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CHRIS EDWARDS, CATO INSTITUTE Another day, another news article supportive of raising the federal gas tax. This time it’s the Wall Street Journal. The article notes that there is strong public opposition to raising gas taxes, but then proceeds to give us the arguments in favor of it, but none...
CHRIS EDWARDS, CATO INSTITUTE I have posted an updated plan to cut spending by one fifth and balance the federal budget. These cuts are not the only ones needed, but they are a mix of reasonable reforms spread broadly across the government. A new poll discussed in Govexec.com finds that “Americans...
CHRIS EDWARDS, CATO INSTITUTE The Trump administration proposed privatizing the Power Marketing Administrations (PMAs) in its budget last year.  Cato has released a study discussing the PMAs and the advantages of privatization. https://tinyurl.com/yb4lsb39 The federal government has been in the electricity business since in the mid-20th century. Over time it has become clear that...
CHRIS EDWARDS, CATO INSTITUTE Congress may loosen 401(k) rules to allow Harvey and Irma victims to access their retirement savings without the usual 10 percent penalty on early withdrawals. The Washington Post reports mixed views from experts on the idea. In the past, the government has allowed “hardship loans” against 401(k) assets in...
CHRIS EDWARDS, CATO INSTITUTE Tomorrow at CPAC, I will discuss some advantages of infrastructure privatization. Perhaps the largest advantage is innovation. Unlike government bureaucracies, private firms in a competitive environment are eager to maximize the net returns of projects, so they find new ways to reduce costs and improve quality. The...
CHRIS EDWARDS, CATO INSTITUTE The Tax Policy Center (TPC) has released a new analysis of the Tax Cuts and Jobs Act passed in December. The analysis examines the distributional effects of the individual income tax changes separately from the corporate and estate tax changes. In the abstract of the new report, TPC suggests...
CHRIS EDWARDS, CATO INSTITUTE Infrastructure is in the news as policymakers face a deadline to pass a new highway bill. President Obama visited the Tappan Zee Bridge yesterday and said that “rebuilding America … shouldn’t be a partisan issue,” and then cast blame on the Republicans. The president is right that...
CHRIS EDWARDS, CATO INSTITUTE The Bureau of Economic Analysis (BEA) has released data on worker compensation for 2016. The data show that wages and benefits for federal-government workers grew faster than for private-sector workers last year. Federal workers now receive 80 percent more compensation, on average, than do workers in...
CHRIS EDWARDS, CATO INSTITUTE The Washington Post reports that President Obama is cheerleading for more spending on high-speed Internet, tablet computers, and Wi-Fi in the nation’s K-12 schools. There are budget and federalism reasons why the president of the United States should not be sticking his nose into local schooling...
CHRIS EDWARDS, CATO INSTITUTE Kansas Gov. Sam Brownback (R) has become a punching bag for liberal pundits. They particularly dislike his tax reforms, which they say are causing a state budget disaster. Nicole Kaeding and I awarded Brownback an “A” on our “Fiscal Report Card.” So let’s take a look at...
CHRIS EDWARDS, CATO INSTITUTE A tax reform is spurring a savings revolution in Canada. Amity Shlaes and I wrote about Canada’s Tax-Free Savings Accounts (TFSAs) in the Wall Street Journal in August. We think that such accounts would be a fantastic policy reform for America. They would simplify the taxation...
CHRIS EDWARDS, CATO INSTITUTE Part of the federal government is closed today because the two parties cannot agree on a discretionary spending plan for the balance of fiscal 2018. No compromise has yet secured the 60 needed votes in the Senate. The government had been operating under a “continuing resolution”...
CHRIS EDWARDS, CATO INSTITUTE In recent decades, the Democratic Party has moved far to the left on economic policy. I have discussed the leftward shift on tax policy, which was illustrated once again by President Obama’s generally awful proposals in his new budget (see here, here, and here). What about regulations?...
CHRIS EDWARDS, CATO INSTITUTE President Obama’s tax plan would create “A Simpler, Fairer Tax Code,” according to the official fact sheet. The president’s budget uses “simplify” numerous times in describing the plan, and the president declared in his State of the Union address “let’s simplify the system.” The president promised us ‘middle-class economics,’ but...
CHRIS EDWARDS, CATO INSTITUTE President Donald Trump and congressional Republicans are proposing to cut the corporate tax rate. With any tax cut, members of Congress want to know how much revenue the government may lose from the reform. I do not think that cutting our 35 percent federal corporate tax...
CHRIS EDWARDS, CATO INSTITUTE Under the U.S. Constitution, the powers delegated to the federal government are “few and defined,” as James Madison noted in Federalist 45, while the powers of the states “will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and...
CHRIS EDWARDS, CATO INSTITUTE If you are interested in national issues such as defense, foreign policy, and trade, and want to hold public office, you should run for Congress. If you are interested in roads, beaches, subways, and policing, you should run for city council or the state legislature. The push...
CHRIS EDWARDS, CATO INSTITUTE For more than a century, America has been the global leader of the aviation industry. But these days, the government-run parts of the industry are inefficient and falling behind, including airports, security screening, and air traffic control (ATC). International experience shows that these activities can be...
CHRIS EDWARDS, CATO INSTITUTE President Obama’s tax plan would create “A Simpler, Fairer Tax Code,” according to the official fact sheet. The president’s budget uses “simplify” numerous times in describing the plan, and the president declared in his State of the Union address “let’s simplify the system.” The president promised us ‘middle-class economics,’ but...
CHRIS EDWARDS, CATO INSTITUTE For taxpayers needing IRS help, this year’s filing season could be a nightmare. The Washington Post today reports on the long lines at IRS offices. The newspaper suggests that five years of Republican budget cuts are to blame, even though Democrats control the White House and,...
CHRIS EDWARDS, CATO INSTITUTE This small news bite from the Washington Post yesterday caught my eye: Moving costs: Booz Allen Hamilton, the McLean, Va., consulting and government contracting giant, is receiving a $750,000 loan from a Maryland economic development fund and a grant of $250,000 from Montgomery County to relocate 750 Maryland workers from...
CHRIS EDWARDS, CATO INSTITUTE The Office of Management and Budget has released new data on the amount of time Americans spend complying with the federal tax code. Tax Foundation summarizes the data here. Individuals and businesses spend 8.9 billion hours a year on federal tax paperwork, which is equivalent to 4.3...
CHRIS EDWARDS, CATO INSTITUTE President Trump and his advisors are stressing that they want tax cuts for the middle class, not high earners. Trump said, “the rich will not be gaining at all with this plan,” while Treasury Secretary Steve Munchin said, “Our objective is not to create tax cuts for the wealthy....
CHRIS EDWARDS, CATO INSTITUTE The House and Senate have passed bills cutting the federal corporate tax rate from 35 to 20 percent. This overdue reform will spur capital investment, strengthen the economy, and reduce tax avoidance. Republicans have long championed this reform, and President Trump had proposed an even lower...
CHRIS EDWARDS, CATO INSTITUTE An op-ed in the Wall Street Journal today indicates that Edwards’ Law of Cost Overruns is an international standard. If a politician says that a project will cost $100 million, it will end up costing $200 million or more. The WSJ piece by Bent Flyvbjerg and Atif...
CHRIS EDWARDS, CATO INSTITUTE Rep. Ralph Hall is in the news for losing to a primary challenger in his Texas district. I first met 91-year-old Hall just last week as we were on a Capitol Hill panel together organized by the Texas Association of Business (TAB). In the photo, that’s...
CHRIS EDWARDS, CATO INSTITUTE After the terrorist attacks in 2001, the federal government moved quickly to increase spending on aviation security and take control of passenger and baggage screening at U.S. airports. Congress created the Transportation Security Administration (TSA) in 2001, and then transferred the agency to the new Department...
CHRIS EDWARDS, CATO INSTITUTE One of my first professional jobs 25 years ago was with the economic forecasting firm DRI/McGraw-Hill. It was fun work, but I noticed that the firm’s gross domestic product forecasts with models hundreds of equations long were no better than simple forecasts based on the interest rate yield...
CHRIS EDWARDS, CATO INSTITUTE Large government projects often double in cost between when they are first considered and when they are finally completed. This pattern—call it “Edwards’ Law”—is revealed in story after story about highways, airports, computer systems, and other types of government infrastructure. It looks like New York’s World Trade...
CHRIS EDWARDS, CATO INSTITUTE President-elect Donald Trump said on the campaign trail that he will balance the federal budget and cut wasteful spending. Here are some of Trump’s views on budget reforms: “We are going to ask every department head in government to provide a list of...