BLOG
Why the Income Tax Is Just Plain Evil
Despite this coming from someone who used to tease about government being the root of all evil just to get a rise out of people, this is not hyperbole. The income tax is evil – truly, seriously evil. It should die at every level of government. There is nothing about it that is even slightly redeeming. The income tax is a product of pure ideology, nothing pragmatic, nothing rooted in practicality, nothing to promote general prosperity. And that ideology is rooted, more than anything else, in envy, one of the seven deadly sins. But evil? Seriously? Where’s the evil? Let’s start with what an income tax actually is. Whether simple or complicated, an income tax is a tax on prosperity and material progress – you know, what it is that makes malnutrition, starvation, disease, and general misery a whole lot less common. Even today, with all the automation we have, the bedrock on which all of our prosperity is built is human effort – work. Work’s reward is income. There is an old adage that, like most adages, is rooted in truth. “If you want less of something, tax it.” An income tax is essentially a wish for less income, which is the same thing as a wish for less work. And frankly, it is...
Commerce: Incentives Hurt Entrepreneurship
[E]conomic growth doesn't come from government spending or planning, but from the heart and soul of entrepreneurs –men and women who are willing to take risks, who brave failure to seek success on the frontiers of enterprise. -Ronald Reagan The problem with economic incentives lies in the fact they take from one company and give to another. The Oklahoma Department of Commerce hands out tax dollars through various incentive schemes to companies they favor over others. Incentives give the illusion of creating prosperity by the fact that actual people are employed, but this is not actually enhanced prosperity. In reality, it is government created growth that occurs only with a constant infusion of taxpayer funds and that will fall away. Or, one-time economic incentives are a mere redistribution from taxpayers to the politically connected. Regardless, economic incentives from government distort the market and drive investment through government favors instead of through innovation and the preferences of free individuals acting as producers and consumers. Actual economic growth must come from entrepreneurs. Entrepreneurs are the driving force in...
Grand Jury Indicts Itself with Report on Epic Charter Schools
Several months ago, we criticized the multicounty grand jury for wading into public policy rather than sticking to its mission: determining if there are grounds to prosecute someone for a crime. The multicounty grand jury, empaneled in March of 2020, produced a so-called interim report that criticized the lack of transparency surrounding Epic Charter School’s use of its funding. Coming from a grand jury, it gave the impression something criminal was soon to be discovered. Last week, the grand jury’s final report on the entire 18-month grand jury session was made public. Special mention was given to the Epic investigation, noting that “much of its time and attention” was devoted to the matter. But that time and attention resulted in no indictments. That, in itself, is neither good nor bad. Grand juries should only return indictments if there is clear evidence a crime has occurred. A lengthy investigation that results in no indictments may feel like a waste of time, but it might be the best way to serve justice. Indicting someone simply to justify the time spent investigating them would be a terrible injustice. However, given the attention the grand jury focused on Epic, especially...
The Acquisition of Land Adjacent to Hafer Park is a Costly Violation of Private Property Rights
Edmond residents will soon be voting on a proposed increase in sales tax. Revenue generated by the tax will fund the purchase of land south of Hafer Park to prevent the owner from developing it. While purchasing the property may be preferable to perpetually denying a property owner the right to make beneficial use of the property, it is an unusual and costly violation of private property rights. Deploying the despotic power of government to extort private property is wrong, as is requiring the entire tax-paying public to become an accessory to extortion. The handful of voters that turn out for a special election should not be able to deploy the expropriative power of government to satisfy activists’ illegitimate, overly-intrusive interest in another’s rightful use of privately-owned property. If NIMBY (not in my backyard) activists are interested in keeping the property undeveloped, they should put their money where their mouth is. Either the developer should be permitted to proceed, or activists should purchase the property with privately-raised funds. At its core, the controversy is an issue concerning property rights. These include the right to benefit from, enjoy, and use...
COVID-19 Vaccine Mandates Based on Fear, Not Facts
In one ranking of 20 pandemics that have occurred throughout recorded history, COVID-19 ranks eighth in the estimated number of total deaths caused worldwide. However, were the estimates of various pandemics’ death tolls adjusted to take account of the planet’s population at the time they occurred, COVID-19 would rank much lower. While it’s estimated that 4.5 million people have died from COVID-19, that’s on a planet with a population of around 7.8 billion. That’s a worldwide death rate of 0.06% (so far). In the second century, the Antonine plague is estimated to have killed 5 million people with a worldwide population of 200 million. That’s a death rate of 2.5%, over 40 times higher than that of COVID-19. Similarly, plagues in the 17th century killed 3 million, or 0.5 percent of the population at the time, a rate eight times higher than COVID-19 so far. Obviously, the COVID-19 pandemic, with all its variants and continuing mutations, is ongoing. Its ranking among pandemics will tragically rise. But does this fact justify some of the police state style mandates, tactics, and paper checks that are occurring today? Are the vaccine resistant some sort of oddity to be studied, gawked...
Oklahoma Towns Continue to Use TIFs Despite Flaws
The Stillwater City Council recently approved a $275,000 (RE)Investment Plan payment to assist with the development of a taproom for Stonecloud Brewing Company in downtown Stillwater. According to the Stillwater NewsPress, the building chosen for renovation (the old Mistletoe Express warehouse) has been vacant for over 40 years. Cory T. Williams, the former state representative for District 34 (Stillwater), owns the property development company that applied for the funding. The (RE)Investment Plan funding for this project comes from TIF district #3, which encompasses the downtown area and much of the area adjacent to the Oklahoma State campus. So, what is a TIF district? TIF, which stands for Tax Increment Financing, is basically a geographically defined area within the boundaries of a larger taxing jurisdiction (like a city). Upon the creation of a TIF district, tax revenues for taxing entities (such as the city, county, or school district) are frozen at a specific base level. After that date, those entities continue to receive revenue at the frozen level, while any revenue growth collected above that is raked off and given back to the TIF. Those funds are used for any number of...
The Real Problem of Licensing, and Why Our Movement Fights for the Wrong Cure
In a recent 1889 Institute blog, one of my colleagues discussed one suggested cure for occupational licensing: universal recognition. Its shortcomings became obvious with a bit of thought: it only helps some consumers (those close enough to the state border to be worth traveling to) and it only helps them a little bit - allowing out of state practitioners to practice in the state doesn’t boost the supply of practitioners to anything like the same degree eliminating the licensing requirements would. Sure, universal recognition makes a certain kind of sense, if you don’t think too hard about the immorality of requiring government permission to sell your labor. After all, why would a hair stylist trained in Oklahoma be lower quality than a hair stylist trained in Kansas? But universal recognition does nothing to help two groups: potential practitioners who might be great at a trade but who perform poorly on tests, and consumers who live in the middle of big states. While there may be a few out of state practitioners who relocate once they are allowed to transfer their credentials, it is unlikely to make much difference to the cost of services. The biggest problem with universal...
Time to End the State’s Cartel in Higher Education
Recently, the chair of Oklahoma’s Board of Regents called into question the state’s cartel in higher education. These days, when people hear or read “cartel” they think of drug cartels. But “cartel” is actually the name given to a monopoly created by many participants. If a group of companies get together and agree not to compete, with each firm given an exclusive right to sell in a specific territory or for each to sell a fixed amount of a product so that monopoly pricing can occur, a cartel exists and each company operates and prices its product as a monopoly. Independently created cartels generally fall apart. Cheating on pricing and territory agreements is so profitable that someone eventually gives in to the temptation and drops price or violates the territorial agreement to rake in more sales and profit. When that happens, everybody else starts cheating. Legally, its nearly impossible to enforce a cartel agreement, especially in the United States where they are explicitly illegal under federal law. Drug cartels last because they’re enforced, through violence. Any cheater is summarily dealt with in the severest possible way. The law means little to those who are...
Universally Recognized Occupational Licensing Ignores the Underlying Problem – Occupational Licensing
Occupational licensing is a hot topic across the country. However, few proposals address the underlying problem: one must secure the government’s approval to earn a living. One of the latest fads proclaiming to remedy this evil is universal recognition of occupational licensing – a policy where a state recognizes every other state’s licensees as eligible to receive a license to practice their occupation in that state. Universal is not a common word in the vernacular of liberty. It is a term more often deployed by the progressive left to denote a nationalized industry or social program. For example, universal health care, universal preschool, and universal basic income, to name a few. To be fair, some things may be (or should be) universal – like natural rights. However, many other things cannot be universal without imposing a high cost on those naturally and rightfully universal things. The 1889 Institute has been a leading voice against occupational licensing in Oklahoma and co-authored an alternative to occupational licensing, private certification, with the Goldwater Institute. Given 1889’s involvement and the fact that Oklahoma recently passed a version of the Universal...
Do Not Put Your Hope in the Courts; Actively Fight for Yourselves
Conservatives have been disappointed by several recent Supreme Court rulings. From declaring half of Oklahoma a tribal reservation to a strained interpretation that conflates sexual orientation and gender identity with one’s sex for purposes of Title VII of the Civil Rights Act, the supposed conservative majority on the court has swung and missed on some big issues. Some question whether the right justices were nominated, but a more important question is whether so much policymaking power should be left to the courts. Judge Wyrick, one of Oklahoma's legal luminaries, recently addressed the latter question from a political perspective, identifying legislative failures nationwide for putting too much importance on the opinions of nine Ivy League lawyers. This is absolutely correct, as far as it goes. The public views legislators as inept at even the most basic functions of governance, spending trillions and doing little else. They may be correct, but the public hasn’t found the correct solution. Since at least the 1940s the Supreme Court has been wading into congressional business. It has been interfering with the executive for far longer, with Marbury v. Madison comprising the...
Performance-Based Compensation is Good, but School Choice is Best
“Except for different salary levels based on years of classroom experience, unions insist on equal pay for every teacher in a district, regardless of productivity, professionalism, subject taught, and expertise. This is less respect than one would give a dog as it denies agency, ignores incentives, and effectively equates everyone to the lowest common denominator.” -Byron Schlomach, Director of the 1889 Institute As stated above, the teacher compensation structure in Oklahoma is flawed. Good teachers should be rewarded, and bad teachers should not be in the classroom – much less paid the same because the unions demand it. Unfortunately, administrators have no incentive to compensate teachers based on their performance. Due to the monopolistic structure of our public education system, administrators have no incentive to economize. Unlike a commercial enterprise, they do not have to attract and retain customers (students). Students are assigned to their schools and districts based on their addresses and have few alternatives. Even with the advent of charter schools and recently passed legislation expanding open transfer, schools still face little competition for...
Oklahoma Department of Commerce: California Dreamin’
When the Okies left Oklahoma and moved to California, it raised the I.Q. of both states. -Will Rogers In late 2019 the Oklahoma Department of Commerce started a campaign to convince California-based companies in Oklahoma’s key industry sectors to move to Oklahoma. Governor Stitt sent a letter to businesses within target markets, including Los Angeles and San Jose, particularly targeting those that manufacture smaller parts and firms with large demand for electricity. In 2020, billboards were put up in California to advertise that Oklahoma is business-friendly compared to California. While it’s true that Oklahoma is more business friendly than California, it falls short of other states, leaving significant work to be done. Although many companies are leaving California, they are not moving in droves to Oklahoma. The deciding factors for companies moving, according to a new report by the Hoover Institution, are increased cost of business , decreased productivity, and profitability. Economic incentives do have a marginal effect on some businesses, and California provides enough corporate welfare to keep many from fleeing. Others, however, leave without a promise of economic...
The Simple Solution to High-Cost Healthcare
A couple of weeks ago, in a blog entitled “Free Market Healthcare: Fighting Industrialized Corruption,” a follow-up blog was promised that would describe a key, simple healthcare reform that would bring about a rapid expansion of a truly entrepreneurial, free market healthcare system. This system would give us all the benefits that free markets dominated by the entrepreneurial spirit bring in every other economic area – higher quality and lower prices even as those working in such an industry get richer. This comes about as a result of innovation born of competition and free enterprise. How can healthcare be simply transformed and, almost overnight, be made more like the competitive, free enterprise systems that have made automobiles, computers, and nearly everything we consume on a daily basis both better and less expensive? The first thing that must be understood is the degree to which the high cost of healthcare is driven by the “third-party payer problem.” This is that patients (healthcare consumers) pay only about a dime of the average dollar spent on healthcare in the United States. The rest is paid by private, usually employer-provided, health insurance, or by some level...
How the Legislature Can Get Tough On Insubordinate Universities
Who runs Oklahoma’s state universities? Remember that state university means state-funded, which really means taxpayer-funded. So how much input do taxpayers have on the direction of our institutions of higher education? Turns out, very little. At the national level, Congress derives much of its power from appropriations. Even though Congress would have a hard time passing enough laws to get every agency to do what it wants, they don't have to. Instead, they leverage their power to dole out money to every federal agency. So, if an agency is acting contrary to the congressional will, Congress can cut, or in extreme cases withhold, that agency’s budget. Federal agencies are highly responsive to Congress, especially to members of appropriations committees. In Oklahoma, two obstacles hinder this arrangement: institutional practice, and the Oklahoma Constitution. And while the constitution is the highest law in the land, the legislature’s history of hands-off administration of agencies, including the Board of Regents, may be harder to overcome. In 1941 Oklahoma’s constitution was amended to include the provision that: The appropriations made by the Legislature for all such...
When it Comes to Children, “Local Control” Belongs With Parents
In education policy, local control is a hotly contested issue. But one crucial party is frequently ignored in the rhetoric – parents. Worse than ignored, they are sometimes viewed with derision. A parent is the ultimate local authority on the health, safety, and welfare of their child. Generally, parents are the most knowledgeable, most interested, most invested party in the development and education of a child. However, instead of being empowered, the system seems to see them as an adversary. For me, this point was driven home recently when I stumbled across a statement made by the spokesperson for an out-of-state school district. Talking about its decision to ignore a statewide policy prohibiting mask mandates, the spokesperson said something like: “Children want to do the right thing; It’s the adults that make this complicated.” Her statement raised some immediate questions. Which adults was she talking about? When talking about obstructionist adults, I highly doubt she was referring to teachers or school administrators. It was far more likely she was referring to politicians who recently empowered parents, and those parents who refuse to mask their children. Additionally,...
Oklahoma’s Promise Unfairly Discriminates against Homeschool Students
The Oklahoma Higher Learning Access Program (OHLAP), otherwise known as Oklahoma’s Promise, offers higher education scholarships to students from low and middle-income families in Oklahoma. During the 2019-20 school year, the program provided over $66 million in scholarships to 15,347 students. According to the Oklahoma Higher Learning Access Act, the program is intended to relieve students of the burden of paying tuition and help them achieve post-secondary success. Requirements for the program are as follows: applicants must be in the 8th, 9th, 10th, or 11th grades (or specifically ages 13-17 for homeschool students), and their parents’ adjusted gross income (AGI) must be below $60,000. In addition, they must maintain a 2.5 cumulative GPA throughout high school and complete a 17-unit college preparatory curriculum that consists of credits in English, math, lab science, humanities, foreign language, fine arts, etc. (much like the Oklahoma core graduation requirements). Students must also agree to some basic guidelines regarding class attendance, homework completion, drug use, and criminal behavior. The requirements above apply to homeschool and public school students. However,...
Free Market Healthcare: Fighting Industrialized Corruption
After attending the Free Market Medical Association meeting in Dallas recently, one cannot help but be impressed by the innovations of honest providers in making affordable, quality healthcare services increasingly available in a hostile policy environment. While big hospitals, big insurance, big pharma, and big government continue to insist that a healthcare sector that swallows nearly 20 percent of our GDP remains destitute and needs more of our money, principled entrepreneurs (often against the lobbying efforts of the “bigs”) soldier on, finding and exploiting opportunities to serve us well, and without robbing us. Perhaps the degree to which the dominant players in health care rip us all off on a daily basis can best be illustrated by something said at the breakfast table one morning during the FMMA event by a businessman from McAllen, Texas. His is a self-insured enterprise, as are many decent-sized businesses, where one of the insurance companies is paid by the employer to administer a health insurance plan where the employer pays the bills when employees need health care, net of deductibles and co-pays. Under circumstances where one of his employees needs a major surgery,...
American Rescue Plan: A Lead Weight of Inflation and Higher Taxes
"The government pretends to be endowed with the mystical power to accord favors out of an inexhaustible horn of plenty. It is both omniscient and omnipotent. It can by a magic wand create happiness and abundance. The truth is the government cannot give if it does not take from somebody." - Ludwig Von Mises During the Great Recession, Oklahoma City received $48.7 million in stimulus to use in reducing the effects of the 2008 economic downturn. Some of the money went to starting new projects that would inevitably need future funding, which contributed to a funding gap in 2014 (fiscal year). This means city officials had to make hard choices, evaluating which programs were worth spending city funds after the federal funding had been exhausted. Oklahoma City’s economy weathered the Great Recession better than most of the country. Why then did they take federal money to start programs they would not want in the future? This was not free money. The state of Oklahoma is in the same position Oklahoma City found itself in over a decade ago. While the state’s economy has had downturns resulting from the current crisis, it has bounced back surprisingly well. From the beginning of the...
OKCPS Mask Mandate Clearly Illegal
Last spring, the Oklahoma Legislature passed and the governor signed a law that forbids school district boards from imposing mask mandates unless an emergency is first declared. Last week, Superintendent Sean McDaniel, with the support of the Oklahoma City school board, imposed a district-wide mask mandate. His rationale is that the law only applies to school boards, not to superintendents. Two issues arise from this development, one having to do with mask efficacy and the pagan-like faith being placed on what amount to talismans, and the other having to do with rule of law. Mask mandates are like requiring everyone to carry a crucifix as a guard against the plague. Surgical masks and their cousins were never intended for the purpose of preventing a respiratory-infecting virus from being transmitted, but are merely to prevent bacteria-infested saliva particles from falling into open surgical wounds. There are too many leaks around these masks to block infected air from escaping. These close-fitting masks are not intended for all-day use; they retain bacteria and fungus that cause skin infections. The best mask-type protection for those concerned about catching Covid is the N-95...
Transit Hypocrisy: So That Others May Ride a Train
While modes of transportation have changed little in the last century, speeds and efficiency have dramatically improved. Additionally, new, innovative transportation options are on the horizon. Autonomous vehicles and drones are two prominent examples. Yet, planners and elite bureaucrats insist on imposing some utopian vision of urban transportation that ignores the reality of demand and the current spatial distribution of jobs. They pursue inefficient and outdated modes of transportation, often to get other people out of their cars and into trains and buses. The imposition of utopian urban transport is currently being pursued at the national and local levels. Nationally, the trillion-dollar “Historic Bipartisan Infrastructure Deal” proposes massive sums of money for rail and public transit services that are unmerited by market demands. Most of America’s transportation happens on roads in automobiles, yet the plan disproportionately funds government-operated transportation. Locally, the Regional Transportation Authority of Central Oklahoma persists toward an interurban commuter rail. In a recent article, former Governor Brad Henry stated that now is the time for Oklahoma “to...