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How about Spending Cuts Instead of Sanders's War Tax?

March 27, 2015 in Economics

By Daniel J. Mitchell

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Daniel J. Mitchell

Sen. Bernie Sanders (I) of Vermont wants a new “war tax” on the rich to help pay for U.S. overseas military operations.

The idea has a certain perverse appeal to libertarians. We don’t like nation-building and we don’t like punitive tax policy, so perhaps mixing them together would encourage Republicans to think twice (or thrice) before trying to remake the world.

But since I’m not a foreign policy expert, let’s focus solely on the fiscal aspects of the senator’s plan.

Although that’s a challenge, since there’s nothing more than a generic press release on Sanders’s website, and it doesn’t specify how the money will be generated. Does the senator want a new top tax rate? Does he want to increase the double taxation of dividends and capital gains? A more onerous death tax? Or is he planning some indirect money grab, such as disallowing certain expenses for those with “excessive” compensation?

It’s not clear what will be accomplished by the senator’s class-warfare gambit other than a defeat on the floor.”

Regardless, it’s not clear what will be accomplished by the senator’s class-warfare gambit other than a defeat on the floor, perhaps combined with some low-level embarrassment for the hawkish wing of the GOP.

And even if the world turned upside down and he was able to add another soak-the-rich provision to the tax code, it wouldn’t have much effect. Notwithstanding the numbers generated by antiquated revenue-estimating methodology at the Joint Committee on Taxation, it’s very likely that the IRS wouldn’t collect much additional money. Simply stated, upper-income taxpayers have considerable control over the timing, level and composition of their income, so many of them would adjust their economic choices to avoid the brunt of any new tax.

That’s why lawmakers would be well served to instead look on the spending side of the budget. Wouldn’t it make more sense to hold taxpayers harmless and ask Washington — if it really wants a war — to finance it with restraint elsewhere in the budget?

This may seem like a foreign concept in today’s Washington, but it actually was standard procedure at times in our history.

This chart shows that domestic spending fell sharply as a share of gross domestic product (GDP) during World War II. Much of the change in that ratio was due to rising economic output, of course, but non-defense outlays were subjected to some …read more

Source: OP-EDS

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FEMA Tells Oklahoma to Do the Impossible … Or Else

March 27, 2015 in Economics

By Patrick J. Michaels

Patrick J. Michaels

Last fall, the Federal Emergency Management Agency issued a draft proposal that will require Oklahoma to do the impossible or face the loss of disaster relief funds. Specifically, state governments will be required to assess the risk of future disasters in a changing climate.

FEMA has solicited public comments and will, as per usual, ignore most if not all of them when it issues its final rulemaking later this year. So what can Oklahoma confidently expect global warming to do to its significant natural hazards?

Oklahoma’s peculiar geography makes it home to some of the most violent weather on Earth, in almost every flavor and hue. In fact, in the developed world, you’d be hard put to find a place with a combination of more tornadoes, droughts, deluges, and wild temperature swings — and these climatological facts are not going to change due to the slight changes in surface temperature that may be associated with human emissions of carbon dioxide.

State governments will be required to assess the risk of future disasters in a changing climate.”

Nonetheless, FEMA will require Oklahoma to “Provide a summary of the probability of future hazard events that includes projected changes in occurrence for each natural hazard in terms of location, extent, intensity, frequency, and/or duration. Probability must include … the effects of climate change on the identified hazards.”

Anything one can say about climate change and future hazards, such as tornados, has to be based upon some kind of forecast model, and there are a lot out there. For example, in its most recent compendium on climate change the United Nations uses 107 different versions, all of which predict slightly different futures and none of which have been correct about the climate of the past two decades.

In those last two decades, according to the global satellite-sensed temperature record environmentalists used to love, there has been no net global surface warming whatsoever. This is unfortunate because planners are often constrained to use their two scenarios for future guidance, even as evidence continues to mount that both have predicted considerably more warming than will occur this century.

Is it realistic to think we could use these same models to predict reliably how many tornados will hit Oklahoma in 2050? It simply can’t be done. Not only have these models failed to accurate predict global temperatures, but hurricanes are too small to be captured by them.

The …read more

Source: OP-EDS