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InsiderOnline Blog: February 2013

Pro-Growth, Limited-Government Policies Are Winning in the States

The U.S. economic future, writes Joel Kotkin, will be “dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.” Kotkin continues:

Overall, these corridors account for 45% of the nation’s land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average. […]

[C]orridor states took 11 of the top 15 spots in Chief Executive magazine’s 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.

Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel-based energy, notably shale oil and natural gas, is especially important. Over the past decade, Texas alone has added 180,000 mostly high-paying energy-related jobs, Oklahoma another 40,000, and the Intermountain West well over 30,000. Energy-rich California, despite the nation’s third-highest unemployment rate, has created a mere 20,000 such jobs. In New York, meanwhile, Gov. Andrew Cuomo is still delaying a decision on hydraulic fracturing. [Wall Street Journal, February 25]

Posted on 02/28/13 06:51 PM by Alex Adrianson

Online Courses Just as Effective as Face-to-Face Teaching

The potential of online learning to save money is obvious, but can students learn as well from online instruction as they can from face-to-face teaching? The results of a recent randomized trial study suggest that they can indeed. Six-hundred and five students taking seven statistics courses at six different campuses participated in the study, with half taking the course in a traditional format and half taking the course in a hybrid online format. Students taking the hybrid format were just as likely as students taking the traditional format to pass the course. The study also found no differences between the two groups on scores on both the course final exams and a post-course standardized test of statistics.

Another good sign for the potential of online learning: The researchers found that while the students taking the hybrid online course learned just as much as the students in the traditional course, the hybrid online course took up 25 percent less of their time. [“Online Learning in Higher Education,” by William G. Bowen, Matthew M. Chingos, Kelly A. Lack, and Thomas I. Nygren, Education Next, Spring 2013]

Posted on 02/28/13 05:30 PM by Alex Adrianson

Brainstorming Academics

Control student behavior with chemicals, institute a faculty dress code, abolish big-time sports, ban writing in the first person, require students to engage in manual labor, and prohibit students from eating and drinking while studying. Those are some of the more provocative of the “One Hundred Great Ideas for Higher Education,” published recently by the National Association of Scholars to celebrate the 100th issue of its journal, Academic Questions.

Here are a few more ideas from the list worth considering: Vary interest rates on student loans according to students’ prospects of repaying, giving them a better incentive to study hard in school; make racial preferences in admission policies transparent; eliminate student evaluations which tend to reflect how much fun a professor’s class is, not how good the professor is at teaching; stop putting adherence to vocationally relevant orthodoxies ahead of the pursuit of truth; get rid of the journalism degree so that students who want to become journalists will first learn something about something; and ensure students learn “critical thinking” skills by requiring them to take a course in logic rather than courses in criticizing Western Civilization.

Read the whole list and you’ll have a good idea what academics themselves think is wrong with higher education.

Posted on 02/27/13 06:32 PM by Alex Adrianson

Sequester Shmequester

Here’s a chart, based on Congressional Budget Office projections, of how the sequester will affect federal spending over the next 10 years.

That thin sliver of red represents the spending “cuts,”—the ones that President Obama says will “jeopardize our military readiness” and “eviscerate job-creating investments in education and energy and medical research.” Take away that red area and what do you see? Federal spending still goes up every year. That fact hasn’t stopped journalists from claiming that spending is going to be cut unless Congress undoes the sequester. As Dan Mitchell notes, that kind of journalism is nothing new, unfortunately. [International Liberty, February 25]

George Will paints a word picture:

Batten down the hatches—the sequester will cut $85 billion from this year’s $3.6 trillion budget! Or: Head for the storm cellar—spending will be cut 2.3 percent! Or: Washington chain-saw massacre—we must scrape by on 97.7 percent of current spending! Or: Chaos is coming because the sequester will cut a sum $25 billion larger than was just shoveled out the door (supposedly, but not actually) for victims of Hurricane Sandy! Or: Heaven forfend, the sequester will cut 47 percent as much as was spent on the AIG bailout! Or: Famine, pestilence and locusts will come when the sequester causes federal spending over 10 years to plummet from $46 trillion all the way down to $44.8 trillion! Or: Grass will grow in the streets of America’s cities if the domestic agencies whose budgets have increased 17 percent under President Obama must endure a 5 percent cut!

The sequester has forced liberals to clarify their conviction that whatever the government’s size is at any moment, it is the bare minimum necessary to forestall intolerable suffering. [Washington Post, February 22]

Posted on 02/25/13 05:36 PM by Alex Adrianson

To Do: Discover a Program that Can Bring Libertarians and Conservatives Together

Hear Peter Berkowitz make the case for constitutional conservatism as “a sturdy framework for developing a distinctive political agenda to which both social conservatives and libertarian conservatives can in good conscience subscribe.” Berkowitz will be at The Heritage Foundation to talk about his new book, Constitutional Conservatism on March 4 at noon.

• Find out how local governments are stymieing competition in eateries. The American Enterprise Institute will host a discussion of “Big government and big food vs. food trucks, foodies, and farmers markets,” on February 28 beginning at noon.  

• Get your tickets for the Conservative Political Action Conference, the undisputed heavyweight champion of conferences for political activists. It’s coming up soon—March 8.

• Learn about the foundations of liberty and free markets. The Foundation for Economic Education will host a Freedom Academy in Fort Lauderdale on March 9.

• Want to work for the Reason Foundation? Then check out their open jobs, because the folks at Reason are hiring. They’re looking for a communications specialist, a project manager for their California Reform Initiative, and a development writer.

Posted on 02/22/13 05:34 PM by Alex Adrianson

The Risk of a Gun Accident

A reality check, from Robert VerBruggen:

Somewhere between 35 percent and 47 percent of Americans have a gun in the home; to be generous let’s go with the low number and say 100 percent have a car. Back-of-the-envelope math indicates that 600 fatal gun accidents would be the equivalent of 1,700 car fatalities if we’re assessing the average risk of owning one versus the other. There have been more than 30,000 car fatalities almost every year since the mid-1930s.

Of course, one would assess the tradeoffs of a car differently than the tradeoffs of a gun — a car is necessary for transportation in most parts of the country, while a gun provides enjoyment and protection. A gun presents risks besides accidents as well — the owner or someone else might lose it and use the gun intentionally for ill; someone might commit suicide when they otherwise would not have. All of these factors are important and the risks vary from household to household. I don’t think anyone says that every person will be safer with a gun in the house.

But it’s simply not true that gun accidents are a great concern. There are 114 million households in the U.S., which comes to about 40 million households with guns. Again, back-of-the-envelope math: Each gun-owning household has a 0.0015 percent chance of a fatal accident each year. And you can reduce the risk of an accident greatly by following standard safety procedures. [The Corner, February 20]

Posted on 02/22/13 04:12 PM by Alex Adrianson

Columbine Survivor Tells Obama to Drop Gun Control Ideas

From a letter to the President, by Evan Todd:

Let me be clear: These ideas are the worst possible initiatives if you seriously care about saving lives and also upholding your oath of office. There is no dictate, law, or regulation that will stop bad things from happening — and you know that. Yet you continue to push the rhetoric. Why?

You said, “If we can save just one person it is worth it.” Well here are a few ideas that will save more that one individual:

First, forget all of your current initiatives and 23 purposed executive orders. They will do nothing more than impede law-abiding citizens and breach the intent of the Constitution. Each initiative steals freedom, grants more power to an already-overreaching government, and empowers and enables criminals to run amok.

Second, press Congress to repeal the “Gun Free Zone Act.” Don’t allow America’s teachers and students to be endangered one-day more. These parents and teachers have the natural right to defend themselves and not be looked at as criminals. There is no reason teachers must disarm themselves to perform their jobs. There is also no reason a parent or volunteer should be disarmed when they cross the school line. [as reproduced by The Blaze, February 20]

Posted on 02/22/13 01:53 PM by Alex Adrianson

Where Persistent Public Debt Leads

Thomas Jefferson, in a letter to Samuel Kercheval, July 12, 1816:  

I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessities and our comforts, in our labors and our amusements, for our calling and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow suffers. Our land-holders, too, like theirs, retaining indeed the title and stewardship of estates called theirs but held really in trust for the treasury, must wander, like theirs, in foreign countries, and be contented with penury, obscurity, exile, and the glory of the nation. This example reads to us the salutary lesson, that private fortunes are destroyed by public as well as by private extravagances. And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for the second; that second for a third; and so on, till the bulk of the society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering. Then begins, indeed, the bellum omnium in omnia, which some philosophers observing to be so general in this world, have mistaken for the natural, instead of the abusive state of man. And the fore horse on this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression. [quoted in Thomas Jefferson on Democracy p. 73-74 (S. Padover, ed. 1953).]

Posted on 02/22/13 01:11 PM by Alex Adrianson

The Mortax

Who knew the sequester could be such fun, all that bother about debt—and a ton?
Morning Bell’s clever scribe Amy Payne knew. She had a hint and wrote it down for you.
So go read her smart missive this morning; read it at The Foundry, this pointed ping.
Then share it with your best neighbors and friends; spread the alarm on our steep spending trends.

Posted on 02/22/13 10:15 AM by Alex Adrianson

A Younger Brick in the Wall

There’s no reason to think President Obama’s idea of making universal pre-K schooling a federal responsibility won’t be a colossal waste of taxpayer money. Most 4-year-olds already attend a preschool program anyway; so turning pre-K into another middle-class entitlement would mostly just replace private funding. The federal government already has an early learning program targeted at low-income, at-risk kids; it’s called Head Start, and the government’s own scientifically rigorous assessment has found that the program’s short-term gains in kids’ cognitive abilities entirely disappear by the time the kids reach third grade.

Further, Georgia and Oklahoma have already put in place universal pre-K, and have little to show for the investments. While Georgia’s achievement gap has narrowed somewhat since the introduction of universal pre-K, Oklahoma’s gap has gotten bigger:

[The Foundry, February 21]

The proponents of federal funding for universal pre-K point to three discrete programs as providing the evidence that investment in early childhood education has a significant payoff in educational achievement and life outcomes. These are known as the Perry Preschool Project which ran from 1962 to 1965; the Abecedarian Project, begun in 1972; and the Chicago Child-Parent Center Program, begun in 1985. A 2009 paper by Adam Schaeffer of the Cato Institute summarizes the problems with the assessments of those programs. Most importantly, he notes that those programs all provided more extensive services than what a public preschool program would provide and served low-income children who would be more likely to benefit from the programs than would the average child served by a universal pre-K system. Schaeffer writes:

The academic research suggests that how and where children are cared for in their early years is a negligible factor in determining their later academic performance and adjustment in grade school. Obviously an abusive environment can cause lasting damage. But within the broad general range of current childcare arrangements, the differences between them are of little consequence. A child’s family environment and later educational environment are the most important factors for the simple and commonsense reason that they are more pervasive and extensive.

Schaeffer continues:

American student achievement is already fairly comparable to that in other wealthy nations in the early years. But as our children spend more time in our inadequate public school system, they fall behind. The problem is not that we lack preschool options, but that children do not gain a good enough educational foundation during the crucial grade-school period. If we want to improve life outcomes for all children, and for poor children in particular, we need to make sure that their early grade-school years build solid academic skills that will allow them to advance in later grades. [“The Poverty of Preschool Promises: Saving Children and Money with the Early Education Tax Credit,” by Adam B. Schaeffer, The Cato Institute, August 3, 2009]

One reason pre-K programs don’t produce lasting gains may be that they are too much like the early years of grade schools. Education journalist Shepard Barbash writes:

Pre-K teachers learn that it’s not “developmentally appropriate practice” to seat children at desks; to give them worksheets; to make them work to master the alphabet, letter sounds, and math; to assess their academic skills (medical, dental, and nutrition assessments are okay); and to group them by skill level for instruction (because all children should receive equal treatment and because children learn as much from one another as they do from adults). Many things that parents would call common sense are, for the preschool professional, high-risk activities.

No amount of contrary data has been able to dislodge this constellation of beliefs, which afflicts not just pre-K but elementary education as well. The largest experiment ever to compare different approaches to instruction in the early grades, sponsored by the federal government in the 1970s and known as Project Follow Through, tracked more than 75,000 K–3 students. It found that only one of the nine methods examined—the one least in keeping with educators’ traditional views—had consistently accelerated the academic achievement of poor children. The least successful approaches all shared the prevailing ideas. And if an approach fails in kindergarten, you can bet that it will fail in pre-K, too.

But Follow Through’s results proved too unpopular for the government to act on. Hence the same flawed ideas continue to absorb public funds and drive the training, accreditation standards, and state policies that shape today’s Head Start, pre-K programs, and elementary education. One can infer their ongoing failure from the lagging academic performance of children from poor families, nationally and in states like Georgia and Oklahoma, which have funded universal pre-K for years. [“Pre-K Can Work,” by Shepard Barbash City Journal, August 2008]

Whatever space exists now for competition between alternative ideas in early childhood education, it can only be narrowed by putting the federal government in charge of funding pre-K for the whole country. That’s because federal strings always follow federal funding; and you can expect the most organized interests to weigh-in most heavily on what kinds of programs qualify for federal funding.

Posted on 02/21/13 10:16 PM by Alex Adrianson

No Thanks to Anti-Science Environmentalists, Golden Rice Will Be Coming to the Philippines

The Philippines has decided to allow farmers to plant Golden Rice, a genetically modified strain that is super-rich in Vitamin A. Other nations such as Bangladesh, Indonesia, and India appear ready to follow suit. In spite of the lack of any scientific evidence that Golden Rice is a hazard to health or the environment, writes Bjorn Lomborg, environmental activists have succeeded in delaying the adoption of Golden Rice by about 12 years, a span of time during which “about 8 million children worldwide died from vitamin A deficiency.”

Three billion people depend on rice as their staple food, with 10 percent at risk for vitamin A deficiency, which, according to the World Health Organization, causes 250,000 to 500,000 children to go blind each year. Of these, half die within a year. A study from the British medical journal the Lancet estimates that, in total, vitamin A deficiency kills 668,000 children under the age of 5 each year. […]

Two recent studies in the American Journal of Clinical Nutrition show that just 50 grams (roughly two ounces) of golden rice can provide 60 percent of the recommended daily intake of vitamin A. They show that golden rice is even better than spinach in providing vitamin A to children. […]

Supplementation programs [handing out vitamin pills] costs $4,300 for every life they save in India, whereas fortification programs [adding vitamin A to staple foods] cost about $2,700 for each life saved. Both are great deals. But golden rice would cost just $100 for every life saved from vitamin A deficiency. [Slate, February 17]

Posted on 02/19/13 06:09 PM by Alex Adrianson

To Do: Hear How the Battle for Religious Liberty Is Going

• Get a report from the front lines in the fight for religious liberty. Adele Keim of the Becket Fund, Kellie Fiedorek of the Alliance Defending Freedom, and Ken Klukowski of the Family Research Council will speak at the Family Research Council at noon on February 20.

• Hear Peter Wallison talk about his new book Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act. Wallison will speak at the American Enterprise Institute at 12:15 p.m. on February 19.

• Learn how the underrated Silent Cal Coolidge was really one of the most eloquent voices defending the principles of the American Founding against the progressive onslaught. Amity Shlaes will talk about her new book Coolidge at The Heritage Foundation at noon on February 20.

• Examine the Organization of American States’ complacency in the face of attacks by far-Left governments on human rights and democratic institutions. The Cato Institute will host Guillermo Cochez, who was recently dismissed as Panama’s Ambassador to the OAS for publicly criticizing the OAS. The event will begin at noon on February 19.

• Future religious leaders, put the Toward a Free and Virtuous Society Conference on your calendar. The conference explores “the nature of the human person and the created order from the perspectives of Scripture and natural law, examining concepts such as justice, equality, stewardship, and virtue,” and focuses on “applying the principles of economic liberty to complex issues such as poverty, welfare reform, and globalization.”

Posted on 02/15/13 03:54 PM by Alex Adrianson

Yes, ObamaCare’s Medicare Cuts Do Hurt Seniors

Remember when Soledad O’Brien told John Sununu that ObamaCare’s cuts to Medicare ($716 billion over 10 years) were not real cuts because they wouldn’t lead to a reduction in the services and benefits that seniors would receive? Ahem. Bob Moffit observes that the hospice care providers are already responding to the $17 billion in Medicare payment cuts they expect over the next 10 years:

San Diego Hospice recently laid off 260 workers, closed a 24-bed hospital, and has recently filed for Chapter 11 bankruptcy. San Diego Hospice’s financial condition is attributed mainly to reduced Medicare reimbursement, fewer patients, and a federal audit that hurt the center’s reputation.

Another provider, Delaware Hospice, had to lay off 52 workers, citing lower federal reimbursement as the cause. “The decision,” said CEO Susan Lloyd, “is a direct result of a consequential decline in census and the need to position the organization to meet additional changes and challenges that the hospice industry anticipates with health care reform.”

“There’s a bit of a squeeze going on,” said Theresa M. Forster, vice president for hospice policy and programs at the National Association for Home Care & Hospice. “Hospices have to do more with less, and you can see how that could take its toll over time.”

Moffitt continues:

Recall that both the actuary of the Centers for Medicare and Medicaid Services and the Medicare trustees projected that Obamacare’s cuts would cause 15 percent of Part A providers to become unprofitable by 2019 and (if the reimbursement rates stay at Obamacare levels) 40 percent by 2050. [The Foundry, February 12]

If, because of payment reductions, the services seniors were expecting become unavailable, what good does it do them to say the benefits are still covered? As Moffit observes, a better way of controlling Medicare spending would be to unleash the forces of competition and consumer choice, which have improved quality and lowered prices in every area of the economy where they have been allowed to work.

Posted on 02/15/13 12:34 PM by Alex Adrianson

President Proposes Bigger Government

The President’s state of the union address contained proposals that would increase government spending by at least $83 billion per year, calculates the National Taxpayers Union. The costly proposals include combating global warming with a cap-and-trade plan ($56.5 billion per year); Obama’s mini-stimulus bill, the American Jobs Act ($15.3 billion per year); and infrastructure repair ($7.8 billion per year). NTU also says the President’s speech contained 40 proposals with fiscal impacts that could not be calculated. [National Taxpayers Union, February 13]

But it won’t increase the deficit one dime, he says.

Posted on 02/15/13 12:06 PM by Alex Adrianson

Obama’s Higher Minimum Wage Will Hurt the Poor and Help the Unions

In his State of the Union address Tuesday, President Obama said the national minimum wage should be raised to $9 per hour. Hey, why not $500 per hour? Wouldn’t an even higher minimum wage raise standards of living even more?

The economy doesn’t work that way. No worker gets a raise just because the government sets a higher minimum. He gets a raise if his employer thinks his labor is worth the higher wage. If his labor isn’t worth the legal minimum wage, then the employer is going to pay him nothing, because he won’t employ the worker. The real minimum wage is zero. The higher the legal minimum wage, the larger the number of people who can’t be employed legally at a wage employers are willing to pay.

In a Cato paper published last year, Mark Wilson reports that most empirical research over the last 70 years confirms that minimum wage increases reduce employment among low-wage, low-skilled workers. Wilson writes:

Evidence of employment loss has been found since the earliest implementation of the minimum wage. The U.S. Department of Labor’s own assessment of the first 25-cent minimum wage in 1938 found that it resulted in job losses for 30,000 to 50,000 workers, or 10 to 13 percent of the 300,000 covered workers who previously earned below the new wage floor. […]

Following passage of the federal minimum wage in 1938, economists began to accumulate statistical evidence on the effects. Much of the research has indicated that increases in the minimum wage have adverse effects on the employment opportunities of low-skilled workers. And across the country, the greatest adverse impact will generally occur in the poorer and lower-wage regions. In those regions, more workers and businesses are affected by the mandated wage, and businesses have to take more dramatic steps to adjust to the higher costs.

As an example, with the original 1938 imposition of the minimum wage, the lower-income U.S. territory of Puerto Rico was severely affected. An estimated 120,000 workers in Puerto Rico lost their jobs within the first year of implementation of the new 25-cent minimum wage, and the island’s unemployment rate soared to nearly 50 percent.

Similar damaging effects were observed on American Samoa from minimum wage increases imposed between 2007 and 2009. Indeed, the effects were so pronounced on the island’s economy that President Obama signed into law a bill postponing the minimum wage increases scheduled for 2010 and 2011. [Internal citations omitted.] [“The Negative Effects of Minimum Wage Laws,” by Mark Wilson, Cato Institute, June 21, 2012]

But minimum wages do help some workers—union workers. As James Sherk explains, most companies can substitute high-wage/high-skill labor for low-wage/low-skill labor. Higher minimum wages tend to reduce the competition between those two groups of workers, leading to even higher wages for the high-wage/high-skill workers—who tend to be unionized workers. Sherk writes:

This is not just a theoretical argument. Researchers have found that this is what happens when the minimum wage rises. Using data from government surveys, economists at the Federal Reserve and the University of California-Irvine examined how past increases in the minimum wage affected the earnings of both low-income and unionized workers.

They found that increasing the minimum wage had few statistically significant effects for unionized workers who earn well above the minimum wage. For example, United Auto Workers members in Detroit who earn $75 an hour do not usually perform work that could be done by any number of unskilled workers. But the minimum wage significantly increases the earnings of union members who compete with low-skilled workers for jobs. The researchers estimated that if the minimum wage were hiked 40 percent, unionized workers who earn between the minimum wage and twice the minimum wage could see their earnings rise between 20 and 40 percent. The evidence shows that a higher minimum wage unambiguously helps union members. [Internal citations omitted.] [“Union Members, Not Minimum-Wage Earners, Benefit When the Minimum Wage Rises,” by James Sherk, The Heritage Foundation, February 7, 2007]

Posted on 02/15/13 11:43 AM by Alex Adrianson

A Flat Tax Lesson from the Bible

That’s what Ben Carson, director of pediatric neurosurgery at Johns Hopkins, provided when he addressed the National Prayer Breakfast last Thursday:

What we need to do is come up with something simple. And when I pick up my Bible, you know what I see? I see the fairest individual in the universe, God, and he’s given us a system. It’s called a tithe.

We don’t necessarily have to do 10% but it’s the principle. He didn’t say if your crops fail, don’t give me any tithe or if you have a bumper crop, give me triple tithe. So there must be something inherently fair about proportionality. You make $10 billion, you put in a billion. You make $10 you put in one. Of course you’ve got to get rid of the loopholes. Some people say, “Well that’s not fair because it doesn’t hurt the guy who made $10 billion as much as the guy who made 10.” Where does it say you’ve got to hurt the guy? He just put a billion dollars in the pot. We don’t need to hurt him. It’s that kind of thinking that has resulted in 602 banks in the Cayman Islands. That money needs to be back here building our infrastructure and creating jobs. [as quoted in the Wall Street Journal, February 8]

Maybe the National Prayer Breakfast isn’t the time and place for a lecture on public policy. On the other hand, is there another time and place when Washington’s governing class would have been interested in hearing this kind of argument?

Posted on 02/14/13 08:39 PM by Alex Adrianson

Marriage Fights Poverty

National Marriage Week ends February 14, AKA Valentine’s Day. One thing to remember year-round is that, as Andrew Walker notes, there is a strong link between being married and staying out of poverty:

In recent years, the percentage of intact households has been in steady decline. Nearly 80 percent of all adults were married in 1980. Today, that number has fallen to 52 percent. Combine that with the fact that 41 percent of children in America are born outside of marriage. The number tragically climbs to 71 percent in the African American community.

The collapse of marriage correlates strongly with child poverty. Parents who forgo marriage increase the likelihood that their children will experience some aspect of poverty. A child raised outside of marriage is six times more likely to experience poverty than a child who grows up in an intact family, and 71 percent of poor families with children are headed by single parents. By contrast, 73 percent of all non-poor families with children are headed by married couples. [The Foundry, February 12]

Posted on 02/13/13 06:17 PM by Alex Adrianson

Gun Shows Aren’t the Problem

The enthusiasm for background checks for gun-show sales is either misguided or disingenuous, contends Robert Levy:

Survey data indicate that less than 2 percent of guns used by criminals are bought at gun shows and flea markets—and that includes sales through licensed dealers. Still, the New York Times editorializes that background checks “prevented nearly two million gun sales” over a 15-year period. Of course, that’s ridiculous; there is no way for the Times to determine how many sales did not happen. Violence-prone buyers who do not pass the background check go elsewhere for their purchases.

Here are the figures for a recent year: The National Instant Criminal Background Check System (NICS) denied 79,000 would-be buyers. Of those, 105 were prosecuted and 43 were convicted. That’s a conviction rate of 5/100ths of one percent. Either the remaining denials were false positives – legitimate purchases unjustly blocked by NICS – or, if the denials were proper, then 99.95 percent of the 79,000 rejected applicants escaped punishment. Neither conclusion offers much hope for an expanded system of background checks.

Further, the claim that background checks take just a few minutes to process on the telephone is disingenuous at best. A significant number of checks last 72 hours, and most gun shows are two-day events. The intent of requiring checks for private sales may be to drive gun shows out of business. Indeed, existing delays and the large number of false positives have reduced gun shows by about 14 percent. Some say that’s a good thing. But they know that a law banning gun shows would not pass constitutional muster; so they try to accomplish the same thing through the backdoor. [National Law Journal, February 11]

Posted on 02/12/13 04:22 PM by Alex Adrianson

It’s Easier to Preserve Religious Liberty, When You Don’t Have to Ask for a Religious Exemption

Conflicts between government edicts and religious liberty—such as the battle over the Department of Health and Human Service’s contraception mandate—are a danger whenever government takes over a significant part of the economy, explains Ilya Shapiro:

As my colleague Roger Pilon has written, when health care (or anything) is socialized or treated as a public utility, we’re forced to fight for every “carve-out” of liberty. Those progressive Catholics who supported Obamacare, or the pro-life Democrats who voted for it, who are now appalled by certain HHS rules should have thought of that before they used the government to make us our brother’s keeper.

The more government controls — whether health care, education, or even marriage — the greater the battles over conflicting values. With certain things, such as national defense, basic infrastructure, clean air and water and other “public goods,” we largely agree, at least inside reasonable margins. But we have vast disagreements about social programs, economic regulation and so much else that government now dominates at the expense of at the expense of individual liberty. Those supporting Wheaton and Belmont Abbey Colleges and Hobby Lobby are rightly concerned that people are being forced to do what their religious beliefs prohibit. But that all comes with the collectivized territory. [Cato-at-Liberty, February 8]

If you value religious liberty, then you should be wary of collectivizing economic choices more generally.

Posted on 02/11/13 03:39 PM by Alex Adrianson

To Do: Examine the Coming Crisis of Demography

•Examine the coming problem of a contracting U.S. population. The American Enterprise Institute hosts Jonathan Last, author of What to Expect When No One’s Expecting. Last’s talk begins at 5:30 p.m. on February 11.

• Learn how social media played a key role in Arab Spring. The Heritage Foundation hosts a panel discussing the state of social media in the Middle East. The program begins at noon on February 13.

• Mid-career professions, get your applications in for PERC’s Enviropreneur Institute, a ten-day program based in Bozeman, Montana, that teaches how property rights and markets can enhance environmental assets. The program runs June 23 to July 2. Applications are due March 18.

• Students, get your applications in for the AEI Summer Institute, “a monthlong, fully funded experience learning the principles of public policy analysis and discussing liberty, individual opportunity and free enterprise.” Applications are due by March 1.

Posted on 02/08/13 05:31 PM by Alex Adrianson

The Fiscal Problem Is Also an Over-Regulation Problem

Using the latest projections by the Congressional Budget Office, Dan Mitchell calculates that the federal government could close its budget deficit easily in ten years if it merely limited the growth in spending to the rate of inflation. [International Liberty, February 6]

OK, let’s do that. Of course, the revenue projections will turn out to be accurate only if the economic growth projections turn out to be accurate, which has not happened recently notes Salim Furth:

[Heritage Foundation, February 5]

In his recent article, “Why Such a Slow Recovery,” (The Insider, Winter 2013) Furth explains the economic problem:  

With new regulations and business requirements in health insurance, small-business finance, environment, energy, and tax compliance, not to mention the ever-expanding reach of state licensure boards, it is expensive to open a business. In a report published by the Weidenbaum Center at Washington University in St. Louis and the George Washington University Regulatory Studies Center, Melinda Warren and Susan Dudley have calculated how much money the federal government spends to develop and enforce regulations. They calculate that the federal budget for economic regulation increased to $9.2 billion in 2012 from $6.3 billion in 2007. In President Barack Obama’s first three years in office, 106 new major regulations were created (four times more than in President George W. Bush’s first three years), report The Heritage Foundation’s James Gattuso and Diane Katz. Those regulations cost earners $46 billion annually. The biggest new fixed costs come from the Dodd–Frank bill, ObamaCare, and the activist Environmental Protection Agency. In all three cases, enormous discretion is left to regulators to write and implement rules as they see fit. Under arbitrary enforcement, large firms with lobbyists and lawyers have a competitive advantage over unconnected newcomers.

High fixed costs and onerous regulation are textbook “barriers to entry.” Incumbent firms favor many of these barriers, because they keep competitors out of the market, which keeps profits high. In banking, the stringent regulations of the Dodd–Frank Act not only make it hard for small or start-up banks to survive, they discourage banks from lending to borrowers who do not have a strong track record. Less credit for unknown borrowers means fewer start-up jobs created.

Posted on 02/08/13 03:16 PM by Alex Adrianson

Mandate Still Not Fixed

Last Friday’s “update” by the Department of Health and Human Services to its rule mandating employer coverage of abortion-inducing drugs, contraception, and sterilization leaves in place a rule that will force some Americans to violate their religious beliefs. Explains Sarah Torre:

HHS’s “notice of proposed rulemaking” does not change the coercive mandate that is currently forcing countless employers to provide and pay for coverage of abortion-inducing drugs, contraception, and sterilization in their employee health plans—regardless of moral or religious objection.

Instead, HHS feigns to extend protection of religious freedom by proposing a slight expansion to an offensively narrow religious exemption and providing an “accommodation” to certain qualifying non-profit religious groups.

The document is not even final. It is merely an update to the Obama Administration’s “advance notice of proposed rulemaking,” further sketching out its accommodation first released last March.

Even if today’s suggestions were adopted into law, the narrow exemption would cover only formal houses of worship and their integrated auxiliaries. It would fail to encompass many employers—and certainly all individuals—with moral or religious objections to complying with the mandate.

The latest proposal fails to protect businesses such as Tyndale House, the nation’s largest Bible publisher; or Hercules Industries, a family-owned and operated HVAC company; or Hobby Lobby, an arts and crafts retailer—all of which seek to operate according to deeply held religious and moral beliefs.

In fact, the Administration explicitly states that it does “not propose that the definition of eligible organization extend to for-profit secular employers.” [The Foundry, February 1]

Posted on 02/08/13 02:49 PM by Alex Adrianson

Medicaid Is a Rigged Game

Medicaid provides poor health care to the populations it is supposed to help, and the spending on the program is driving states to fiscal ruin. Yet the welfare state marches forward. This week, Gov. John Kasich decided Ohio would participate in ObamaCare’s Medicaid expansion in exchange for federal money. He follows other governors—both Republicans and Democrats—who have decided to take the money, whatever reservations they may have about the expansion. Arizona Gov. Jan Brewer, whose state sued the federal government—successfully!—over ObamaCare withdrawing all Medicaid funds from non-participating states, is the most infamous governor to flip flop on Medicaid.

Such decisions should make it clear that the problem is not the players but the game—one thatis rigged to expand the federal welfare state. As Michael Greve explains: “All federal grant [programs] create a fiscal asymmetry: taxpayers in non-participating states will pay ‘their’ share of the program one way or the other. The state as a state can say no’ only to the proceeds, not to its taxpayers’ contributions.” That means declining the funds just leaves money on the table, to no benefit to its own taxpayers. Greve suggests a fix:

Medicaid is somewhere around eight percent of federal expenditures (growing fast). For taxpayers in non-participating states, let’s rebate those eight percent against their income tax returns. Each state could then freely decide whether it wishes to participate in the federal program or rather exit, let its taxpayers keep the rebate, and run a comparable program—presumably on a smaller scale—on its on nickel.

Would that reform wring all the crazed incentives, cross-subsidies, and fiscal illusions out of Medicaid? No, but it would go a long way. Would all states exit? Probably not. But a few might; and in many more, we’d get a more realistic and informed debate about the program—not some burble about “coercion,” but a debate about the costs and benefits of the transfer state. [Liberty Law Blog, February 6; Greve provides a similar diagnosis in his recent article, “But What Kind of Federalism?” The Insider, Winter 2013.]

Posted on 02/08/13 02:37 PM by Alex Adrianson

Public Pensions Cost More than You Might Think

Are defined-benefit public pension systems overly generous compared to the defined-contribution systems typical of the private sector? Defenders of the status quo say no, but they’re using a number of fallacious talking points to make their case. Jason Richwine runs those down in a new Heritage Foundation paper.

In the first place, observes Richwine, the real cost of public pensions is greater than what governments have been contributing to the pension funds. When plans’ assumed rates of return are adjusted to account for the risk that plan assets will not achieve those returns, many pension funds are revealed to be significantly underfunded. Defenders of the practice insist that “[s]ince governments (unlike individuals) are multi-generational entities, year-to-year deviations from the expected return are likely to average out,” which “means that the risk of underperforming expectations in the long run approaches zero.” But that’s only part of the story, says Richwine:

Although lower-than-expected annual returns become less likely over time, the effect of compounding enhances the negative impact of such lower returns if they occur. The cumulative return on an investment therefore exhibits continued volatility over time, and governments cannot claim to eliminate risk on their own investments by being long-lived.

Another common fallacy in defense of public pensions: Generous pensions are justified because public employees do not participate in Social Security. But they also don’t have to pay Social Security taxes. Observes Richwine:

Since most public employees fall into the middle-income range, it is generally a benefit for them to be exempt from participating in Social Security. Instead of contributing to Social Security, they contribute to a public pension where benefits per dollar of contributions are much greater.

For more, see: “Nine Fallacies Used to Defend Public Sector Pensions,” by Jason Richwine, The Heritage Foundation, February 5.

Posted on 02/08/13 01:16 PM by Alex Adrianson

Your ObamaCare Papers, Please

Americans will spend an additional 128 million hours per year filling out forms, thanks to the reporting requirements in ObamaCare, says a new report from the House Ways and Means Committee. Restaurants, for example, will spend about 14 million hours annually filling out forms to verify they are putting all the nutritional information on their menus that the law says they should. Hospitals will have to spend an extra 7 million hours every year to make sure they are reporting the right data on the quality of their services to the Department of Health and Human Services. Some of the reporting burden is born by directly by the government (i.e., taxpayers). State and federal agencies will spend about 21 million hours on paperwork every year just to make sure they are coordinating Medicaid eligibility determinations. In all, the report identifies 157 different provisions of ObamaCare that create or add paperwork burdens. [ObamaCare Burden Tracker, House Ways and Means Committee]

Posted on 02/06/13 06:58 PM by Alex Adrianson

A Growth Model that Works for Pretty Much One City Only

The beltway has been booming, notes Aaron Renn:

 [P]rosperous urban regions in America are increasingly divided into two kinds. Some, like the Bay Area, embrace a “vertical” model of success, generating increases in economic output and per-capita income with stagnant or declining population and jobs. Others, like Dallas, are “horizontal,” featuring growth in population and jobs but stagnant or declining output and income. But Washington is an exception: it is the only metropolitan area with a population of at least 1 million that achieves the best of both worlds, combining Dallas-style population and job growth with the fabulous output and wealth of a San Francisco. In that respect, it is a city without peer in America.

What’s the explanation? Renn offers:

Washington has discovered a new way to extract value from the federal government, based not just on spending but on an ever-expanding regulatory state. An array of programs—the Sarbanes-Oxley and Dodd-Frank acts governing finance; the government’s auto-industry takeover; the EPA’s declaration that carbon dioxide is a pollutant—takes regulation to new levels of detail and intrusiveness, even extending to the micromanagement of particular companies. The trend began long before President Obama took office, but its quintessence is Obamacare, an annexation by the federal government of one-sixth of the American economy via 2,000 pages of byzantine legislation, not counting the thousands of pages of implementing regulations still to come.

All this intrusion emanates from the legislative and especially the regulatory machinery in Washington. The city has become, in effect, the Brussels of America. So a wider and wider variety of businesses and organizations must be located there to lobby the government that decides their fate. (According to the Center for Responsive Politics, total spending on lobbying rose from $1.6 billion in 2000 to $3.3 billion in 2011.) These firms pay local taxes. So do their workers, who also buy houses, patronize stores, pay tuition at private schools, employ local doctors and lawyers, and so on. The regulatory superstate is turbocharging Washington’s local economy. [City Journal, Winter 2013]

Posted on 02/05/13 06:29 PM by Alex Adrianson

No, a Recession Isn’t Good for the Environment

The Greeks are responding to their relative poverty these days by buying less heating oil and burning wood instead, which is bad for the environment, reports Iain Murray:

The average level of particulate matter in London fell from around 160 micrograms per cubic meter to less than 20 between 1961 and 1998, so successful was the industrialized west at cleaning up its act. The current levels in Greece are reaching 300 micrograms per cubic meter.

There will be substantial health effects from this increase in pollution back to dangerous levels. A London “black fog” in 1952 killed 4,000 people. Current Greek smog levels are fast approaching that level of danger. […]

Greeks have been forced by the high prices of home heating oil – of which a large proportion is government-imposed taxes – to use wood for fuel, and much of that wood is gathered illegally. The Greek environment ministry estimates more than 13,000 tons of wood was harvested illegally in 2012.

What we are seeing is Greece retreating back up the slope of what is known as the Environmental Kuznets curve. This model theorizes that, as a civilization starts to use natural resources, it increases its impact on the environment until it reaches a stage where it becomes more efficient to reduce its impact[.] [Huffington Post, January 23]

Posted on 02/04/13 05:25 PM by Alex Adrianson

To Do: Get Ready for CPAC

Write a speech or make a video for the Conservative Political Action Conference. Are you student who wants to attend the Conservative Political Action Conference for free? Winning the “Why I Am a Conservative,” essay contest will get you a 3-day VIP pass (value: $1,000) and an opportunity to address the CPAC convention. Mail your submissions (no more than 700 words), to CPAC@conservative.org by February 7, 2013. You can also enter the CPAC YouTube Video contest with a video that addresses the topic: The Future of the Conservative Movement: Timeless Principles, New Challenges. You could win $750 and have your video showcased at CPAC. Make sure you include “CPAC 2013 in the title and submit the video and link by February 28. 2013 to CPAC@conservative.org. Both contests are open to students.

• Hear Sen. Rand Paul talk about how to restore the Founder’s vision of foreign policy. The senator will speak at The Heritage foundation at 11 a.m. on February 6.

• Get an update on the new legal challenges to ObamaCare. The Cato Institute will host a panel discussion featuring the lead attorneys in two different cases. The event begins at 4 p.m. on February 7.

• Help honor Israel Kirzner for his contributions to market process theory and entrepreneurship studies. The Mercatus Center, the Fund for the Study of Spontaneous Order, the Atlas Economic Research Foundation, and the Liberty Fund will host a panel discussion on Prof. Kirzner’s work. A reception will follow. The event begins at 4 p.m. on February 7, and will be held at the Mason Inn in Fairfax, Virginia.

• If you are a pro-liberty student, then you should attend the 2013 International Students for Liberty Conference. It’s the largest such gathering in the world, and will help you engage in the battle for liberty on your campus. The event, organized by Students for Liberty, will be held February 15 – 17 at the Grand Hyatt Hotel in Washington, D.C.

(And check out our conservative calendar for more things to do.)

Posted on 02/01/13 04:31 PM by Alex Adrianson

Also Worth a Read

• This week was National School Choice Week, and if you haven’t done it already you should at least take a moment to find out what school choice programs your state has. Start by checking the handy table reference in the new Heritage Foundation publication, Choosing to Succeed.

• Did you know clouds cannot form precipitation without the presence of living microbes? There’s a whole ecosystem up there in the sky, and scientists are still trying to figure out how it works. But the impact of clouds on the climate is nearly absent from the climate models predicting future warming. Another wrench in the consensus: The Medieval Warm Period appears to be about 0.5 degrees Celsius warmer than today, despite having a lot less carbon. [“Time to Chill Out on Global Warming,” by Charles Hooper, Defining Ideas, January 17]

• Why, exactly, do we need one big bill that tries to solve all our immigration policy problems at once? Why, for example, does securing the border or streamlining the visa program require also having a plan to deal with those immigrants who are currently in the United States illegally? [“Senate Immigration Reform: Another Misguided Call for Comprehensive Legislation,” by Jessica Zuckerman, The Heritage Foundation, January 30]

• Wikipedia is 12 already! Is it, as some of its fans think, the grandest example of diverse people collaborating peacefully? Not exactly: “Wikipedia is certainly an impressive success story. It’s collaborative, diverse, and peaceful—and people increasingly rely on Wikipedia to acquire information. It is worth celebrating. But it is not humanity’s greatest collaborative effort, nor our greatest source of useful information. Those come from the direct and indirect benefits of the peaceful, voluntary arrangements referred to in shorthand as ‘market interactions.’ Yet while we laud Wikipedia for what it provides, we should also remember that the benefits of voluntary association in the market are under attack on many fronts. Giving markets the kind of respect Wikipedia currently enjoys would be a major step forward for humanity.” [“If You Like Wikipedia, You Should Love Markets,” by Gary M. Galles, The Freeman, January 30]

• Critics of “enhanced interrogation techniques” seem to want to reduce the issue to the question of whether those techniques actually worked. Wouldn’t it be convenient if our moral instincts never had a cost? But three of the people who ran the Central Intelligence Agency’s detainee interrogation program told an audience at the American Enterprise Institute that the program did produce valuable information. They also revealed some ways the program didn’t work as the critics imagine. Interrogators were not so naïve, for example, as to think detainees wouldn’t lie in order to avoid suffering. The purpose of “enhanced interrogation” was to break the detainee’s will to resist. “Once you got through the enhanced interrogation process, then the real interrogation began,” explained one official. [“The Case for Torture,” by William Saletan, Slate, January 30]

• Fifty-two percent of Pennsylvania public teachers say union leaders do not represent their views. [FreetoTeach.org, January 2013]

• Lisa Jackson is the worst head of the worst regulatory agency ever, says Henry Miller, who points out the problem wasn’t just that Jackson’s Environmental Protection Agency ignored science and failed to balance costs and benefits in pursuit of regulatory power. The agency also exceeded its authority under law (and was regularly rebuked by the courts); treated its grant programs as slush funds to buy support from non-profit allies (the Government Accountability Office found a systematic failure to award grants based on merit); and has used the legal subterfuge of finding friendly activist organization willing to sue the agency in order to justify harsher regulations. Gosh, what could be in those “Richard Windsor” e-mails we haven’t yet seen? [“The EPA’s Lisa Jackson: The Worst Head of the Worst Regulatory Agency, Ever,” by Henry I. Miller, Forbes, January 30]

• Among the tools you might find handy in case a gunman comes looking for targets, says the Department of Homeland Security: scissors! This advice on how to protect yourself during what the agency calls an “active shooter situation,” comes from a video the agency recently produced. The video also recommends crouching, hiding, and running—all to be preferred, no doubt, over doing nothing. But, for some reason we can’t think of, the folks at DHS overlooked something. So we’ll fix the oversight: Another tool you might find helpful in case someone with a gun tries to kill you would be a gun. You’re welcome, DHS.

• The Cato Institute is the house that Ed Crane built. “‘In the long run, the ideology of freedom will win,’ [Charles] Murray said at the Cato Club 200 retreat in September. ‘And when the history is written of how it is that, in the last quarter of the twentieth century, the flickering flame of freedom became strong enough to withstand the winds, Ed Crane’s name will figure very largely.’” [“The Legacy of Edward H. Crane,” Cato Policy Report, January/February 2013]

• Thanks to ObamaCare, health insurers are no longer guaranteeing initial rates for a year at a time. Put it down to the actuarial uncertainty that happens when so many new regulations come at once. [“The Most Ominous Sign Yet Health Insurance Premiums Will Explode,” by Merrill Matthews, Forbes January 30]

Posted on 02/01/13 01:02 PM by Alex Adrianson

Solis Forgot to Police the Unions

Hilda Solis resigned as Secretary of Labor on January 22, and her legacy will be giving the unions a pass on the financial reports they’re supposed to fill out so that union members know how their money is being spent. The reports are required under the Labor-Management Reporting and Disclosure Act (LMRDA), which was given teeth by the previous Secretary of Labor, Elaine Chao. Solis’s undoing of that progress can be seen in the findings last year of the Office of Inspector General’s review of the Department’s own auditing of union disclosures. As James Sherk and Rudy Takala point out: 

[T]he OIG found that 76 percent of the reviewed […] audits missed non-criminal violations of the law. These violations include failing to file and failing to maintain records.

The audits did track criminal violations of the LMRDA. A good thing, too: 16 percent of unions audited—one in six—committed criminal violations of the LMRDA. In all, 92 percent of the unions that were audited violated regulations. The [Office of Labor Management Standards] failed to report 76 percent of those violations because of their flawed reporting standards.

Equally problematic, OLMS has dramatically cut back on its audits. Despite frequently finding criminal violations, the Obama Administration cut the number OLMS audits by almost 40 percent between 2009 and 2011. Union officers abusing their positions are substantially less likely to be audited now than before Solis took office. [The Foundry, January 29]

Posted on 02/01/13 04:56 AM by Alex Adrianson

Make Sure You Have the Right Tools for the Job

Among the tools you might find handy in case a gunman comes looking for targets, says the Department of Homeland Security: scissors! This advice on the best way to protect yourself during what the agency calls an “active shooter situation,” comes from a video the agency recently produced:

Crouching, hiding, and running are all good ideas, but, for some reason we can’t think of, the folks who produced this fine video overlooked something. So we’ll fix it for them: Another tool you might find helpful in case someone with a gun tries to kill you would be a gun. You’re welcome, DHS.

Posted on 02/01/13 02:36 AM by Alex Adrianson

If You Think the Public School Monopoly Is More Egalitarian Than School Choice, Think Again

Education policy researcher Michael McShane, who once taught English at a historically African-American Catholic school in Montgomery, Alabama, explains how public schools segregate students:

Because the lion’s share of our public schools are residentially assigned, and because our neighborhoods are, by and large, segregated, we see racial and socio-economic stratification in our schools. Houses in neighborhoods zoned for better public schools cost more, and therefore people have to pay “tuition” (in the form of a higher mortgage) to get their children into them.

Look at the breakdown by race of the seven public high schools in Montgomery. The only schools that are less than 80 percent African-American are the three academically-selective magnet schools. This tells us that in Montgomery if you want to attend something other than a hyper-segregated school with a less than 52 percent graduation rate you must qualify for a magnet, move to the suburbs, or pay to attend a private school. That is neither right nor fair. School choice, done right, can offer stronger academic alternatives without sacrificing the public mission of schooling.

[American Enterprise Institute, January 30]

Posted on 02/01/13 01:12 AM by Alex Adrianson

Big Cuts in Income Taxes Are Coming—in the States

The action on tax policy is in the state capitals. Lawmakers in Oklahoma, Kansas, North Carolina, Indiana, and New Mexico, are planning major reductions in tax rates this year, reports the Wall Street Journal. Plus the governors of Nebraska and Louisiana want to eliminate their states’ income taxes while boosting sales taxes; in other words, they want to trade a tax on wealth creation for a tax on consumption. These lawmakers, observes the Journal, seem to have noticed the good results achieved by states with no income taxes:

A new analysis by economist Art Laffer for the American Legislative Exchange Council finds that, from 2002 to 2012, 62% of the three million net new jobs in America were created in the nine states without an income tax, though these states account for only about 20% of the national population. The no-income tax states have had more stable revenue growth, while states like New York, New Jersey and California that depend on the top 1% of earners for nearly half of their income-tax revenue suffer wide and destabilizing swings in their tax collections.

In the case of North Carolina, a new study by the Civitas Institute concludes that a tax reform that shifts more of the burden to consumption from income would increase average annual personal income growth by 0.38% to 0.66%. That’s enormous over time and would lead to much higher state tax revenues. North Carolina’s top income tax rate is 7.75%, which is higher than that of most nearby states that it competes with for investment. Virginia’s top rate is 5.75% while Tennessee has no personal income tax. [Wall Street Journal, January 29]

Posted on 02/01/13 12:27 AM by Alex Adrianson

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