On this episode of Liberty Never Sleeps, host Tom Purcell explains why liberalism is a failed ideology, and produces failed results with failed leadership.
*Gilette Metrosexuals *Teacher Strike in CA *Politicization in the FBI *Brown Fiddled While California *Dark Side Landing Faked?
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Manufacturing Activity in Northeast Slows to Lowest Level Since May 2017
A factory worker at a New York manufacturing plant. (Photo: Reuters)
The Empire State Manufacturing Survey barely expanded in January, coming in well below the 12.0 consensus forecast at 3.9.
Readings above 0 point to growth, while readings below indicate contraction.
The reading on the general business conditions fell 8 points, its lowest reading since mid-2017. The index for future business conditions fell 13 points to 17.8.
Twenty-three percent (23%) of respondents reported that conditions had improved over the month, while 20% said conditions worsened. The new orders index fell 10 points to 3.5.
On this episode of Liberty Never Sleeps, Tom discusses how Democrats are battling the American people with their narrative and each other for control of the argument.
*Jim Acosta Burns Himself *Having a Good Time in PR *Wall Battle Continues *New Blood Vs. Old Blood *Brexit Vote and Guns
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The bad news is that Democrats in the House of Representatives already are pushing for a big increase in the corporate rate.
Rep. John Yarmuth, the new House Budget chairman, said his chamber’s budget blueprint will aim to claw back lost revenue by boosting the corporate tax rate from its current 21 percent to as high as 28 percent… he anticipates the budget resolution will envision changes to the 2017 GOP tax overhaul, including raising the corporate tax rate above its current 21 percent. “…We’ll see how much revenue we can get out of it.” The rate was 35 percent before it was cut in the GOP tax bill.
Since Republicans control the Senate and Trump is in the White House, there’s probably no short-term risk of a higher corporate tax rate.
But such an initiative could be a major threat after the 2020 election, so let’s augment our collection of evidence showing why a higher rate would be a very bad idea.
We’ll start with some analysis from the number crunchers at the Tax Foundation.
A corporate tax rate that is more in line with our competitors reduces the incentives for firms to realize their profits in lower-tax jurisdictions and encourages companies to invest in the United States. Raising the corporate income tax rate would dismantle the most significant pro-growth provision in the Tax Cuts and Jobs Act, and carry significant economic consequences. …Raising the corporate income tax rate would reduce economic growth, and lead to a smaller capital stock, lower wage growth, and reduced employment. …Raising the rate to 25 percent would reduce GDP by more than $220 billion and result in 175,700 fewer jobs.
Here’s the table showing the negative effect of a 22 percent rate and a 25 percent rate, so a bit of extrapolation will give you an idea of how the economy will suffer with a 28 percent rate.
By the way, since the adverse impact on wages is one of the main reasons to be against a higher corporate tax rate, I’ll also share this helpful flowchart from the article.
Now let’s look at some research from China, which underscores the importance of low rates if we want more innovation.
Here’s the unique set of data that created an opportunity for the research.
In November 2001, China implemented a tax collection reform on all manufacturing firms established on or after January 2002, which switched the collection of corporate income taxes from the local tax bureau to the state tax bureau. After the reform, similar firms established before or after 2002 could pay very different effective tax rates because of the differences in the management and incentives of those two types of tax bureaus…, resulting in a reduction of effective corporate income tax rates by almost 10% among newly established firms. …the policy change created exogenous variations in the effective tax rate among similar firms established before versus after 2002. We can thus apply a regression discontinuity design (RD) and use the generated variation in the effective tax rate to identify the impact of taxes on firm innovation.
And here are the findings.
Our analysis yields several interesting results. First, we show a strong and robust causal relationship between tax rate and firm innovation. Decreasing the effective tax rate by one standard deviation (0.01) increases the average number of patent application by a significant 5.7% (see Figure 2 for the graphical evidence). The reform also stimulated R&D expenditures and increased the skilled-labour ratio by 14%. Second, a lower tax rate also improves the quality of patents. The impact of tax reform on patent applications mainly comes from its effect on invention and utility patents – decreasing the effective tax rate by one standard deviation improves the probability of having an invention patent application by 4.4% and increases the number of utility patent applications by 4.7%.
Here’s a chart from the study, showing the difference in patents between higher-taxed firms and lower-taxed firms.
Last but not least, let’s review some of the findings from a study published by the National Bureau of Economic Research.
We present new data on effective corporate income tax rates in 85 countries in 2004. …In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. For example, a 10 percent increase in the effective corporate tax rate reduces aggregate investment to GDP ratio by 2 percentage points. Corporate tax rates are also negatively correlated with growth, and positively correlated with the size of the informal economy. The results are robust to the inclusion of controls for other tax rates, quality of tax administration, security of property rights, level of economic development, regulation, inflation, and openness to trade
And here’s one of the many charts and tables in the study.
The bottom line is that a higher corporate tax rate will be bad for workers for the simple reason that less investment means lower productivity and lower productivity means lower wages.
P.S. It’s also likely that House Democrats will try to increase the top personal tax rate, though hopefully they’re not so crazy as to push for Ocasio-Cortez’s 70 percent rate.
Alexandria Ocasio-Cortez, right, during a widely criticized interview with PBS, and a protestor resting next to a sign that reads, Big Government Big Mistake. (Photos: Screenshot/Fair Use)
Bernie Sanders is yesterday’s news.
He’s now being overshadowed by Rep. Alexandria Ocasio-Cortez, D-N.Y., another out-of-the-closet socialist who somehow thinks America should be more like Greece or Venezuela.
Brian Riedl of the Manhattan Institute opines in National Review about AOC’s proposed tax hike on the rich. He starts with a very appropriate economic observation.
A 70 percent tax bracket would raise very little (if any) revenue, while damaging the economy and sending income and jobs overseas.
He then points out that we should look at both sides of the fiscal ledger. And the spending side of the left’s ledger is very crowded and very heavy.
…when assessing the needed tax revenues, a green-energy initiative costing $7–$10 trillion over the decade should be examined in the context of$42 trillion in additional Democratic-socialist proposals that include single-payer health care ($32 trillion), a federal jobs guarantee ($6.8 trillion), student-loan forgiveness ($1.4 trillion), free public college ($800 billion), infrastructure ($1 trillion), family leave ($270 billion), and Social Security expansion ($188 billion). …These spending promises are so stratospheric as to be incomprehensible — except to the far Left, which clings to the myth that simply taxing millionaires can finance a level of socialism that would make the Swedes start a tea-party movement.
Brian Riedl of the Manhattan Institute for National Review continued.
Here’s the key part of Brian’s column.
He points out that there’s no way to finance the agenda of Democratic Socialists with class-warfare taxes. Even if the AOC tax plan is dramatically expanded.
…a 100 percent tax rate on all income over $1 million…would raise 3.8 percent of GDP — not even enough to balance the current budget, much less finance a Green New Deal. And even that figure implausibly assumes that people continue working and investing. Slightly more realistically, doubling the top 35 percent and 37 percent tax brackets, to 70 percent and 74 percent for singles earning more than $200,000 and couples earning at least $400,000, would raise roughly 1.6 percent of GDP. That figure also ignores all revenues lost to the economic effects of 85 percent marginal tax rates (when including state and payroll taxes) as well as tax avoidance and evasion. …limiting the 70 percent tax bracket to incomes over $10 million…would raise only 0.25 percent of GDP — about $50 billion annually. …$50 billion is surely too high of an estimate, because the kind of people with incomes over $10 million also have teams of accountants and tax lawyers finding every conceivable tax loophole and overseas income shift.
Brian Riedl of the Manhattan Institute for National Review continued.
But, as Brian noted, these taxes wouldn’t come close to financing the leftist wish list even if one makes absurd assumptions that behavior doesn’t change and the economy is unaffected.
So how do European nations finance their large welfare states?
Europe finances its generous welfare states through steep value-added taxes that hit the entire population. …Increasing federal spending by 21 percent of GDP to fund Democratic socialism — even after slashing defense — would require either a 55 percent payroll tax increase, or 115 percent value-added tax, according to CBO data. Acknowledging this brutal middle-class burden would immediately end any public flirtation with “free-lunch socialism.”
Brian Riedl of the Manhattan Institute for National Review continued.
This is the most important takeaway from the column.
If you want European-type handouts, you better be prepared to cough up a lot of money.
Onerous value-added taxes.
Punitive payroll taxes.
And income taxes that impose high rates on modest incomes.
Simply stated, there is no way to finance a European-sized welfare state without pillaging middle-class and lower-income taxpayers.
Which helps to explain why European living standards are significantly below American levels.
By the way, there one final point from Brian’s column that is worth sharing.
He explains that high tax rates in the 1950s, 1960s, and 1970s didn’t generate much revenue. Even from the rich.
A common liberal retort is that the economy survived 91 percent income-tax rates under President Eisenhower and 70 percent tax rates through the 1970s. That does not mean those policies raised much revenue. Tax exclusions and high income thresholds shielded nearly everyone from these tax rates — to the degree that the richest 1 percent of earners paid lower effective income-tax rates in the 1950s than today. In 1960, only eight taxpayers paid the 91 percent rate. Overall, today’s 8.2 percent of GDP in federal income-tax revenues exceeds that of the 1950s (7.2 percent), 1960s (7.6 percent), and 1970s (7.9 percent). Those earlier decades were not a tax-the-rich utopia.
Brian Riedl of the Manhattan Institute for National Review continued.
The bottom line is that Alexandria Ocasio-Cortez’s economic agenda cannot be justified when looking at economic data, fiscal data, and historical data.
But we can say with great confidence that ordinary people ultimately will pay the heaviest price if her proposals get enacted since her class-warfare tax hikes will be a precursor for huge tax increases on the rest of us.
Senate Minority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., give a rebuttal to the first Oval Office address delivered by President Donald Trump, right, on January 9, 2019. (Photos: Video Screenshot/PPD)
It’s going to be a very frustrating two years for Americans who were hoping the new Congress would get to work on healthcare. The “negotiations” over border security have failed, leading to the longest partial government shutdown in history.
House Speaker Nancy Pelosi, D-Calif., is too weak to negotiate in good faith, and favors securing talking points for her party in 2020 over sound policy to protect American citizens and vulnerable migrants.
In constant fear of a far-left revolt, she is unwilling to compromise with President Donald Trump. The same is true of Senate Minority Leader Chuck Schumer, D-N.Y., though his position is not nearly as tenuous as his counterpart.
Democratic congressional leaders know it is easier to ensure their nominee has a broken promise to throw in the president’s face in 2020. They view The Wall as the political equivalent of “read my lips, no new taxes.”
On Thursday, Senator Lindsey Graham, R-S.C., released a statement calling on President Trump to use his emergency powers to secure funds to construct wall/border security funding.
The chairman of the Senate Judiciary Committee is widely known as a moderate compromiser, and yet he cited Speaker Pelosi’s untenable position as the reason he decided to support the president’s plan to declare a national emergency.
“Speaker Pelosi’s refusal to negotiate on funding for a border wall/barrier — even if the government were to be reopened — virtually ends the congressional path to funding for a border wall/barrier,” Senator Graham said. “It is time for President Trump to use emergency powers to fund the construction of a border wall/barrier.”
Last week, Democratic sources on The Hill predominantly argued a wall on U.S. southern border with Mexico was ineffective, and “immoral.” While they claim the party supports border security, they were unable to cite a single proposal on which they could begin to build a compromise.
This week, those same sources all but conceded defeat on the effectiveness of the barrier. The heads of the Department of Homeland Security (DHS), Customs and Border Patrol (CBP), the National Border Patrol Council and even Barack Obama’s former border chief, all agreed with President Trump.
This week, those same sources acknowledged the party backed itself into an uncompromising corner. Since Donald Trump first announced his bid for the presidency, Democrats have argued a wall — and anyone who would support it — is racist.
It fired up their liberal base, despite their clear collective flipflop. Now, the party fears any compromise with the president will result in that fire being turned around on them.
Unsurprisingly, media outlets have not been honest with the American people. The president has repeatedly referred to corporate big media outlets as the “opposition party.”
The coverage of the partial government shutdown and the border crisis continue to make that case for him.
In 2010, the Democratic Party was truly “shellacked” in a first-term incumbent midterm. The Republican Party netted 63 seats in the U.S. House and 6 seats in the U.S. Senate.
That was an undeniably historic outcome, and yet it was not covered as an electoral mandate. Barack Obama did not and was not expected to pivot to the middle like Bill Clinton, the last president to suffer such a significant first-term midterm defeat.
Media outlets characterized any and all GOP resistance to Mr. Obama’s unpopular agenda as obstructionism and extremism. The new Congress was fully expected to compromise and break their campaign promises.
In 2014, the Republican Party unexpectedly gained another 13 seats in the lower chamber and another 9 seats in the upper chamber. Yet again, a truly historic electoral outcome not viewed or covered as a mandate.
The results of the 2016 presidential election — perhaps the most historic in our lifetime — were never accepted by the Democratic Party and corporate big media, let alone seen as a mandate from the voters.
Rhetoric aside, the 2018 midterm election was a split decision.
Democrats regained control only in the U.S. House, and underperformed expectations and historic averages elsewhere. Historically, the 40-seat net gain in lower chamber was a very average shift for a first-term incumbent president’s party.
The only truly historic outcome was in the U.S. Senate, which Democrats failed to retake. Republicans expanded their majority in the upper chamber by gaining the most seats for a first-term incumbent midterm since 1962.
Yet, a rather underwhelming result in one chamber has been portrayed as an electoral mandate since Election Night.
Worth noting, swing state voters overwhelmingly supported the president’s immigration agenda. Wall Street might not be able to buy as many hearts and minds as they thought, but corporate big media narratives are always for sale.
Democratic congressional leaders have no interest in governing, and for news outlets to pretend otherwise is inconsistent and disingenuous.
Senator Lindsey Graham, R-S.C., Chairman of the Judiciary Committee.
Senator Lindsey Graham, R-S.C., on Thursday released a statement calling on President Donald Trump to use emergency powers to secure wall/border security funding.
“Speaker Pelosi’s refusal to negotiate on funding for a border wall/barrier — even if the government were to be reopened — virtually ends the congressional path to funding for a border wall/barrier,” Senator Graham, the Chairman of the Senate Judiciary Committee, said.
“It is time for President Trump to use emergency powers to fund the construction of a border wall/barrier.”
In his first Oval Office address to the nation on Tuesday, President Donald said he was “determined to end” the “cycle of human suffering” at the U.S. southern border with Mexico.
“There is a growing humanitarian and security crisis on the southern border,” a serious- and sober-toned president told the nation. “We are out of space to hold them and we have no way to promptly return them to their country.”
President Trump also told the nation that he had once again invited congressional leaders to the White House to negotiate an end to the government shutdown in exchange for the $5 billion requested by border personnel to construct the barrier.
But House Speaker Nancy Pelosi, D-Calif., once again rejected any and all support for a border wall or barrier of any kind. The president had offered to reopen the government beforehand, but ultimately walked out of the meeting after it became clear Democrats were not negotiating in good faith.
As People’s Pundit Daily (PPD) recently reported, the Justice Department (DOJ) announced the sentences for members of a notorious Mexican sex trafficking organization that “frequently” relies on the U.S. southern border to smuggle their victims.
“These children are used by vicious coyotes. One out of three women are sexually abused on the trek to the southern border,” President Trump said. “Women are the biggest victims by far.”
“This is the cycle of human suffering I am determined to end.”
The president continued to highlight the human trafficking during his trip to the U.S. southern border in Texas on Thursday.
“Where you have a good strong barrier, you don’t have problems,” the president told reporters. “If we had a barrier of any kind, a powerful barrier, whether it’s steel or concrete.”
The People’s Pundit joined “Quite Frankly” on Wednesday, January 9, 2019 to discuss how the failure to prevent illegal immigration and secure the border has led to the exploitation of migrant women by sex trafficking organizations.
As People’s Pundit Daily (PPD) recently reported, the Justice Department (DOJ) announced the sentences for members of a notorious Mexican sex trafficking organizations that “frequently” relies on the U.S. southern border to smuggle their victims.
On this episode of Liberty Never Sleeps, Tom argues American citizens need to become more responsible and self-reliant for society to truly progress.
*Blocked in 232 Countries *Immorality and the Left *Caring– About Who? *Men’s Rights and Amazon *Fox Ratings
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U.S. jobless claims graph on a tablet screen. (Photo: AdobeStock)
The Labor Department said initial jobless claims fell far more than expected to 216,000 for the week ending January 5, crushing the consensus forecast at 224,000.
The forecasts ranged from 215,000 to 229,000.
The 4-week moving average was 221,750, an increase of 2,500 from the previous week’s revised average. The previous week’s average was revised up by 500 from 218,750 to 219,250.
The advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending December 29. The advance number for seasonally adjusted insured unemployment during the week ending December 29 was 1,722,000, a decrease of 28,000.
The 4-week moving average was 1,721,250, an increase of 15,250 from the previous week’s revised average.
No state was triggered “on” the Extended Benefits program during the week ending December 22.
The highest insured unemployment rates in the week ending December 22 were in Alaska (3.3), Connecticut (2.2), New Jersey (2.2), Montana (2.0), Illinois (1.9), Massachusetts (1.9), Minnesota (1.9), Pennsylvania (1.9), California (1.8), Puerto Rico (1.8), Rhode Island (1.8), and Washington (1.8).
The largest increases in initial claims for the week ending December 29 were in Michigan (+7,997), New Jersey (+7,845), Pennsylvania (+7,367), Connecticut (+5,472), and Ohio (+4,835), while the largest decreases were in California (-10,107), Texas (-4,804), North Carolina (-1,667), Florida (-1,315), and Arizona (-970).
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