Simon? Yes. Garfunkel? Hmm…

The good people of Austin, Texas, have grown weary of their reputation as the Live Music Capital of the World. How else to explain the city government’s creation of a Live Music Task Force

Austin became a live-music hot spot without a government task force. Any bets on how long live music will survive now that they’ve got one?

“But wait,” you might object, “how would the task force destroy something that it exists to promote?”

I’m sure the Task Force is working on many fronts. But one obvious strategy might be to have the government decide who is a “musician” and who is not. You know, for the purpose of doling out government health benefit to musicians. Hey, if the government’s going to be passing out benefits, it has to decide who makes the cut.

And the Task Force will face some tough decisions. Right now, musicians:

Must provide 3 references who will be contacted to corroborate that applicant is a working musician (examples: club owners, booking agents, record labels, etc.)

Sounds reasonable. But is that fair to this guy just because he can’t get a gig?

Rhymin’ Simon should meet anyone’s definition. But what about GarfunkelJohn, Paul, George … yes, yes, yes. But Ringo?? The Blue Öyster Cult is a no-brainer. But what about this guy:


Does the government have any business deciding who is a musician? Even if it did, would we want it to? Is that really going to improve live music in Austin? Or the quality of health care?

Does it even occur to anyone to ask these questions?

Obama’s Tax Promises

President-elect Obama has made a slew of tax promises. Some of them are tax increases, some of them are tax cuts, and many of them are actually spending increases. Let’s try to sort them out.

Here I classify tax changes in comparison with the taxes that Americans are paying this year. I am mainly working from this excellent Urban/Brookings study.

Note that many of Obama’s proposed tax breaks are “refundable,” meaning that much of the effect is to increase federal spending, not to cut taxes. Refundable tax breaks involve cash hand-outs to many people who do not pay any federal income taxes. 

With that in mind, here are Obama’s main proposals to change the tax system from its 2008 structure:

Tax Increases

  • Raise the top two personal income tax rates from 33 and 35% to 36 and 39.6%, respectively.
  • Restore the income phase-outs for personal exemptions and itemized deductions, further increasing effective tax rates at the top end.
  • Raise the top capital gains tax rate from 15 to 20%. 
  • Raise the top dividends tax rate from 15 to 20%.
  • Increase taxes on oil and gas companies.
  • Increase taxes on U.S. multinational companies.

Combined Spending Increases / Tax Cuts

  • Making Work Pay. A refundable tax credit of up to $500 for low-income workers.
  • Mortgage Credit. A refundable tax credit of up to $800 for nonitemizers who own homes.
  • Saver’s Credit. A refundable tax credit of up to $500 per family for retirement saving.
  • American Opportunity Credit. A refundable tax credit of up to $4,000 for education expenses.
  • EITC Expansion. Expand the refundable earned income tax credit.
  • Child Care Credit. Turn the current child care credit into a refundable credit.

The Urban/Brookings analysis (pages 22 and 25) found that more than half of the dollar impact of these six tax code changes will be to increase federal spending, not to cut taxes. That’s $648 billion more in federal spending over the next ten years. In addition, Obama is proposing a new refundable tax credit for buying health insurance. 

Tax Cuts

  • Exempt people age 65 and over from federal income tax if they earn less than $50,000.
  • Minor business incentives. These promises were so small and undefined that the Urban/Brookings study didn’t even score them.

Conclusions

As you can see, it was genius of Obama to successfully run for the White House as tax cutter, given that most of his proposed tax code changes are tax or spending increases. Part of the problem is that the media keeps calling Obama’s proposals “middle-class tax cuts,” as on the front of the Washington Post today.

For the economy, for tax code complexity, and for the America ideal of equal treatment under law, Obama’s tax proposals would be a disaster. With Obama’s tax and spending proposals, government as Santa Claus has reached new heights.

For other posts on Obama’s tax plans, see:

http://www.cato-at-liberty.org/2008/06/13/obama-tax-proposals/

http://www.cato-at-liberty.org/2008/09/17/obama-tax-cutter-or-tax-hiker/

Obama’s Touch Cured Me of Scrofula

Arjun Appadurai (of “Magic Ballot” fame) has replied to my recent post. I think it’s at least worth clearing up a few misconceptions:

I assume Mr. Kuznicki is sympathetic to the mission of the Cato Institute, whose name can be traced back to Cato the Younger, implacable foe of Julius Caesar. Alas, he sounds a lot more like Cato the Elder, also known as Cato the Censor, famed for his rigid moralizing, his ascetical approach to public spending, and his brutal approach to war against the enemies of Rome.

I don’t care for moralizing, and still less for war, but I’m guilty as charged when it comes to asceticism in public spending.

I believe that the government should live within its means, and that whenever possible, workers and investors should keep what they earn. Call me a penny-pincher, but I think that terming a $700 billion bank bailout “magic,” as Mr. Appadurai did, is the single weakest justification I’ve ever heard for any government project, ever. And I’ve heard some doozies before.

Calling acts of government “magic” gives our political leaders way more credit than they deserve. Our leaders may be intelligent, or charismatic, or honest, or judicious. But even the best of them are not magic. To tell the truth, I hadn’t thought this a controversial idea.

Mr. Appadurai continues:

Mr. Kuznicki is keen to remind me that the United States is a Lockean republic, that Barack Obama is not a priest or magician, that the Presidency is just a job (presumably like employment at Kinko’s) and that Obama was elected and not crowned. Well, where do I begin? I do know these facts. My essay was an interpretation of what seemed to us (not to Mr. Obama) so special about this election.

But his essay was the first to use the word “crowned,” not mine.

This election certainly was special: We shattered a racial barrier, and I’m thrilled to see it gone. We repudiated neoconservatism, our ill-conceived foreign wars, and the big-spending Bush administration. So much the better. But none of this is magic, and we don’t need the vocabulary of mysticism to express it. (In fact, I believe I just did express it.)

Mr. Appadurai also gets the following wrong:

Mr. Kuznicki is the kind of “secular” libertarian to whom the entire world of non-secular feelings, sensations, experiences and actions makes no sense, indeed it makes him sick. Well, in that case, 90% of humanity makes him sick, and perhaps 80% of the American electorate, including those who believe in faith-based philanthropy, religious calls to dialogue between faiths, and I assume the entire family of words from grace and charisma to hope and redemption also makes him sick. I am afraid there is no easy cure for this ailment.

It’s a bit silly to think that because I won’t call Barack Obama “magic,” I must have some deep-seated problem with 80% of the American electorate. I’d think, rather, that Christians would be on my side: Obama is a man and a sinner like any other, and all magic – excuse me, all glory – belongs to God.

In fact, the only thing I object to here is magical or mystical thinking about the government. The government has to serve people of all religious faiths, and of none. It can’t play favorites, and it can’t be some strange mysticism unto itself. If it were, it would alienate much of the public, and make tyrants of the rest. That’s what I object to.

A government of, by, and for the people is a huge advance over the divine rule of kings, kings who in former ages claimed that they really were magical, and whose touch was said to cure scrofula. Our leaders are human like the rest of us, and they should be open to our criticism, just like the guy at Kinko’s if he ruins our copies. That’s the genius of America: having a government we’re not afraid to criticize.

America is also about celebrating individual virtues. These virtues, however, take a pounding from Mr. Appadurai:

…Mr. Kuznicki knows the answers already and is sure that what makes the world go around are: “reason, hard work, rectitude, compassion, courage, and thrift.” I assume that when things go wrong, it is due to a deficit of these things. Well, there’s his answer to global warming, the biggest financial meltdown in the world’s wealthiest economy, military failure in Iraq and Afghanistan for the world’s most sophisticated army, not to speak of Avian flu, sudden infant death and Katrina.

“[R]eason, hard work, rectitude, compassion, courage, and thrift” are virtues. Virtues aren’t “the” answer, but they’re the beginning of one, and it’s a weak theodicity that gives up on virtue when the going gets tough.

(Ask yourself: Can there be a solution to global warming or Avian flu – without reason? A solution to Iraq – without courage? A solution to the financial crisis without hard work and thrift? Well, yes, there can be such solutions, but we wouldn’t want to implement them.)

And you know, it’s funny. I’d imagined that liberals would really go for the “reason” line, having plausibly accused the Bush administration of waging “war on science.” But I suppose that for at least a few liberals, when their guy wins, “reason” is out the window, and “magic” is what it’s all about.

Marshall Fritz Passes

Marshall Fritz, founder of the Alliance for the Separation of School and State, passed away last week. Marshall was a principled, honorable man, and one of the clearest voices for the view that the state should play no role in the education of children. He advocated parental responsibility and private philanthropy as the only proper means of ensuring universal access to education. While Marshall and I disagreed on some issues, he was always the model of civility and empathy. He strove to lead a good and charitable life, and he succeeded. Rest in peace, Marshall.

Isn’t It Nice: Obama Can Choose!

Speaking of school choice, here’s the Washington Post’s Jay Mathews on President-elect Obama’s upcoming school selection.

Read it and then let me know: Could Mathews be any less critical? Jay regularly dodges any meaningful discussion of private-school choice reforms like vouchers while railing about such peripheral tweaks as increasing Advanced Placement offerings. Apparently, school-choice reforms don’t even rate when the incoming President—a choice opponent—is about to choose a school for his kids. Jay just happily discusses Mr. Obama’s impending decision with the friendly warmth of a helpful new neighbor, for all intents and purposes dodging not just the political implications of the President-elect choosing a private school for his own kids, but the exceptionalism that seems to be heading his way within the public-schooling system.

“One educational gem happens to be the closest public school to their new home,” Jay writes, after noting without a hint of reservation that the Obamas will probably choose the private Georgetown Day School. “Strong John Thomson Elementary School is at 1200 L St. NW, three-fifths of a mile from 1600 Pennsylvania Ave.”

There are a few minor problems, though, with getting into Thomson, problems that would be deal-killers for normal DC citizens. One is that “the White House is actually in the attendance area of the Francis-Stevens Educational Center.” President-elect Obama wouldn’t want to send his kids there, though, because “that is a recently merged school with a new principal.”

Another problem is that Strong John Thomson is, according to Mathews, “close to capacity.” But no worries. The principal “said she would have room after the holidays for a fifth-grader and a second-grader transferring from the Midwest.”

When the time finally comes for Mr. Obama to select a school for his kids, would it be too much to ask that the education columnist in the Washington Post not dodge the actual political implications of the decision? I know these kinds of decisions are too personal to listen to ”kibitzing from outsiders,” but I’d sure hate for people to perceive some kind of a media bias.

The Public-School-Choice Horror!

Here are a couple of articles discussing first the hope, then the disappointment, of charter schools and other public-school choice.

The problem especially with charters is that they dangle the hope of real change and competition in front of desperate parents but are all too often at the near complete mercy of their public-schooling masters. It’s why public-school choice alone simply will not transform American education from our current moribund, socialist monopoly into a thriving free system. Just because he lets you live doesn’t mean Col. Kurtz will set you free.

Macho Sauce Gives Cannon a Run for His Money

Here’s an interesting video in which the economics of health care are described in slightly more vernacular language than my colleague Michael Cannon would typically use. I venture to say that the presenter makes the eminently capable Mr. Cannon look quite staid.

This is a conservative, of course, and not a libertarian. Much of what comes after the first two minutes is off the mark in my opinion. But it’s good entertainment and it carries some good messages about how socialized medicine is a policy that’s best regarded as somewhat infelicitous.