Capitol Ideas / Occasional Economics
Bethell, Tom
SENATOR WILLIAMS FIGHTS BACK by R. Emmett Tyrrell, Jr. D e s p i t e our admittedly flyblown canons of dignity and good sense, the jig is not yet up for Senator Harrison Arlington Williams, J r...
...First of all think of your wallet, which may have a few dollars in it...
...You need to know the full story...
...Policemen are standing by in the background, ready to enforce this t h r e a t if the government's demand is not meekly complied with...
...THE AMERICAN SPECTATOR APRIL 1982 39...
...The Charmer From Tennessee," reads the page-one headline...
...Ill in April - automatically, with no additional handling charge...
...whereas under the noncompassionate Reagan in 1982, 26.2 percent of the budget went to defense and 53.2 percent to "human resources...
...True, anyone who wished to watch the evening news last spring could have seen him on film suavely convincing a simulated sheik of his power to bend laws in his bare hands, but in this g r e a t day being caught flagrante delicto is no proof of anything...
...We Americans have, of late, seen a lot of suspicious behavior on the tube...
...residents please add 696 sales tax...
...For Baker to propose it shows that over the past 18 months he has learned nothing about taxation, incentives, and marginal effects...
...Now his case will not go to the floor until March 3. Some say the senator, now convicted and sentenced, should resign on his own...
...The three-volume study raises disturbing questions about television's conception of economic forces - and TV's objectivity in reporting them...
...In time enough new leaks might spring in the nation's system of justice to overturn the conviction leaving him scot-free and surrounded by those literary agents who merchant fat removal manuals and other such best-selling works of art...
...The lady doesn't understand that the "10 percent tax c u t , " as she calls it, is already being wiped out this year thanks to inflation...
...Yet the (continued on page 39) 9 Q Q O @ O O O g @ O Q O Q Q O O Q b . . . . . . . . 0 @ O O ~ ý84 . . . . @ @ @ O @ . . . . . . . Q 0 0 @ @ . . . . . . . . . . . . ~ O O O J O . . . . @ @ @ O 9 @ @ 9 6 0 0 @ 0 Q . . . . 6 O O ~ I O O O O t @ O O O O O t . . . . 0 9 Q ~ . . . . B Q O O O Q ~ O Q @ @ O O O O 0 @ @ 0 0 . . . . . @ O Q @ O O 0 O O @ O OCCASIONAL ECONOMICS by Tom Bethell C l a s s will come to order for today's lecture in our "Occasional Economics" series...
...I see in today's Washington IJost, for example, a typically misleading story about the remarkable "federal income surtax" proposed by Sen...
...The main instrument of fiscal policy is taxation, whereby the government interposes its hand between two people engaged in a voluntary transaction, threatening to send either or both to jail if they do not hand over a percentage of that transaction to the government official...
...His presence obviously brings further disrepute to the Senate...
...Notice that the misleading phrase "tax cuts" blurs the distinction between tax rates and revenues and in fact makes intelligent discussion of the whole topic of taxation almost impossible...
...This steady accumulation of leaks is called judicial reform...
...In postponing the alleged income- tax rate reductions to 1982 and 1983, no allowance was made in the bill f o r intervening inflation...
...In case you have already fallen asleep, monetary policy is the government's method of creating the money that you may or may not have in your pocket or bank account...
...Then think of people like Senator Baker, who spend their waking lives trying to think of innovative but legal ways of tweaking some of those dollars out of your wallet...
...What keeps his colleagues from expelling him...
...I _ _ Hardbound book(s) at $15.95 plus $1 handling per book...
...It further delegitimates an important American institution...
...Why, indeed, would anyone in America today admit guilt for anything...
...Bracket creep and higher social security taxes will offset the 25 percent reduction in personal income tax rates for families in a majority of brackets...
...Today's story, again by Dewar, has the following: "Although Baker did not go into details, other sources said a temporary surtax of 5 percent or 10 percent is being 'discussed' among Senate Republicans . . . . The surtax would virtually wipe out the 10 percent tax cut that Congress has approved for this year, although technically it would leave the Reagan tax program in place...
...20007 I J Please send me TV Coverage of the Oil Crises: How Well I Was the Public Served...
...II in late March and Vol...
...If there isenough inflation between 1981 and the end of 1983, t h e " t a x cut," so-called, will be effectively destroyed by bracket creep--movement up the schedule of brackets as earners are paid nominally greater amounts to compensate for inflation...
...most of his colleagues would act no differently if lured into such sinful circumstances...
...Really, it's quite simple...
...gentleman...
...The money that you are compelled to save is then taken from you and given to someone who has recently retired...
...Bulk rates ~upon request...
...There's really no accounting for tribal behavior, but in the case of the Washington journalists there was at least the extenuating circumstance that not a few had real estate investments in the nation's capital and so they were in real danger of being "hurt by the Reagan budget cuts," which would translate into less money sent to Washington, less bureaucrats needed there to spend it, less demand for housing, and so on...
...For a goodly portion of 1981 he grappled with Congress, a bicameral body of 535 men and women dedicated to the proposition that spending other p e o p l e ' s money is both fun and helpful at reelection time...
...with $20,000 of taxable income is in the 48.5 percent marginal tax bracket...
...Our institutions have been successfully drained of legitimacy by sophists and of efficacy by those judges who dream of perfect justice ~ven as they free the most ferocious thugs...
...So they did agree to a small relaxation of their bulldog grip on your billfold and mine...
...Instead, they will stay home and watch television, go jogging, write novels, or even, it is sometimes alleged (although one can scarcely credit such things' happen~ng in a nation conceived in liberty and dedicated to the proposition that all men are c r e a t e d equal), actually exchange things among themselves without advising government agents that they are so occupied/ In November 1980, the American people elected a new President, Ronald Reagan, who was said to be cognizant of all these problems, and who did indeed set about the task of reducing those very high tax rates on income...
...The results may startle you...
...but in the case of the New York journalists there was no excuse whatsoever...
...But by 1981, sufficient of them were persuaded (or so it seemed) by the argument that I'HE AMERICAN SPECTATOR APRIL 1982 5 they were grasping for such a large percentage of each transaction in the economy that the number of transactions was in danger of diminishing, or at least becoming invisible to the federal police...
...in the quantities marked: I _ _ Three-volume set(s) (soft cover) at $12.95 plus $1 handling I per set...
...It goes without saying that if such a surtax were to pass and remain unvetoe~l, Reagan's whole program would certainly be doomed...
...What keeps Senator Williams's colleagues from expelling him...
...But if you place a premium on being well informed, put TV Coverage of the Oil Crises: How Well Was the Public Served...
...The complete text of the threevolume study will also be available as a quality hardbound book for $15.95 (plus $1 handling...
...But don't expect people who are jumping up and down shaking spears to take rlf you felt you weren't getting the full story about the oil crises in 1973 and 1 9 7 9 . . . You were right...
...As was pointed out by Warren Brookes, one of the small handful of journalists in the country not wearing war paint and jumping up and down in unison, this made no sense at all bearing in mind that under John F. Kennedy in 1962, 47.8 percent of the budge t had gone to defense, and only 25.1 percent to "human resources...
...Subject: monetary and fiscal policy...
...My check for $. is en.closed...
...People are supposed to add up the total number of transactions and exchanges they make in any given year, and from each additional exchange, the government demands a larger and larger slice...
...For e~tample, if you are unmarried and your transactions to date are valued at $41,500, then you must hand over half of the value of each additional exchafige to the U.S...
...Pre-publication purchase: If we receive your check for $12.95 (and $1 handling) prior to publication of the complete set, we will mail Volume I immediately, Vol...
...continued on pug e 39) 6 THE AMERICAN SPECTATOR APRIL 1982 EDITORIAL (continued from page 5) alleged gunman, John Hinckley Jr., insists that he too is innocent...
...D e s p i t e our admittedly flyblown canons of dignity and good sense, the jig is not yet up for Senator Harrison Arlington Williams, J r . In October 1980 he was indicted on bribery and conspiracy charges...
...Their findings, plus a commentary by economist Fhomas W. I lazlett, are being published in three volumes beginning in March 1982...
...Somehow the charnel proceedings have been delayed five times since then...
...Then there might be appearances on talk shows and a profitable place on the campus lecture circmt...
...They ignore the momentous fact that the senator protests that he is innocent...
...Certainly I have seen no mention of the Philadelphia Fed articles in either paper...
...Thus the Baker surtax would be a tax rate increase, presumably raising the top rate to 55 percent...
...This overall arrangement is called the "welfare state," although the "police state" is perhaps more accurate...
...In this era of juridical glory, why should an innocent man resign...
...Ronald Reagan signed the 1981 Economic Recovery Tax Act, and newsreader Dan Rather, newsspeaker Leslie Stahl, and the entire editorial staff of the V/ashington Post and the New York Times put on war paint and went into a hopping-and-jumping war dance about the "uncompassionate" and " u n c a r i n g " nature of our society...
...CAPITOL IDEAS (continued from page 6) As far as I know, this feature of the 1981 Tax Act--that it was not a real rate reduction at all but little more than an indexing of the rates (the formal indexing of the tax brackets does not begin until 1985)--has not yet been reported either by the New York Times or the Washington Post...
...If you relied on television news, you only got part of the y. I TV Coverage of the Oil Crises: How Well Was the r Public Served...
...I, for one, believe him...
...But that is not the way the law came out...
...He insists that he was set up...
...Today, however, there remains not much respect for authority, nor much authority...
...r' l 7o pt-, 7.s u / l . . . . . . I 3017 M Street, N.W., Washington, D.C...
...I n earlier times, of course, Senator Williams would have resigned like a gentleman...
...That is, if he makes an additional dollar over and above the $20,000, he must give 48 and a half pennies of that dollar to the local and federal governments...
...The overall conclusions of the original article largely remain," the authors wrote...
...Although the 1981 tax cut ensures that tax rates in 1983 will be lower than they would otherwise have been, tax rates in 1983 will be the same as or higher than they were in 1980, with few exceptions...
...The more overwhelming the evidence against the accused the more plausible his pleas of innocence will be to the multitudes of softheads who inhabit the elite provinces of our society...
...government...
...J u s t last March we saw a young man ambush the President and three other men...
...The top rate remains 50 percent, taking effect at a higher income threshold...
...In addition, if you live in the District of Columbia, you must then give about ten percent of each transaction to the local government, and another chunk to " s o c i a l s e c u r i t y , " this l a t t e r imposition deriving from the assumption that you are too improvident to save for your own retirement and thus must be compelled to do so under the t h r e a t of imprisonment...
...He protests that he is innocent...
...on the top of your must-read list...
...It finds the networks virtually ignored the role of economic forces such as supply and demand in reporting the crises...
...Last May he was convicted...
...Now I know I had meant to say something about monetary policy, which is good fun and games because it is so little understood and so controversial, but that will have to wait until class reconvenes...
...After all, quite possibly he is innocent...
...Available as a three-volume set, $12.95 per set (please add $1 handling per set...
...And that network news tended to portray government intervention not as a cause of, but as a solution to the crises...
...The end result of all these compulsory expropriations by government is that a single person in D.C...
...He knows what every petty scamp and every arrant scoundrel knows, namely: If a convicted felon insists on his innocence stubbornly enough a growing number of softheads will come to believe and even admire him...
...Still, he did commit felonies...
...Since we have a "progressive" income tax code, it follows that any such tax-rate reduction is at the mercy of inflation...
...I Name Title I I Organization Address I City, State, ZIP I , , J notice of complicated things like percentages...
...The explanation for the senators' hesitancy is provided by a wise Norwegian judge who viewed the present state of criminal procedure in the West and observed, "our grandfathers punished, and they did so with a clear conscience [and] we punish too, but we do it with a bad conscience...
...Please return the completed coupon with your check, payable to The Media Institute...
...They were understandably reluctant at first to loosen their grip on the national income...
...All that the accused must do is lie long and hard...
...by Stephen A. Meyer and Robert J . Rossana...
...Pure ideology was the only conceivable motive...
...is landmark study by The Media Institute, a Washington-based research organization...
...Then imagine this money being "Doled" out to constituents (Dole's another one, you should know), who will vote for him on reelection day...
...Howard Baker, new darling of the Washington war-dance set and the subject, in last week's Washington Post, of a "Strange New Respect" profile by Helen Dewar...
...One of the great confusions arises because many people believe that the alleged ten percent rate reductions in 1982 and 1983 will result in the top rate on earned income (50 percent) dropping first to 45 percent and then to (about) 40 percent...
...You see what I mean...
...We hesitate to impute guilt to anyone," says Professor Walter Berns, author of For Capital Punishment, "because we are so uncertain of our right to do so...
...Now Judge George Pratt has sentenced him to three years in the hoosegow (he could have gotten 15) and imposed a $50,000 fine...
...Of course, the news media wardance team didn't even notice when the Federal Reserve Bank of Philadelphia published an article in its Business Review entitled "Did The Tax Cut Really Cut Taxes...
...Simple respect for the authority of the United States Senate would have induced a man convicted and sentenced for felonious acts to depart...
...This article, published in the November/December 1981 issue, evidently contained some "mechanical errors in converting total income into taxable income," and so had to be amended in "A Further Note" published in the January/February issue...
...In fact, he has not even been tried...
...It also finds the majority of oil crisis stories were based on government sources...
...Supply-siders are people who believe that such levels of taxation, unprecedented in American history, r e f l e c t a c o n s i d e r a b l e measure of g r e e d on the part of government officials of every description, and discourage people from engaging in voluntary exchange beyond a certain point...
...Instead both papers seem eager to continue creating the impression that an unconscionably large "tax cut" was enacted, threatening to drain the Treasury and expose us to massive deficits...
...Media Institute researchers viewed over 1,400 oil stories broadcast in 1973-74 and 1978-79...
...fiscal policy is the government's method of taking it back again...
...W e l l , now you know something about fiscal policy...
...Then think of reporters like Helen Dewar who will rush forth with page-one stories about the hitherto unsuspected compassion and (don't forget) "pragmatism" that animates such lawmakers, stories that are glowing and laudatory to the precise degree that such statesmen attempt to divert a larger proportion of the GNP into the headwaters of the Potomac, thence to the nation's capital...
...Still he remains the senior senator from the g r e a t s t a t e of New J e r s e y , and why should he not...
...He has not even been convicted and sentenced...
...The Senate Ethics Committee last August 24 voted to expel the Hon...
...Doing so would jeopardize his case and leave him lonely...
...I I D.C...
...Presumably, were he a United States senator he would still have his seat...
...This it does by promising to return the money once more to some specially selected pockets: those that are organized into groups able to use effective lobbying tactics before Congress (e.g., "welf a r e " groups, r e p r e s e n t e d by The Washington Post Co., and so on...
...Why, really, should Senator Williams resign...
Vol. 15 • April 1982 • No. 4
