Pun Salad

When Gov. Chris Sununu announced the end of the statewide mask mandate on April 15, the seven-day rolling average of positive COVID-19 cases was 411.6, the number of positive cases in the state was 3,763, and 130 people were hospitalized with COVID-19.

By June 8, the number of known COVID-19 cases had declined by 91% from April 15, hospitalizations had declined by 78%, and the seven-day average of new cases had declined by 88%.

Only 28 people were hospitalized on June 8, and only 322 known cases existed in the state.

In a report hyped as a "bombshell," investigative journalism outlet ProPublica managed to get access to and publish the private tax returns of thousands of the nation's wealthiest individuals. They claim the data "demolishes" the "myth" that the wealthiest Americans pay the most in taxes, and the authors employ tortured reasoning to attempt to come up with a new, nonsensical "true tax rate" for the tax data that no genuine tax policy expert would take seriously.

The idea that the tax code is already fairly progressive is not a myth at all, though—wealthier Americans pay a much higher tax rate on their income than lower-income taxpayers do.

Despite ProPublica's best efforts to make the information enclosed within seem damning, the data tell us little we didn't already know. For the 2018 tax year, the last year for which we have data, the top 1 percent paid over 40 percent of federal income taxes, despite earning just under 21 percent of total adjusted gross income (AGI). The bottom 50 percent of taxpayers earned 11.6 percent of total AGI, but paid less than 3 percent of income taxes. The same story holds when looking at all revenue sources too, so it's not just the income tax that is progressive.

Billionaires often pay little in income taxes because billionaires don’t typically make their money from a salary. Billionaires exist for the most part because they own assets—stocks, businesses, commodities, property, etc.—and the paper value of those assets amounts to the bulk of their wealth. And in America, we do not tax wealth. 

Nor should we. 

Let’s say you collect baseball cards. On paper, your collection is worth a bundle. But its real value is realized only when you sell it. Do you think the IRS should tax you every year for what your collection could be worth if you sold it? Do you want the IRS to tax you for the value of your wedding ring—not at purchase, but forever—even if you’re never going to sell it?

The same principle applies to other unrealized gains. If your stock portfolio increases in value, you get taxed on your gains when you sell. 

ProPublica ignores all this. “We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period,” they explain. “We’re going to call this their true tax rate.”

Janet Yellen celebrated a recent G7 tax agreement as a win for “the middle class and working people in the U.S.” In reality, the scheme to establish a minimum global corporate-tax rate would transfer revenues from the U.S. treasury to foreign governments while putting American businesses at a disadvantage in international markets.

At the heart of the current drive for a global tax system is the fact that President Biden is pushing $4 trillion worth of spending plans at a time of record debt. Because suburbanites are now a core part of the Democratic coalition, there could be severe political ramifications to forcing the upper middle class to pay for too much of his agenda. The lowest-hanging fruit from a revenue and political standpoint is to hike corporate taxes. But Yellen recognizes that, under the current system, raising corporate-tax rates risks making the U.S. uncompetitive. Thus, she’s determined to create some sort of global corporate-tax system to reduce the incentive for multinational companies to seek out lower-tax jurisdictions.

Construction of the San Francisco-Oakland Bay Bridge took four years in the 1930s, but after a 1989 earthquake, when one-third of the Bay Bridge had to be replaced, the project took over two decades. A nation planning to quickly spend hundreds of billions on infrastructure should wonder why the repair proceeded so sluggishly — and why economists have found that the inflation-adjusted cost of building a mile of the interstate highway system tripled between the 1960s and 1980s.

The Claremont Institute’s William Voegeli considers this evidence of “activist government’s dysfunction” — government’s inability, or unwillingness, to do one thing at a time. Government cannot simply repair a bridge; it must do so while complying with an ever-thickening, sometimes immobilizing web of ever-multiplying environmental, labor, safety and other mandates. They also now include, as part of what Voegeli calls the Biden administration’s “shock-and-awe statism,” Washington’s obsession with “equity” — racial distributions of government goods and services.

Remember Barack Obama’s 2010 epiphany about the nonexistence of his promised “shovel-ready” projects? According to Alan Greenspan and Adrian Wooldridge in “Capitalism in America: A History” (2018), “Today bigger highway projects take a decade just to clear the various bureaucratic hurdles before workers can actually get to work.”