Taxing Wars: The American Way of War Finance and the Decline of Democracy, Author: Sarah Kreps.
By Sarah Kreps – What explains the American tolerance for such open-ended, seemingly never-ending wars?
One view is that the light footprint of modern warfare — drones, small numbers of special forces, and cyber, as opposed to large deployments of troops — is a chief culprit. This approach to conflict removes a barrier to war because it does not inflict casualties on American troops that would draw attention to and drain support for the enterprise.
This is surely a contributing factor. But I argue that the most crucial difference between these wars and those of the past is how they have been financed.
Contemporary wars are all put on the nation’s credit card, and that eliminates a critical accountability link between the populace and the conduct of war.
But without war taxes, the country is left with mounting debt — and left, too, with wars without accountability. If the public fails to experience the “inconvenience” of taxes, paraphrasing Adam Smith, there is no incentive for voters to push for a course correction.
When no citizen feels a financial pinch during wartime, open-ended wars like those in Afghanistan and Iraq are likely to become the norm, not the exception. more>
Source: To stop endless war, raise taxes – Vox
Posted in Book review, CONGRESS WATCH, Economy, Education, History, Leadership, Media, Net, Technology
Tagged Business improvement, Congress Watch, Endless war, Government, Leadership, Taxes, Technology, United States
Why it’s so hard to simplify the tax code
By Dee Gill – Simplifying the tax code ostensibly has bipartisan backing. Both the Bush and Obama administrations advocated for simplification, in reports, as have House Speaker Paul Ryan (Republican of Wisconsin) and Senator Elizabeth Warren (Democrat of Massachusetts). But when the Senate passed a tax bill this past December, there was no postcard.
What happened? The same thing that always does, suggest researchers. While simplicity is a stated goal, complexity wins the day. Hence companies and individuals will hire accountants to wade through the latest bill, interpret the new rules, offer guidance, and help work through the inevitable corrections and amendments.
And this comes at an economic cost. Research by James Mahon and Chicago Booth’s Eric Zwick, and others, collectively indicates that the complexity leads individuals and companies to fail to take advantage of billions of dollars in offered breaks, many of them presumably intended to stimulate the economy. In this way, complexity undermines what tax incentives are purported to accomplish. more>
Posted in Business, CONGRESS WATCH, Economy, History, Media, Regulations
Tagged Chicago Booth, Complexity, Inequality, refunds, Tax deduction, Taxes
Why we should teach people how to lie
By Chana R. Schoenberger – Could you handle being honest—totally, brutally truthful, without even a well-intentioned falsehood to smooth over a social situation—for three days?
Most people don’t think they could, at least not without ruining their family, social, and work lives. Fibs, white lies, and half-truths (along with, perhaps, more egregious whoppers) are such an important part of our interpersonal tool kit that going without them seems next to impossible.
But Chicago Booth’s Emma Levine, along with Carnegie Mellon’s Taya R. Cohen, asked exactly that of a group of research subjects and came away with a surprising conclusion: it’s not as bad as it sounds.
The researchers asked some participants to be completely honest in every interaction, with every person in their lives, for three days, while other participants were asked simply to be kind or conscious of their words. The participants predicted that being forced into honesty would make them unhappier than if they had to be kind or just aware of what they were saying to others. They anticipated frayed relationships as a result of abandoning the lies they typically use to cover up awkward or uncomfortable situations.
But being honest didn’t torpedo subjects’ friendships, family connections, or jobs.
“The experience of being honest is far more pleasurable, leads to greater levels of social connection, and does less relational harm than individuals expect,” Levine and Cohen write. more>
By Andrew Soergel – As recently as Wednesday, President Donald Trump was quoted during a Cabinet meeting as saying he sees “no reason why we don’t go to 4 percent, 5 percent and even 6 percent” gross domestic product expansion in the months and years ahead.
Economists have broadly doubted these claims – though few quibble with the idea that the GOP-constructed tax plan would have a modestly positive impact on markets and the economy over the near term. Analyses from the Joint Committee on Taxation, the Tax Policy Center and the University of Pennsylvania’s Wharton Budget Model have all predicted a final bill, in a best case scenario, would add a few fractions of a percentage point to the country’s GDP growth rate over the course of the next 10 years.
A growing number of experts are using the term “sugar high” to describe what the tax bill is likely to do to the U.S. economy – provide some short-term energy for growth before petering out or, even worse, pushing the country toward a crash. more>
By Adam Looney – Although it has now been killed by the Republican congressional leadership and the White House, it’s worth understanding why it would be better for the U.S. economy and American workers than any available alternative.
If the goal is to disincentivize firms from inverting—moving their residence abroad—or shifting profits and activities to lower-tax countries, reforms must address why firms move abroad or start overseas to begin with. Firms don’t move abroad to pay lower taxes on foreign-source income—after all, they don’t pay that much now—but to reduce the taxes they owe on their domestic profits.
The BAT addresses the fundamental problem: as long as there is a lower-tax country out there, there is always going to be a tax incentive to produce abroad and sell it in America, rather than to make it in America in the first place.
Under the BAT (border adjustment tax), all companies would pay tax if they sold to Americans, no matter where the goods and services were produced or where the company makes its headquarters. If firms don’t sell to Americans, they don’t pay U.S. tax. And if something is produced in America and consumed abroad, that’s tax free too. In this world, the U.S. tax rate or tax burden no longer matters for the firm’s decision on where to locate. more> https://goo.gl/Vwcocw
Posted in Business, CONGRESS WATCH, Economic development, Economy, History, Leadership, Regulations
Tagged BAT, border adjustment tax, Investment, Tax inversion, Taxes
By Isabel V. Sawhill – Republicans have become trapped in their own rhetoric, crafted during years of being in opposition. As Ross Douthat noted in a recent New York Times column, drawing on new analysis in a report by Lee Drutman, that rhetoric is now well to the right of the beliefs held by the broader Republican electorate.
Republican leaders have failed to recognize the fact that the economic views of those who voted Republican in 2016 “lean only slightly to the right.”
Republicans could have used the Trump election to effect a political realignment—one that would have combined a more moderate set of economic policies than the Republican elite currently supports with a more moderate set of cultural positions than those espoused by leading Democrats.
Instead, the Republican elites are now out-of-step with their followers and could pay a big political price if they continue down their current path. more> https://goo.gl/AXQ7x3
Capital Without Borders, Author: Brooke Harrington.
By Aamna Mohdin – In researching the book, Harrington traveled to 18 countries, interviewed 65 wealth managers, and even trained as one herself to better understand how tax avoidance works. In an interview last week with the Nation, she said although tax evasion would exist even without wealth managers, they have massively accelerated the trend. Tax dodging couldn’t happen “on the grand scale that we are seeing today without expert intervention,” she said.
“There’s a certain group of well-to-do people who don’t want to be subject to the laws that bind the rest of us,” she said. “With the help of wealth managers, they put themselves above the nation-state system by changing passports at will, having multiple residences, and bouncing around strategically to ensure that no national laws apply to them.” more> https://goo.gl/fzaAqJ