Tag Archives: economy

Sorry, Obama, But Legalizing Pot Is About Jobs

In an interview with Vice News released Monday, President Obama stated that marijuana legalization “shouldn’t be young people’s biggest priority” and that they “should be thinking about climate change, the economy, jobs, war and peace.” He then went on to intimate that ending the prohibition of other, harder drugs would be unreasonable. But in truth, what’s unreasonable is the notion that marijuana prohibition – and drug prohibition at large — has nothing to do with the economy and jobs.

Since the time President Nixon officially declared a “War on Drugs” in 1971, the United States has spent well over $1 trillion enforcing drug laws and incarcerating drug offenders. But this is just part of the equation and there are other costs incurred from drug prohibition, namely productivity losses in the labor sector. For the year 2007 alone, the Department of Justice put that price tag at a total of $48 million, in regard to both market and household productivity losses as a direct result of the incarceration of drug offenders.

The reason that these costs are so exorbitant is due in large part to the accelerated rate of incarceration that resulted when the nation’s draconian drug laws were established. Since the Controlled Substances Act was passed in 1970, the US prison population has surged 700 percent, leading to a populace full of convicts. Today, over one in every four American adults has a criminal record. Not only has this resulted in a number of non-violent criminals stigmatized for their past, but it has severely impacted their future.

Read the rest at Townhall…

How the Death Tax Hurts the Living

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…

Social Security Robs the Poor to Pay the Rich

If the point of Social Security is to take money from the poor to give to the rich, it’s working.

As the young pay Social Security taxes, the old collect benefit payments and live in relatively low poverty. The poverty rate for those aged 18 to 64 is 13.6 percent, nearly 50 percent higher than the 9.5 percent rate for those over age 65, according to the Census Bureau. Those aged 65 to 74 live in even lower poverty at 8.3 percent. Americans 75 and older are still less impoverished than working-age Americans at 11.2 percent.

The average federal tax rate paid by elderly households is 13 percent, according to the Congressional Budget Office. For the lowest fifth of income earners, elderly households pay an average rate of 1.6 percent. Meanwhile, non-elderly childless households pay an average effective federal tax rate of 20 percent, with the bottom fifth paying 7.7 percent. Non-elderly households with children pay lower average tax rates due to child tax credits, deductions and exemptions.

The elderly typically have lower incomes than some working age groups, but they have had decades and decades to build up savings and financial assets to live off of. The young, who finance Social Security, lack that advantage.

One major issue with Social Security is the way it’s funded. Workers pay Social Security taxes that go into a Social Security Trust Fund, and the money in that Trust Fund is disbursed to the elderly. This often leads people to say they paid into the system and deserve full benefits. However, just because Social Security taxes are paid into the system does not mean that retirees receive the same amount they paid in. Benefits are calculated according to income levels, but current workers fund Social Security payments for current retirees, not their own retirement in the distant future. The money that current retirees paid into the system was spent years ago because the program was flawed from its creation.

Read the rest at the Washington Examiner…

Rubio-Lee Plan Is Tax Reform We’ve Been Waiting For

To many in Washington, DC, comprehensive tax reform seems like a mirage. It is something to be spoken about, to float dream-world proposals of, and for bureaucrats to build careers chasing, without ever amounting to anything in law.

Yet, periodically, we see serious proposals emerge to fix the tax system once and for all. Some are good, some come up short, but all aim to make the system simpler and easier for average people to deal with.

The latest of these plans is the Economic Growth and Family Fairness Tax Plan, better known as the Rubio-Lee plan, after the senators who proposed it. The plan would fix many, if not the large majority, of the problems with the current federal tax system.

Some highlights include the end of damaging extraterritorial taxation of corporate income, ending taxation of capital income, and ending the vast majority of itemized deductions. All of these would dramatically simplify the current tax system for both corporations and average citizens, and remove much of the confusion that confronts taxpayers each April when they file their income taxes.

Simplifying the corporate tax system and ending taxation of capital income are clear and well-understood measures that would boost the economy. Ending extraterritorial taxation of corporate income and lowering the overall corporate tax rate are major components of the Rubio-Lee proposal.

We know the United States has one of the highest and most burdensome corporate tax regimes in the developed world, lagging behind her peers in Europe. The Rubio-Lee plan would put an end to that, encouraging companies to invest in new US operations, and bring some of the cash they have abroad for tax purposes back to the United States.

Read the rest at the PanAm Post…