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In the City of Roses, Fight Against Inequality Might Turn into Nightmare

in Liberator Online, News You Can Use by Alice Salles Comments are off

In the City of Roses, Fight Against Inequality Might Turn into Nightmare

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When the federal government comes down hard on companies, all states suffer. But when state lawmakers pass laws that hurt businesses, these very companies are often forced to move elsewhere, leaving consumers and workers in that state in a bad shape. Who gains is the worker whose state has a more business-friendly set of rules.

Sometimes, those policies are enacted on the local level. Forcing companies to move between cities, taking their jobs with them.

City of RosesIn Portland, Oregon, workers are about to lose. Big time. Unless changes recently enacted are brought down promptly.

According to Fortune magazine, the city has begun fighting a war against income inequality, whether locals like it or not.

Recently, Portland’s City Council voted to create a new tax that would hurt businesses whose chief executives earn more than 100 times what the company’s average employee earns. Breaking a record, Portland has essentially made it a crime for a company to set its own rules regarding what they consider to be fair compensation.

If a company whose CEO makes 100 times more than his or her average employee and it decides to remain in Portland, it will be forced to pay an extra 10 percent surcharge on the 2.2 percent business income tax imposed in the City of Roses.

According to Fortune, “[c]ompanies with CEOs who make 250 times will pay an additional 25” percent.

By using the coercion of the state to pursue a Quixotic goal such as absolute equality, city officials will undoubtedly see their radical move backfire.

As assistant professor of entrepreneurship Per Bylund explained on Mises.org, the only possible outcome is far from what Portland residents imagine.

Instead of helping to reduce inequality, the city is effectively making individuals less equal by imposing extra burdens on companies that will push job creators away. And while companies will have some “wiggle room” when calculating the median employee pay — giving the city the illusion that the new rules are working — Bylund explains that in the long run, “many businesses who were considering [moving to Portland] will not,” while established Portland businesses will end up moving out sooner, “and in greater numbers than otherwise would be the case.” Bylund also adds that, as business begin to move out and few, or perhaps no companies decide to move in, larger local firms will find it hard to hire a CEO. As a result, management efficiency hurts, causing the firm to become less efficient, and adding an extra burden on the consumer. Over time, these companies will tend to stop hiring, which will also lead to more unemployment.

Instead of allowing individual companies to set their own rules, officials are simply making the inequality issue worse by ruining locals’ chances at obtaining a job or launching new companies. Is that what Portland officials really want?

Should Libertarians Work Within the Libertarian Party?

in Ask Dr. Ruwart, Liberator Online, Libertarian Answers on Issues by Mary Ruwart Comments are off

(From the Ask Dr. Ruwart section in Volume 19, No. 1 of the Liberator Online. Subscribe here!)

QUESTION: I’m very disappointed in the Libertarian Party (LP). It doesn’t elect many libertarians. Shouldn’t we just try to take over the GOP and work within that party instead?

MY SHORT ANSWER: Some individuals feel called to do that, but it’s tough. After Congressman Ron Paul qualified to be nominated for president in 2012, the GOP changed the rules at the last minute to exclude him.

The LP has had great success at rolling back Big Government without electing anyone. When the city of Kalamazoo tried to take some land by eminent domain shortly after my run for city commission, an elderly gentleman came up to me and put $200 cash into my hand.

“Dr. Ruwart,” he said, “the city wants to take my bicycle shop. I know your employer, Upjohn, is going to benefit, but YOU are a Libertarian, so I know you are on my side. Take this money and fight them for me!”

Clearly, I had a conflict of interest, but this gentleman trusted me because the LP candidates had made principle their campaign focal point. The local LP joined the fight — and stopped the land grab.

This is what the LP does best. It stops eminent domain, tax hikes, etc. at the local level, even without ever electing anyone.

The LP does this at the state and national level too. LP member Steve Kubby and the California LP were key players in getting the first medical marijuana bill passed. Many states now have medical marijuana laws and a couple have decriminalized it.  Big Government was rolled back without ever electing anyone.

About 80% of the visible critics of ClintonCare (myself included) were libertarians. Although Libertarians haven’t taken credit for it, they were the prime movers in stopping ClintonCare. Big Government was thwarted — for a while, at least — without ever electing anyone.

Maybe the LP should run candidates so that people know where to turn when Big Government comes knocking at their door. Rolling back Big Government is something the LP can do, whether or not it elects candidates.

LEARN MORE: Suggested further reading from Liberator Online editor James W. Harris on this topic:

* “7 Vital Reasons to Join the Libertarian Party Now.” In this short piece the Libertarian Party makes its case for why it is essential in the fight for liberty.

Libertarians Save Taxpayers Billions: “Libertarian Party Successes” by “Critto” is an informal forum post at the website of the Free State Project. It lists a number of major anti-tax efforts initiated by, led by, or joined by, the Libertarian Party. It argues persuasively that the Libertarian Party has helped save taxpayers literally billions of dollars. No doubt this list, which is ten years old, could be enormously expanded. Further, similar lists could be created showing how the LP has helped defeat other oppressive legislation.

(Note, this information is provided for educational purposes. The Advocates does not, and cannot, endorse parties or candidates.)