Vol. 28 / No. 1 / Spring 2018

IndependentNEWSLETTER OF THE INDEPENDENT INSTITUTE

Assessing Tax Reform

By William F. Shughart II IN THIS ISSUE Last year’s federal tax overhaul gives a valuable boost to the American economic engine and 1 Assessing Tax Reform the hard-working people who drive it. For years, U.S. businesses were burdened by 2 President’s Letter tax rates that were both too high—39 percent, combined state and federal—and totally out of 3 New Book: step with our global competitors, who enjoy a Eleven Presidents top average rate of 22.5 percent, down from a high of 30 percent in 2003. The Tax Cuts and Jobs Act of 2017 removes that huge disadvantage. 4 Independent Institute Its reduction of corporate income tax rates to 21 percent (a single rate!) in the News serves to lower what economists call the “user cost of capital” and thereby encourages new private investment in job growth. Some of the spending on business equipment and expansion will use funds that U.S. and non- 5 Symposium on U.S. corporations would have invested abroad. Immigration The corporate tax cut and other provisions of the new law credibly raise the long-run level of annual GDP growth by 3 percent, according 6 Economic Freedom to a group of economists that includes Robert Barro, Michael Boskin, in North America Glenn Hubbard, George Shultz, and John Taylor, in an open letter published last November in the Wall Street Journal. Higher GDP growth 7 K-12 Students Thrive translates into higher real wages—that is, what people’s money wages with Education actually buy, adjusted for inflation. Savings Accounts Cuts in individual tax rates will ease taxpayers’ financial burdens. Although the cuts are smaller than corporate taxes in percentage terms, 8 Sponsor Spotlight: they are more helpful for the middle class than most people realize. Terry Gannon One reason for the misunderstanding is that analysts often measure tax cuts as percentages of after-tax incomes. However, it’s more illuminating to evaluate the cuts as percentages of income taxes that would have been owed under the old tax code. Using this approach, National Review reports that “households earning between $50,000 and $75,000 would get a 24 percent cut in 2019, while those over $1 million would get just a 6 percent cut.” While the Tax Cuts and Jobs Act is a big improvement over the status quo, much work still must be done if we are to enact a better (less plunderous and simpler) tax code that promotes real prosperity and efficiency. Here are a few reasons why I see the tax reform as unfinished business. Simplification. The 2017 tax law preserved seven individual income tax brackets. It also kept various exemptions and deductions that distort taxpayers’ decision making. The trick going forward will

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William F. Shughart II is Research Director and Senior Fellow at the The Power of Independent Thinking Independent Institute and the J. Fish Smith Professor of Public Choice INDEPENDENT.ORG at Utah State University. 2 INDEPENDENT

PRESIDENT’S LETTER Spreading the Message of Liberty

upward mobility, and a future • Independent’s Center on En- of liberty and opportunity for trepreneurial Innovation draws all—especially the poor. on our roots in Silicon Valley This year we are redoubling to explain how trends such as our efforts to bring that message the sharing economy and other to young people, making the case advancements can be harnessed for turning away from expensive to promote economic opportu- and harmful government ap- nities for those most in need. proaches to social ills and instead Our new initiative, Innovating embracing voluntary, entrepre- for People, Prosperity, and neurial solutions: Liberty, shares inspiring ex- DAVID J. THEROUX • We are planning a sequel to amples of how technology and Founder and President our popular video series, Love entrepreneurship are solving Gov: From First Date to important problems, in areas 767 million people worldwide Mandate, which uses satirical ranging from mobile apps for live on less than $1.90 per day. humor to engage younger education and healthcare, to Although this is less than half as audiences on the issues of housing and water quality. many people as in 1990, still far healthcare, education, jobs, We invite you to join with too many lives are crushed by housing, and privacy. As of this disease, ignorance, and destitution. writing, Love Gov has received “The Independent For years, most nonprofit well over 7.4 million com- Institute is our beacon groups and government agencies bined YouTube views (97.4% for the future of liberty!” have proposed to “solve” global from Millennials) plus 10 film —George Gilder, bestselling poverty with government-to-gov- awards and 18 laurels. author, Wealth and Poverty ernment aid or unsustainable • Last year we hosted New us to advance these and other handouts—stop-gap measures Bridges events in Dallas and market-based alternatives to that have done little to promote San Francisco, which united government folly—and to build long-lasting progress. over 200 people with a shared a better future—by becoming an In contrast, we believe that vision of individuals working to- Independent Member. With your an “opportunity society,” based gether to solve local and national tax-deductible membership, you on free markets and property problems. We also hosted the can receive a FREE copy of Pope rights, is the world’s best cure first meeting of Independent Francis and the Caring Society, for poverty, because it encourages Communities of Impact— plus other benefits (please see and enables technological inno- people eager to solve problems envelope). vation, market entrepreneurship, in their own cities. More events We look forward to working are in the works. with you to advance all that only a free society can provide! EXECUTIVE STAFF

David J. Th eroux Founder, President, and Chief Executive O cer Ivan Eland Mary L. G. Th eroux Senior Fellow Senior Vice President John C. Goodman Sally S. Harris Martin Buerger Senior Fellow President, Saint James Place, Inc. Herman Belz Vice President and Stephen P. Halbrook Philip Hudner, Esq. Professor of History, Chief Financial O cer Senior Fellow Retired Lawyer University of Maryland William F. Shughart II Robert Higgs Gary G. Schlarbaum, Thomas Bethell Research Director and Senior Fellow Senior Fellow Author, The Noblest Triumph: Property Ph.D., CFA and Prosperity Through the Ages Roy M. Carlisle Lawrence J. McQuillan Managing Director, Acquisitions Director Senior Fellow Palliser Bay Investment Management Thomas Borcherding Professor of Economics, Jason Monaghan Susan Solinsky Claremont Graduate School Publications Director Robert H. Nelson Co-Founder, Vital Score Senior Fellow Boudewijn Bouckaert Carl P. Close Benjamin Powell W. Dieter Tede Professor of Law, Research Fellow, Senior Editor Senior Fellow Former President, Hopper Creek Winery University of Ghent, Belgium Paul J. Theroux Randy T Simmons David J. Teece, Ph.D. Allan C. Carlson Technology Director Senior Fellow Chairman and CEO, President Emeritus, Howard Center for Berkeley Research Group, LLC Stephanie N. Watson Alexander Tabarrok Family, Religion, and Society Development Director Senior Fellow David J. Theroux Robert D. Cooter Rebeca Zuñiga Founder and President, Herman F. Selvin Professor of Law, Alvaro Vargas Llosa The Independent Institute University of California, Berkeley Digital Communications Director Senior Fellow Alisha Luther Mary L. G. Theroux Robert W. Crandall Richard K. Vedder Former Chairman, Garvey International Senior Fellow, Brookings Institution Director of Administration Senior Fellow Robert M. Whaples Richard A. Epstein Managing Editor and Co-Editor, BOARD OF ADVISORS New York University The Independent Review BOARD OF DIRECTORS A. Ernest Fitzgerald Christopher J. Coyne Author, The High Priests of Waste Co-Editor, The Independent Review Leszak Balcerowicz Gilbert I. Collins Professor of Economics, George Gilder Michael C. Munger Private Equity Manager Warsaw School of Economics Senior Fellow, Discovery Institute Co-Editor, The Independent Review John Hagel III, J.D. Jonathan J. Bean Nathan Glazer Bruce L. Benson Co-Chairman, Center for the Edge, Professor of History, Professor of Education and Sociology, Senior Fellow Deloitte & Touche USA LLC Southern Illinois University Harvard University Newsletter of the Independent Institute 3

NEW BOOK Eleven Presidents Reveals the Hidden Scorecard for Limited Government

U.S. presidents often claim to federal spending oppose big government, yet more than any few have succeeded in cutting president since its size and impact, especially Truman, shrank over the past 100 years. Most the federal work- of the government’s Chief force by 350,000, Executives—even self-de- lowered trade barriers, scrapped Depression-era scribed advocates of small banking restrictions, and ended unfunded federal government—have presided mandates on the states. over periods of growing federal spending, debt • Clinton ordered the U.S. military to intervene accumulation, and government bureaucracy. in many overseas conflicts, but he managed to Too often, however, the public has failed to notice avoid embroiling troops in a large-scale ground the yawning gulf between rhetoric and reality. Too often, war. The same cannot be said of George W. Bush, it has bought into stereotypes about party affiliation who landed the military in two costly long-lasting and failed to scrutinize the presidents’ actual records. quagmires. He also signed Medicare Part D, at the The breadth and depth of the disappointments time the largest expansion of federal entitlements and broken promises—as well as some underap- since 1965. preciated successes—are revealed by Independent Eland reserves his highest praise for two unsung Institute Senior Fellow Ivan Eland in his latest heroes of limited government: Warren Harding and book, Eleven Presidents: Promises vs. Results in Calvin Coolidge. Pundits have focused on the Teapot Achieving Limited Government. Dome scandal and Silent Cal’s quiet personality, but Eland doesn’t hold back as he scrutinizes the America’s Founders would have lauded their limit- record of eleven American presidents since the end ed-government policies. of World War I who pledged to restrain or reverse “Had the Constitution’s framers been able to the growth of federal power: Harding, Coolidge, evaluate Harding and Coolidge,” Eland writes, “they Hoover, Eisenhower, Nixon, Ford, Carter, Reagan, likely would have lauded them for maintaining Bush I, Clinton, and Bush II. peace, prosperity, and liberty and for trying to stay Eleven Presidents is sure to provoke discussion, within the limited role for the executive enshrined perhaps even soul searching, with its contrarian in the Constitution.” findings. Here are a few: It’s essential to set the historical record straight • By most relevant measures, President Reagan, and give credit where it’s due. But Eleven Presidents actually failed to restrain Leviathan. During his achieves more than this. It gives readers insights tenure, federal spending rose, the nonmilitary for helping to return America to the constitutional federal workforce increased, and the national debt republic the Founders created it to be. grew as a share of GDP—even more than under Anyone eager to champion limited government previous presidents after World War II. and prevent Big Government’s ongoing attack on civil • President Clinton, according to Eland, is under- and economic liberties will become more effective rated for restraining of government growth. He cut after having absorbed Eland’s timeless lessons.

For more information, see www.independent.org/books.

Steve H. Hanke Professor of Applied Economics, Johns Hopkins University June E. O’Neill James J. Heckman Director, Center for the Study of Busi- Nobel Laureate in Economic Sciences, ness and Government, Baruch College University of Chicago P. J. O’Rourke Wendy Kaminer Author, Don’t Vote! - It Just Encourages Bruce M. Russett Contributing Editor, The Atlantic the Bastards and The Baby Boom Dean Acheson Professor of International Relations, Yale University Lawrence Kudlow James R. Otteson, Jr. Chief Executive O cer, Professor of Economics, Wake Forest Pascal Salin Kudlow & Company University Professor of Economics, Arnold S. Trebach University of Paris, France Professor of Criminal Justice, John R. MacArthur Thomas J. Peters, III American University Publisher, Harper’s Magazine Co-Author, In Search of Excellence: Vernon L. Smith Lessons from America’s Best-Run Nobel Laureate in Economic Sciences, William Tucker Deirdre N. McCloskey Companies Chapman University Author, The Excluded Americans: Distinguished Professor of Liberal Arts Homelessness and Housing Policies and Sciences, Univ. of Illinois at Chicago Charles E. Phelps Joel H. Spring Provost and Professor of Political Professor of Education, Queens College Richard E. Wagner J. Huston McCulloch Science and Economics, University of and Graduate Center, City University Hobart R. Harris Professor of Professor of Economics, Rochester of New York Economics, George Mason University Ohio State University Daniel N. Robinson Rodney Stark Paul H. Weaver Thomas Gale Moore Distinguished Professor Emeritus of Distinguished University Professor of Author, News and the Culture of Senior Fellow, Hoover Institution Philosophy, Georgetown University the Social Sciences, Baylor University Lying and The Suicidal Corporation Charles Murray Paul H. Rubin Richard L. Stroup Walter E. Williams Senior Fellow, Samuel Candler Dobbs Professor of Adjunct Professor of Economics, Distinguished Professor of Economics, American Enterprise Institute Economics, Emory University North Carolina State University George Mason University 4 INDEPENDENT

Independent Institute in the News

Center on Entrepreneurial Innovation Center on Peace and Liberty “Local communities have lost too much self-deter- “To explain Spain’s repression, follow the money. mination. As recent catastrophes show, it’s time to Although Catalonia has a separate culture from empower local fire districts and private landowners Spain, it is a cash cow for the Spanish government. It to direct prevention efforts year-round, and in- is Spain’s wealthiest region and supplies more in tax crease their own proactive capabilities. This would dollars to the central government than it gets back.” establish proper priorities and stricter accountabil- —Ivan Eland in Newsweek, 10/19/17 ity, and ensure greater efforts to protect the public.” —Lawrence J. McQuillan in The San Francisco Chronicle, 10/31/17 Center on Law and Justice “‘Gun control’ is code for unconstitutionally criminalizing the possession of common firearms by ordinary citizens. Just like our response to 9/11, our reaction to the Las Vegas massacre should be IVAN ELAND ON C-SPAN’S that we continue to live and stand strong as free WASHINGTON JOURNAL, 11/22/17 Americans.”” Center on Global Prosperity —Stephen P. Halbrook in The Sacramento Bee, 10/12/17 “Macron’s reforms should frighten no one. We know they work. An obvious example is Germany, France’s Center on Educational Excellence neighbor, which implemented them more than a decade ago and whose economy is a locomotive that “ESAs are the latest advance in educational not even the recent and dreadful European decade innovation that offer all students, regardless of could stop.” their income or address, the opportunity for personalized learning customized by those who —Alvaro Vargas Llosa in The Hill, 10/18/17 know and love them best: their parents.” —Vicki E. Alger in The Washington Times, Media Reach: 2nd Quarter FY 2018 12/6/17 (October, November, December 2017)

Center on Healthcare Choices 1.063 Billion Total Media Reach “We don’t require people to buy broccoli. Or eat spinach. We don’t require them to exercise. Or join 800 a health club. By the same logic, we shouldn’t require them to buy health insurance unless there is a very 700 strong reason to set aside the normal presumption 600 in favor of individual liberty.” —John C. Goodman in Forbes, 11/20/17 500

400

300 840,511,620

Media Reach (millions) Media Reach 200 123,225,214

100 72,827,764 26,256,189

0 JOHN C. GOODMAN ON PRINT RADIO TV WEB FOX BUSINESS NETWORK, 10/20/17

VISIT OUR NEWSROOM AT INDEPENDENT.ORG/NEWSROOM TO READ THESE ARTICLES AND MORE. Newsletter of the Independent Institute 5

THE INDEPENDENT REVIEW Symposium on Immigration

The United States has long America of its democratic insti- been the top destination for tutions, a caper allegedly master- migrants, but in recent years minded by the late Nobel laureate more people than ever—about economist (and Independent In- 1 million annually—have found stitute Board of Advisors member) their way to the land that John James M. Buchanan, author of F. Kennedy and Ronald Reagan books such as Democracy in Deficit called “a nation of immigrants.” and The Limits of Liberty. Consequently, the share of for- Buchanan, it is true, led a eign-born U.S. residents is now scholarly field that seeks to view just under its all-time high of politics realistically, not roman- 14.8 percent in 1890. tically; the findings of pub- Although the influx has been lic-choice analysis therefore often met with public controversy, stray from the textbook version social scientists have been largely THE INDEPENDENT REVIEW of democracy taught in high- ambivalent or optimistic, view- WINTER 2018 school civics. But it’s also true ing the free movement of workers site direction, exaggerating the that Buchanan disdained the en- as a net benefit to the United costs and minimizing the benefits trenched elites who undermined States akin to the gains from in- of immigration.” the aspirations of ordinary people. ternational free trade. However, Jones: “One side effect of Democracy in Chains, however, not every academic researcher immigration deserves particular neglects this “populist” facet of holds this view. attention: the populist backlash Buchanan. For this reason and As The Independent Review against immigration itself.” others, Munger argues that the co-editor Robert M. Whap- Whaples: “In the interdisci- book is best viewed as a work of les writes in our winter 2018 plinary spirit of The Independent speculative historical fiction. issue, “One noted exception to Review, we hope that these ar- Munger’s takedown is with- this ‘economistic perspective’ is ticles will push readers to con- ering, but it’s his masterful pre- George J. Borjas—author of sider immigration in its broadest sentation of public-choice the- a stream of important research context.” ory that makes his article must articles on the economics of im- This symposium is another reading. Highly recommended! migration and a recent, influential example of our aim of raising the book, We Wanted Workers: Unrav- quality of public-policy debate. See www.independentreview.org eling the Immigration Narrative.” Read it, and tell us whether or Borjas, who teaches labor eco- not you agree. nomics at Harvard Univ., con- eSubscriptions Origins and Goals tributes the feature article for Now Available! our immigration symposium. It’s of Public Choice followed by replies from Garret Also notable in our winter Jones (George Mason Univ.) and issue is co-editor Michael C. Independent Institute Senior Fel- Munger’s critical review essay To download, please visit the: low Benjamin Powell (Texas Tech about Democracy in Chains, a • Apple App Store Univ.). The following quotes may controversial National Book • Amazon App Store give you the flavor of the debate: Award Finalist by historian • Magzter Digital Newsstand Borjas: “Immigration [to the Nancy MacLean. As of Novem- United States] is responsible for a ber 16, the essay has been cited Single Issues: $2.99 huge redistribution of wealth, to- in 34 media outlets, including Annual Subscriptions: $9.99 taling around half-a-trillion dol- Forbes, National Review, Reason, lars per year, from native workers Wall Street Journal, and Wash- who compete with immigrants to ington Post. those natives who use or employ A professor at Duke Univer- immigrant labor.” sity (where Munger also teaches), Powell: “Borjas’s own writings MacLean claims to have un- tend to filter things in the oppo- covered a systematic plan to rob 6 INDEPENDENT

Economic Freedom in North America

Source: Economic Freedom of North America 2017

Although many in Congress may be focused on opportunity, the message is crystal clear. “The easing the government’s burden on households and 2017 report shows the public, news media, and making the United States more competitive glob- policymakers in Sacramento what changes need ally, policymakers in two of the nation’s four largest to be made to make California competitive in the states appear to have been doing the opposite. future,” said Independent Institute Founder and California (the most populous U.S. state, with President David J. Theroux. about 40 million residents) and New York (the Fortunately, there is good news for some four largest, with about 20 million people) are the Americans. New Hampshire ranked highest in lowest ranked in economic freedom and oppor- economic freedom for the third year in a row, tunity, according to Economic Freedom of North scoring 8.3 out of 10 in measures of government America 2017, a study published in December by spending, taxation, and labor market restrictions Canada’s Fraser Institute in conjunction with the based on 2015 data, the most current available. Independent Institute. Texas and Florida (the second and third most Ranking 49th out of 50, California has policies populous states, respectively) tied for second more harmful to economic freedom and opportu- place, South Dakota ranked fourth, and Ten- nity than any state other than New York. Its potent nessee placed fifth. combination of high taxes and regulatory overreach Economic performance is tied to economic has been so toxic for economic opportunity that freedom, the report shows. In the most-free states, many workers and employers have fled the golden the average per capita income in 2015 was seven state for greener pastures. percent above the national average, whereas the “California’s lack of economic freedom least-free states had incomes of roughly five percent helped motivate more than 10,000 businesses below the national average. to leave the Golden State, reduce operations, or Unfortunately, the average score for U.S. states expand elsewhere during the past seven years,” in the all-government index (federal plus state) said Lawrence J. McQuillan, Senior Fellow and has fallen from 8.20 in 2004, to 7.78 out of 10. Director of the Independent Institute’s Center This decline is driven largely by changes at the on Entrepreneurial Innovation. federal level. In comparisons with other countries, California’s high-tax/regulatory squeeze has the United States ranked 11th (tied with Canada) also contributed to an exodus of workers. Census out of 156 countries. data show that 3.5 million people left Califor- The 2017 report, which also ranks economic nia from 2010 to 2015. “The loss of talent and freedom in 32 Mexican states, and 10 Canadian creativity is staggering, and bad policies coming provinces, was co-authored by Fred McMahon, out of Sacramento will drive more people away,” Dean Stansel, and José Torra of Canada’s Fraser McQuillan said. Institute, which partners with the Independent For California, which was once widely con- Institute in the EFNA (Economic Freedom of sidered the “promised land” of innovation and North America) Network. Newsletter of the Independent Institute 7

Personalized Learning for California | 1 K-12 Students Thrive with Independent Institute POLICY REPORT Education Savings Accounts CUSTOMIZED LEARNING FOR CALIFORNIA Helping K–12 Students Thrive with Education Savings Accounts

From agriculture to tour- grams rely on By Vicki E. Alger

ism and from Hollywood public fund- Executive Summary The taxpayer-funded public education system in Mississippi, and Tennessee. And so far in 2017 at least California is broken. It costs residents nearly $66 17 bills enacting or expanding ESA programs have billion dollars annually, resulting in an average per been introduced in 13 states. to Silicon Valley, Cali- ing through student cost of more than $12,000. In fact, K–12 ESAs are popular, easy to use, fi scally responsible, education represents the single largest share of the and constitutional. Best of all, they empower parents state’s entire general fund budget, nearly 43 percent. to choose how, not just where, their children are Yet student achievement places California among educated, which customizes learning in ways that no fornia is a leader in many legislative ap- the bottom fi ve states in the nation in reading and one-size-fi ts-all system could ever match—no matter math. Currently, nearly one out of fi ve high school how lavishly funded. students does not graduate, and just 43 percent of This Independent Institute Policy Report discusses those who do graduate meet California’s four-year K–12 education options in Calfornia, explains industries. Unfortunately, propriations. college course requirements. the basic mechanics of ESAs, corrects misconceptions The proven policy-path for dramatic improvements about ESAs, and outlines the features of a California in student achievement is parental choice: giving ESA program that is privately funded through parents the ability to choose the methods and means tax-credit contributions, much like tax-credit of their children’s education, including the freedom to scholarship programs operate in other states across its K-12 public-school Alger, in con- use education savings accounts, or ESAs. the country. The Appendix offers an elaboration of The concept behind ESAs is simple. In the typical the fi scal impacts of the California ESA proposals ESA program, parents who do not prefer a public and provides a comparison of ESAs programs in fi ve school for their child simply withdraw him or her, and states. system is not one of them: trast, proposes the state deposits most or all of what it would have California’s public school system, which largely spent into that child’s ESA. Parents then receive a rations education based on where a child’s parents can type of dedicated-use debit card to pay for authorized afford to live, is a relic of a bygone era. Such a system expenses including private school tuition, online cannot provide the customized preparation students Student achievement a California courses, testing fees, tutoring, and special education need to succeed in a rapidly changing, increasingly therapies. Any leftover funds remain in the child’s competitive world. In contrast, ESAs would empower ESA for future education expenses, including college parents and guardians to personalize their child’s under some programs. education, and would foster a educational landscape scores put the state among ESA program Today ESAs are helping more than 11,000 students that can quickly adapt to meet the diverse needs of in states with operational programs: Arizona, Florida, students and their families. the bottom five in the that relies on a Copyright © 2017 by Independent Institute www.independent.org nation for reading and math. The Golden State different fund- could fix this problem and become a national ing mechanism: tax-credit contributions.Alger leader, however, if lawmakers in Sacramento pass estimates that her tax-credit ESA proposal would legislation to create Education Savings Accounts generate net savings to local schools and the state. (ESAs), according to Independent Institute Re- In 2017, at least 17 bills enacting or expanding search Fellow Vicki E. Alger. ESA programs were introduced in 13 states. It’s “ESAs empower parents and guardians to easy to see why they enjoy growing popularity. customize their children’s education, and would ESAs empower parents and guardians to person- foster an educational landscape that can quickly alize their children’s education. adapt to meet the diverse needs of students and If they are adopted on a mass scale—if every their families,” Alger writes in the new Indepen- K-12 student were eligible to participate—then dent Policy Report, Customized Learning for ESAs would foster an educational landscape that California: Helping K-12 Students Thrive with could quickly adapt to meet the diverse needs of Education Savings Accounts. students and their families. That’s something ESAs put parents in charge of their children’s California’s current public-school system, which education funding so they can pay for things such rations education based on where a child’s parents as tuition, special education therapies, tutoring, can afford to live, seems incapable of doing. and online curricula. This is done through a With the publication of Customized Learn- dedicated-use debit card that allows parents to ing for California, lawmakers in the nation’s purchase eligible education services and supplies. largest state have no excuse for accepting educa- Today ESAs are helping more than 11,000 stu- tional mediocrity. dents in states with operational programs: Arizona, See www.independent.org/publications/pol- Florida, Mississippi, and Tennessee. These pro- icy_reports/.

ASSESSING TAX REFORM (continued from page 1) be to propose a much simpler tax code in ways that It’s the Spending, Stupid! Chronic budget minimize political blowback from special interests. deficits and a record national debt are direct Permanence. Several parts of the new tax law results of profligate public spending, not losses of are set to expire in 2025, including the cuts in revenue. If the federal government won’t balance individual tax rates, the larger standard deduction, its budget by raising enough revenue to cover its and the five-year provision for immediate and “full expenditures, it should heed the advice of Adam expensing” of business investments. Lawmakers Smith (and Charles Dickens’s Mr. Micawber) by should make the tax cuts permanent as soon as lowering spending to meet its revenue. Entitlements it’s politically feasible. reform, anyone? Corporate income taxes. Corporations ultimately The 2017 tax law isn’t perfect, but it’s worth do not pay income taxes, only people do. Because toasting overall. Most taxpayers will get to keep corporate taxes are shifted to stockholders, employees, more of their own money, and the economic pie suppliers, and customers, one can make a principled will grow faster. Still, much work lies ahead on the case for a corporate income-tax rate of zero. path to economic freedom and prosperity for all. 8 free markets tosolve pressing stateandnationalprob- and thinkingonliberty and themedia,tospurnew outreach to Millennials, business and civic leaders, academics, andstudents. ourambitious They support create auniqueknowledge baseforpolicymakers, how ourpeer-reviewed research andpublications problems facingournationandworld. providing innovative, market-based solutionsto the educate current andfuture generationsofleadersby projects toinspire to discussourforthcoming and dropped withhiswifeCarolyn by ourheadquarters executive (TeraGen, amongothers), Terry recently versity ofCalifornia,Santa Barbara) andtechnology many ways.Aretired electricalengineer(Ph.D., Uni- Independent longtime donorwhohassupported in been contributingfortenortwenty years ormore! Sponsor Spotlight: Terry L.Gannon NON-PROFIT ORG For over adecade, Terry andCarolyn have seen Terry L.Gannon of Woodside, California,isone US POSTAGE PAID 100 Swan Way KENT, OH Oakland, California 94621-1428 PERMIT #15 CHANGE SERVICE REQUESTED for liberty. dedicated donors some ofthemost tute isproud tohave Independent Insti - and know theyhave with ourdonors pendent toengage unusual forInde- It isnot at [email protected] or (510) 632-0824. at [email protected](510)632-0824. contact Development Director Stephanie Watson on how you canhelpadvance ourmission,please anddignity.human worth For more information and free societies grounded in a commitment to mission istoboldlyadvance peaceful,prosperous, Institute non-profit whose isanon-partisan, Located adjacenttoSilicon Valley, theIndependent www.ClimateIlluminated.com. congratulations your website new onclimateissues, tunity, equity, andprosperity through liberty—and sharing avisionofworldofferinggreater oppor- a word from Terry: tunities forupward mobilityacross theglobe.Here’s technology toalleviatepoverty andprovide oppor- work thatconnectsfree-market and opportunities lems. The Gannons alsofosteroursolution-oriented “The Independent Institute “The provides anincredible Thank you, Terry andCarolyn Gannon, for contributing today.” peaceful, prosperous, free societiestojoinmeby encourage anyone interested creating afuture of dent Institute ismissionfocused,andIwould work ishavingapositive impact. The Indepen- the broad set of issues we face today. Its influential return oninvestment by aggressively addressing email newsletter of the Independent Institute Independent the of newsletter email • • • • • Subscribe

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