Every congressional district gets a tax cut in 2018. Economic modeling by Kevin Dayaratna, Parker Sheppard, and Adam N. Michel finds that the Tax Cuts and Jobs Act will benefit the typical taxpayer in every congressional district:
Due to the TCJA, the typical household in every congressional district will see a reduction in tax liability in 2018. Nationally, 89 percent of Americans will see either a tax cut or no change. Approximately 4 million more low-income filers will not pay any income taxes in 2018. [...]
There is a significant range in the size of the average tax cut among all filers across the 435 congressional districts, ranging from an average of slightly above $395 (New York's 15th district, represented in the House by Jose Serrano) to $3,332 (California's 18th district, represented in the House by Anna Eshoo). For families of four, the comparable range is from $625 (NY–15) to $5,682 (CA–18). [...]
[H]ouseholds in West Virginia on average will see an $873 tax cut in 2018, which corresponds to a 14 percent reduction in income taxes, the largest benefit of any state by this measure. The smallest tax cut goes to the residents of the District of Columbia, who can expect a more modest 10 percent decrease in 2018 income taxes. This reduction, however, of over $1,600 for 2018 is also a large tax cut and is more than enough to pay for 12 credits of tuition at the University of District Columbia's Community College. [...]
[T]he TCJA's tax cuts, measured on a percentage basis, benefit lower-income districts more than districts with larger incomes in bigger population centers, contrary to some claims put forward by opponents of tax reform.
For example, NY–15 will see a 32 percent decrease in income taxes as a result of the TCJA, the largest percentage reduction of any congressional district in the country. Taxpayers in East Los Angeles, in California's 40th congressional district, represented in the House by Lucille Roybal-Allard, benefit from a 21 percent reduction in tax liability. Both NY–15 and CA–40 average less than $36,000 in total income per filer and receive average tax cuts of $395 and $510, respectively.
[Kevin Dayaratna, Parker Sheppard, and Adam N. Michel, "Tax Cuts in Every Congressional District in Every State," The Heritage Foundation, July 23]
Visit www.taxesandjobs.com for a state-by-state and district-by-district breakdown of the tax cuts and their economic effects.
Democratic attorneys general ask the courts to preserve their big-government tax subsidy. Democratic attorneys general in Connecticut, Maryland, New Jersey, and New York have filed a lawsuit in federal court against the provision of the Tax Cuts and Jobs Act that caps the deduction for state and local taxes at $10,000 per filer. They and other politicians from high-tax (typically democratic) states, like the deduction because it shifted the cost of their big government policies from their own taxpayers to federal taxpayers. But, as Brian Riedl notes, if the lawsuit were to be successful (which it will not be), the result would be a large tax cut for the wealthy—the opposite of what Democrats in Congress argued they wanted when they opposed the tax cuts.
Throughout 2017, Democrats savaged the Republican push for "tax cuts for the rich." Dozens of liberal organizations formed a group called "Not One Penny" to fight all upper-income tax relief. Eventually, the GOP enacted the Tax Cuts and Jobs Act (TCJA), which more or less cut taxes across the board. The TCJA even made the federal tax code slightly more progressive, by raising the estimated share of 2019 taxes paid by million-dollar earners from 19 to 20 percent.
How could the tax cuts slightly add tax progressivity? Because although nearly all families benefited from lower tax rates, the wealthy families who received additional benefits, such as relief from the Alternative Minimum Tax (AMT), were also hit with provisions such as capping the deduction for state and local taxes (SALT) at $10,000 per filer. Given that 96 percent of all SALT benefits above that $10,000 level go to the top 20 percent of earners, and that 57 percent of those benefits go to the richest 1 percent, this cap represented a straightforward way to ensure that the rich did not disproportionately benefit from the rest of the TCJA.
Repealing the new SALT cap would make the TCJA more expensive by $650 billion, and overwhelmingly tilted toward the rich. The annual tax-cut savings for New York's richest 1 percent would rise from $24,000 to $82,000 per family. Nearly all families outside the richest 20 percent would receive literally nothing.
[Brian Riedl, "Democrats in Four States File a Misguided Lawsuit against the Tax-Reform Law," National Review, July 24]
"Stand Your Ground" isn't a defense for the Florida shooting. Jacob Sullum writes that Pinellas County's decision not to charge Michael Drekja for a shooting stemming from a parking lot argument is a misapplication of the state's "Stand Your Ground" law.
"We're precluded from making an arrest in this type of a situation," [Sheriff Bob] Gualtieri claimed at a press conference the next day. "Stand Your Ground allows for a subjective belief by the person that they are in harm's way," the sheriff said, and "we don't get to substitute our judgment for Drejka's judgment."
To the contrary, the law requires police and prosecutors to assess the judgment of someone who uses deadly force, which he is allowed to do only if he "reasonably believes" it is "necessary to prevent imminent death or great bodily harm." It is not enough to claim you shot someone because you believed he otherwise would have killed or maimed you; that belief has to be reasonable in the circumstances.
The video shows McGlockton backing away when Drejka draws his gun. Even assuming that McGlockton was not done with Drejka after the shove, Gualtieri conceded that Drejka "probably could have" fended McGlockton off simply by brandishing the pistol. The implication is that Drejka did not reasonably believe shooting McGlockton was necessary, which means there was probable cause to arrest him.
[Jacob Sullum, "'Stand Your Ground' Did Not Kill Markeis McGlockton," Reason, July 25]
Sharing economies prosper in free economies. Timbro has produced a new global index of the sharing economy. The findings, writes Iain Murray, show the value of avoiding heavy regulation of the sharing economy:
[M]any believe that high levels of social trust are a precondition to maintaining an effective sharing economy. By controlling their international data sample for certain variables, Timbro found that social trust is unrelated to the use of sharing economy services. This suggests that introducing sharing economy services to a nation contributes to an increase in social trust there.
Critics have also claimed that the sharing economy has developed simply as a way for businesses to avoid taxation and regulation. If this were true, one might expect the data to show a correlation between high regulatory environments and expansive sharing networks. Instead, TSEI shows a negative correlation between the two. Furthermore, sharing networks tend to thrive in nations with greater economic freedom. According to the report, the sharing economy is "basically a new and innovative way of doing business" rather than an end-around run around excessive regulation. This suggests that regulators should be less skeptical about the emergence of a sharing economy innovation in an area they regulate.
[Iain Murray, "Driving Innovation: Timbro Index Charts Scope of Global Sharing Economy," Competitive Enterprise Institute, July 26]
The index can be found at beta.timbro.se/allmant/timbro-sharing-economy-index.
Trade war leads to bailouts. The Trump administration has announced it will provide subsidies for farmers hurt by retaliatory tariffs, which, writes Vincent Smith, shows why the Trump administration tariffs were always a bad idea:
How silly is this? Impose tariffs on steel and aluminum imports from around the world that anyone with a lick of insight knows are sure to be countervailed by steel and aluminum exporting countries through tariffs on U.S. major exports like agricultural commodities. Then give subsidies only to one relatively small privileged group of businesses being damaged by the policy you dreamt up, in this case a small section of the rural population, because you hope they may vote for your party in November.
In fact, use these tariffs as an excuse to double the crop insurance and price subsidies already being doled out to many of the same financially secure farm businesses who will receive the new subsidies. Just how financially secure are the farm businesses to whom you plan to give a helping hand? The average debt to asset ratio for the farm sector is about 12.6 percent, close to its record low of 11.3 percent in the last 50 years, and lower than in any other private sector of the economy. The subsidies farm businesses are already getting, by the way, will in any case be larger as a consequence of this trade war because they are triggered and increased when the prices of crops like wheat and corn fall.
Moreover, you can increase the federal budget deficit, although this time by only about $13 billion. Of course, happy thought for the day, as any trained economist knows, increasing the federal budget deficit will eventually only make the balance of trade deficit worse.
[Vincent H. Smith "Bailing Out Farmers Shows Why Tariffs Were Always Bad Policy," American Enterprise Institute, July 27]
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