaks to be “offensive”, but I’d have to concede the role of judgment in discerning the best available middle course between the Rothbard-Block attitude that any relief for anyone, no matter how narrowly targeted, is an advance for liberty, and on the other hand the will’o-the-wisp that would be the imagined least-distorted economy that exists with a given amount of democratic interference with liberty. There was a good discussion of this issue over 30 yrs. ago in an LP newsletter (I think LP News from national, but it might’ve been Cal-Liber) with Milton Mueller as one of the discutants.

    I think “divide & conquer” is a viable strategy in a democracy for advancing liberty, though it will favor various special interests at any given step of the way. Of course the same strategy works for advancing tyranny too.

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  20. How they can proceed with “No Corporate Welfare” only they know. If it is giving something good outcome then they can do this.
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  21. This is a very important problem.I do not know How they can proceed with “No Corporate Welfare” .who can tell me?

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