Public-policy makers in Washington and many state capitals seem bound and determined to worsen the economic recession by burdening cash-strapped households and businesses with new taxes, fees, restrictions, and paperwork. Conservative and libertarian think-tankers continue to document the consequences.
• The tax bill from “cap-and-trade” proposals will be steep, according to a new report from the Tax Foundation. Forget all the promises of offsetting it with a few hundred dollars in federal tax credits. Adjunct scholar Andrew Chamberlain estimates that cap-and-trade will cost the average household $1,218. In share of income terms, the bite will be bigger at the low end of the distribution — 6.2 percent of income for the lowest 20 percent of households, 3.2 percent for the next quintile, and 2.4 percent for the middle quintile. Regionally, the South gets socked. Gee, thanks.
• The Manhattan Institute’s Steven Malanga offers a great case study of the effects of government regulation on entrepreneurship: the dance-studio business. As a former dance teacher myself, I appreciate Malanga’s Dancing with the Stars tie-in and a personal example closer to his heart:
Ask the typical dance studio owner about government and the first thing he or she will probably tell you about are all the ways it makes life difficult: the building inspector who suddenly decides there’s something wrong with the ceiling in the studio that he’s seen a dozen times before but now deems a violation. The incessantly rising property taxes that eat up some of the incremental revenue you’ve earned from expanding. The state labor department that keeps trying to get you to pay unemployment insurance for that freelance instructor who shows up once a month to teach a random lesson—forcing you to tell the guy he can’t come to your place anymore because it isn’t worth the cost of hiring lawyers to fend off government.
It was just such headaches that helped prompt my wife to give up a few years ago her studio in New York City, maybe the toughest place to do business in America.
• Other jurisdictions are contesting NYC for the title, unfortunately. The Reason Foundation’s Leonard Gilroy offers an instructive comparison between California and Texas. The Golden State uses tax policy to punish success and regulatory policy to discourage entrepreneuership. The Lone Star State imposes some of the nation’s lowest tax and regulatory costs. The results couldn’t be clearer. Among other indicators, Texas was the site of 70 percent of all new job creation in the United States last year.
• Even after Arlen Specter came out against the union bully bill, at least for now, why are Democratic members of Congress pushing forward with card check or similar measures to weaken the secret ballot and impose binding arbitration on unionized workplaces? Some Republicans allege that the Democrats are simply too beholden to labor union support to stand up against their political benefactors, but that doesn’t quite capture it. It assumes the Labor and the Dems are two different groups. As the Mackinac Center’s Paul Kersey explains, card check is as much about strengthening Democratic politics as anything else.
• Stitching these kinds of issues together into a coherent political message will be a challenge. NR’s own Ramesh Ponnuru speculated about the future of conservative politics during a speech at my think tank, the John Locke Foundation. You can watch it at our video site, Carolina Journal TV. Look for the “Locke Box” feature.