Wrecked Silver Bridge, extending to the Ohio River between Ohio and West Virginia, is shown after … more
Western Virginia must be rich, right? All these federal money flowing there every year. Hopefully readers will see the obvious defect or contradiction.
Government spending is harmful, by its own description. Just because it marks the central design of goods, services and work by politicians, it is economically harmful. Only one economist could believe differently.
That requires us to start with the first principles of finances that have been forgotten in the present debate on state and local tax discounts (SALT). Government spending is harmful. Say it repeatedly because economists will not.
Take the economist of the University Duke Michael Munger. A person with free purchase bent in good condition with other free market types, munger register that “by allowing citizens to deduct state and local taxes to effectively reward high spending states and punish prudence”. Munger’s claim is acceptable to wisdom, and that is the problem. His views violate the basic economic principles.
Really, are “high -cost” states rewarded through salt reductions? How yes? Munger’s comment suggests that the states in which local spending and taxation to finance these costs are quite high of them. It would only be great once if the Munger or a multitude of Rose Bowl’s size he believes would explain how “high -cost” states are rewarded when their politicians are taxed and spent wasted. Whether there is a latent key within the Munger and most of the free market economists, or they have the meaning of salt wrong. Probably both.
To understand why, let’s say again: Government spending is harmful. California, New York, New Jersey and Illinois are rich states despite All local taxation and spending on these states, not because of it. They would be much richer if state and local politicians did not hurt their economies with government spending.
It is a long or short way to say that the salt discount does not reward “high expenditure states”, as Munger and Rose Bowl assume, but rewards the US as a whole by reducing the flow of tax dollars to the federal government. If anything, and assuming Munger et al agrees that government expenditure is harmful, they should shout for a Salt credit For further limiting the federal government’s tax share in economic activity in California, New York and other high tax states. See west Virginia if you are confused.
Is western Virginia rich or rich or because of all federal money that has been flowing for decades and years? Clown question. The central, politicized design of resources is harmful, always and everywhere. Let us call western Virginia and other poor American states receiving gobs of federal money domestic laboratory evidence for the truth that just as foreign aid always fails and everywhere around the world, it fails in the US.
Bringing it back to salt, what Munger et al View as its weakening, that “rewards states of high expenditure and punishes” is its biggest feature. As much as possible we want to limit the harmful effects of government waste to national level by limiting the flow of tax dollars from the US states. Translated, if California wants to tax and spend room, let it do just that. And let’s keep the wealth produced in California by reaching the federal government, so that the national government does not have so much dollars to harm the rest of the country. The salt is simple. It is about the placement of a fence around the big government.
That is why the true goal should be a salt credit. Anything to detect costs and taxation as much as possible. There are your states as workshops. If there must be government waste, let it be in cities and states, not by the national government.
