No Income Tax=Faster Growth

In their 2015 book, “The Wealth of States,” Arthur Laffer, Rex Sinquefield and Travis Brown examined the 11 states that have adopted income taxes since 1960. All 11 grew more slowly than the national average and all of them had slower job growth.  Meanwhile, since 1990 the nine no-income-tax states have had twice the population growth and job creation as measured by payrolls, and about one-third faster total income growth than the high-tax states like New York, California and New Jersey. A no-income-tax policy is a flashing billboard telling employers: We’re open for business.

Environmentalism and Electric Cars

3 Questions for the Settled Science Crowd

According to Progressives, Global Warming is "settled science".  Beyond the obvious point that it is settled only among those who wish it so, I do have three serious questions:

1.  Most of the climate models advanced a couple of decades ago predicted warming that has not since come to pass. How certain are you that the other predictions of these models are now accurate?

2. Why is it you think that we have the technology resources to counteract the enormous forces that have driven the climate to constantly change over millions of years?

3. What evidence can you offer that the cost of fighting a changing climate is less than the cost of adapting to a changing climate? Maybe instead of trying to protect existing vineyards in the Napa Valley it might be cheaper to plant vines in Greenland (like they did during the last warming period)?

Obamacare's Effect on Worker Hours

Thanks to Obamacare, the number of people working more than 30 hours has fallen as employers are incented to reduce worker hours below 30.

Yes, The Middle Class is Shrinking . . .

 . . .  but not because they've gotten poorer.

If a couple of people in your middle class neighborhood earn more money, the percentage of households represented by the remaining middle class shrinks. But isn't this a good thing?

The Rational Economic Reason for Income Inequality

Ever notice the price of gasoline or beef or television sets rises when demand increases and/or there is a shortage of supply? Ever notice that prices fall when there is a glut of supply or demand decreases? Of course you have. That's just the way economics works, right?

But when it comes to labor prices, somehow this relationship is not supposed to hold. Over the last thirty years (at least), the demand for high-skill labor -- the sort that requires advanced training and often a college degree -- has been increasing rapidly. The supply of that skilled labor has not increased nearly as fast. At the same time the demand for unskilled labor has been falling as more and more routine functions are done by machines rather than people. Meanwhile the supply of unskilled labor has been steady to increasing (especially due to immigration).  What would you think the consequence of this to be? That's right, wages paid to higher skilled labor would grow faster than those paid to lower skilled labor.

This obvious and efficient* phenomena goes by another name in the political realm: Income Inequality. There is only one way to change the underlying fundamentals (assuming you want to): increase the supply of skilled labor and reduce the supply of unskilled labor. The former can only be accomplished by getting more people into post-high school programs (not necessarily a 4 year college) that equip them with higher value skills. The most likely way to accomplish the latter is to restrict immigration of low-skilled people. This would require the US to adopt an immigration policy that prioritized economic viability over family ties. Sorry, but that means that someone from China you don't know will get a visa rather than your illiterate brother Fernando. 

* Income inequality serves the same economic purpose that any price does. The greater the income gap between skilled an unskilled, the more incentive there is to acquire skills. When there were plenty of semi-skilled jobs that paid you $50,000/year, the incentives were low. When those same skills will only pay you $35,000, the incentives are higher. 

California Dreaming

What do you think the odds are that the recently adopted minimum wage (which will, in real terms, be about 30% higher than ever before) will have an impact on businesses and hiring in California. You would think there are some things so obvious even a California legislator could see them.