…An intellectually vibrant conservatism is essential to a healthy democracy. The United States needs conservatives willing to criticize the grand plans we liberals sometimes offer, to remind us that traditional institutions should not be overturned lightly and to challenge those who believe that politics can remold human nature.
Wait, is he suggesting we are slow to change? No, say it’s not so!
At its best, as Philip Wallach and Justus Myers argued in National Affairs , conservatism is a “disposition” that “has the most to offer societies that have much worth conserving.” Even those of us who are critical of our nation’s injustices and inequalities can agree that the United States is such a society. The task of conservatives, Wallach and Myers write, is to offer “incremental adaptation” as an alternative to radical change.
So, in plain speak, progress at a thoughtful pace. How reasonable.
Conservatives in power could never materially reduce the size of government, because so much of what it does and spends money on — from supporting the elderly to protecting consumers to providing for the common defense — is so popular. Conservatives haven’t been able to roll back cultural changes, because most Americans don’t want to return where we were before the rights revolutions on behalf of African Americans, women and gays. And politicians can’t reverse the fact that white Americans gradually are losing their majority status in an increasingly diverse nation.
…If the deficit is going to be eliminated, that isn’t the main way it will happen.
No one can surely doubt that higher taxes are contractionary. Japan’s consumption tax rise in 1997 is often cited as a historic mistake; derailing a nascent recovery. As for taxing companies, they are merely a legal entity. Higher taxes on them must be passed on in one of four ways; higher prices on the goods they produce and sell, lower wages, less employment or lower profits.
Corbynites might hope all the burden will fall on the last but managers, who have a responsibility to shareholders (and a fear of being taken over), will fight hard to avoid that (and of course, any hit to profits and dividends will affect the funds that have promised workers’ pensions). Some companies may be able to increase prices to offset the tax but many won’t for fear of losing business to foreign competitors which will not be facing the same tax bill. They could cut wages, except that the Corbyn programme includes a provision for a sharp increase in the minimum wage. So the biggest impact will probably be on jobs; the jobs of Labour voters.
The 2014 IRS Statistics of Income, available for download here, reflects that all Business tax collections only amount to 11.8% of the total collections. (Total was roughly $2.691 trillion and Business (including tax on Non-Profits who sell unrelated stuff) only totaled about $318 billion.) A 10% reduction in Corporate Income Taxes would equal about $30bn. Good Managers can multiply that 3-5 times creating almost $1tn-$1.5tn in new capital to invest in their business. In 2014 Individual Income and Employment taxes accounted for 84.8% of collections.
Is it possible that lowering corporate taxes 10% (about 1% of total collections) would allow Managers to keep producing the minimum returns they need to support stock prices while allowing them to invest now freed earnings (previously going to income taxes) in new equipment (creating jobs for the builders of that equipment) as well as higher wages (to keep talent other managers might try to steal with excess earnings) and adding new workers? The Managers will see that investing in the future of their business is reflected in higher valuations of the stock and they get bigger bonuses (on which they pay nearly 45% Federal Taxes). Raising Corporate taxes always costs jobs, let’s try reducing corporate taxes and see if we can create jobs, that is the way to address the deficit. Just sayin….
My approach is to try to assess how the U. S. is doing, relative to the other developed democratic countries. The premise for the analysis is that the great transformation of the world economy over the last 30 years (documented by Nobel laureate economist A. Michael Spence) has generated a difficult set of problems that no individual or country has solved. There is in this new transformed economy increased global competition as labor in Asia and the developing world displaces the middle class and high-paying manufacturing jobs in Europe and the U.S., leading to high unemployment levels and the concomitant spending increases.
The present crisis generates a similar set of problems, though even more consequential for the U.S., because the world is more connected now, with China and India leading the transformation. The problem for the U.S. is further complicated by the world economy counting on U.S. military might to keep oil flowing around the globe and to bring stability to the Middle East, among other duties. Given this daunting set of problems, how is the U.S. doing economically, relative to the rest of the developed world?
Even with the possible exception of Germany, one cannot credibly claim that the U.S. economic response to the recession compares unfavorably to other advanced democracies. All of which raises a logical question: How could a broken, gridlocked, dysfunctional government come out so well when compared to other countries?
Yet this is not the narrative one hears discussed—on either side of the Atlantic.
It may not be perfect, but who’s doing better? Just sayin…
It’s been reported that some of these entrepreneurs are doing business in cold, hard cash lugging bags around even to pay taxes. And of course, as volumes continue to rise, there be more money in more bags—a dangerous scenario by any measure. Of course, banks are heavily regulated by the federal government, which still has laws on the books banning not the sale but even the use of marijuana. Taking in and storing money from pot dealers sounds like the textbook definition of a criminal enterprise.
This isn’t just an inconvenient gap between what’s legal in one place and illegal in another. It’s a chasm the size of the Grand Canyon.
However, the feds have finally stepped up. The U.S. government just issued rules that, for the first time, allows banks to legally provide financial services to state-licensed marijuana businesses. There are still strict penalties against certain infractions: distribution to children, trafficking by cartels, shipping to states where marijuana isn’t legal, and so on. Short of those restrictions, however, financial services providers doing business with these businesses “may not” be prosecuted.