Cutting the Corporate Income Tax Wouldn’t Cost Any Revenue

Complete elimination of the corporate income tax would boost the American economy by 6 percent in the long run — enough to raise other tax revenues and, over time, make the tax cut revenue-neutral.

The government would immediately lose $273.5 billion in annual corporate tax revenue if the tax were eliminated. But within roughly ten years, income, payroll, and other tax revenues would rise by an annual $273.9 billion as a result, according to the Tax Foundation.

As the above graph shows, the more the corporate income tax rate is cut, the higher economic growth rises. Increasing the corporate tax rate would hurt economic growth and might actually cost tax revenue. Every corporate income tax cut would boost revenue, with the highest revenue boost at about a 20 percent tax rate. However, a 20 percent tax rate would only boost economic growth by 3 percent, whereas eliminating the corporate tax would boost growth by 6 percent.

Read the rest at the Washington Examiner…

What’s Behind the Government’s Hatred of Raw Milk?

Government bans on the sale and distribution of raw milk and raw milk products are enforced in the name of public safety. But many people enjoy the health benefits of milk that has not been pasteurized, and some farms want sell it. Are the health threats from raw milk significant enough to warrant a ban on its sale? Government data and the lack of regulation of other raw foods suggest that they are not.

The Food and Drug Agency currently prohibits the interstate sale or distribution of raw milk and raw milk products, such as yogurt, ice cream, cheese, and sour cream, and requires anyone selling raw milk to be licensed. The FDA delegates all further regulation to the states by advising them to likewise regulate the sale and distribution of raw milk. Based on this advice, 40 states prohibit the retail sale of raw milk and raw milk products and 13 states make unpasteurized dairy products completely illegal for human consumption.

Though they have the potential to make people sick if they are not prepared carefully, unpasteurized dairy products carry health benefits—especially for those people who are sensitive to lactose or have allergies. Kristin Canty, director of the documentary Farmageddon, told us, “My son was completely ridden with allergies and asthma until we started drinking raw milk as a family. We have been drinking it now for 15 years. I find it ridiculous that the government thinks that they have the right to tell us that we can’t consume a substance that has been used for sustenance for thousands of years.”

Dan Allgyer, an Amish farmer in Pennsylvania who violated the FDA’s ban on interstate raw milk sales, was subjected to an early morning armed raid to his farm which put him out of business. Milk from Allgyer’s now-closed farm was never alleged to have made any of his customers in the Washington, D.C. area sick. Rather, his customers sought out his dairy products, fully aware that they were unpasteurized.

The FDA and Centers for Disease Control and Prevention are determined to educate the public on the perceived dangers of raw milk, but their data suggest that raw milk is not as dangerous as their slanted language implies.

In its video explanation of the dangers of raw milk, the FDA claims that, “healthy people of any age can get very sick or even die if they drink contaminated raw milk.” This is not news—healthy people of any age can get very sick or even die if they drink or eat any contaminated food. All products carry risks, but their sale is not prohibited. Consumer freedom would be substantially limited if only fully-cooked chicken breasts or well-done steaks were available for sale.

Read the rest at The Manhattan Institute’s E21…

Higher Cigarette Taxes Will Do Little to Decrease Smoking

Following months of tenacious lobbying by groups like the American Heart Association, State Sen. Ed Hernandez (D-Azusca) introduced a bill last week that would raise the smoking age in California from 18 to 21 and impose a $2 cigarette tax hike. While certainly well-intended, Californians should be skeptical of such a proposal as new research suggests that cigarette taxes do not decrease smoking as much as conventional wisdom suggests.

Since 2002, there have been more than 110 increases in cigarette taxes at the state level.Taxes now make up about $2.50 of the $6 price of a normal pack of cigarettes. Adult smoking rates in the U.S. dropped from 22.5 percent in 2002 to 19 percent in 2011 according to the Center for Disease Control. The agency hopes to see rates fall to 12 percent by 2020. Tax increases on cigarettes are seen as a valuable tool for discouraging smoking by both policy makers and public health advocates like like the ALA. With numbers like these, it is difficult to argue against these points from a public health standpoint.

Yet, this argument is misguided. New research by professors Kevin Callison and Robert Kaestner published in Regulation questions whether further raising cigarette taxes will do much to decrease smoking rates. They find that adult cigarette use is largely unaffected by taxes. Moreover, they estimate  that a large increase, possibly about 100 percent, would be required to decrease smoking rates by just 2 to 3 percent. This flies in the face of the conventional arguments provided by cigarette tax advocates.

Moreover, the study finds, the tax burden of further cigarette taxes is felt acutely by the nation’s poor. If, as stated above, tax increases do little to reduce smoking, then a $1 tax increase would cost the average low-income smoker an extra $480 per year. Worse, even in the best-case-scenario, the person would spend an extra $450 per year, every year moving forward. Not only would higher taxes do little for public health, but their burden would be felt disproportionately by those with lower incomes.

Read the rest at Watchdog…