by | BLOG, FREEDOM, GOVERNMENT, LAW
The world is going nuts. Between May 29-May 31, “Chicago saw its deadliest weekend of gun violence this year as protests, riots, and looting continued to rock the city after the death of George Floyd at the hands of a Minneapolis police officer. A total of 24 people were killed and at least 61 injured by gun violence…. Chicago Police Superintendent David Brown said that 17 of the gun deaths occurred on Sunday alone.”
Yet according to the Washington Post police database that has tracked the number of people shot and killed by police since 2015 there were 9 unarmed blacks and 19 unarmed whites were killed by law enforcement in the entire country in 2019. In other words, more people were killed by rioters and looters in one weekend in Chicago than the total number of unarmed black men in all of 2019. And over Father’s Day weekend, 104 people were shot, 15 fatally, in Chicago. Where is the outrage? What is the REAL problem?
by | ARTICLES, BLOG, GOVERNMENT, HYPOCRISY, OBAMA, POLITICS
Last week, Nick Gillespie of Reason moderated a webinar on policing and protests with Jacob Sullivan and C.J. Ciaramella. Gillespie is a thoughtful libertarian whose discussions I generally enjoy. Thus, I was appalled to hear Gillespie –no less than five times during the hour-long segment–refer to the 2014 Ferguson incident with Michael Brown as the beginning of the focus on police abuse and brutality. That is completely fictional. It was very clearly established that the police did nothing wrong in that case, a determination subsequently confirmed by the DOJ report — under Eric Holder no less!
It’s bad enough that this particular lie continues to be propagated by the left and progressives and repeated again and again, but for Reason to do so? For Nick Gillespie to do so? This is shameful. There are certainly well known cases of very wrongful and egregious cases of police misconduct that inform society’s dealing with the problem. But the Michael Brown incident – with its now famous though absolutely false “hands up, don’t shoot” – is actually a potent example of a mantra of a movement built on a lie.
To present Michael Brown’s case in the same sentence as George Floyd or Breonna Taylor is both damaging and reckless and it undermines the credibility of any meaningful conversation on a very important topic.
by | BLOG, FREEDOM, GOVERNMENT, LAW
In the wake of the George Floyd tragedy, there have been calls to take over police stations and even defund police departments as solutions to perceived systemic racial inequality in law enforcement. Even if systemic racism is a real and serious problem, defunding the police is not in any way a fix. The key reason for this is: any systemic inequality and other systemic bias has been created by the very people who are now demonstrating, because they are responsible for putting in the people who created this problem into office.
Some people are protesting against policing that sends black people disproportionately to jail, claiming police are in more black communities to make arrests. Yet of course many of the 911 calls for police help come from within black communities. To a certain extent, there’s frustration against racism, but the protestors are not advocating for solutions, because they know there’s no simple fix; the liberal democrats and a large number of black leaders have been responsible for the entire political environment of every major city for the last several decades in which there have been protests. So here’s what they should advocate for:
Reform in the areas of qualified immunity, public service union protections, taxpayer funded lawsuit settlements, removing police from non-police activity, such as routine traffic violations and mental health issues, decriminalizing some behaviors and demilitarizing police will go a lot farther to solving issues instead of removing law enforcement altogether.
by | ARTICLES, BLOG, FREEDOM, LAW, POLITICS
I’ve been thinking a lot about the riots lately from my apartment in Manhattan, watching the looters come down my streets without a cop in sight. At first, I understood the protests to be about George Floyd and wanting appropriate action for the officers who were responsible for his death. So far, that has been handled correctly as the powers in charge have said the right things, and the perpetrators have been charged with murder. But now the tone has shifted; the assertion is that systemic police bias exists. However, the proposed fix has now become an outright assault on law enforcement, culminating in some cases in the takeover of police stations and the call for defunding of police units. That is neither okay nor actually productive.
One of the biggest problems with the systemic bias narrative is the fact that the overwhelming majority of cases of racist police brutality have occurred in cities where liberal Democrats, supported by significant involvement of black officials, have been running the system for roughly 50 years. In other words, if systemic racism exists, it exists within the realm of Democrat policies and leadership. Thus the majority of those protesting are–at the same time–the very people responsible for such a racist system in the first place.
A recent article in the WSJ reviewed the very idea of systemic police bias and found that statistics don’t bear out such a charge. “Crime and suspect behavior” on the other hand, are the factors that drive most actions taken by law enforcement. For instance, in 2019, African-Americans accounted for just under 25% of those fatally killed by police, which was a statistic relatively unchanged for the prior 4 years. Likewise, the Washington Post police database shows that in 2019, 9 unarmed blacks and 19 unarmed whites were killed by law enforcement, a number which had decreased since 2015. Furthermore the National Academy of Sciences published an important report in 2019 on the very topic of “officer characteristics and racial disparities in fatal officer-involved shootings” which concluded: “we did not find anti-Black or anti-Hispanic disparity.”
The problem is more police quality control than it is police bias. Very often, police unions use their power to represent a bad cop (as is their job), giving bad cops protection instead of accountability. In the case of George Floyd, the officer who knelt on his neck allegedly had a total of 18 misconduct reports in his file, and yet he was still allowed to hold a badge. But this isn’t a new thing. The Atlantic took pains back in 2014 to chronicle how police unions and arbitrators keep bad cops on the street. Yet they still exist largely unchecked today. Want true systemic reform? Tackle the issue of police unions.
In fact, there are other policy changes that can be done to ameliorate the situation. Starting with ending ludicrous public service union protections as mentioned above, we can also limit qualified immunity, make the offending police individual or department be responsible for lawsuit settlements, and end militarizing the police. Such items are the result of years and years of liberal and minority policies that have produced the broken system we see today. These areas of police reform will go a long way toward rebuilding public trust instead of removing law enforcement from the public altogether.
by | ARTICLES, BLOG, COVID, ECONOMY, GOVERNMENT, QUICKLY NOTED
Veronique de Rugy (one of my all time favorite people) and Tad DeHaven of the of the Mercatus Center have written a wonderful article about why there should not be state bailouts (pandemically-induced or otherwise) It is a great read here:
A key thing to note is about Veronique’s observation of why New York’s perennial claim that it sends more money to Washington than it gets back. The situation occurs because 1) the federal tax code is very progressive (thanks to NY and the other liberal states that insist on it) and New Yorkers have high incomes, and 2) NY receives relatively less money in the form of federal contracts and federal employee wages: (my note: this is logically caused by the fact that New York has made itself such a terrible place to do business -including sky-high costs and ridiculously burdensome regulation and taxes- that it can’t compete for these projects. Furthermore, the fact that New York taxpayers send more to Washington than they get back has nothing to do with why the government can’t balance its budget. The government is not the taxpayer. The states send no money to Washington – their earners do.
The states often argue that if corporations can get bailed out, states should as well. But note, that before there is ever a consideration of a corporate bailout, the corporation has taken dramatic steps to stem the problem, chopping costs, revising operations, and demonstrating that with the bailout funds the entity will again be viable. There is also a promise to repay the amounts with a significant return to the government.
But what about the states? There has been virtually no movement to reduce their budgets – in fact, NY continues to show that it is not only refusing to lay off personnel whose jobs are no longer viable, but they intend to go ahead with scheduled increases even to employees who are not working. No company would dream of requesting a bailout in those circumstances. And without serious and immediate cutbacks, how would the states ever have the capability to repay any bailout funds?
Many states have failed their fiduciary responsibilities to their citizens. If these lawmakers requesting bailouts are so concerned about their states, they should aim to reduce the size and scope of their governments, and the wildly out-of-control spending that created revenue shortfalls prior to the pandemic, instead of expecting others to subsidize their irresponsibility.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, NEW YORK, TAXES
For years, I’ve been pounding the table about how public sector wages and compensations have steadily outpaced those found in the private sector. This is no more readily apparent than in New York where runaway budgets and deficits continuously fleece the taxpayer.
The private sector has several factors in place that help control runaway costs, chief among them being competition. The profit motive in the private sector keeps compensation at levels where economic factors limit them to their true market value, reflecting economically rational and fair compensation levels. On the other hand, there are no such competitive inhibitions in the public sector where politics and cronyism, rather than economics, create a fairy-tale negotiation for wages and benefits.
Here’s a tale of two states: New York and Florida. In New York, it is clear that public service unions are a significant reason why the cost of living is higher. In 2010, Florida’s population was 18.8 million while New York’s was 19.3 million. In the past ten years, New York experienced population stagnation (19.4m) while in Florida, the population grew to 21.8 million and continues to be one of the fastest growing states in the country. Yet crucially, over the same period, New York’s budget increased to $177 billion while Florida’s was a mere $93 billion, up from 70.4 billion in 2010. One could argue that New York does more for its people than Florida does, but the reality is that they just spend more money. Bloated public service payrolls and off-the-charts cost burdens of regulation are the main culprits. And that’s the problem.
I propose that the people of New York withdraw its authorization to its elected officials to enter into any contracts with public service unions that provide compensation, benefits, and terms in excess of those being paid for similar work and skills in the private sector. Furthermore, there should be a requirement that restricts any federal government employee from receiving a raise if it puts his compensation in excess of the benefits and wages paid for the same work in the private sector.
By “competing” per se with the private sector for compensation, the government can do its part to help keep its budget and deficits from getting any more out of control.
by | ARTICLES, BLOG, GOVERNMENT, NEW YORK, POLITICS, TAXES
New York’s state budget director, Robert F. Mujica, Jr., wrote an anemic, laughable Letter to the Editor (printed in the Wall Street Journal) trying to defend New York’s fiscal record in an effort to get a federal bailout. Those of us who live in New York couldn’t help but notice it was full of half-truths. For instance, Mr. Mujica boasted lowering income-tax rates, but neglected to include the fact that Florida doesn’t even have an income tax yet still manages to operate on a budget of $93 million vs NY’s $177 million — in a state with 2 million more people!
Furthermore, he talks about a 20% increase of private-sector jobs, but leaves out the fact that “private job growth in Florida has been about 60% higher than in New York from Jan 2010 to Jan 2020.”
Likewise, he claims that New Yorkers send $29 billion more in taxes to the federal government than it gets back, but fails to mention that the reason for this is New York’s tax code punishes high income earners by adding extra taxes, so much that some earners pay nearly 50% of their earnings in taxes! Nor does he mention that many wealthy New Yorkers have wised up to being fleeced over the last decade, making New York one of the top ten out-migration states in order for earners to try to keep their own income — some going to Florida, no less. This loss undoubtedly contributes to the $6 billion budget shortfall that existed before Coronavirus even hit, something that was also conveniently left out of his defense.
Finally, Mr. Mujica tries to suggest that the $29 billion New Yorkers send to the federal government somehow subsidizes Florida’s budget because Florida receives $30 billion more from the federal government than Floridians send. But he leaves out the fact that New York’s budget contains 35.9% of federal money compared to Florida’s 32.8%. With a budget of $177 billion, that’s $63 billion of spending from federal dollars compared to $30 billion in Florida. Who is more fiscally irresponsible?
If states like New York are not willing to take any of the economic risk going forward, they should not get any money. They have willfully chosen to engage in a prolonged economic lockdown in hopes that someone else pays for it. Florida was one of the last states to shut down and has begun opening up once again, understanding the need for economic recovery. If New York wants to continue to take the economic risk of staying closed while other localities choose to reopen, they should be the ones to pay for it.
by | BLOG, FREEDOM, MEDIA
Alan Dlugash is a member of the New York State Society of CPAs (NYSSCPAs) serving on the Individual Tax Committee (and a previous chair), and is currently also a member of the IRS Relations Committee. He has also served on the Society’s Task Force on Tax Simplification as well as on the Special Committee for Reform of the Tax System whose report had been widely circulated. Additionally, he is a member of the American Institute of CPAs (AICPA) and its Tax Division.
Mr. Dlugash has over 40 years of accounting and taxation experience and recently gave an interview to the Atlas Society talking about taxes, bailouts, and New York City. Here are some highlights.
On taxing the rich:
“The standard view of Robin Hood is that he stole from the rich to give to the poor. But that’s not really what happened. Robin Hood didn’t steal from the rich. He stole from the government, which was impoverishing the people with excessive and inappropriate taxes. He stole from tax collectors, not the rich. Robin Hood, read correctly, is a libertarian.
The rich are people who create things that people want to buy. The government, on the other hand, doesn’t do anything productive. It takes your money then redistributes it to special-interest groups.
Taxing wealthy people and giving it to poor people does not make people more equal. It does the exact opposite. High taxes mean less money reinvested in businesses, which means fewer jobs. Moreover the people who get the money transfers are less likely to risk those benefits, which keeps them dependent and relatively poor. The idea that we can tax the rich to solve our problems is just wrong. Taxing the rich is just a recipe for making everybody worse off.
There are many, many ways in which the tax code is ridiculously unfair, but because high earners are often the victims, no one cares. There hasn’t been an honest article written on taxes in the New York Times in 20 years.”
On bailouts:
“In 2008 – 2010, the need for the Treasury to get involved was legitimate. Once they determined that the economy wasn’t going to tank, however, and that the banking system wasn’t going to collapse, after the first week or ten days, that should have been the end of it. Their review showed that the banking system was safe.
But politics overruled logic. There were really only a handful of banks that were in trouble because of the mortgages that the banks were holding. Most of the banks were not in danger. They were able to quantify their situation. But the Treasury decided that they were going to force every bank to take a bailout as if it were failing. This way, people wouldn’t know which banks were in trouble but think that all the banks were in trouble instead. I don’t know what they were drinking, because it was the dumbest idea ever. And they lied. That was the other thing. The government forced the banks under threat of criminal prosecution. If anyone hasn’t read John Allison’s book, The Financial Crisis and the Free Market Cure, about his experience at BBT, then read it now.
To me, the ensuing Obama Stimulus was criminal. Either stupid or evil, I’m not sure which. Obama just called it a stimulus package, but it was nothing of the sort. A stimulus is a one-time deal. The money goes out and is spent, and the budget returns to what it was. The administrative state had grown so big, however, that nothing like a shovel-ready project was possible. What Obama did instead was increase welfare, increase teacher pay, lower the threshold for people to qualify for food stamps, and other things that would not disappear as a one-time stimulus outlay but rather remain in the budget, which created huge deficits during the rest of his Administration.
Now, with the coronavirus pandemic, things are going to get even worse. We’re in a horrific situation, because we do need to deal with the virus. And we will need to spend. The best we can hope for is that they decide on an amount to spend in that regard, then make a commitment that once the virus danger is over to cut the budget.
Without the virus problems, which are new and severe, most of the budget is Medicare, Medicaid, and Social Security. If those programs are not reformed, our budget deficits will be impossible, coronavirus or not. There will be a tipping point. For a long time people have said, “Yes, we have a massive deficit, but it hasn’t hurt us so far, so let’s keep spending.” They ignore Stein’s Law: “If something can’t go on forever, it won’t.”
Well, we will wake up one day, and the rest of the world will have decided not to buy our debt any more. Our ability to keep printing money will end. People will no longer be willing to buy our bonds. There will either be huge inflation, or we’ll be unable even to refinance our maturing bonds. When something like that happens, I don’t know how we will undo it. I think we need to practice fiscal restraint now. Deal with the virus, absolutely, but afterwards commit to cut entitlements.
And it isn’t just the responsibility of government. People have to stop electing irresponsible politicians, stop believing pie-in-the-sky promises. Government has never been the answer. It is individuals who will pay the consequences of these massive deficits, and individuals who need now to take responsibility for their own finances and their own well-being.”
The interview is worth to read in its entirety, which you can find here.
