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Valentine’s Day: Uncle Sam Breaks Taxpayers’ Hearts

in Business and Economy, Communicating Liberty, Liberator Online Archives by Sharon Harris Comments are off

(From the One-Minute Liberty Tip section in Volume 20, No. 6 of the Liberator Online. Subscribe here!)

Cupid

As I often point out, holidays can be a great time to share libertarian ideas with family and friends. It’s even more fun and effective if you’ve gathered liberty-themed facts, figures and stories specific for each holiday. We often share such information in the Liberator Online as a holiday nears.

With Valentine’s Day upon us, I’m pleased to present the following information from Americans for Tax Reform (ATR) about how much government is adding to the cost of your Valentine’s Day celebration. It’s shocking stuff, sweetened just a bit by ATR’s trademark humor.

Government Versus Valentine’s Day
(from Hayley Robinson, Americans for Tax Reform)

This Saturday is Valentine’s Day. Romantics all over the nation have spent the week buying gifts and making dinner plans, all at a considerable price. Last year the National Retail Federation estimated consumers would spend a whopping $17.3 billion on Valentine’s Day — an average of $133.91 per person.

But that price is driven up enormously by an unexpected third wheel — Uncle Sam. Valentine lovers certainly won’t love discovering that, for almost every part of the day spent with that special someone, government taxes and fees send costs skyrocketing.

Consider:

Roses and Valentine’s Cards: These are romantic must-haves for many people. An estimated 233 million roses are grown for Valentine’s Day, and consumers will spend $1.9 billion on flowers145 million Valentine’s cards will be purchased for the occasion. Over $1 billion of the money spent on cards and flowers goes to… you know who.

A Romantic Dinner for… Three? Yep, save a chair at the table for Uncle Sam. $3.5 billion is spent dining out on Valentine’s Day — and a hard-to-swallow 31% of the cost of your bill comes from government taxes.

Wine: If you’ve been saving a nice bottle of wine for the occasion, be sure to savor it — 33% of the cost is due to government. That’s enough to drive you to drink… if you could afford all the taxes.

Chocolate: Consumers will spend nearly $1.3 billion on chocolate. Of this, 31% will be paid to the government. Ugh — that dessert just got a little less sweet.

Jewelry: In 2013, 6 million people expected or planned a marriage proposal on Valentine’s Day. In 2014 it was projected that $3.9 billion would be spent on diamonds, gold, and silver. But beware, the government is standing right there beside you as you pledge your love — and taking a 36% cut of the cost of your glittering symbols of love.

Cell Phones: If you’re in a long-distance relationship and can’t travel to see your sweetheart, hopefully you’ll still be able to give them a call. You might want to keep it short, though: Uncle Sam will be on the line as well, and he’ll be responsible for 40% of the cost of your bill.

Travelling: Making a surprise visit to your long-distance loved one? Whether you’re driving or flying, you’re paying Uncle Sam for the privilege. Last year 45% of the cost of gasoline was due to government taxation, while other taxes and fees accounted for 44% of the cost of airfare. An annoying backseat driver or snoring seat mate would be much better than the travel companionship offered by Uncle Sam.

ATR sums it up this way: “Single or steady, taxpayers will remain heartbroken this Valentine’s Day — when it comes to the costs imposed by the government.”

The Coming Government Debt Explosion — and How to Deal with It

in Business and Economy, Liberator Online Archives by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 6 of the Liberator Online. Subscribe here!)

The U.S. ship of state is sailing full steam ahead — straight toward a massive debt iceberg. Debt Iceberg

Here are some genuinely shocking figures from “Medicare and Social Security Tabs Coming Due,” an article by Michael Tanner, senior fellow at the Cato Institute, in the March 2015 issue of Reason magazine:

  • The national debt recently reached $18 trillion — approximately 101 percent of the United States’ GDP.
  • The Congressional Budget Office projects the debt will rise to $27.3 trillion within the next decade. 
  • But those numbers are actually far too low — because they ignore Social Security and Medicare’s unfunded liabilities. Add those in, and the national debt hits $90.6 trillion.
  • Social Security, Medicare and Medicaid are responsible for fully 47 percent — nearly half — of federal spending, and they continue to grow. 
  • Social Security has a $24.9 trillion shortfall, while Medicare has $48 trillion in unfunded liabilities. Should healthcare costs rise, the Medicare figure could soar to $88 trillion. 
  • Just this year, Social Security will have a $69 billion cash-flow deficit. Every year after, that shortfall will worsen. And Medicare is in even worse financial shape than Social Security.

In an article at Vice News last January, Tanner described the difficult choices we face:

“To pay all the benefits promised in the future, Social Security would have to increase the payroll tax by as much as half, or find that revenue elsewhere. The government can always cut benefits, but without a tax increase those benefits would have to eventually be slashed by 23 percent. That would be very hard for seniors who depend on the program to get by.”

What to do about these problems? You can read Cato’s proposals for reforming Social Security at their Social Security reform website.

Cato’s research and proposals for health care and welfare reform (including Medicare and Medicaid and Obamacare) can be found here.

Libertarian Party presidential candidate Harry Browne offered his plan for replacing Social Security with consumer-based choices in his 1996 book The Great Libertarian Offer. Though the numbers are a bit dated, his explanation of Social Security’s problems, and his solution, remain very relevant, elegant, and easy to read and understand.

For a quick overview of genuine market-based health care reform, see this short 2015 article “What True Health Care Reform Would Look Like“ by Matt Battaglioli, published by the Mises Institute.

Finally, see “How to Eliminate Social Security and Medicare“ by George Reisman (Mises Institute, 2011) for more reasons why these programs should be eliminated, and a plan to accomplish this.

The Great Libertarian Idea in President Obama’s 2015 Budget

in Business and Economy, Liberator Online Archives by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 5 of the Liberator Online. Subscribe here!)

 Surprise! There’s at least one great — and solidly libertarian — idea in President Barac

Occupational LicensingObama’s 2015 budget: cutting back the plague of occupational licensing.

In an item entitled “Reducing Unnecessary Occupational Licensing Requirements” Obama announces plans to “reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do,” noting that occupational licensing is “putting in place unnecessary training and high fees” in many fields.

President Obama proposes a $15 million in grants to states for “identifying, exploring, and addressing areas where occupational licensing requirements create an unnecessary barrier to labor market entry or labor mobility…”

This is yet another example of a libertarian/free market idea bursting into the mainstream.

Libertarians at the Institute for Justice, the Reason Foundation and elsewhere have long pointed out the harm of occupational licensing requirements.

For example:

  • Occupational licensing laws — found in all 50 states — restrict entry into over 1,100 different occupations.
  • They have grown explosively. In the 1950s, less than five percent of American workers were required to obtain a government license to do their job. But today, that number has passed an incredible 30 percent — meaning one in three Americans must obtain permission from the government to pursue their chosen profession. 
  • The cost of these laws to consumers is astonishing. One 2011 study estimated that occupational licensing laws increase costs to consumers by a whopping $203 billion per year. As a result, some people are not able to afford some services, including crucial ones like dental care. A 2009 study found that states allowing dental hygienists to provide routine dental care had fewer adults with missing teeth than those that did not.
  • Occupational licensing laws destroy millions of American jobs — by one estimate, a whopping 2.85 million jobs. They make it prohibitively expensive or too difficult for newcomers to enter fields in which they have competency but can’t afford costly and unnecessary training and licensing. 
  • Occupational licensing laws slow or even halt innovation. One recent example is the use of licensing regulations for taxi drivers to halt new, highly competitive app-based services such as Uber.
  • Among the occupations in which entry is restricted by licensing laws: interior decorators, hair braiders, foot massagers, animal breeders, bartenders, funeral attendants, upholsterers, shampooers, music therapists, auctioneers, talent agents, and ballroom dance teachers. 

Of course, supporters of occupational licensing argue it is needed to protect the public from unscrupulous or incompetent practitioners.

However, reports the Institute for Justice: “Research to date — on occupations as diverse as school teachers, interior designers, mortgage brokers, dentists, physicians and others — provides little evidence that government licenses protect public health and safety or improve the quality of products or services.”

Astute Liberator Online readers can probably guess the real reason these laws exist.

“These laws are created under the guise of ‘helping’ consumers,” wrote Adam B. Summers of the Reason Foundation in a 2007 study. “In reality, the laws are helping existing businesses keep out competition, restricting consumer choice, destroying entrepreneurship, and driving up prices.”

Further, many of these occupations are in fields where, in the past, the poor, immigrants and other challenged workers — those with the least resources — have been able to get a toehold in the economy.

To learn more, check out these resources:

Writing at National Review Online, economist Veronique de Rugy sums up the problem nicely:

“People who want to work, start businesses and make a living shouldn’t have to ask the government for permission to do so. Consumers can take care of themselves, especially with our sharing economy and the easy feedback mechanisms it offers. …

“Many of the licensed occupations have traditionally provided low-income Americans with a path to self-sufficiency and upward mobility. By erecting barriers to entry to these occupations, we erect barriers to entry to the American dream.”

Uber Revolution Shows How “Competition Breeds Competence”

in Business and Economy, Liberator Online Archives by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 4 of the Liberator Online. Subscribe here!)

UberThe reaction of taxi companies to the sudden new competition from Uber and Lyft is revolutionizing the stuck-in-its-ways taxi industry — and it offers an excellent demonstration of how strong competition enormously benefits consumers, says economist Mark Perry at his blog Carpe Diem.

Writes Perry:

“When government agencies or heavily regulated industries are insulated from market competition, the incentives to offer better service and lower prices, along with the incentives to innovate, upgrade and improve are either significantly weakened or non-existent. But when faced unexpectedly with some market competition, it’s amazing how the normally sclerotic, anti-consumer and unresponsive government agencies or protected industries can suddenly become responsive and consumer-friendly.”

Perry quotes an article from the Los Angeles Times:

“All taxicab drivers in Los Angeles will be required to use mobile apps similar to Uber and Lyft by this summer, according to a measure passed by the Los Angeles Taxicab Commission this week.

“The order, passed on a 5-0 vote, requires every driver and cab to sign onto a city-certified ‘e-hail’ app by Aug. 20 or face a $200-a-day fine. The move is seen as a way to make taxicab companies more competitive with rideshare apps such as Uber and Lyft.

“Los Angeles cab companies reported a 21% drop in taxi trips in the first half of 2014 compared with the same period the previous year, the steepest drop on record. Cab companies largely attribute the drop to the popularity of app-based ride services.

“William Rouse, general manager of Yellow Cab of Los Angeles, says his company has utilized a mobile app for several years. The app, Curb, allows riders to hail and track a cab, provide payment and rate drivers. ‘If our industry is ever going to get a chance to move passengers from Uber back to taxis, each one of these companies should have an app,’ Rouse told The Times. ‘It’s a shame that the city had to mandate it in order for this to happen.’”

And this stunner, from ABC News last summer:

“Meet the new secret weapon to get a leg up in the cutthroat competition among cabbies — charm school. Taxi drivers in Washington state are getting lessons that they hope will give them an edge against startups such as Lyft and Uber. About 170 taxicab operators paid $60 out of their pockets for a four-hour training session to learn about topics including customer satisfaction and developing relationships with institutional clients.”

Taxi drivers going to charm school to learn how to better please customers? Talk about an economic miracle!

It all demonstrates what Perry calls Perry’s Law: “competition breeds competence.” It’s a perfect example, he says, of how “direct, ruthless, even cutthroat competition is often the most effective form of regulation, and provides the intense discipline that forces firms to maximize their responsiveness to consumers. … Government regulation typically reduces competition, which then reduces the competence of producers, and reduces their willingness to serve consumers and the public interest, which make us worse off. I say the more market competition the better, for consumers and for the human race.”

Food Stamps Shocker

in Business and Economy, Liberator Online Archives, Welfare by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 3 of the Liberator Online. Subscribe here!

Exploding Cost of Food StampsSome startling numbers on the recent explosive growth of the food stamp program (aka SNAP, the Supplemental Nutrition Assistance Program), from journalist Ali Meyer of CNSNews.com:

  • The number of Americans receiving food stamps has topped 46,000,000 for 38 straight months, according to the Department of Agriculture. 
  • In 1969, the average participation in the SNAP program stood at 2,878,000. In 2014, the average participation grew to 46,536,000 — an increase of 1,516.96 percent. 
  • About 14.6 percent of the U.S. population — about one in seven Americans — receives food stamps. 
  • Just under 20 percent of the nation’s households — one in five households — receive food stamps. 
  • Food stamp recipients have exceeded 46 million every month since September 2011.
  • Rapid increase: in October 46,674,364 Americans were on food stamps — an increase of nearly a quarter-million people (214,434) in just one month. According to the conservative Heritage Foundation, the number of food stamp recipients grew by about 26.39 million people from 2003 to 2013.
  • The 46,674,364 people on food stamps in the United States in October 2014 exceeded the total populations of Columbia (46,245,297), Kenya (46,245,297), Ukraine (44,291,413) and Argentina (43,024,374), and is just less than the population of Spain (47,737,941).
  • Households on food stamps got an average benefit of $261.44 in October. 
  • In October alone the program cost taxpayers $5,978,320,593 — just under $6 billion. 

While food stamp (SNAP) enrollment and spending have both grown dramatically under President Obama, the Cato Institute notes that the explosion in food stamp use and SNAP eligibility actually began with conservative Republicans under the leadership of George Bush, via the 2002 and 2008 farm bills.

New Study: Minimum Wage Hurts Low-Skilled Workers

in Business and Economy, Liberator Online Archives by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 19, No. 25 of the Liberator Online. Subscribe here!)

A new paper from the National Bureau of Economic Research brings new weight to the argument that significant minimum wage increases hurt the very people they are intended to help — low-skilled workers, especially teens and minority workers.

minimum wageEconomists Jeffrey Clemens and Michael Wither examine the effects of the minimum wage increases in 2007, 2008 and 2009. They find that minimum wage increases have three devastating effects upon low-skilled workers: “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.”

The study indicates that the minimum wage can keep low-skilled workers from moving up to a middle class income; such workers experience “significant declines in economic mobility.” Charles Hughes of the Cato Institute explains:

“Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.”

Adding weight to these findings is a report earlier this year by the non-partisan federal Congressional Budget Office estimating that a three-year phase in of a $10.10 federal minimum wage option would reduce total employment by a stunning 500,000 workers.

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, nicely summed up at MarketWatch the massive problems created for low-skill workers by the minimum wage:

“Minimum-wage laws criminalize low-skill work. Imagine being forbidden to work. That is the case for people with skills under $8.25 an hour. The federal hourly minimum wage is $7.25, and additional costs, such as Social Security, unemployment insurance, and workers compensation bring the cost of employment closer to $8.25. The minimum wage is one reason why the teen unemployment rate is 18%, the youth (20 to 24) unemployment rate is 11%, and the African-American teen unemployment rate is 28%. Those groups have markedly lower skills than average. …

“When the minimum wage is set above someone’s skill level, that person is left on the sidelines. If people cannot get their first job, how can they get their second or third? People who take minimum-wage jobs gain entry to the professional world. Once they are in, they can keep rising.”

A short, highly readable summary of the negative effects of the minimum wage is the 2004 booklet “Minimum Wage, Maximum Damage: How the Minimum Wage Law Destroys Jobs, Perpetuates Poverty, and Erodes Freedom” by Jim Cox, published by the Advocates and available at our online Liberty Store.

Free Market or… Freed Market?

in Business and Economy, Communicating Liberty, Economic Liberty, Liberator Online Archives by Sharon Harris Comments are off

(From the One Minute Liberty Tip section in Volume 19, No. 10 of the Liberator Online. Subscribe here!)

Free MarketHere’s a neat little phrase that can be very handy when talking about economics: “freed market.”

No, not “free market.”

Freed market.

Here’s why.

As we’ve discussed in the past, “capitalism” is often not a very useful word for libertarians to use to describe the economic system we advocate. Sheldon Richman of the Future of Freedom Foundation gives some good reasons for not always using the word “capitalism” here.

A more accurate and more popular (according to a Gallup poll) alternative I’ve discussed is “free enterprise.”  Also good is “free market.”

But even these useful words are often hijacked by big-government conservatives and others who don’t really mean what libertarians mean by genuine free enterprise.

Today’s economic system is nothing like a free market. Yet it is often described as one. So, when people see massive economic problems and scandals all around them — subsidies and bailouts of rich businesses, unemployment, high taxes, dangerous products, corporate favoritism, monopolies — all of which are due to anti-market actions — it’s natural that they would oppose the “free market” system that we supposedly have. After all, the terms “capitalism” and “free market” are frequently used by those who defend this very system.

Ugh! What confusion!

Which makes “freed market” a great phrase to toss into a discussion.

For example, asked about your economic views, you might say: “I believe in the free market. Or, to be more precise, a freed market.”

Your listener: “What do you mean, ‘freed’ market?”

And that gives you the chance to explain what libertarians actually believe. Something along these lines:

“I want to see our current economic system freed up, for consumers and for competitors. A free market — which we don’t have today — would do that, and we’d all benefit.”

You then persuasively share the many ways everyone would benefit from this.

The use of “freed market” lets you point out how government meddling and crony capitalism, not the market, are responsible for today’s economic woes. It frees you from defending the present system, while still letting you use successful examples from that system as examples of what libertarians are striving for.

Importantly, “freed market” also makes it clear that we don’t have a free market today. It makes it clearer that you are talking about a goal, a better future, something different and better than the status quo.

In short, it lets you present the free market as the solution — not the cause — of today’s problems. It lets you offer a vision of a better future — not a defense of current abuses.

It’s a neat little twist.

The word “freed market” and the idea behind it have been discussed a lot at the Center for a Stateless Society. Here’s an excerpt from “Embracing Markets, Opposing ‘Capitalism’” by Gary Chartier that nicely points out the difference between the economic system we have today — and the free market libertarians want to see:

“To a very significant degree, the economic system we have now is one from which peaceful, voluntary exchange is absent. An interlocking web of legal and regulatory privileges benefit the wealthy and well connected at the expense of everyone else (think patents and copyrights, tariffs, restrictions on banking, occupational licensing rules, land-use restrictions, etc.). The military-industrial complex funnels unbelievable amounts of money — at gunpoint — from ordinary people’s pockets and into the bank accounts of government contractors and their cronies.

“Subsidies of all kinds feed a network of privileged businesses and non-profits. And the state protects titles to land taken at gunpoint or engrossed by arbitrary fiat before distribution to favored individuals and groups. No, the economies of the US, Canada, Western Europe, Japan, and Australia, at least, aren’t centrally planned. The state doesn’t assert formal ownership of (most of) the means of production. But the state’s involvement at multiple levels in guaranteeing and bolstering economic privilege makes it hard to describe the economic system we have now as free.”

With the right listeners, the term “freed markets” can help you open minds to a new understanding of genuine economic freedom and the blessings it can bring.

Thursday, June 5, 2014: Online Liberty Campaign “Reset The Net”

in Business and Economy, Liberator Online Archives by Sharon Harris Comments are off

(From the President’s Corner section in Volume 19, No. 9 of the Liberator Online. Subscribe here!)

Fed up with government surveillance spoiling the freedom and fun of the Internet? You’re not alone. And now there’s something you can do about it.

“Don’t ask for your privacy. Take it back.” Reset the Net - June 5, 2014

That’s the theme of Reset the Net — a new worldwide coalition of organizations, companies and tens of thousands of Internet users dedicated to preserving free speech and basic rights on the Internet.

They’re all pledging to “Reset The Net” on Thursday, June 5th, 2014 — the anniversary of the first NSA surveillance story revealed by whistleblower Edward Snowden — by empowering Internet activists, companies and organizations to take simple steps to encrypt the web to shut out the government’s mass surveillance capabilities.

And you can join them.

Organizations — including some of the Internet’s largest and most influential — will participate by publicizing the effort, improving their own security and promoting free privacy tools to their followers.

Individual Internet users can act with Reset The Net in several important ways. Reset The Net will offer a free “privacy pack” of safe open-source software tools for easy encrypting of chat logs, email, phone calls and text messaging, as well as information on other ways to secure online life against intrusive surveillance.

” These super-easy encryption tools let you talk, chat, and text with pretty strong privacy,” says Reset The Net. “If everyone used them, that would go a long way to shutting down mass surveillance. So, be the first. And tell your friends. In the end, beating the NSA could be that simple.”

Reset The Net will offer supporters a splash screen they can run at their websites on June 5. These screens will reach millions with a call for privacy and a link to the privacy tools pack. You can also join the worldwide #ResetTheNet Twitter brigade to publicize the effort.

Information on these and other activities is at the Reset The Net website. Watch the short video on the home page to learn more.

“The NSA is exploiting weak links in Internet security to spy on the entire world, twisting the Internet we love into something it was never meant to be,” says Reset The Net. “We can’t stop targeted attacks, but we can stop mass surveillance, by building proven security into the everyday Internet.”

For more information — and more ideas on what you can do — watch the short ResetTheNet.org campaign video and visit ResetTheNet.org.

And remember the date: June 5th, 2014.