Andrew Evans from The Washington Free Beacon has recently reported about the close relationship between a Chicago-based power company and the current administration. Exelon Corp., has been receiving money from the federal government and has been leveraging regulations in order to protect themselves from competition.
A representative for the National Center for Public Policy Research (NCPPR), a Washington-based think tank that holds stock in utilities company Exelon Corp., attended Exelon’s shareholder meeting and asked CEO Chris Crane about the company’s relationship to the Obama administration and the wisdom in taking government money.
Exelon officials used their connections to the White House to shape environmental policies in order to hurt their competitors, according to a New York Times article. […] Exelon also secured favorable loans from the government for an already-financed project.
The following article written by Randall Holcombe for The Independent Institute comments on the increasing possibilities of the internet sales tax. Businesses that are not based on internet sales are adding pressure to get this bill pass and damage their internet competitors.
The pressure for the Senate bill comes from “brick and mortar” stores who argue that out-of-state internet sellers have an unfair competitive advantage because they don’t charge sales tax on their sales.
The Senate bill, and the whole Streamlined Sales Tax initiative, is driven by political interests, not common sense. But then, so are all public policy decisions. Even for those who want to tax internet sales, the Senate bill is not the right way to do it.
Mark Koba, senior editor of CNBC has written the following article, emphasizing the growing underground economy in the U.S. and how it may help to sustain economic growth.
The shadow economy is a system composed of those who can’t find a full-time or regular job. Workers turn to anything that pays them under the table, with no income reported and no taxes paid — especially with an uneven job picture. “I think the underground economy is quite big in the U.S.,” said Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver. “Whether it’s using undocumented workers or those here legally, it’s pretty large.”
“People are running out of patience when it comes to finding a job and losing income,” Gonzalez said. “So it’s not that surprising to have workers take jobs that are in the shadow economy. But it’s a sign of how bad things are and how we have to get the real economy moving again.”
Jared Pincin and Brian Brenberg write a column in USA Today about cronyism in the US foreign aid program:
Cronies never miss an opportunity to feast on taxpayer dollars — even if it means taking from those who are most vulnerable.
The United States is the largest donor of international humanitarian aid, contributing roughly $8 billion in emergency food aid over the past five years. But a significant portion of that food aid is “tied,” which means the food must be sourced from U.S. suppliers and transported on U.S. ships, even if cheaper alternatives exist. The benefits of tying go to politically-connected companies in the U.S. at the expense of aid recipients. It’s a prime example of cronyism at work.
Mark Newgent at the Maryland Watchdog Wire writes about a new tax in Maryland that will tax…rain?
In 2010, the U.S. Environmental Protection Agency ordered Maryland to raise money to reduce storm water runoff in order to reduce phosphorus and nitrogen levels in the Chesapeake Bay. In response the Maryland General Assembly passed HB 987 mandating that the state’s 10 largest counties generate the revenue through taxing “impervious surfaces” (roofs, driveways, patios, parking lots) in order to pay for storm water management. Beginning in July, property owners will now see a new line item on their tax bills based on the amount of impervious surface on their property.
Timothy P. Carney has recently written the following article at the Atlantic, pushing libertarians to stand up to the corporate welfare we see today. Carney makes a call to libertarians and conservatives alike to start stressing the issue of cronyism on the ground of “free-market corporate social responsibility.” This means business are responsible and ethical in the way they make profits. Companies that receive subsidies, bailouts or use legislation to impede competition are generating unethical profit, damaging society and the free-market.
[…] in the age of crony capitalism, libertarians must declare that some means of pursuing profit are immoral and call on executives to reject them. This would create a positive case for capitalism — arguing that the pursuit of profit, in the context of fair and open competition, helps the whole society. The new corporate social responsibility, redefined for libertarians, must stand athwart crony corporatism yelling “stop.”
A Wall Street Journal article highlights a specific tax break for…television program?
Empire State Governor Andrew Cuomo and the legislature have helped to grease the show’s eastward move with a special new tax credit available only to big-budget television programs that relocate to New York. According to the state’s new budget the credit is aimed at “a television production that is a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season.” Oh, and the show has to be filmed in front of a studio audience of 200 or more and spend at least $30 million in annual production costs in New York. How’s that for a very specific special interest?
Jarrett Skorup at CAPCON writes about the failed policies of a corporate welfare program in Michigan, and how despite the failures the state is planning on extending the program:
Despite repeated failures, the Michigan Legislature is pushing ahead with extending, and in some ways expanding, a government program that hands out select tax breaks, subsidies and loans to particular firms and special interests.
The “21st Century Jobs Fund” law enacted in 2005 created a smorgasbord of selective business subsidy-granting techniques targeted at different types of economic activities and actors. Reviews of this and other state “economic development” programs show that they consistently fall short on jobs projections, lack sufficient documentation for auditors, and spend tens of millions of state dollars with little or no return for taxpayers.
Angela Longomasini from OpenMarket.org has written the following article asking questions about those who benefit from alcohol taxes. The issue according to the article is that the main advocacy groups that seek tax increases on alcohol are not really concerned about the public health impacts of these taxes, but rather they are concerned with inserting earmarks in the tax code to favor their organizations.
While there appears to be no acceptable level of alcohol consumption to participants at the Alcohol Policy 16Conference, which met last week in Arlington, Virginia, they certainly don’t mind profiting from people who do drink. During a discussion on alcohol tax policy, these “public health advocates” discussed ways to hike the rates as much as possible and earmark the funds to their own organizations.
Rebecca Ramirez of the Bloomberg School of Public Health at Johns Hopkins University presented her qualitative research on the framing of pro-tax messaging for use in lobbying campaigns. […]. One disability advocacy group, she noted, told her flat out that they simply didn’t care about the public health impacts of taxes. They were in the game solely to get some of the tax revenue earmarked to their organization.
William D. Cohan from Bloomberg.com has recently written an article highlighting the latest case of the revolving door affecting the federal government. Mary Schapiro, former chairman of the Securities and Exchange Commission SEC, will be joining the Promontory Financial Group LLC as a managing director in its Washington office, in charge of its governance and markets practice.
[…] four months after leaving the SEC, Schapiro is joining a firm stuffed to the gills with former government financial-services regulators peddling their knowledge of Washington’s regulatory thicket to the banks and financial-services companies they once oversaw. (Schapiro, remember, also had a swell incoming trip through the revolving door: She previously ran the Financial Industry Regulatory Authority, Wall Street’s self-appointed watchdog, which paid her a bonus of almost $9 million after she left to go to the SEC in 2009.)
About 100 of the 400 Promontory employees are former Washington regulators; some 5 percent, like Ludwig, come from the Office of the Comptroller of the Currency, which regulates all banks with federal bank charters, including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. Last year, the firm hired Julie Williams, the former chief counsel of the OCC. To keep things in the family, the agency hired as Williams’s replacement Amy Friend, a Promontory managing director.