Category: Public Policy

The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated.  The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater.  The regulation was supposed to help the little guy but as Acton Director of Research Samuel Gregg writes at The Stream, it actually hurts the little guy.

President-elect Donald Trump claims that he wants to deregulate the financial industry but in order for this to happen successfully, we need to understand the argument for why such actions would be beneficial.  Gregg says this:

Consider, for instance, the costs associated with meeting the ever-growing demands of regulatory compliance. Such costs are more easily borne by large banks than smaller-sized institutions such as community banks. The result is that excessive regulation makes it harder for smaller banks to compete. That often puts access to capital out of reach for many people.

But perhaps the most harm which excessive financial regulation inflicts upon ordinary people concerns the ways in which such regulations can — and have — contributed to financial meltdowns. Such crises are far more likely to hurt those on the lower-side of the economic scale than the already-wealthy.

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President-elect Donald Trump

President-elect Donald Trump

Sen. Lindsey Graham, Republican from South Carolina, wants to change the rules of one of the biggest crony capitalist organizations in Washington.  He wants to make it easier for the Export Import Bank to dish out large amounts of corporate welfare to companies such as Boeing, which already brings in revenues upward of $95 billion per year.

USA Today reported in a recent article that “Graham, as chairman of the Senate Appropriations subcommittee that funds foreign operations, has added a provision to the 2017 spending bill that would allow the Export-Import Bank to consider projects of more than $10 million.”

Many supporters of free trade have long opposed the cronyism and corporate welfare of the Export-Import Bank, all while only celebrating minor victories.  In the summer of 2015, the Export-Import Bank’s charter expired forcing it to close its doors until five months later when Congress reauthorized the bank for another five years.

Another minor victory for those who oppose the Export-Import Bank might be the election of Donald Trump.  Although evidence from Trump’s past portrays him as a mercantilist, the president-elect is on record of making critical remarks toward the Export-Import Bank:

I don’t like it because I don’t think it’s necessary. It’s a one-way street also. It’s sort of a featherbedding for politicians and others, and a few companies. And these are companies that can do very well without it. So I don’t like it. I think it’s a lot of excess baggage. I think it’s unnecessary. And when you think about free enterprise it’s really not free enterprise. I’d be against it.

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republican-powerBecause of the recent election, Republicans now control the White House, the U.S. Senate (51 percent), the House of Representatives (54 percent), 31 of the 50 state governorships (62 percent), and a record 67 of the 98 partisan state legislative chambers in the nation (68 percent).

What will they do with all that power and influence?

To predict what policies the GOP will champion over the next two to four years we can turn to the most recent party platform. Although the document is not binding on the presidential nominee or any other politicians, political scientists have found that over the past 30 years lawmakers in Congress tend to vote in line with their party’s platform: 89 percent of the time for Republicans.

Here are the agenda items that are related to issues covered by the Acton Institute. (Note: This level of government that would handle each item is not designated, so some issues may be handled at the state level and others by the U.S. Congress.)

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 In a radio address on July 24, 1933, President Franklin D. Roosevelt referred to the 100-day session of the 73rd United States Congress between March 9 and June 17, a session that produced a record-breaking volume of new laws.

Despite the fact that the 100 days referred to a legislative session and not the beginning of a presidency, the term has become a metric for what a new president can accomplish and how effective they will be during their term. For this reason, president-elects often lay out a proposal for what they hope to accomplish during the early days after the Inauguration.

During a speech at Gettysburg, Pennsylvania last month, Donald Trump laid out his own plan for what he’ll do in his first days. Below is a summary of all the actions related to economics that Trump has promised to tackle in his Hundred Days.
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rules“Power tends to corrupt, and absolute power corrupts absolutely,” is the most famous quote by the English Catholic historian Sir John Dalberg-Acton. But what exactly did he mean by it?

That particular quote comes from a letter to Bishop Creighton in which Lord Acton explains that historians should condemn murder, theft, and violence whether committed by an individual, the state, or the Church. Here is the context:

I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. Power tends to corrupt, and absolute power corrupts absolutely. s, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it.

Here are the greatest names coupled with the greatest crimes; you would spare those criminals, for some mysterious reason. I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher for the sake of historical science.

Lord Acton is saying that rather than excuse “great men” because of the burdens placed upon them by their office or authority, we should judge them even more harshly than we would actions of the common man or woman. It’s ironic that Acton had to tell this to a bishop since the Bible has quite a lot to say about abuse of power. Yet even Christian tend to think that we are immune to the temptations of power and that if we were give more authority we wouldn’t abuse it.
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fairshare-taxesDuring her presidential campaign, Sec. Hillary Clinton has repeatedly said she’d implement a tax system in which the wealthy “pay their fair share in taxes.” Expecting the rich to pay what is “fair” is not asking to much of them. But one question that is rarely considered is, “What if they already do pay their fair share?”

Before we can determine whether the rich pay enough we have to first ask what would be “fair.” How much of total tax revenues should, say, the top one percent of households pay? Five percent? 10 percent? 20 percent?

According to new IRS statistics from 2014 tax returns, the top one percent of households paid almost 40 percent of all income taxes collected by the federal government.

In 2014, 139,562,034 filed an income tax return, putting just under 1.4 million people into the category of “one percenters.” They earned 20.58 percent of all income and paid 39.48 percent of the taxes. The average adjusted gross income (AGI) for the group was $465,626 (the “poorest” people in the group had an AGI of $257,110).

This chart by the Wall Street Journal’s Richard Rubin highlights that the top 25 percent (avg. AGI: $77, 714) paid nearly 86.78 percent of all income taxes.
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Blog author: jballor
Friday, October 14, 2016
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Maerten de Vos - The temple taxOver at the Libertarian Christian Institute, Jamin Hübner engages my reflection on taxation and Sam Gregg’s book, For God and Profit, with his sed contra: “But what if the ‘taxation is theft’ creed is consistent with both Christian and libertarian ideas, and that all things considered, taxation really is theft? And what if we’re simply misreading or misappropriating the New Testament? This wouldn’t be a comfortable or popular conclusion to draw, but it might be the case nevertheless.”

Hübner accuses me of prooftexting because I take as point of departure for my short reflection (not really an argument, I would say) Paul’s instruction in Romans 13:7, “Give to everyone what you owe them: If you owe taxes, pay taxes.” I don’t properly connect my treatment to Jesus, says Hübner, who is “Paul’s primary source.”

Now if all that was said about paying taxes was that short verse in Romans from Paul, then perhaps Hübner may have a point. And I agree that a full argument and exploration of taxation in Scripture would take into account a good deal more, not only of Scripture but of Christian reception of Scripture. Hübner wants us to account for Jesus in our theology of taxation. I’m fine with that. But I think we would probably need to explore the full scriptural witness, too.

Next, Hübner points out that my prooftexting hermeneutic could likewise be applied to legitimate slavery. If he can find a scriptural text where Paul instructs someone to buy slaves, then I suppose I would have to grant him that point, too. The moral status and treatment of taxation and slavery in the Bible are not exactly equivalent, however. Even if “no NT writer condemned [slavery] outright,” neither did anyone of them instruct Christians positively on this matter, e.g. to acquire slaves. But not only are taxes not condemned outright, there are numerous indications, including Romans 13:7, where paying them is positively mandated.

But perhaps all that is just outdated, contextual instruction relevant for the first century but not now. Hübner promises to examine that in a future installment, and in the meantime you should check out his first part. Whether or not I am prooftexting, I think we can agree that our hermeneutical approaches are quite different.

I wonder whether the taxation issue really is just a symptom, however, as the quote from Rothbard at the end of Hübner’s post might indicate. Isn’t the problem for Hübner really the existence of “violence-based governing authorities,” of which taxation is just one manifestation?
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