SUNDER THE SKY

What’s the worst possible tax hike, the one that would do the most economic damage? Raising income tax rates is never a good idea, and there’s powerful evidence from the 1980s about how upper-income taxpayers have considerable ability to change their behavior in response to changes in incentives. But if you want to know the tax hikes that do the most damage, on a per-dollar raised basis, it’s probably best to focus on levies that boost double taxation of saving and investment . The Tax Foundation ran some estimates on five different tax increases, for instance, and found that worsening depreciation rules (an arcane part of the tax code dealing with the degree to which new investment is taxed) would do the most damage, followed by a higher corporate tax rate , and then higher individual income tax rates. But I wonder what they would have found if they also modeled the impact of a higher death tax. That levy is particularly destructive because it directly requires the liquidat

When I was younger, folks in the policy community joked that BusinessWeek was the “anti-business business weekly” because its coverage of the economy was just as stale and predictably left wing as what you would find in the pages of Time or Newsweek . Well, perhaps it’s time for The Economist to be known as the “anti-economics economic weekly.” Writing about the stagnation that is infecting western nations, the magazine beclowns itself by regurgitating stale 1960s-style Keynesianism . The article is worthy of a fisking (i.e., a “point-by-point debunking of lies and/or idiocies”), starting with the assertion that central banks saved the world at the end of last decade. During the financial crisis the Federal Reserve and other central banks were hailed for their actions: by slashing rates and printing money to buy bonds, they stopped a shock from becoming a depression. I’m certainly open to the argument that the downturn would have been far worse if the banking system hadn’

I like when leftists accidentally make the case for limited government. The IMF, for instance, accidentally put together some solid evidence showing that a value-added tax is a money machine for bigger government. A story in the New York Times , meanwhile, accidentally showed that politicians will hike taxes if they’re not constrained by tax competition. And a statist in Illinois tried to argue that higher taxes don’t enable higher spending, but he accidentally showed that politicians raised taxes so they wouldn’t have to cut spending . Another report in the New York Times accidentally acknowledged that genuine private savings is the best route to obtain a secure retirement. You can look at more examples here , but you get the point. Gun-Free Zones And now we have another item for our collection. Sean Davis of The Federalist must believe in taking candy from babies and in exploiting the weak and defenseless. I’m jumping to this uncharacteristic conclusion because he j

The word “libertarian” has gained new prominence due to the strange politics of our time. According to Google Trends, its use as a search term in the US is at a 10-year high. It’s long. It’s awkward. It always needs explaining. In America, it’s a word for both a party and an ideology. And the wars over what it actually means never end. What I haven’t seen is a serious investigation into the modern origins of the use of the term that might allow us to have a better understanding of what it means. Thanks to FEE’s archiving project , we now have a better idea. As it turns out, libertarianism is not a strange new ideology with arcane rules and strictures, much less a canon of narrowly prescribed belief. It predates the Libertarian Party’s founding in 1972. The term came into use twenty years earlier to signal a broad embrace of an idea with ancient origins. To be sure, if we go back a century, you will find a 1913 book Liberty and the Great Libertarians by Charles Sprading (reviewed

There’s a principle in hypnotism that goes like this: A person cannot be hypnotized against his will. He must be a willing subject. He must be fully cooperative. So it goes with propaganda. For propaganda to be effective, it requires submissive subjects. As Professor Nicholas O’Shaughnessy wrote, propaganda is a “co-production in which we are willing participants.” Propaganda is typically defined as the dissemination of particularly biased information in support of a political or ideological cause. In his 1965 book Propaganda: The Formation of Men’s Attitudes , philosopher Jacques Ellul provided us with some of the basic characteristics of propaganda : it thwarts dialogue , it is geared toward the masses, it utilizes various media, it is continuous, it is not intended to make one think. Disable the Brain If these are the characteristics of propaganda, then it is no exaggeration to say that we are surrounded by it today. Most news organizations have become partisan shills and

The life of commerce is far more dramatic, engaging, and even thrilling than its reputation suggests. There are clear signals to follow (prices and profitability), which make it easy to determine success. There is energy and the action of competition. There is a reward for intelligence and foresightedness. And there is plenty of risk. Under the right conditions, enterprise can be an extreme sport. It’s not just personally rewarding. As the theorists of the Scottish Enlightenment were first to suggest, it also benefits the whole of society. The winner gets the gold, but so does everyone else. It’s not easy to make a movie that demonizes all of this, not if it is realistic. The very act of presenting the drama of enterprise – complete with huge rewards – can inadvertently serve as a recruitment tool into the world of commerce. One of the reasons is that so few movies treat business life at all. They are so rare that just to get a peek into this world is thrilling by itself, even if t

Over Labor Day weekend, I saw many friends arguing that labor unions and government intervention “humanized capitalism” by giving us the 8-hour workday, the 40-hour workweek, ending child labor, and so forth. Unfortunately, these folks have their history backward. The wealth produced by capitalism allowed us to indulge our humanitarianism in ways not possible when we were on the edge of survival. We didn’t humanize capitalism, it humanized us. The wealth produced by capitalism allowed us to indulge our humanitarianism in ways not possible when so many were living on the edge of survival. You can’t have 8-hour workdays, 40-hour work weeks, and no child labor, until the material conditions exist to make such changes feasible for a large number of people. Workers didn’t work long hours, and kids didn’t work at young ages, because employers held a gun to their head. And they didn’t do it because they loved to work hard, long, uncomfortable hours. They, like us, would have preferred sh