Trudeau’s Class-Warfare Tax Hike Produces Less Revenue

Dan Mitchell:

It appears, though, that he wasn’t aware of a concept known as the Laffer Curve (or, like some folks on the left, maybe he simply didn’t care).

. . .

The Liberal government’s tax on Canada’s top 1 per cent failed to produce the promised billions in new revenue in its first year, as high-income earners actually paid $4.6-billion less in federal taxes. …The latest available tax records show that revenue from Canadians earning about $140,000 or more – which had previously been the fourth and highest tax bracket – dropped by $4.6-billion in 2016, the first full year that the Liberal tax changes were in effect. Further, 30,340 fewer Canadians reported incomes in that range for 2016 compared with the year before. …The new top bracket with a 33-per-cent tax rate was predicted to raise about $3-billion a year in new revenue…

Funny how that works.


Raise Taxes in Response to French Tax Revolt?

Well, that makes sense only if you’re a dogmatic socialist. It makes no sense for someone concerned about prosperity and happiness. Here’s Dan Mitchell, firmly in the latter category analyzing Thomas Piketty, blindly in the former category.

To put it mildly, this plan is absurd. It would impose another layer of government and another layer of tax on a continent that already is suffocating because the public sector is too large.

I’m not the only one with concerns.


Farm Bill Socialism in Senate


Republicans have criticized the socialism of Democrats such as Rep. Alexandria Ocasio-Cortez, but they should reflect on their own party’s socialist vote in the Senate yesterday. The upper chamber voted 87-13 for the bloated monstrosity known as the farm bill, which funds farm subsidies and food stamps. Republicans in the Senate voted in favor 38-13.

I’m less worried about the food stamp wealth distribution. After all, it is part of a safety net in a market economy. Its the corporate and industry control that is more worrisome: ” 807 pages of legalese laying out excruciating details on crop prices, acres, yields”. It also pays wealthy landowners who live in a city but qualify for subsidies because they finagle the rules that say they are farmers.

Some Republican hypocrites listed. But it is a bipartisan freak show.


U.S. State Comparison: FL, IL

Nancy Smith:

On a day when an editorial in the venerable Chicago Tribune newspaper is making national news for pleading with Illinois lawmakers to clean up the state’s fiscal mess, it’s a good time for Florida to count its blessings.

. . .

Right now, on the basis of its solvency in five separate categories, Florida ranks 4th among U.S. states for fiscal health, behind only Nebraska, South Dakota and Tennessee.

. . .

Illinois, on the other hand, ranks 50th — dead last and apparently in real trouble.


To be sure, fiscal policy at the state level is only one measure of economic health. Economic regulations, personal safety, rights also matter. Local government activity has an impact as well. Several localities raised taxes to pay for increased teacher pay and more police. Unfortunately, higher pay does not equate higher student competency.

It is scary that a far-left candidate for governor lost his race by a few thousand votes out of millions cast. Even with a GOP legislature, the governor controls a vast bureaucracy with which to implement policy.

One thing on the docket is for state-level elected officials need to write the regulations on marijuana legalization.

Report here.

Taxes, Spending, France – Again

Following up on my post yesterday about France being the top taxed country in the OECD (Organization for Economic Cooperation and Development), the ever resourceful fiscal economist Dan Mitchell dives deeper into the data, including a table that compares the taxes AND spending as a percentage of GDP.

The US ranks in the lower percentages than most countries on both scales. Lower means lower tax and spending levels as a percentage of GDP. This is a positive development in my book because the government wastes a lot of resources and is less efficient. Dan also explains that. How does a government provide necessary services efficiently and effectively but keeps the politics and feeding of bureaucracy?

Congress Proposes to Increase Military Spending to $700 billion


Approved by the Armed Services Committee by a 27-0 vote in late June, the overall Senate bill provides $640 billion for core Pentagon operations, such as buying weapons and paying troops, and another $60 billion for wartime missions in Afghanistan, Iraq, Syria and elsewhere. Trump’s budget request sought $603 billion for basic functions and $65 billion for overseas missions.

As their House counterparts did, the Senate bill rejects Mattis’ plan to launch a new round of base closings starting in 2021. He told lawmakers in June that closing excess installations would save $10 billion over a five-year period. Mattis said the savings could be used to acquire four nuclear submarines or dozens of jet fighters. But military installations are prized possessions in states and lawmakers refused to go along.

Any base closings? Any discussion about cutting back on the ambitions of its advocates, the global footprint, the number of missions, the empire maintenance? Nope. Just like every other function of government, it continues to grow.

Are you kidding me? We have wars to fight, people to kill, money to spend, and jobs to protect.



That $65 billion in “overseas missions” is called the Overseas Contingency Operations (OCO) fund.

It is a separate pot of funding operated by the Department of Defense and the State Department, in addition to their “base” budgets (i.e., their regular peacetime budgets). Originally used to finance the Iraq and Afghanistan wars, the OCO continues to be a source of funding for the Pentagon, with a fraction of the funds going to the State Department.

Since the OCO fund has very little oversight and is not subject to the sequestration cuts that slashed every other part of the budget in 2013, many experts consider it a “slush fund” for the Pentagon.

Details here.