By William Shughart •
Friday April 24, 2015 8:54 AM PDT •
The Tax Foundation announces “Tax Freedom Day” every year to mark the date on which the average U.S. taxpayer has earned enough income to pay in full all federal, state and local taxes owed. The date this year is today, Friday, April 24, 2015.
“Tax Freedom Day” is determined by taking the ratio of the estimated total tax burden imposed by governments at all levels ($4.8 trillion) to national income. That works out to 31 percent, and 31 percent of the 365-day calendar year falls on April 24. Tax Freedom Day thus is an estimate across all Americans, but it captures the idea that in 2105, the average person must earn income for 114 days in order to “pay” his or her tax bill and therefore can “keep” everything earned from now until December 31.
Obviously, not everyone is required to pay all of the taxes included in the Tax Foundation’s calculation. Only smokers pay federal, state and local excise taxes on cigarettes, for example. And, fortunately, not everyone dies; estate taxes apply only to the heirs of those who do. But “Tax Freedom Day” supplies a rough and ready estimate of the weight of the heavy hand of government on the average American.
Trends are more informative. Tax Freedom Day this year is three days later than it was last year, reflecting an increase in the total tax burden on the average American. It was latest in 2000 (May 1). The date of Tax Freedom Day varies not only over time, but also across states. It occurs earliest this year in Louisiana (April 2) and latest in Connecticut and New Jersey (May 13). The Tax Foundation also estimates that the typical American household owes more in taxes than it spends on housing, food and clothing.
Since voters are “rationally ignorant” (not “stupid” as MIT economist Jonathan Gruber once said was the reason Congress enacted the Affordable Care Act), the Tax Foundation, where I serve as a policy adviser, supplies an easily understood if imperfect measure of what government costs them. If one looks impartially at the programs and policies those tax revenues partly finance (much money spent at the federal level is borrowed), one must conclude that what government mainly does is to transfer income from taxpayers in general to well-organized special interest groups, including farmers, private corporations, peddlers of “green” alternatives to fossil fuels and too many others to list.
Tax Freedom Day is both a cause for celebration and a sobering reminder of what Justice Oliver Wendell Holmes, Jr. called the “price we pay for a civilized society.” The current price is way too high.
Tags: Budget and Tax Policy, Politics, Public Choice, Rent-seeking, Taxation, The State
By John R. Graham •
Friday April 24, 2015 8:30 AM PDT •
On April 15, President Obama signed the so-called Medicare “doc fix,” a bill that I previously warned would recruit Republicans onto Obamacare’s B-Team. I had also hoped that they would reject the bill, especially after Medicare’s Chief Actuary delivered an even harsher verdict on its consequences than the Congressional Budget Office had. Unfortunately, massive majorities of Democrats and Republicans in both the House and Senate voted to increase deficits by $141 billion in 10 years and half a trillion dollars in 20 years.
During the three-week period the secretly negotiated “doc fix” legislation was being rushed through Congress (“rushed” because the Senate was in recess for most of it), I wrote an article suggesting Republicans who voted for it might be casting their first vote for Obamacare.
Well, don’t take my word for it.
Tags: Affordable Care Act, Budget and Tax Policy, Healthcare, Medicare
By John R. Graham •
Wednesday April 22, 2015 12:45 PM PDT •
Vox’s Mattew Yglesias, an undaunted Obamacare supporter, has listed “7 charts that show what Obamacare critics are getting wrong.” The first is, you guessed it, that chart from the Gallup survey of health insurance, which (wrongly) claims Obamacare reduces the number of uninsured Americans.
Another chart claims that Obamacare is not causing part-time work at the expense of full-time work. Here it is:
Note how Mr. Yglesias’s chart begins in 2010, just when we finally started climbing out of the Great Recession. Trends in employment are caused by many things. Obamacare is only one of them. However, Obamacare did not cause the Great Recession (having been passed in 2010). And its effects are not bad enough to completely crush recovery. However, as comedian and U.S. Senator Al Franken has said, “It takes a lot more work to drive the car out of a ditch than to drive it into a ditch.”
Financial Advisor Doug Short has a great chart showing how part-time-workers and full-time workers flipped as a result of the recession. So, as we come out of it, of course full-time workers will gain.
The question is: What is the effect of Obamacare at the margin, notwithstanding all other effects? To answer this question, University of Chicago’s Casey Mulligan is the go-to source. Obamacare clearly induces many workers of a certain income to lose hours.
* * *
For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.
Tags: Affordable Care Act, Employment, Healthcare
By Abigail Hall •
Wednesday April 22, 2015 5:06 AM PDT •
“Behave, or I’ll sell you.”
This “threat” was one I heard with some regularity as a child. It was my mother’s way of letting me know that I was driving her up a wall. It was usually followed by something like, “then they’ll pay me to take you back.” (In retrospect, if this was true, my mother missed out on a serious profit opportunity.)
This week marks National Infertility Awareness Week. The idea behind the campaign, as the name suggests, is to raise awareness of the variety of fertility problems that keep many couples from conceiving children naturally.
As a “woman of reproductive age,” this is an issue that has crossed my mind on more than one occasion. Will my soon-to-be husband and I be able to have children? Will it be easy or difficult? We can’t know until the time comes. For several friends and acquaintances, however, they do know, and it’s not the answer they were seeking. They know that, even if the reasons are unclear, they have been unable to successfully conceive or bring a pregnancy to term.
Tags: Children, Economics, Family, Health, Uncategorized, Women, Youth
By John R. Graham •
Tuesday April 21, 2015 11:23 AM PDT •
For a number of years, there has been a problem of shortages of certain generic drugs for injection. These are often important cancer drugs. In 2012, I wrote a report that concluded over regulation by the Food and Drug Administration (FDA) was the primary cause of the shortages.
The President and Congress acted, but their actions did not result in improvement for over a year.
Today, the FDA claims to have improved the situation. However, an article in Health Affairs points out that the number of drug shortages reported by the FDA and the number reported by the University of Utah Drug Information Service (UUDIS), the leading private source of this data, are diverging dramatically:
Tags: Drugs, FDA, Healthcare
By Randall Holcombe •
Monday April 20, 2015 1:33 PM PDT •
Presidential candidate Marco Rubio says, “I believe that sexual preference is something that people are born with,” but goes on to say, “I don’t believe same-sex marriage is a constitutional right.” Let’s consider both of these ideas from a political perspective.
First, whether people choose their sexual orientation or are born with it is irrelevant from a political perspective. As long as people’s actions are not violating the rights of others, their choices about sexual partners and any other personal matters should be of no concern to the government. So, I’ll criticize Rubio for making this statement, not because he’s right or wrong, but rather because as a political candidate he should have said that whether people are born with their sexual preferences should have no bearing on politics or government.
Tags: Civil Liberties, Discrimination, Law, Liberty, Morality, Nanny State, Personal Liberty, Politics
By Abigail Hall •
Friday April 17, 2015 6:17 AM PDT •
Unmanned aerial vehicles (UAVs), commonly known as “drones,” have been the subject of heated debate in recent years, especially their role in combat. Without a doubt, the number of air strikes using drones has increased at an astonishing rate. Consider that in Afghanistan, Iraq, Libya, Pakistan, Yemen, and Somalia, the U.S. government has launched over 1,500 known drone strikes since 2008. This visualization of strikes in Pakistan is particularly illustrative:
Tags: Defense, Innovation, Iraq, Middle East, Military, Pakistan, Uncategorized, War
By William Watkins •
Wednesday April 15, 2015 5:09 PM PDT •
It is always good news to hear about a patent troll taking one on the chin. According to this article from the BBC, the U.S. Patent and Trademark Office (PTO) has invalidated parts of a patent claimed by Personal Audio. The patent at issue claimed all rights on “a system for disseminating media content representing episodes in a serialized sequence,” what we might generally call podcasting. The PTO’s decision can be found here. (Personal Audio was the troll that tangled with Adam Corolla last year and lost via a settlement.)
The latest action was brought by the Electronic Frontier Foundation.
Tags: Economic Growth, Entertainment, Innovation, Law, Patent Reform
By Lawrence J. McQuillan •
Wednesday April 15, 2015 4:26 PM PDT •
In a recent op-ed in the Wall Street Journal titled “Pension Reform Doesn’t Mean Higher Taxes,” Andrew Biggs correctly pointed out that new Governmental Accounting Standards Board (GASB) rules require state and local governments across America to be more transparent about the financial health of their public-pension plans. But, as he noted, the rules do not require governments to change how they fund pensions. The new rules are accounting rules, not funding rules.
Then Mr. Biggs said: “there’s no reason” why a public pension plan should “pay off its unfunded liabilities rapidly.” Actually, there are two good reasons for paying off pension debt sooner rather than later.
Tags: Budget and Tax Policy, Children, Millennials, Morality
By John R. Graham •
Wednesday April 15, 2015 12:48 PM PDT •
Gallup has released the full results of its first-quarter survey of health insurance. It concludes that the proportion of uninsured Americans has collapsed to the lowest level ever: 11.9 percent.
Only the people who have employer-based benefits can be said to be paying for their own health insurance. They decreased 0.9 percentage points in the quarter.
Tags: Affordable Care Act, Healthcare, Insurance