Browsing the blog archives for November, 2017.

Chris Cuomo on Government Responsiveness

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CNN’s morning programming is typically a non-stop attack on President Trump. Occasionally Chris Cuomo backs into the truth, which he did today in an exchange with Alisyn Camerota about sexual harassment:

CAMEROTA: I mean, it’s a tidal wave. Every day, we have breaking news. Every day, it feels like, we have breaking news on some sort of sexual harassment. It has been pointed out, look at the people being fired in our business, in the media, huge names, Bill O’Reilly, and Matt Lauer, being fired. And in Congress, it sort of lingers while ethics commissions form and people investigate it. And, you know, we heard a lawmaker say, but we are elected, the people are their bosses.

CUOMO: That’s exactly right.

CAMEROTA: They can be fired the next election day.

CUOMO: But that — that’s the difference. The difference is, if you work for a company, the company decides your fate, if it wants, almost instantaneously.

CAMEROTA: We’ve seen that.

CUOMO: Not true in government. We’re seeing that play out in real time.

Did you catch that? Cuomo conceded that business is more responsive than government when it comes to issues like sexual harassment. He’s right, but this responsiveness doesn’t end with workplace harassment. Businesses are under constant pressure to satisfy fickle customers, who are free to go elsewhere if they aren’t satisfied with the project, the service, or the organization in general.  The market enforces a certain level of responsiveness. Companies make mistakes, but there’s built-in immediate accountability.

The choices available with government are more limited or nonexistent. If you don’t like social security, you can’t choose another retirement option instead. If you don’t like the tax code, you still have to pay your taxes. Our representatives exempt themselves from many of the laws they pass and frequently hide behind the bureaucracy when expedient. They face elections every several years (depending on the office), but the bureaucrats who run the IRS, EPA, HHS, and other government agencies do not. Responsiveness is directly related to choice. When compared to the private sector, government gives us much less of each.

Our federal government must be more accountable, but it will always be less responsive and less efficient than the private sector. This is why government should be limited and empowered to do what it must, but no more. As Henry David Thoreau famously noted, “That government is best which governs least.”

I guess Chris Cuomo gets it right once in a while.

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Taxes: House vs. Senate

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Senate Republicans are now debating their own version of tax reform. As I write, the Senate bill entirely eliminates the deduction for state and local taxes, while the House retains a deduction for property taxes. This deduction is illogical, subsidizes state and local governments; it should be eliminated and balanced with a rate cut. But on the whole, the Senate is straying even further than the House from real reform.

Senator Cruz’s opposition to the bill is most curious: “There are some taxpayers in some high-tax states like New York and California that could conceivably be paying higher taxes. I think that is a mistake. I think tax reform needs to cut taxes for everybody.” But his argument is logically flawed.

The only way we can ensure that everyone gets a tax cut is to retain all of the complexity of the current system. To be blunt, real tax reform probably means that some people could pay more. Lower rates reduce the burden on everyone and should more than cover the elimination of deductions for most Americans, but the greatest beneficiaries of those deductions could see a net increase. This is precisely why the system needs to be reformed in the first place; it arbitrarily favors some taxpayers over others. It takes political courage to say this, but it’s the core argument for real reform.

It’s difficult to predict the outcome at this point, but it looks like anything that gets passed will constitute limited reform at best. To be fair, there are some positives on the corporate side. In the end, supporting an incremental improvement is worthwhile, but it’s a shame to pass on an opportunity for real reform that might not come again.

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