Archive for the 'Economics' Category

Urban Renewal and Littleton’s Ballot Measure 300

Posted by on Feb 13 2015 | debt, Economics, Regulation, Taxes, Video

Mike Krause intro’s former Littleton mayor Doug Clark’s explanation of why gambling with taxpayer money on real estate is almost always a bad idea in this short 1 minute video.

Littleton voters will be able to have a say on whether government uses their money to get into the land speculation business with Ballot Measure 300.

To learn more about tax increment financing (TIFs), urban renewal authorities (URAs), and Littleton Ballot Measure 300, watch the full Devils Advocate episode below.

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“Progressive” States Have the Greatest Income Inequality

Posted by on Feb 03 2015 | Economic LIberties, Economics, Politics

The percentage of total income received by the top one percent of income earners is a commonly-used measure of income inequality.

The Wall Street Journal recently published a list showing how each state, together with the District of Columbia ranks on this index.

Funny thing: Deep blue states—those dominated by Democrats and liberal Republicans—make up a disproportionate share of the states with the greatest inequality.

In order, the top “income inequality” jurisdictions are:

New York
New Jersey.

It’s easy to explain why Wyoming, Florida, and Nevada are on the list: Those three are among the relatively few states without a personal income tax, so the wealthy might be expected to shelter income there.

But all the rest are solidly “progressive” jurisdictions.

If “progressives” have the answer to income inequality, then how come there is so much income inequality where they are in charge?

The answer, of course, is that “progressive” policies really don’t cure inequality. They aggravate inequality. Policies of government control and and crony capitalism benefit those rich enough to buy influence in the political system and use it to smother the rest of us.

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Do you have a minute? For our Freedom Minute?

Posted by on Jan 29 2015 | Economics, education, Regulation, Taxes, Video

We just got a cool new green screen here at the Independence Institute offices so…. we decided to make one minute, editorial videos. Cause why not?

You can find all of our Freedom Minute’s on our YouTube channel, IITV.

Here are the first few that we’ve done:

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Cato Institute gives Hick an “F”

Posted by on Oct 02 2014 | debt, Economic LIberties, Economics, Economy, TABOR, Taxes

Our friends over at the Cato Institute just came out with their Fiscal Policy Report Card on America’s Governors (2014). You’ll never guess where our governor lands in their ranking. Would you believe it if I told you Hick is 2nd?! Yes, Governor Hickenlooper – Mr. I haven’t met a tax or debt increase I haven’t liked – earned 2nd.

SECOND FROM DEAD LAST THAT IS. Only California Governor Jerry Brown was ranked lower than Hick.

Don’t believe me? Here’s a picture (click to enlarge):

Screen Shot 2014-10-02 at 3.39.26 PM

Each state get its own little paragraph. Here’s the commentary for Colorado, ranked 49th out of 50:

General fund spending has ballooned over the past three years under Governor Hickenlooper, from $7.2 billion in 2012 to a proposed $9.2 billion in 2015. The governor’s proposed spending increases have averaged 6 percent over the past three years. His most recent budget included a 15 percent spending boost for higher education and new spending on corporate welfare programs. State government employment is way up under Hickenlooper, rising 16 percent since he came to office. He pushed for a huge personal income tax increase on the ballot in 2013 to fund education, which would have raised more than $900 million annually. If passed, Amendment 66 would have replaced Colorado’s flat income tax of 4.63 percent with a two-rate structure of 5.0 and 5.9 percent. Luckily for Colorado taxpayers, this increase was soundly rejected by voters, 65 to 35 percent.

Read the whole thing here.

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Linda Gorman on the Health Care Commission

Posted by on Sep 10 2014 | Economics, Health Care, health control law

In this previous legislative session, Senate Bill 187 was passed to create a health care commission for the purpose of discovering what drives health care expenditures in Colorado. Health Care Policy Center Director Linda Gorman was appointed as the sole health economist. Tune in to discover what the commission’s stated goals are and how Linda expects to contribute.

Below you’ll find out latest episode of Independence Institute Television (IITV). For more episodes, visit our YouTube page here.

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Bennett-Burr “Bipartisanship” = Yet Another Federal Power Grab

Posted by on Jan 01 2014 | congress, Constitutional History, Constitutional Law, Economics, federalism, Growth of Government, Health Care, Natelson Rob', obamacare, Op-eds, Rob Natelson, supreme court, Tenth Amendment, U.S. Constitution

When politicians start talking about “bi-partisan cooperation,” smart citizens get nervous. It usually means another transfer of freedom and taxes to the federal government at the expense of individuals, families, localities, and states.

Case in point: a Denver Post op-ed by two U.S. Senators (or their staffs) on their latest “bipartisan” deal. The Senators are Michael Bennett (D.-Colo.) and Richard Burr (R.-N.C.). The op-ed is pure political blather, a haze of almost incomprehensible feel-good rhetoric. But the upshot is this: The two distinguished solons are very proud of themselves for managing yet another transfer of authority from the states to the federal government.

You can read the op-ed here. As you can see, it is filled with mind-deadening phrases refined by pollsters and focus group research: “we have worked with,” “bipartisan,” “ensure the safety,” “stakeholders,” “pragmatism and hard work,” etc., etc.

As for the law itself, it has the kind of title we have come to expect from Congress in recent years: The Drug Quality and Security Act. (Doesn’t that title make you feel good?) Of course, many of these labels have about as much correspondence to the real world as the “Patient Protection and Affordable Care Act.”

The text of the measure is almost impossible for anyone without legal training to understand. (You can see for yourself here.) Essentially, however, it transfers to the federal government areas of drug compounding and distribution traditionally controlled by the states. It imposes new obligations, licenses, and/or paperwork on manufacturers, repackagers, wholesalers, and your local pharmacy. It takes major steps toward federal control of our state pharmacy boards, and restricts state regulatory choices in the areas it covers.

The bill is also about revenue: It authorizes the federal government to collect various new “fees.” (I put the word in quotation marks because those “fees” are really taxes.)

Like the op-ed, the text of the law is filled with mind-numbing, and sometimes deceptive, language. Consider this provision:

Nothing in this section shall be construed to preempt State requirements related to the distribution of prescription drugs if such requirements are not related to product tracing as described in subsection (a) or wholesale distributor and third-party logistics provider licensure as described in subsection (b) applicable under section 503(e) (as amended by the Drug Supply Chain Security Act) or this subchapter (or regulations issued thereunder).

At first, you might think the bill leaves state regulations in effect. But look closer: The provision really is about where federal law does preempt: “requirements . . . related to product tracing . . .. [and] wholesale distributor and third-party logistics provider licensure.” Another passage makes it clear that much state flexibility is gone:

Beginning on the date of enactment of the Drug Supply Chain Security Act, no State or political subdivision of a State may establish or continue any standards, requirements, or regulations with respect to wholesale prescription drug distributor or third-party logistics provider licensure that are inconsistent with, less stringent than, directly related to, or covered by the standards and requirements applicable under section 503(e).

The measure does not set forth its constitutional justification. In other words, it does not cite any of Congress’s enumerated powers as the basis for the authority it claims. Occasional mentions of “commerce” suggest that it relies on the Constitution’s much-abused grant of power to “regulate Commerce . . . among the several States.” In fact, however, the bill sweeps deeply into in-state commerce and into activities that really are not “commerce” at all.

The op-ed touts the bill’s “strong [meaning "intrusive"], uniform” [meaning "centralized"] standards. But the Constitution limited congressional powers precisely to protect us from too many centralized standards. The federalism created by our Constitution is about local control, responsiveness to local preferences, better government, diversity, and the ability of each state to learn from the experience of others. Moreover, as the Supreme Court has pointed out repeatedly, federalism is also about fracturing power to preserve freedom.

Our Founders and generations of Americans have concluded that human freedom and the other benefits of federalism are worth the occasional inconvenience arising from lack of uniformity. This should be particularly true today, when technology has reduced both the benefits of uniformity and the costs of diversity.

“The Drug Quality and Security Act,” however, appears to have been the product of one of those classic deals among politicians and lobbyists. The two Senators assure us that all the “stakeholders” (i.e., groups with lobbyists) were consulted.

But were you?

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Foundation for Economic Education Event in Denver

Posted by on Oct 02 2013 | Economics, Events

The Foundation for Economic Education, also known as FEE, does a ton of great work. We are excited to join them for their event at the Tavern Uptown tomorrow night at the Tavern Uptown, from 6 to 7:30.

Join FEE Alumni Board Member, Stephen Macaskill, and other FEE supporters, friends and alumni for an evening of drinks and hors d’oeuvres to hear how FEE is cultivating the next generation of innovative free-market leaders in all industries and arenas. Free with RSVP.

RSVP here.

Click here for the official event flyer.


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Colorado’s Billion-Dollar Tax Hike Proposal: Really Bad Constitution-Writing

Posted by on Sep 24 2013 | Amendment 66, Constitutional Amendments, Economics, Economy, education, Initiative 22, Politics, Taxes

Hear Justin Longo’s interview with Rob on Amendment 66 here.

Colorado’s Amendment 66—the billion dollar tax hike—is a constitutional monstrosity.

Amendment 66 is, technically, not entirely a constitutional amendment. It is an unusual hybrid of constitutional amendment and change in the state tax law. The secretary of state refers to it as Initiative 22, and it is on the ballot this fall.

The constitutional change would lock in a hugely-disproportionate share of state spending for a single program at the expense of every other Colorado service, public or private. The statutory change would impose a big hike in the state income tax.

As explained below, the costs across a wide range of areas—including public health and safety—could be immense.

But before we get to that, just think of how unfair this measure is:

Under its rules, everything else would take a back seat to the demands of the school bureaucracy. Law enforcement would suffer. So would disaster relief, parks, the environment, services for the elderly, health care, our universities, not to mention economic investment and the taxpayers’ own needs.

Why? Because Amendment 66/Initiative 22 says that (with a sinister refinement explained below) the state school bureaucracy “shall, at a minimum, receive forty-three percent of sales, excise, and income tax revenue collected in the general fund.” In other words, it requires that we spend nearly half our state general fund for a single service before funding anything else!

And that 43% is only a floor. Amendment 66 demands even more. Here’s why:

* The 43% is in addition to what we pay in property taxes.

* The statutory part adds a steep income tax hike on top of that and gives all he revenue to the school bureaucracy.

* The 43% is calculated on what the older, lower tax rates would have brought in. But an income tax of, say, 20% yields less than 20% more revenue, because of disincentives and tax avoidance. So the 43% is calculated on the older, richer system, not on the newer, poorer one.

Now consider some of the other consequences:

* Because of the 43% strait jacket, the legislature couldn’t freely reallocate existing revenue to new needs. For example, the Denver Post has reported that due in part to funding limitations for supervision, inmates released on parole often commit new crimes, including murder. Yet Amendment 66 would make re-allocating funds to parole supervisions that much harder, thereby endangering the lives and safety of Colorado citizens.

* That means a primary way of allocating revenue would become more tax increases.

* We would be crippled in adjusting school costs to reflect changes in technology or to promote educational accountability. Even if schools don’t do the job or are using money wastefully, they still get their guaranteed cut. This violates a basic principle of Anglo-American constitutionalism: agencies are responsible to the legislature for what they do with appropriated funds.

* State income taxes would jump for everyone—by over 27% for everyone with a taxable income of more than $75,000, and 8% for everyone else.

* And the cost of living would rise for every family in the state—including and especially the poor. This is because tax increases–even they seem to hit only the “rich”—have a way of seeping through an economy like venom. Almost everyone pays in the form of higher prices, lower incomes, and fewer jobs. A tax hike, like water, runs downhill.

* Higher taxes also weaken the entire economy. Don’t be misled on this score: The studies show that the additional spending mandated by Amendment 66 is likely to harm much more than it helps.

* The state income tax hike could wound Colorado’s economic competitiveness and kill Colorado jobs—a serious concern right now. Remember that we are in economic competition with other states and other countries, and several of our neighbors either don’t have an income tax or are cutting, reducing, or phasing out the income taxes they have.

* Colorado’s current tax may look like a flat rate, but because of the base on which it is calculated it is actually somewhat punitive as to income. Amendment 66 would make it much more so. Tax hikes like that have been shown to be particularly damaging to prosperity.

* Because the 43% guarantee is based on revenue from former, lower tax rates, the Amendment 66 insulates the school bureaucracy from the economic damage imposed by the tax hike.

A good constitution protects individual rights and structures government to serve the interests of all. But Amendment 66 mutilates our state constitution to privilege the greedy few. It transfers more money to the bureaucracy to do things that will hurt the general welfare, including the welfare of our children.

This violates every principle of good constitution-writing.

* * * *
P.S.: Here’s the ultimate irony: For years advocates of this money-grab have attacked Colorado’s Taxpayer Bill of Rights (TABOR), claiming it unduly restricts the legislature. Yet now they want to constrict the legislature far more than TABOR does. Hypocrisy, anyone?

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Transportation One-Two Punch

Posted by on May 06 2013 | Economics, Taxes, Transportation

With all the focus on guns, it’s easy to forget about all the other areas the Colorado legislature effects our daily lives – like transportation. Transportation policy has been one of my pet issues for quite sometime. As you may recall, I used to be chairman of the RTD board (see, I’ve got some street cred).

Some important things to note: First, the big light-rail boondoggle moves forward with the recent opening of RTD’s West line. You may have read that it came under budget, but of course that’s not true. It actually costs more than double what they estimated back in 1997. Not to mention it will service less people than originally proposed, making it the perfect combination of a government program: Over budget with less benefits. You can read more about the boondoggle in this Complete Colorado Page 2 editorial, “Light-rail boondoggle moves money instead of people,” from Brian Schwartz and Randal O’Toole.

Speaking of Brian Schwartz… he’s been on fire in relation to transportation these days. Not only did he help write that fantastic editorial for Complete Colorado, he was also quoted in this morning’s Denver Post. In an article describing how the state can now use road money for virtually anything transit related (totally unconstitutional by the way), Brian is quoted as the lone voice in opposition (go figure).

Keep it up Brian, we – and our cars – need you fighting the good fight.

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VIDEO: One on One with Professor Walter Williams

Posted by on Mar 22 2013 | Economics, Economy, Idiot Box (TV Show), PPC, Video

The great economics professor Walter Williams joined me on my show last week. In case you missed it, here is the video.

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