Browsing the blog archives for December, 2017.

4 Takeaways From Tax Reform

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The tax reform package just passed is a mixed bag, but it’s a clear improvement over the current system. Amidst all of the details, there are 4 takeaways that will be good for the country.

First, the $10,000 limit for state and local taxes means that tax increases for upper (and some moderate) income earners at the state level will no longer be subsidized by the federal government. As a simple example, with unlimited SALT deductions, a $1000 tax increase at the state level would reduce the federal tax burden of an itemizer with a 35% marginal rate by $350. States will be under greater pressure to manage their own fiscal houses without indirect federal subsidies.

Second, the increased standard deduction means that many middle-income Americans will be able to reduce their taxable income without itemizing, thereby weakening the effect of political intervention through subsidies and deductions. This could make the transition to a flat tax—or something close—easier one day.

Third, reducing the corporate tax rate from 35% to 21% will level the business playing field for firms. Companies will invest a significant part of the savings, which will drive economic growth in the near term. The actual benefits of this change are hard to calculate, but it’s a definite plus for the economy and jobs.

Finally, the tax plan eliminates the individual mandate for health insurance. The left’s contention that Trump is “taking healthcare away from millions of Americans” is a lie. Eliminating the mandate only gives them a choice without a tax penalty. The ACA is built on the mandate, so this simple change will bring Obamacare back to the forefront. The ball is now in the Democrats’ court, because the program will struggle even more without increased subsidies.

The reform package didn’t go far enough, but compromise was inevitable.

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What we learned from Alabama

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We learned several things from yesterday’s Alabama Senate election. Roy Moore’s defeat was not an “upset” and it does not signal “a turn against Trump.” Although Moore was not an ideal candidate on the issues, sexual misconduct claims translated an easy win into a close loss. Had Moore prevailed, it would have been just as incorrect to suggest “a win for Trump” either, as he didn’t endorse Moore in the primary anyway.  But if you step back, there is a bigger issue that we must confront.

I’m not talking about sexual wrongdoings, but let me start by restating the obvious: If Judge Moore did everything he was alleged to have done, he should be held accountable. However, this analysis overlooks several facts:

Most importantly, we do not know what did or did not happen. Claims of behavior 40 years ago are almost impossible to unravel. Democrats and the mainstream media constantly referred to the charges as “credible.” Perhaps, but believable claims are not necessarily true. They referred to the number of allegations as evidence as well, but this, too, is flawed logic. The quantity of allegations does not constitute any evidence because different allegations represent different events. They claimed that this was not a partisan issue; the Democrats dispatched Al Franken, so they must be committed to reform in their own party. But this is not true either. Unlike Moore, Franken admitted wrongdoing, and because the Minnesota governor is a Democrat, his resignation paves the way for another liberal anyway, without a special election.

The most egregious intellectual mistake was made by Senator Shelby. “A lot of smoke, there’s got to be some fire there.” Wrong, Senator. The entire objective of this attack on Judge Moore was to create a lot of smoke. If this is your honest assessment, then we definitely need sharper minds in Washington. If not, then you owe the country an apology. Your opposition to Moore likely tipped the election to Jones.

Here’s what we know. These allegations emerged immediately following the Republican primary, when it was too late for voters to consider an alternative to Moore. Even if some of the allegations were true, the timing is no coincidence. We also know that some of details in the allegations just don’t add up. Does this mean none of the accusers were telling the truth? Not necessarily, but then again, we just don’t know.

Perhaps we will know the facts one day, but I doubt that the networks that pounded Moore for weeks will invest the time and resources necessary to sort out the truth in the coming months. Their goal was accomplished, so it’s time to move on to bigger fish now—President Trump.

I understand why voters could have concerns about Judge Moore. He’s not a gifted speaker and his denials didn’t have a convincing tone. But the same people who have been beating the Russia collusion drum for a year now just destroyed a man’s life and reputation with unsubstantiated 40-year-old allegations, and they don’t know what actually happened any more than the rest of us. What happened to the American value of innocent until proven guilty?

With Moore’s defeat, rest assured that the political lynch mob is here to stay. Just create “a lot of smoke,” and you can turn an election.

P.S. I received a couple of interesting emails asking if I supported Moore. He wasn’t the ideal candidate, but you ultimately choose between individuals on the ballot. I’ll trust Alabama on this one. My point was not about Moore per se, but about the willingness of many to jump on the anti-Moore bandwagon without seriously questioning the allegations. It’s not “anti-women” to insist on strong evidence for 40-year-old accusations. We should give respect and full consideration to women who come forward in situations like this, but without abandoning reasonable standards of evidence and judgment, especially regarding serious accusations like sexual assault. I welcome a reckoning for anyone guilty of workplace harassment or physical assault, but let’s avoid the lynch mob.

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