Now that President Donald Trump is in office, the temptation to pass legislation to either raise or remove the spending caps established by the Budget Control Act of 2011 (BCA) is enormous, and Senator John McCain recently released a proposal that would do just that.
McCain’s proposal comes in response to claims that the American military has been neutered by the Obama administration’s inattention to proper funding. These claims have been a central part of the narrative employed not only by Trump during his campaign but also by rank-and-file legislators eager to demonstrate their commitment to a renewal of American strength and vitality.
The premise that underlies this crusade is deeply flawed. American military spending is already sizeable, and though the military’s footprint has declined, it remains strong. Repealing the BCA would unnecessarily boost military spending while leaving less funding available for other increasingly costly areas of the budget like healthcare, education, and infrastructure spending.
In 2011, a deeply divided Congress, in an effort to produce a legislative mechanism so grim that both parties would have no choice but to engage in bipartisan deficit reduction, passed the BCA. The bill was designed to trim a projected $984 billion from the budget over the next decade.
Read the rest at RealClearDefense…
Advocate Phumlani Majozi was interviewed on eNews Channel Africa, where he responded to the 2015 South African Budget from a free market standpoint.
Watch the interview on YouTube here.
With the House Ways and Means Committee voting on repeal of the death tax next week, there is renewed hope that this inappropriate tax will soon kick the bucket. Although descendants of the deceased are most directly hurt by the death tax, everyone else gets hurt economically as well.
Repeal of the death tax would create a small, but significant, economic boost, according to Alan Cole of the Tax Foundation. “Repealing the estate tax in the United States would increase investment, add jobs, and expand the economy,” Cole says. Over the course of a decade, repealing the death tax would create 139,000 jobs. It would also boost the economy by 0.8 percent, or by over $100 billion dollars. Wages would rise by 0.7 percent.
The boost comes from lifting the tax burden on accumulated wealth, which Cole says improves the economy. When accumulated wealth is taxed, the government redistributes it in inefficient ways, and those hit by the tax try to shift their assets into less productive endeavors. As a result, money flows into life insurance policies and government coffers instead of into job-creating capital.
Read the rest at the Washington Examiner…
On Sunday, the White House released the president’s proposed budget for fiscal year 2016, which includes a major corporate tax overhaul aimed at repatriating profits American companies earn abroad. At first glance, the proposal seems like a win-win for both the private and public sector by increasing government revenue and encouraging companies to invest in their U.S. operations. However, if implemented, the plan would only be a minor tweak to a fundamentally broken corporate tax code that puts American companies at a competitive disadvantage in the global economy.
Currently, the U.S. operates on a so-called “worldwide” system of corporate taxation, meaning that American companies are liable to pay U.S. taxes on profits they earn anywhere in the world on top of whatever taxes they owe to the country they earned the profits at. The U.S. corporate tax code is already a major obstacle for growth in itself with the a top statutory rate of 39.1 percent — the highest among OECD countries. Considering the additional taxes an American corporation would have to pay a foreign government, it could easily lose half of profits abroad.
As such, the tax code allows for American corporations to indefinitely defer their tax payments to the US so long as their earnings are not repatriated. In other words, American corporations can make money abroad free from the federal government’s reach so long as they don’t use it to pay U.S.-based employees or invest in domestic operations. As such, many American corporations like Apple, Google, Twitter, and Facebook have majorly expanded operations in lower-tax countries like Ireland, which currently holds a 12.5 percent corporate rate, while choosing to indefinitely defer tax payments to the U.S.. Consequently, American corporations have accumulated over $2 trillion of overseas earnings of which Uncle Sam has not received a cent.
Read the rest at Watchdog…
Young Voices Advocate Matt Needham was published by Townhall writing about the Paul Ryan budget deal.
Solutions to reduce the budget deficit require actual spending to decrease in real time. An ideal solution would simply reduce spending, starting with cutting waste. If a political agreement must be met that pairs spending cuts with spending increases, the cuts must exceed the increases. The spending cuts must also precede the increases, to prevent a future Congress from reversing such an agreement. Until these measures are put into place, Washington will continue its budget gimmicks, while young workers will be saddled with trillions more in debt.
Read the entire piece here.
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