All posts by Thomas L. Knapp

Torturing the Truth: The Tax Cut Debate vs. the English Language

Hundreds (RGBStock)

On April 26, the Trump administration released a one-page summary of its tax reform proposals. The following morning, US Treasury Secretary Steve Mnuchin appeared on CBS This Morning to discuss those proposals. Co-anchor Norah O’Donnell didn’t waste any time ham-handedly injecting  the mainstream media’s dishonest narrative-shaping language into the conversation.

“As you mentioned this would be historic tax cuts [sic],” her first question began. “Estimated to cost the American taxpayer $7 trillion over a decade. So when will you tell us how you will pay for it?”

Unfortunately Mnuchin played along: “In regards to the pay for [sic], I don’t know how people can estimate the cost since we don’t haven’t released all the details, but this is going to be paid for by economic growth and by a reduction of many, many deductions in special interest.”

O’Donnell tried to put two ginormous lies over on her viewers. And Mnuchin let her get away with it.

Tax cuts don’t “cost the American taxpayer” anything. Quite the opposite, in fact. Taxation takes money from taxpayers and gives that money to politicians. Tax cuts leave some of that money in the taxpayers’ pockets.

Tax cuts don’t “cost the government” anything either. The money the politicians aren’t taking as taxes wasn’t theirs in the first place. They didn’t create the wealth it represents, the taxpayers did. Not taking it isn’t a “cost,” any more than me not shoplifting a pair of shoes “costs” me footwear or constitutes “payment” by me to the shoe store.

Nor do tax cuts need to be “paid for.” Yes, the government will have less to spend if it takes less from those who earn it.  Spending cuts aren’t “payment” for tax cuts. They’re not “payment” for anything. In fact, they are the exact opposite of “payment.” They are, by definition, NON-“payment.”

If O’Donnell had phrased the question truthfully, it would have gone something like this:

“With these tax cuts, the government will take $7 trillion less from American taxpayers than it would have taken if the current rules were kept. What are you guys not going to buy that you would have bought if you had taken that $7 trillion?”

O’Donnell’s torture of the English language — and of the truth — implies that that $7 trillion just naturally belongs to the government rather than to the people it was to be taken from — that not taking it somehow constitutes a “cost”  both to those people and to the politicians who want the money. That’s the opposite of the truth.

Taxing is taking, not giving. Spending costs and not spending doesn’t. If there’s a good argument for either, that argument will be based on those facts, not on parlor tricks like O’Donnell’s sleight of word.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION  HISTORY

NYC Gun Permit Scandal: Graft is Inevitable in a Corrupt System

Gun photo from RGBStock

“Two corrupt cops from the NYPD licensing division were plied with strippers, wined, dined and taken on lavish vacations to Mexico and the Bahamas,” reports the New York Daily News. Why? Because in return for nice things, they were allegedly willing to “expedite” the process of applying for and receiving gun permits.

Left unmentioned in the story is the other why. Why would someone be willing to blow that kind of money on gun permits?

Simple: Because New York City’s government requires such permits, then makes the process for getting them long (3-6 months), tedious (in addition to the application, up to nine pieces of paperwork and one or more “personal interviews”), expensive (a non-refundable application fee of $340, plus $87 for a fingerprint check) and, worst of all, discretionary.  After rolling around in all that red tape, maybe the police bureaucrat “assisting” you doesn’t like the way you look that day and it turns out you just wasted a bunch of time and money.

It’s unsurprising that a secondary industry would spring up to make the application process easier (although obviously more expensive). It’s equally unsurprising that people with more money than time would farm out their permit needs to that industry. And it’s not surprising at all that that industry would, if necessary, resort to bribery to deliver the goods.

The US Constitution is crystal clear on the subject at hand: “[T]he right of the people to keep and bear Arms, shall not be infringed.”

Legally conditioning exercise of that right on possession of a permit is most manifestly an infringement.

Additionally, leaving issuance of permits under the clearly unconstitutional scheme to the discretion of bureaucrats is a recipe for both tyranny and corruption.

Finally, as a practical matter, the permit scheme only wastes the time and money — and places at risk the lives — of those who choose to be “law-abiding.” Criminals who want to carry guns don’t apply for permits to do so. They’re criminals, remember? They don’t care if they’re breaking laws, nor do they want their identities tied to the guns they use in the commission of their crimes.

It might be going a bit far to describe cops who “expedite”  gun permits in return for cash bribes or favors as heroes. But they’re not nearly as corrupt as the system they’re accused of subverting. New York City needs to abandon its evil and unconstitutional “gun control” schemes.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION  HISTORY

Tax Reform: Two Places to Start

1040 Tax Form

An anonymous announcement of a forthcoming public announcement: On April 26, an anonymous White House source says, the Trump administration “will outline our broad principles and priorities …. We are moving forward on comprehensive tax reform that cuts tax rates for individuals, simplifies our overly-complicated system and creates jobs by making American businesses competitive.”

That sounds very nice. But given the administration’s previously revealed “principles and priorities,” it’s reasonable to expect a heaping helping of economically dumb protectionist tinkering floating atop a billowing cloud of hot air.

If Trump, his administration, and congressional Republicans were serious about real tax reform (they aren’t, but if they were), I’d expect to see two major initial proposals: A measure increasing the “personal exemption” to the federal income tax once a year, every year, automatically, and a “FICA floor” that likewise increases each year.

The personal exemption is part of the amount an individual can earn each year before being taxed on income at all (the other part is either taking the “standard deduction” or itemizing and adding up specific spending that’s deductible).  For income earned in 2016, the personal exemption is $4,050 (with a “phaseout” starting at $150k; that “phaseout” should be eliminated as well).

Automatically increasing the personal exemption each year and eliminating the phaseout would have two effects: It would cut taxes for everyone who pays them, and it would take the lowest income Americans off the income tax rolls altogether.

Since the Reagan era, tax cut proposals have been aimed at cutting top rates on the basis of a “supply side” theory — that rich entrepreneurs who get tax cuts will invest their retained wealth in new businesses that create jobs. But there are two sides to an economy, supply and demand. Cutting taxes for everyone, starting at the bottom with increased personal exemptions, would spur economic demand. That demand would be just as good for those entrepreneurs, and better for everyone else, than “supply side” cuts.

FICA taxes are used to finance Social Security and Medicare.  They are regressive taxes which, due to collection ceilings and life expectancy differentials,  force lower-income black males to subsidize retirement and healthcare for higher-income white females.

Yes, retirement income and post-retirement healthcare expenses are important. But so is making a living. A FICA floor — a “personal exemption” income amount below which FICA taxes aren’t collected — would let low-income Americans keep and use more of their money now instead of hoping to live long enough to claw some of it back later.

As a libertarian, I would prefer to see the income and FICA taxes eliminated altogether. Failing that, we should at least do what we can to get the government spending monkey off the backs of the poorest among us.

Yes, there is a grass roots organization pushing these two common-sense tax reforms. Disclosure: I am a member of that organization and sit on its steering committee. It’s called the Mobilization for Incremental Tax Exemption (catchy acronym: The MITE). You can find it on the web at TheMite.org.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION  HISTORY