Senate Finance Committee Ranking Member Ron Wyden (D‑OR) recently proposed a new federal tax on data centers. The proposal would tax gross data center revenue “at a low single-digit rate.” Because it taxes revenue rather than net profits, the proposal risks imposing effective tax rates exceeding 100 percent.

Such a tax could end new data center development and risk stripping the US of its status as the global leader in AI and other cloud-based technologies. 

The fundamental problem with taxing revenue rather than profits is that the tax ignores whether a firm can pay the tax. Revenue tells policymakers nothing about profitability. Grocery stores, for example, generate hundreds of billions of dollars in sales each year while typically earning profit margins of only 1 to 3 percent.

This week marks the release of the Consumer Financial Protection Accountability and Reform Act of 2026, H.R. 10184. Discussions of measures to restructure the Consumer Financial Protection Bureau (CFPB) are sharply polarized, mainly along political lines. On the Republican side, proponents of reform call out the bureau’s overreach. Defenders of the status quo, mostly on the Democratic side, remind us that the bureau was intended to protect consumers and insist that only the bureau can do so.

But many policymakers share the same concerns about the CFPB. And a close look at those concerns reveals a bipartisan case for reform. Many of the changes proposed by measures like the CFPB Reform Act of 2026 should be welcomed across party lines.

Thirty years ago last month, Congress replaced the open-ended Aid to Families with Dependent Children (AFDC) entitlement, the largest state-run, federally funded cash welfare program, with the Temporary Assistance for Needy Families (TANF) block grant.

This imposed stricter fiscal discipline on states running TANF, but Congress failed to extend similar restraints to other programs. Consequently, many states circumvented TANF’s budget constraints by shifting spending and enrollment to other, still open-ended entitlements.

Following the 1996 welfare reforms, states moved some recipients off TANF and onto the Supplemental Security Income (SSI) program. Today, state legislators are shifting costs onto federal taxpayers by exploiting eligibility loopholes in the Supplemental Nutrition Assistance Program (SNAP) and exploiting Medicaid’s waiver system to finance initiatives that are at best tangential to the delivery of health care services.

To reverse this trend, Congress should expand the 1996 TANF reforms to other welfare programs, block-grant Medicaid and SNAP to align policy choices with their associated costs, and limit federal taxpayer exposure.

On August 31, Politico’s “Weekly Trade” newsletter flagged a wrinkle in the recent metal tariff pronouncements: In early June, President Trump issued a proclamation adjusting the Section 232 “national security” tariffs to cut rates to 15 percent on a small list of agricultural machinery, including all-terrain vehicles (ATVs). Utility-terrain vehicles (UTVs)—effectively the same machinery except UTVs are enclosed and contain a cargo bed used by farmers and ranchers to move feed, fencing, and tools across ground a pickup truck cannot handle—were left at the full derivative rate of 25 percent.

During the first Trump administration, American firms could request tariff relief under an exclusions process. Although slow, relatively opaque, and tilted toward domestic producers who filed objections, at least the process existed. This time, the Trump administration’s Commerce Department (DOC) created an inclusion process that lets domestic producers and their trade associations sweep more downstream products into the “national security” tariffs. One action in August 2025 added more than 400 tariff lines.

The morning brings news of whistleblower allegations concerning the US Postal Service and its response to President Donald Trump’s executive order on mail voting, key provisions of which are currently blocked by a temporary restraining order as federal courts consider its validity. According to the New York Times’s report, an official with the USPS alleges that the service has moved forward anyway with a “risky and haphazard” implementation of the order that “could lead to a ‘catastrophic failure’ in the mail ballot system ahead of this year’s midterm elections.… The report said that the agency had planned to complete the new digital system overseeing mail ballots by Sept. 1. ‘Potentially millions of American voters may not receive their mail-in ballot this election cycle in a timely manner, or at all,’ the official said in the report.”

Read the rest of this post →

The House is expected to vote Tuesday on a continuing resolution (CR) that would fund the federal government through December 11. Speaker Mike Johnson stated the priority is to “make sure this government gets funded and we don’t have another Democratic shutdown.”

Avoiding another pointless government shutdown is reasonable. But funding the government should not be Congress’s sole fiscal ambition, especially as it vies for Americans’ support in the upcoming midterm elections. Governing at a time when debt exceeds the size of the economy, while interest expenses consume more of the federal budget than national defense, requires more than maintaining an untenable status quo. Bond markets increasingly view federal debt as a riskier investment, demanding higher interest rates. (The Treasury Department’s recent attempt to intervene in the bond market and push rates down was misguided and ineffective.)

Read the rest of this post →

I have long argued against the estate tax and other inheritance tax policies. New evidence from Sweden, which abolished its gift and inheritance tax in 2005, illustrates the harmful nature of these taxes. 

The

findings show that abolishing the tax increased the profitability, net sales, asset value, and productivity of private firms. … The reform also improved firms’ financial health by increasing current assets … and shareholders’ equity while reducing dependence on debt. 

Read the rest of this post →