Apr
13
2025

Tariff-Free Sunday

Our Eye Candy du Jour is a season-appropriate chart from Cato, one of five: It’s Tax Season—Five Charts on Who Pays and What’s at Risk. Text:

Figure 3 shows that as a share of adjusted gross income (AGI), the top half of income earners paid 97.1 percent of federal income taxes. The top 1 percent earned 22.4 percent of total income and paid 40.4 percent of all the income taxes. The top 10 percent earned 49.4 percent of the income and paid 72 percent of the income tax.

The pols who demand high-earners pay some imagined "fair share" need to be shown Figure 3 and asked what those numbers and bars should look like instead. In order to be "fair".

(I realize this only shows Federal income tax data, and doesn't include payroll taxes.)

For more "fairness" discussion, let's go to a reliable source, Vero de Rugy, who explains: How simplifying our tax code would level the playing field. She does a fine job of summarizing the "arbitrary, distortionary, and unfair" system currently in place. Skipping down to her proposal:

My preferred path is to adopt a flat consumption tax, like the one proposed by Robert Hall and Alvin Rabushka. Under this system, income is taxed only once—at the point when it's spent—and saving is not penalized. There are no deductions for mortgage interest, no special credits for electric vehicles, and no carveouts for employer-provided insurance.

The only major remaining tax expenditure would be a generous personal allowance to exempt essential consumption—because everyone needs to buy the basics of life, and this carveout protects those with the least income from paying a wildly disproportionate tax. The result is a simple, transparent tax system with broad fairness and powerful pro-growth incentives. Retain what's justified. Eliminate the rest.

It's been a while since Hall and Rabushka wrote on their proposal, and a lot of the links have decayed. Sad! But Googling gives you some information, and you can read an article from Alvin Rabushka here.

Also of note:

  • Speaking of "fairness"… … albeit in a much different contect, Jeffrey Miron and Karthi Gottipati look at (yet another) constitutional threat from Team Orange: When “Fairness” Becomes Censorship.

    In the name of “political fairness,” some U.S. officials advocate unprecedented government regulation of social media. FCC Chairman Brendan Carr claims platforms are “discriminat[ing] against viewpoints” and pose “the greatest threat [to free speech] we have seen.”

    Senator Josh Hawley champions government oversight of social media, introducing the “Ending Support for Internet Censorship Act” to deny Section 230 protections unless platforms prove their moderation practices are “politically neutral.” Under Hawley’s proposal, federal regulators would periodically certify the political neutrality of platforms, opening the floodgates to litigation and bureaucratic control.

    This amounts to a revival of the Fairness Doctrine—a policy conservatives once denounced as chilling speech. Ironically, these same conservatives now advocate a “new fairness doctrine” that would force online platforms to justify content moderation to federal bureaucrats. Such state intervention inevitably invites partisan abuse. Today, it may empower Republicans demanding reinstatement of far-right accounts; tomorrow, Democrats could require suppression of conservative voices under the guise of combating “misinformation.”

    Fun Fact: Just a few short years ago, then-Democrat Tulsi Gabbard proposed the Restore the Fairness Doctrine Act of 2019. And now she's a Republican, and Trump's Director of National Intelligence.

  • Yes. Do that. Michael Chapman and (apparently also) President Trump get on the hobbyhorse I've been riding for a long time: End All Taxpayer Funding of CPB, NPR, PBS.

    President Donald Trump is not a libertarian, but some of his policies for downsizing the federal government certainly fall in the libertarian column. This is true, for instance, of the administration’s drive to defund the Corporation for Public Broadcasting (CPB), which helps to fund PBS and NPR. Scholars at the Cato Institute have called on Congress for decades to stop subsidizing the CPB. With enough political momentum behind them, perhaps Congress can get it done this time.

    “Republicans must defund and totally disassociate themselves from NPR & PBS,” said Trump on Truth Social on April 1. In late March, he told reporters that he “would love to” defund PBS and NPR. “It’s been very biased. The whole group … and it’s a waste of money especially,” he said.

    It's nice to have something good to say about Trump, for a change. Chapman notes what the late David Boaz had to say:

    “We wouldn’t want the federal government to publish a national newspaper,” Cato’s David Boaz testified before Congress in 2005. “Neither should we have a government television network and a government radio network.” Congress should “terminate the funding for CPB,” he added.

    Boaz, author of The Libertarian Mind and former Distinguished Senior Fellow at Cato, further testified, “If anything should be kept separate from government and politics, it’s the news and public affairs programming that informs Americans about government and its policies. When government brings us the news—with all the inevitable bias and spin—the government is putting its thumb on the scales of democracy. Journalists should not work for the government. Taxpayers should not be forced to subsidize news and public affairs programming.”

    Fun fact: we actually did have a "national newspaper" back in the previous century. Like many bad ideas, it was the brainchild of Woodrow Wilson, fortunately a short-lived one.

  • Why is the USA more socialist than those other guys? That's the question I'm asking based on Chris Edwards' review of Postal Reforms Abroad.

    With a bloated cost structure and falling demand for its products, the US Postal Service (USPS) is in trouble. I contend that privatizing the agency is the best way forward, and President Trump seems open to the idea. Currently, the president’s DOGE team is digging into USPS operations to find cost savings.

    A recent report on foreign postal systems provides reform ideas for the president and Congress to consider. The USPS Inspector General (IG) compared the postal systems of the United States and 25 other countries. Let’s look at some report highlights.

    Privatization may sound radical to US policymakers, but the IG found that of the foreign postal systems, “15 have the status of a private corporation and 10 are state-owned enterprises.” Among the former, three were fully privatized and twelve were partly privatized or structured as private corporations.

    More at the link. And, yes, the report "shows that the United States is on the socialist end of international postal structures."

  • Just a reminder. And it's from the relentlessly entertaining Andrew Heaton: Your tribalism is dumb. He notes that it's probably hardwired into us, a inherited "gift" from our Serengeti ancestors.

    Tribalism compels us to belong to a team—to love it, affirm our loyalty to it, help it, and subordinate our own interests to its greater good. We gain a desperately needed sense of almost transcendent belonging when we lose ourselves to these tribal identities.

    Here's the problem: We don't just crave being on a team; we also crave a rival. We want to be in a club and we want a nemesis to motivate us. We desire an external entity to rally against. In American history, particularly when we have a disconcerting nemesis like the Nazis, the Soviets, or a minotaur, we shift our competitive drive to the external threat and get surprisingly chummy with each other. Absent a compelling bad guy to unite against, partisans glance around and say, "Well, I guess I hate you!"

    The urge to spar with a competing team is foundational, not circumstantial. That is to say, we are not blissfully lacking in team spirit or the inclination to coalitional rivalry until confronted by an external menace, at which point we suddenly group up and compete in response. Rather, the urge to oppose an outside foe precedes the foe itself.

    Andrew's article (from print Reason) manages to be both funny and insightful.