For those who advocate a value-added tax . . . beware the unintended consequences.
As an American servicemen stationed overseas, I am exempt from the host-nation’s taxes. (Yes, that makes Germany’s $8 dollar-a-gallon gasoline much more palatable than it is for the Germans.)
This evening I was in an antique shop about to make a purchase and I asked if they would remove the tax from the price, when the proprietor told me that antiques are not subject to a VAT.
It dawned on me what should have been obvious. Re-sellers of finished products add no value to the item for sale, and hence, there is no value-added tax. Duh. The second thing that dawned on me was that under a VAT regime, used items retain quite a bit of value, while new items have to be that much better to garner a sale. In other words, a VAT is a sure way to reduce the production of new manufactures, because while there is a tax on the new, the used item that it replaces isn’t subject to a tax.
Here in Germany the VAT is 19.5 percent!!! Yes, anything new is marked up by a fifth by the government. Now imagine how much more expensive a car would be in America under such a confiscatory tax arrangement. Do you think that used car sales would spike under such circumstances? And that consequently new car sales might fall? Of course they would. Duh.
Beware the unintended consequences: a VAT may raise tax rates for the government, but it will also reduce the manufacture of new items. And that means fewer American jobs.
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“House Republicans abandoned their effort to add spending cuts to the Senate’s budget legislation and . . . Oklahoma Representative Tom Cole said he expects the House to pass the Senate bill unchanged with a ‘substantial’ bipartisan vote.”
If this is true . . . if House Republicans and their leadership support a bill that raises taxes and spending as opposed to the status quo that raises taxes and lowers spending, then it is time for a third party. I don’t care how many Democrats win House seats in 2014. I really don’t. If this is what Republican style fiscal conservatism looks like, then I am done with the GOP.
UPDATE:
I’ve received lots of criticism for my post. Let me tell you why you’re wrong to think that this bill was anything less than a complete catastrophe.
1. There were NO spending cuts. None. Not a single dime. In fact, there were spending increases. Massive ones. If the Republican Party believes that spending is the problem–and it is–then this deal is a complete betrayal of that belief. Going over the cliff, as imperfect as that option was, at least sends the strong message that without spending cuts, the GOP will not be on board.
2. Along those lines . . . seeing that, Barack Obama going forward would know that every time he has a wish, he would have to come to the table with something he is willing to cut. Now he knows that when bargaining with the GOP, it’s just a matter of how BIG future spending increases will be.
3. Under the fiscal cliff, the biggest spending cuts would have been to DoD–which is as it should be. The Defense Department is bloated and wasteful as a result of twelve years of unshackled restraint. The GOP, by making defense spending the center piece of its opposition to the cliff says loud and clear that they are exactly the same as the Democrats: we want spending cuts–as long as they aren’t cuts to our spending programs. The cliff was a cut to every program. We need that. Big time.
4. Nickel and dime tax victories over a few tax cuts pale in comparison to what was lost in new taxes. We’re still going into a recession because of this tax increase (I actually think that it will be back-dated to the third quarter of 2012, so we’re probably already there anyway.) So if you thought that this is going to save us from a recession, you should think again.
5. Republicans will be portrayed by the media as having lost. That was going to be the case no matter what happened. The GOP will always get the blame and will always be losers–at least in the eyes of the media. So if you’re always going to get the blame no matter what you do, you might as well do what is right. Any attempt to play nice with the media will not work. So stop trying.
6. Any political victories were tactical in nature. Strategically, the GOP ceded the long game. Spending is the enemy. Politically, spending creates addicts for government dollars. Those addicts will always vote for the party of more spending. By voting for more spending while giving lip service to restraint, the GOP has created more Democratic voters over the long term. Congratulations.
7. Still on the subject of strategic failures, and perhaps most importantly, the GOP has not positioned itself for the time when math finally catches up. The only thing enabling our spending binge is a prolonged period of historically low interest rates. Rates are only that low because of (A) a slutty Fed that’s just giving it away for free, and (B) there are no other investment options because the worldwide economy sucks. (A) is obviously inflationary in the long term. And as for (B), it does not benefit the party in power to maintain a crappy economy so that the government can continue to borrow at low rates. Eventually something gives, and when it does, the party out of power–IF IT HAS BEEN MAKING THE PRINCIPLED CONTRARY CASE–is perfectly poised to make changes of historic magnitudes.
From 1912 until 1930 Democrats were largely out of power. They aligned themselves with progressivism, and in the 1920s especially, national Democrats paid a huge political price for it. But once the collapse came, they were perfectly poised to cement in place progressive rules that are with us to this day. Those very rules are the foundations of the next failure. Last night the GOP decided that it didn’t want to offer the nation a different path. It has become just a Dead Elephant Walking.
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Now that the Supreme Court has ruled with Obamacare that the federal government is limited in what it can mandate that the states legislate, I’d like to see one or more of the states lower the drinking age back to 18 this year. If you are old enough to vote and old enough to serve in the military, you should be old enough to buy a drink.
Still on the subject of alcohol, I’d like to to see more states join Washington’s lead and remove the mandatory second tier of alcohol distributors that serve as legally required monopolies that raise prices and reduce the selection available to the wine-buying public in the other 49 states.
Not that I would like to see continued violence in the Middle East, but since it is a near certainty anyway, I’d like to see it happen in 2013 without any hint that America will get even remotely involved.
I’d like to see no calls this year for any sort of extension to American involvement in Afghanistan.
I’d like to see Congress and the White House continue to be at loggerheads throughout all of 2013. Since every meaningful compromise in recent decades has resulted in higher taxes, greater spending, bigger debt, and diminished freedom, doing nothing is Washington’s best course of action.
I’d like to see the Department of Defense deal seriously with sequestration by eliminating commands, agencies, directorates, and staffs instead of reducing either the number or effectiveness of ships, wings, and brigades.
I’d also like to see DoD kill a few hideously expensive major weapons programs this year–especially the F-35.
I’d like to continue to see the collapse of the legacy broadcast and print media. CNN, NBC, Time, and the New York Times each have brands far larger than their real contemporary influence; it only follows that the economics of that untenable situation will catch up to them–hopefully in 2013.
I’d like to see 2013 produce no viral videos that spark any more line-dancing crazes. The Chicken Dance, the Electric Slide, and the Macarena were each bad enough before Gangnam Style. Please, let’s not do this again. Ever.
And since I will have a college student in 2014, I’d like to see the higher education bubble burst in 2013.
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Since I’m on the topic of intellectual consistency . . .
If you are of the belief that gun use should be severely restricted or even banned because some people will use firearms for bad things, then you should also believe that marijuana should be illegal because some people will smoke pot and then drive. You should probably also want to outlaw alcohol for the same reason. Or maybe just outlaw cars.
For those who miss my point, this is call reductio ad absurdum. If your argument is that guns are evil because some people do evil things with them, then on that basis, the list of things that should be banned is infinite.
As a general rule, we should not ban things because of the bad that may occur; instead we should make illegal the bad result.
Oh, but wait, I hear your counter-argument now: if we make illegal only the bad result, then we as a society are limited to reacting after an evil event and are unable to prevent the evil from occurring.
Actually, yes. That is all that the law should do. To do otherwise would require the severest restriction of freedoms. The law cannot prevent you from being murdered. For to do so it would require the confiscation of all possible weapons as well as the imprisonment of those who potentially possess malicious intent. Even were man deprived of all modernity, he would still find a way to kill with rocks.
In short, law cannot keep evil from occurring. But through the proper balance of the prospect of reward and the threat of punishment, it can limit evil’s spread.
UPDATE:
Via Glenn, I found this story linking marijuana and gun violence albeit from a different perspective:
. . . legalize recreational drugs such as marijuana and cocaine. The theory behind this policy prescription is that illegal markets breed competition-driven violence among suppliers by offering the prospect of monopoly profits and by denying them lawful means for enforcing commercial obligations.
There is historical precedent for this. Legalizing alcohol after Prohibition’s end brought alcohol distribution and sales out of the illegal shadows and into the light of day. Mob-related violence fell almost immediately.
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bob | Category:
Culture | Posted at: Tuesday, 18 December 2012
From a Telegraph report about a potential lawsuit by a Christian group:
The Encinitas Union School District plans to offer yoga instruction at all of its nine schools from January, despite a protest by parents who say they believe it will indoctrinate their children in Eastern religion.
Really? Really? This parental protest against yoga is absolutely stupid.
But . . .
This “Christian” protest against yoga is the exact same kind of protest as the one perennially made by other parents who say that references to Christmas and Halloween should be removed from classrooms because it might indoctrinate their children in Christianity.
If you mock one you must mock the other. You can’t have it both ways.
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With a weekend to digest recent events, I have concluded that Newtown is really just the continuation of that timeless discussion regarding the correct balance of individual rights and responsiblities against the ability and wisdom of government to control events.
An obviously mentally unstable man steals some firearms and kills more than two dozen of the most defenseless victims. Immediately, as after all such events, there goes up a cry for more restrictions on the individual ownership of guns. However, even if that were the right course of action, as John Fund points out, in a country that contains over 200 million privately owned firearms, prohibition is not possible. To outlaw gun ownership would be as futile (not to mention damaging to the cause of limiting violence) as would be an attempt to return 11 million illegal aliens to their homelands or a second attempt at the prohibition of alcohol. Some things are just too entrenched to ever completely end.
Another group has argued for a greater ability of the government to diagnose and detain mentally ill individuals. While certainly there is great merit in having a serious adult conversation about the role of mental illness in violent crime, proposals to return to an era of committing people to the Cuckoo’s Nest, are as fraught with societal danger as are proposals to ban guns. Granting to government the power to forcibly hospitalize the mentally ill who might perform violent acts is as anathema to the American way, as giving government the power to imprison those who might commit a crime. Just how many scores of thousands of imprisoned innocently insane is the right number to save the lives of the next score of innocent children?
If phrasing the trade-off that way doesn’t make you uncomfortable, then I suggest that you don’t have an appreciation for what the American ideal of freedom means. Our system was purposefully designed to default to government inaction and individual freedom. While it is understandably frustrating to victims and their families, our rules prefer that the guilty go free rather than to wrongfully imprison an innocent man. That is no less true for the criminally insane than it is for the just plain criminal.
Shit happens. Sorry to so crassly phrase it, but that’s just the way life is. As we grow more technologically advanced, we have had great success in controlling–even eliminating–some of that shit. Smallpox is completely gone. Polio is rare. Malaria is almost non-existent outside of the third world. The same is true of hunger–the real, dying of starvation kind. We have even the ability to screen out telemarketers without ever touching the phone.
While shit still happens, less of it happens than happened before. So it is not surprising that we look around for other shit to stop. But sometimes in our zeal to stop it all, we lose sight of the trade-offs. How many millions of man-hours of economic productivity, for example, are lost every day in airport security lines in an effort to stop a hijacking that takes place less often than once-a-year?
Rare tragic events sharpen the focus more clearly than does the every day cost of preventing them. I remember a couple dozen years ago the sad story of an airplane lap child who died when he struck the bulkhead during turbulence. Immediately a cry went out to require infant seats on aircraft. In one of those uncommon examples of when Washington considers the whole issue–that which is unseen as well as that which is seen–Congress wisely chose not to act. I say wisely, not because I wish for infants on airplanes to die, but because a serious analysis of ALL of the facts indicated that the solution would lead to more deaths than it would save. That was because if parents were forced to buy an extra ticket for their infant, some significant percentage of them would opt to drive rather than to fly. And by driving, they would make their infant child far more susceptible to accidental death. Shit happens. And sometimes we just have to let it happen, because in trying to stop it, we inadvertently add to the pile of shit.
So what should we do to mitigate the risk of shit? Confiscation, as Ed Schultz suggests? Only if you want criminals to act with less caution, not to mention the real risk of igniting a civil war. Outlaw automatic weapons as Rupert Murcoch demands? It wouldn’t have helped as they were already outlawed in 1934 and Mr. Lanza’s weapons were not automatic. Reinstituting the “assault weapons” ban that limits the size of magazines as Senator Schumer wants? That wouldn’t have helped either; as Mr. Lanza reportedly overcame that limitation by having “hundreds of rounds of ammunition in multiple magazines.” Enforce tighter restriction on gun possession by the mentally ill? That might be worth analyzing, but it still wouldn’t have helped here, as apparently Mr. Lanza shot his own mother dead and then stole her guns. More cops in schools? There are 132,000 schools in the nation; even ignoring the $13 billion additional cost, is 132,000 new police really going to stop the violence? In a mall in Clackamas it apparently only limited, but did not stop, the bloodshed. Add to the list of places where guns are illegal? They are already illegal in schools; perhaps that is why schools and other gun-free zones are such a target-rich environment.
In epidemiology there is a concept known as “herd immunity.” If enough of the population is vaccinated, epidemics can’t occur. Even the uninnoculated benefit because their vaccinated neighbors prevent a disease’s spread from getting out of control. Herd immunity doesn’t stop the disease, but it does stop its spread. The evidence of recent gun violence suggests that if enough law abiding citizens are armed, the death toll of mass murder events may similarly be limited by a form of herd immunity. It is worth considering that the answer to gun violence is the counter-intuitive: more guns.
But what I would even more strongly suggest is that more restrictions on individuals is a worse response than doing nothing. Whether it is to leave a hundred million citizens more susceptible to everyday violent acts because, unarmed, they are at the mercy of armed criminals, or to add to the already swollen number of Americans forcibly detained, any heavy-handed governmental reaction to events such as what occurred in Newtown is likely to be worse than the problem it is meant to cure.
Government was never meant to be the last line of defense against evil. We individuals are. We are the militia. That is the meaning of the Second Amendment. Shit happens. And when it does, hopefully enough of our herd is ready to deal with it before shit gets out of control.
UPDATE:
Guy Benson echoes a similar theme:
I’m skeptical that proposing more grief-fueled laws is a meaningful solution. And even if one could accurately project that passing Gun Law X would save Y number of lives, where do Constitutional rights come into play, and who gets to weigh those factors? If curtailing the First Amendment could also be scientifically proven to save some quantifiable number of lives, would we tolerate additional government limits on those core, specifically-enumerated freedoms? These are extraordinarily difficult questions.
Megan McArdle does too:
What Lanza shows us is the limits of the obvious policy responses. He had all the mental health resources he needed–and he did it anyway. The law stopped him from buying a gun–and he did it anyway. The school had an intercom system aimed at stopping unauthorized entry–and he did it anyway. Any practical, easy-to-implement solution to school shootings that you could propose, along with several that were not at all easy to implement, was already in place. Somehow, Lanza blew through them all.
. . . It would certainly be more comfortable for me to endorse doing something symbolic–bring back the “assault weapons ban”–in order to signal that I care. But I would rather do nothing than do something stupid because it makes us feel better. We shouldn’t have laws on the books unless we think there’s a good chance they’ll work: they add regulatory complexity and sap law-enforcement resources from more needed tasks. This is not because I don’t care about dead children; my heart, like yours, broke about a thousand times this weekend. But they will not breathe again because we pass a law. A law would make us feel better, because it would make us feel as if we’d “done something”, as if we’d made it less likely that more children would die. But I think that would be false security. And false security is more dangerous than none.
For McArdle’s crime of pointing out the obvious truth–nothing that gun control advocates have proposed would have stopped Mr. Lanza’s murderous spree–New York Magazine’s Jonathan Chait awards her the “Worst Newtown Reaction Award.” I urge you to read his column, and then, if you can stomach it, read the comments. There really are two Americas. And Chait and his readers apparently have never stepped foot in the America west of the Hudson River.
Daniel Greenfield offers his thoughts on individual rights and responsibilities versus the government’s ability to control events:
The clash that will define the future of America is this collision between the individual and the state, between disorganized freedom and organized compassion, between a self-directed experiment in self-government and an experiment conducted by trained experts on a lab monkey population. And the defining idea of this conflict is accountability.
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Six months ago, I said this about Egypt:
” . . . continuing that level of American support to the military junta that has taken over the country risks an even worse outcome, as a circa-1979 Iranian Shah style backlash becomes increasingly likely. America is already culpable in the eyes of the Egyptian majority. Every passing day that we arm Egypt’s oppressors, we increase the inevitability that an anti-government revolution grows even more anti-Western.”
I’m reminded of that prediction when I see this BBC report about the Egyptian military rolling into the area of protests against the Egyptian president. Look at that video closely. The armored vehicles that you see are American made M60 tanks and American made M113 armored personnel carriers. That Egyptian military is American equipped and American trained, largely at American expense. This has the potential to be 1979 again.
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In doing some housecleaning, I found this forgotten essay that I wrote in February and never got around to posting. With only a few changes for the sake of grammar, and clarity, here it is:
For the first time in over two years I’m afraid that Republicans could actually lose the race for the White House in 2012. Should they do so, especially in light of the enormous advantages they have over a dysfunctional Democratic Party in 2012 (high unemployment, stagnant growth, unpopular programs foisted upon the public, and an unlikable mob–OWS–as the face of liberal activism, just to name a few) it should disqualify the GOP from ever holding the presidency ever again. If the GOP loses the presidency, it will be the biggest victory of an outclassed mismatch since Aesop’s rabbit blew the race with the turtle.
So how could this be? Simple, there isn’t a candidate who can unite the opponents of Barack Obama. That alone would probably be enough to win in November.
Comparisons with Reagan, just as comparisons with FDR or JFK, almost never measure up. That’s not because those three men were supermen–they weren’t–but because in retrospect each of them is bigger now than they ever were at the time. Nonetheless, Reagan’s genius was in recognizing that politics is the art of addition, and not about subtraction or division. That is still true.
The most recent not-Romney is Rick Santorum. He is most closely associated with the “social conservative” wing of the Republican Party. This is an important member of the family of conservatism, but like its siblings–Fiscal, Defense, Libertine, and Law N. Order–none of the conservative brethren are capable of striking out on their own. Still, that’s what Santorum did, when he linked his opposition to the recent Obama decision to force abortificants upon churches to the canard of “birth control isn’t safe. That is the message of subtraction. It is a position that attracts none but the already converted. Even worse, it is a message so offensive to so many (not to mention, so factually incorrect) that it repels those who might otherwise be attracted to his position were it couched in different terms.
What I mean bythat is this: a Republican must unite the whole party around a simple message that resonates with all its wings. And that message is the same now as it was in 1980 when Ronald Reagan put all conservative factions under the banner of “Leave Us Alone.”
“Leave us Alone” applies to Catholics justifiably outraged by the government trampling upon their First Amendment rights. After all, even if you disagree with the Church’s religious position, you must admit, the First Amendment accords to all religions the right to be wrong, otherwise, the right is not a right at all if its only protection is to protect popular positions. Had Santorum cloaked his argument in “Leave Us Alone,” he would have acknowledged the freedom of churches to decide what medical procedures they would pay for, but would do so without appearing to compromise the right of people to choose to do otherwise with their own money. It is a message consistent with (or at least, not in opposition to) the other conservative brothers.
Rick Santorum is hardly the first to make this blunder. Newt Gingrich, Rick Perry, and Michelle Bachman, each fell by failing to embrace a logically coherent message. The problem, I suspect, is that “Leave Us Alone,” or at least its implications, is not a message that any of the current Republican candidates really embrace. For if you truly wish to be left alone, it implies a reciprocal obligation to leave others alone as well. For defense conservatives that means that if you want others to leave America alone, you must let be those military threats that are non-existental in nature: Libya and the Taliban, for example. To the law and order conservative, it implies a level of tolerance to at least some of those activities, like prostitution and minor drug abuse, that are distasteful, but are not a threat to any but those who engage in them. To the fiscal conservative, “Leave Us Alone,” requires that we not fund any good ideas with public moneys, since, if they realy were ”good ideas,” they would find ample private funds.
You see, it’s not simply about “messaging” your support for or opposition to programs. It’s about actually believing your message and all its implications. And when you believe in your message, you are consistent with your message. If there is a Republican killer this year, consistency will be its name. That’s why it’s time to unite the Republican brand around the simple message of LEAVE US ALONE.
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If the deal is $1.2 T in new taxes and new spending now in exchange for $400 B in cuts ten or more years away, then Republicans shouldn’t walk away from “fiscal cliff” negotiations. They should run.
The alternative is to just let sequestration take effect. The biggest hit is to the Department of Defense. And I can tell you that the hit won’t be nearly deep enough.*
*Usual caveat about this being my view and not DoD’s, blah, and blah.
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I don’t understand why Republicans are opposing Ms. Rice to be the next Secretary of State. She was perfectly acceptable to Republicans (not to mention, just as black and just as female) four years ago when she was Bush’s Secretary of State, so why do they oppose her now? Knowledgeable, competent, honest, and strong, Ms. Rice did a pretty good job then.
Wait, what’s that? You mean she’s not the same Ms. Rice?
Never mind.
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