“exempting tips from income taxes would increase the deficit, create some weird economic incentives, and unfairly cut taxes for a small subset of workers while not doing much to help the majority of Americans or grow the economy.”
…
“Alex Muresianu, a senior policy analyst at The Tax Foundation, spells out in detail why that’s the case. He compares two hypothetical low-income service sector workers: a cashier and a waitress, both of whom earn $34,000 annually. Under the current tax code, both have the same baseline tax liability (roughly $2,000) even though about half of the waitress’s earnings are via tips.
If those tips are exempted from income taxes, the cashier still owes that $2,000. The waitress, meanwhile, owes just $600.
Harris should have to explain why she thinks it’s fair to ask some low-income workers to pay tax bills that will be two or three times higher than other workers who earn the same amount—because that’s what she is proposing here.”
“Those laws create a black market in which the composition and potency of drugs is uncertain and highly variable. They also push traffickers toward highly potent drugs such as fentanyl, which are easier to conceal and smuggle. As a result, drug users like Gentili typically don’t know exactly what they are consuming, which magnifies the risk of a fatal mistake. The “poisoning” that Peace and Caban decried therefore is a consequence of the policies they were proudly enforcing in this very case.”
“Kroger is the fourth-largest grocery store chain in America—behind Walmart, Amazon, and Costco—and Albertsons is the fifth-largest. Once merged, the combined company would rise to third on the list. On the surface, this may seem to provide some support for the FTC’s position, but American shoppers would be wise to read the fine print.
In truth, if the deal were to proceed, a merged version of Kroger and Albertsons would still only make up 9 percent of overall grocery sales. To put this in further perspective, consider that Walmart—the nation’s largest grocery provider—would continue to operate more stores (including its Sam’s Club outlets) than a Kroger-Albertson combo and maintain grocery revenue that is more than twice that of the merged company.”
“As a direct result of one-party misrule (there are zero Republicans on the 50-seat City Council), Chicago’s tax base is decreasing, not increasing. The population has declined for nine consecutive years, is shrinking by an annual rate of 1 percent, and is at its lowest point in more than a century.
Illinois, where Democrats control the governorship and a two-thirds majority of the legislature, lost “an estimated $3.6 billion in income tax revenue in 2022 alone, a year the net loss of 87,000 residents subtracted $9.8 billion in adjusted gross income,” syndicated columnist and Illinois native George Will observed last week. “In the past six years, $47.5 billion [adjusted gross income] has left….Illinois leads the nation in net losses of households making 200,000 or more.”
None of these or other grisly Windy City stats—including the murders and the pension liabilities—are obscure. As Illinois Policy Institute Vice President Austin Berg put it Saturday night at a live taping of the Fifth Column podcast, “I believe Chicago is the greatest American city, and the worst-governed American city.””
“A few years back, the organization accrued a $2,543 property tax debt on its community center. So in 2018, the city sold that lien for $5,115 to a California-based investor, who then foreclosed on and sold the ECO’s building for $139,500. In return, the ECO got a check for the difference between its debt and the lien purchase price: $2,572.
In other words, all told, the organization paid six figures to compensate for the $2,543 it owed the government, in what a new federal lawsuit alleges is a pervasive practice in Baltimore that illegally deprives people of their equity in violation of the Fifth Amendment’s Taking Clause as the city attempts to satisfy modest tax debts.
Every spring, Baltimore bureaucrats conduct a mass auction online to sell off liens like the ECO’s. Sometimes the unlucky debtors have fallen just hundreds of dollars behind on their taxes.”
“The transformation is clearest in the GOP, thanks to the elevation of Vance to the GOP presidential ticket. Vance, according to most accounts, was selected in a moment of confidence, as an heir apparent meant to extend and intensify Donald Trump’s core appeal rather than as a counterweight to the former president’s electoral weaknesses.
Vance spent the last half-decade transforming himself into one of the GOP’s most prominent neopopulists. He’s an advocate of tariffs and trade restrictions, a walker of auto-worker picket lines, and a harsh critic of foreign labor. He’s even complimented Lina Khan, the Federal Trade Commission chair who has helped lead the Biden administration’s newly aggressive (if mostly unsuccessful) approach to antitrust enforcement. Vance, who is among those who have a habit of taking swipes at libertarians, combines a rejection of individual liberty with a rejection of economic liberty—and he’s Trump’s newly anointed successor.”
…
“What’s striking about this particular political moment is that on both the left and the right, a new elite consensus appears to be forming, one that is skeptical of, and in some cases quite hostile to, free market ideals and principles.
The neopopulist consensus is still rough, but in broad terms, it favors propping up domestic labor, cracking down on immigration, using taxes and spending incentives to carry out industrial policy, and implementing tariffs and trade restrictions for reasons of national security, job creation, or international competitiveness. Notably, the Biden administration left most of Trump’s tariffs in place—and in some cases increased them.
Whatever their other disagreements, the leaders and rising intellectuals in both parties seem to agree that the important thing is to leave out classical liberals, libertarians, and believers in economic liberty.
It’s true that the parties have never fully embraced these values, and at times have distanced themselves from them. Sen. Bernie Sanders (I–Vt.), a self-described socialist, has long helped pull Democrats to the left on economics. Former President George W. Bush implemented tariffs on imported steel, and his brand of “compassionate conservatism” was partly an attempt to dampen the party’s libertarian tendencies.
Until recently, there was a place for those who prized individual freedom and markets. They were seen as valuable, or at least necessary, partners: As recently as 2012, none other than Democratic stalwart Sen. Elizabeth Warren (D–Mass.) pitched herself to libertarians. That same year, former House Speaker Paul Ryan (R–Wisc.), who was probably most well-known for proposals to reform entitlements, appeared on the GOP ticket. Trump’s first vice president, Mike Pence, was similarly a link to the GOP’s Reaganite past.
There may be some holdouts in the party who still embrace a more orthodox pro-market economics. Speaker of the House Mike Johnson’s Republican National Convention speech paid homage to the “core principles of American conservatism,” which included “fiscal responsibility,” “free markets,” and “limited government.” But with Trump and Vance as the party’s reigning avatars, it seems likely that these values will remain only as limp, legacy platitudes.
That’s a shame. Personal liberty and market freedom are bedrock American political and economic values: That synthesis is explicit in the American founding, and it has long been deeply embedded in American life. In the 1830s, when America was still a young nation, Alexis de Tocqueville wrote that “boldness of enterprise is the foremost cause of its rapid progress, its strength, and its greatness.” That boldness has made America wealthy on a scale that is almost taken for granted: Today, the vast majority of American states are richer than most European countries. The neopopulists take this wealth for granted, and then propose policies—tariffs, labor regulations, vast new spending programs—that would make America poorer, that would slow its progress, that would deplete its strength and greatness.”
“The merely dumb, or at least more respectable, version says that the American economy has become more monopolistic over time, and that is why businesses have been able to raise prices more. Consumers are the victims of a lack of competition. Harris nodded toward this explanation in her speech announcing the new policy, perhaps in response to early criticisms from economists.
Of course, it is absurd to believe that monopolies have developed so rapidly in the last three years that this caused the surge in inflation.
Putting that aside, while few economists would endorse price controls as a solution to insufficient competition—except for true natural monopolies—some would endorse blocking mergers through antitrust policy. The epicenter of the new optimism about antitrust is probably the Stigler Center at the University of Chicago. “The fact that you have prominent people at Chicago calling for antitrust enforcement is changing the game,” says law professor and The New York Times writer Tim Wu.
There aren’t many good case studies of successful antitrust enforcement. Indeed, mergers often create more competition, as when the recent T-Mobile/Sprint merger created a successful wireless network to compete with AT&T and Verizon. Evidence shows the merger raised wireless speeds and expanded 5G availability. Fortunately, the Obama administration did not block the merger (although they did delay it).
But one stylized fact seems to have taken hold of newly pro-antitrust economists: rising markups in the U.S. economy. Markups are the difference between the marginal cost to produce a good or service and the price at which it’s sold. A search for “markups” on the Stigler Center’s ProMarket blog yields dozens of hits. “Markups have increased because firms became better at creating product differentiation and erecting barriers to entry,” Chicago economist Luigi Zingales hypothesized in 2016.
Sounds plausible. But two new papers show that the rise in markups has nothing to do with diminishing competition. The first, a working paper published by the Federal Reserve Bank of St. Louis, finds that markups are higher in the service sector, and consumers are shifting their consumption from manufactured goods to services. Therefore, the average markup in the economy is increasing.
The second, a working paper published by the National Bureau of Economic Research, finds that markups have increased because consumers have become less price-sensitive, a mechanism also explored in the first paper. In other words, consumers have been shopping around less to find lower prices, so markups have risen. But it hasn’t happened because firms have taken advantage of inattentive consumers to raise prices; it’s just that costs have fallen faster than prices, resulting in higher markups.
The two papers have discovered complementary explanations for the rise in U.S. markups. Wealthier households consume proportionately fewer manufactured goods and more services and are also less price-sensitive. As Americans in general have become wealthier, we have all consumed more services and have become less price-sensitive.
This makes sense. As we become wealthier, the cost of our time rises. We’re more likely to quickly buy what we need without comparing prices at multiple locations. We’re also more likely to buy higher-quality versions of the same item. When it comes to food, this is definitely happening; just stroll down the grocery aisles and look at the plethora of “fair-trade,” “humane,” and organic certifications.
These results should hearten us that the U.S. economy isn’t rigged against the consumer.
Indeed, where we do see market power, it’s usually not created by really big companies. A rural hardware store has market power if the next hardware store is a long drive away. Public services like public schools and water and sewer systems have immense market power.
Moreover, big business isn’t necessarily bad. For example, Walmart, Costco, and Amazon have driven down retail prices by competing with each other.”
“trade policy. Trump’s protectionist stance is well-known, with his administration imposing tariffs on a wide range of goods, particularly from China. He has since announced that he would like to impose an across-the-board 10 percent and then 20 percent tariff on imports to the U.S., on top of the those already in place.
But Harris’ stance is hardly better. She has embraced a “worker-centered” trade policy that looks suspiciously similar to Trump’s “America First” approach. Both emphasize protecting existing American jobs and industries, even at the cost of higher prices for beleaguered consumers, fewer resources to start new firms that will lead to more opportunity for the next generation of workers, and reduced economic efficiency. And let’s not forget that during the last four years, the Biden-Harris administration has imposed its fair share of tariffs while keeping many of Trump’s.”
…
“Both sides want to subsidize homeownership. The Republican platform advocates for the government to “promote homeownership through Tax Incentives.” The Harris campaign has announced a $25,000 subsidy for first-time homebuyers. Both plans would subsidize housing demand, thus putting upward pressure on housing prices. Great for people who already own homes; not so great for the new homebuyers themselves.”
…
“Both Harris and Trump represent variations on a theme of big, fiscally irresponsible, hyper-interventionist government.”
“For Tim Walz, in vitro fertilization (IVF) is a deeply personal issue—or at least he made it seem that way. In several recent interviews, the Minnesota governor and Democratic vice presidential candidate implied or outright suggested that his own two children were conceived using IVF.
One problem: It’s not true. Walz’s children were conceived using intrauterine insemination (IUI), not IVF. These are two very different things, and the policy conversations about them are fundamentally distinct; many religious conservatives want to prohibit IVF—which can result in the destruction of unused fertilized embryos outside the womb—but not IUI.
Yet Walz tried to link his own personal experience with potential efforts by Republicans to ban IVF. This is misleading, since he and his wife used IUI, not IVF.
It was an oft-repeated error. On Facebook, Walz wrote that his family had taken advantage of reproductive health care options like IVF, which is true enough. But then he told the Pod Save America podcast that his two kids were born “that way,” in reference to IVF. Worse still, on MSNBC, he flatly stated: “Thank God for IVF, my wife and I have two beautiful children.”
It makes sense that some people who have little familiarity with either procedure use IVF as shorthand for both. But Walz should have a more granular understanding of what they involve. Moreover, he has accused his opponents of wanting to ban IVF. Walz attacked his rival, Republican vice presidential candidate J.D. Vance, saying: “If it were up to him, I wouldn’t have a family, because of IVF, and the things that we need to do reproductively.””
…
“The best major media exposé on Walz’s incautious truth telling came from CNN’s Andrew Kaczynski, who revealed that Walz repeatedly lied about his 1995 arrest for drunk driving when he ran for Congress a decade later.
Walz was stopped for driving 96 mph in a 55 mph zone and admitted to police that he had been drinking. His blood alcohol level was .128.
“But in 2006, his campaign repeatedly told the press that he had not been drinking that night, claiming that his failed field sobriety test was due to a misunderstanding related to hearing loss from his time in the National Guard,” wrote Kaczynski. “The campaign also claimed that Walz was allowed to drive himself to jail that night. None of that was true.”
These were direct lies, and there’s no excuse for them.”
“it’s misleading to suggest that the president—and by extension, the major political party to which the president belongs—is singularly or even primarily responsible for the success or failure of the job market. Rather, individuals in dynamic economies operate independently of the political party that happens to occupy the White House.
Clinton’s numbers are technically right: According to the U.S. Bureau of Labor Statistics, the economy added 2.63 million nonfarm private sector jobs while George H.W. Bush was president. During Clinton’s two terms, the economy added 22.9 million jobs. Only 1.37 million jobs were added during George W. Bush’s terms, with another 11.57 million during Barack Obama’s tenure. During Donald Trump’s single term, the economy lost 2.72 million jobs, and in Joe Biden’s term through July 2024, the economy has added 15.81 million.
In total, that equals 51.56 million net jobs added since January 1989—50.28 million under Democratic presidents and 1.28 million under Republican presidents. That’s not the whole story, though.
Many of the presidents’ terms coincided with substantial external forces. Trump left office during a recession caused by the COVID-19 pandemic: In his first three years in office, the economy actually added 6.4 million jobs. Similarly, George W. Bush left office amid the Great Recession, during which the economy shed nearly 7.4 million jobs. Calculating Bush’s term up to December 2007, the economy added 5.7 million jobs.
On the other hand, Clinton served during the dot-com boom. The tech-heavy Nasdaq composite more than doubled between January 1999 and March 2000. But then the bubble burst: The economy entered a recession in March 2001, just weeks after Clinton left office, and the Nasdaq would lose 78 percent of its value between its March 2000 high and October 2002.”
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“National economies—particularly those as large and complex as ours—are dynamic, with an infinite number of inputs and externalities. “Month-to-month job creation is just a function of the dynamic U.S. economy that’s bigger than one person,” Chris Douglas, associate economics professor at the University of Michigan–Flint, told Marketplace in 2022. Central planning fails for this reason: Dynamic economies are driven by individuals, each operating only with his or her own knowledge and interests in mind.”