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The 2020 Democrats are engaged in a bidding war to lure voters with the promise of free programs and debt forgiveness. Will it work? Also, the prospects for diplomacy with Iran after Donald Trump’s aborted retaliatory strikes and the costs of inaction.
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I believe the underlying problem that is common to most of the major social ills that plague the US today, is that Cheaters Prosper.
From Wall Street, where a CEO can crash his trading firm, with $1.6 Billion missing and not even be questioned by the FBI. To immigration, where legal immigrants can spend thousands of dollars, hundreds of hours in interviews, when the cheaters just walk a few miles and save their money and time. To school scandals and sports. Cheaters are prospering. Fraud has become a business model.
Bernie Saunders speculation tax often called a “Robin Hood Tax” where each transaction on wall street is micro-taxed at .5% or something. This would raise billions in tax revenue – at first – but then the taxable transactions would dry up, either by going over seas or by simply stopping. If day trading, speculation on securities becomes unprofitable or unsustainable it stops quickly.
I don’t support it, but the whole point of a financial transaction tax is to stop speculation, not raise revenue. It’s insane to promise new spending based on it. This should be obvious; we just did a massive corporate tax overhaul precisely because firms had stopped bringing foreign earnings into the U.S. due to the transactional costs of paying high domestic taxes on them.
Progressives hate hearing this, but the engine of “free” government programs are VATs. As California (and Europe) has discovered, funding mass public benefits with taxes on the wealthy isn’t sustainable; the income of the rich is surprisingly variable so when the economy crashes, so do tax revenues (California had a really really bad fiscal crisis during the last recession). But even worse is that politicians start pandering to the rich and engaging in crony capitalism; they are, after all, the primary source of state revenue.
Like Milton Friedman used to say, there is no such thing as a free lunch. If you want a new mass public benefit, the public will ultimately have to pay for it.
I really appreciated John’s words on the stupidity of our higher education system.