Views

Tax Reform Must Be Sustainable

Earlier this month, the voters of Missouri decisively defeated a constitutional amendment authorizing an end to the state’s income tax. It was an overwhelming defeat — 17% for, 83% against — for a ballot measure that failed in urban, suburban, and rural counties alike.
Did this event just set off a progressive counteroffensive against 15 years of state-level tax reform across the country? That’s no academic question in North Carolina, a leader in the tax-reform movement. Through legislation, not referendum, the General Assembly has slashed tax rates on personal and corporate income while broadening the tax base, broadening and reducing the sales tax, and reforming other taxes. Our use of revenue triggers to phase in tax changes has become a national model. And lawmakers have placed a constitutional amendment on the North Carolina ballot that will have the effect of limiting future property-tax increases.
Does the vote in the Show Me State portend a similar result in the Tar Heel State? Nah. I expect the property-tax amendment to pass, albeit not by a comparably overwhelming margin.
Missouri voters don’t love taxes generally or the income tax specifically. But on fiscal matters, they are conservative with a small “c,” as are our own voters. Capping future increases in property tax is a very different ask than abolishing an entire form of taxation, especially when voters are being asked to do so without a clearly laid out plan to fund core public services some other way.
There was a plan, to be sure, and in broad outlines it conformed with prudent reform principles. The purpose of taxation is to finance public services, not to engineer economic or social outcomes. It is best accomplished by applying a single marginal rate to a properly defined tax base. To do otherwise is to create disincentives to work, save, and invest, and to violate the principle of proportionality; if you are, say, three times better off than I, you ought to pay three times as much tax.
Although total income might seem like the proper tax base, it is not. If you tax the principal of an investment, the money used to buy equities or build factories, then you have already reduced the future stream of income by that percentage. To tax the resulting dividends or capital gains is artificially to make consumption more attractive than investment.
In Missouri, the plan was to phase out the income tax in favor of a sales tax more broadly applied to all goods and services sold at retail. Okay, but to accomplish that would require taxing medical care, legal representation, banking, and other services sold by powerful interest groups that will fight tooth-and-nail against it. That’s why broad-based sales taxes are extremely rare. When Missourians were told that, in practice, their sales tax might shoot up north of 10%, they got antsy. What if some future governor and legislature reintroduced an income tax on top of a skewed and costly sales tax? Or a failed sales-tax reform led to budget deficits and fiscal chaos?
In other words, “grand bargain” strategies for tax reform are risky. They contain lots of moving parts, some easier than others to sell or maintain. They change established systems and practices that may not comport with abstract principle but around which households and businesses have long structured their daily operations. Ideological opponents can readily identify these risks, exaggerate them into guaranteed calamities, and then partner with spending lobbies and special-interest groups to destroy the grand bargain, as just happened in Missouri.
There are alternatives. Regarding North Carolina’s tax code, my John Locke Foundation colleagues recommend that the General Assembly index the standard deduction to inflation, remove long-term capital gains from the tax base, and attempt to expand the sales tax to other retail services only after fully exempting business-to-business transactions (which are not, of course, retail sales).
Tax reform succeeds to the extent it is sustainable and retains public confidence. North Carolina has the right approach.

Editor’s Note: John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).

Pitt Dickey: Make America Medieval Again

Are you in a good humor today? Speaking of humor, pretty soon our special little guy RFK Jr is going to bring back the Four Humors of the Apocalypse. Step right up to admire RFK Jr’s Make America Medieval Again (MAMA) movement.
Return with us now to the thrilling days of yesteryear when medical science was ruled by the Medieval Times four humors – Black bile, Yellow bile, phlegm, and blood. Each humor represented a season and had to be in balance with each other.
Have you done your own research to convince yourself that medical science in the form of Dr. Fauci is pure evil? Do you think vaccines are the Devil’s work?
Then you are going to love MAMA. We don’t need no stupid medical science.
Secretary Kennedy’s MAMA movement will take us back to the good old days of Medieval medicine. Like Flounder said in Animal House before the Faber College homecoming parade: “Oh boy, this is going to be great!”
The current Administration has indicated that America can no longer afford Medicare and Medicaid. Wars, ball rooms, and reflecting pools cost money. To save tax dollars for more fun stuff, it is necessary to cut back on medical treatment for Americans.
Behold the new consolidated federal health program MedievalCare! It will cover all Americans. Fortunately, there is a wealth of medical practices from the Dark Ages which are eagerly waiting to be returned to prominence. They are cheap, rely on natural sources, and some might even work. Let the show begin. What does MAMA have in store for America?
MedievalCare! will bring back tried and true Medieval medical practices.
First up is the return of Leeches to cure what ails you. If your Doc thinks you have too much of the blood humor, he will starve a bottle of leeches for a couple of days. Slap those thirsty little guys on your body and watch “em go.
If the leeches didn’t work, then bloodletting is the next protocol; your barber will slice some gashes in your arm and let you bleed into a jug until you are healthy. In Medieval times, barbers were also surgeons. That’s why barber poles have red and white stripes. The red represents blood.
The white represents the bandages barbers used to cover their mistakes. Besides, barbers are cheaper and more plentiful than medical doctors. They have better stories too.
MedievalCare! can fix almost everything. Got a headache or depression? Hurry over to your barber/surgeon for an afternoon of Trepanning. Trepanning involved drilling a hole in your skull to let out bad stuff.
No more need for anesthesia. That is for sissies. The barber/surgeon will whip up a batch of Dwale to knock you out.
Dwale was based on an ancient Roman recipe of a happy mixture of boar bile, wild lettuce, opium, henbane, mandrake root, hemlock and wine. The patient drinks it until he passes out and the surgery begins. In some cases, the patient might even wake up after the surgery.
Pharmacists will be obsolete. Barber/surgeons will compound natural drugs. Moldy bread wrapped in spider webs cures infected wounds.
The dead bodies of criminals are great sources of healing medicine. Medieval executioners took the bodies of the departed and ground their bones into powder. They would render the fat of the deceased into a liquid, storing it in jugs marked Axung Hominis.
Mix in the ground-up bones. Then patients would rub it on aching arthritic or gouty joints as a salve. Many MedievalCare! patients won’t survive. There will be plenty of Axung Hominis to go around.
Snail syrup will return to cure sore throats, gastric ulcers, coughs, burns and serve as beauty products for Milady. Gather up a pound of snails in the garden in the early morning. Remove their shells.
Put them in a bag with a half pound of sugar. Hang them over a basin. The sugar will dissolve the snails. The gooey, sweet snail juices will drip into the basin, providing you a fresh batch of snail syrup.
Greek White is particularly versatile. Greek White is made from the white residue that forms on the outside of doggy poop.
Apply as a salve to cure tonsil pain, lung congestion, and to shrink tumors. Mouse poop is useful for curing intestinal worms. Stuff a puppy with snails, roast it, and you have the cure for lung congestion.
Got a cataract? Your barber/surgeon does a procedure called Needling. He pushes a needle into your eye to move your cornea down away from your pupil which is now clear but unable to focus. Fortunately, you can still work in the fields harvesting lettuce.
Our brave new world of MAMA and MedievalCare! is just around the corner. RFK Jr knows best. Medical Science is hokum. 
Love your MAMA.

(Illustration: Big MAMA loves you! By Pitt Dickey)

Dan DeBruler: We Were Always Becoming

At a recent Saturday morning gathering of several men, I posed a question:
“When did you become the man you are today?”
The idea was simple, but the implications led us into a much deeper conversation about how the way we think affects nearly everything else. After a few attempts by the typical “I’ll go first” guys, the others gathered around the table began to catch on. There was no right or wrong answer. Speaking first did not require any special courage, and waiting for someone else to respond did not make an answer less meaningful.
This was not a test. It was an invitation to honesty. Honesty with one another. Honesty with ourselves. And, perhaps most importantly, honesty before God.
None of us became who we are in a single moment. There may have been defining experiences along the way—a decision, a loss, a success, a failure, a relationship, or a season of hardship—but even those moments became part of something larger.
We were shaped gradually.
The question was intended to help us consider the decisions, habits, assumptions, and compromises that formed the person we have become. Some of those influences were obvious. Others worked quietly
beneath the surface.
That is the troubling thing about becoming: It often happens while we believe we are simply doing. We go to work. We come home. We respond to problems. We entertain ourselves. We manage our responsibilities. We repeat familiar routines. We tell ourselves that these are merely isolated choices—small decisions that have little bearing on anything beyond the moment.
But repeated choices rarely remain isolated. A decision becomes easier the second time. A reaction becomes a pattern. A pattern becomes a habit. A habit begins shaping the way we think. And eventually, the way we think becomes part of our character.
Every tomorrow reveals that we were always becoming. The person we are today is, in many ways, the accumulation of yesterday’s responses. That does not mean we are imprisoned by our past or unable to change. It does mean that change requires more than good intentions.
We must learn to pay attention.
What are our current habits teaching us? What do our private choices reveal about what we truly value? Are our routines shaping us into people who are patient, courageous, truthful, generous, and dependable? Or are we slowly becoming more distracted, defensive, resentful, or self-centered?
These questions are not meant to produce shame. They are meant to awaken us.
We cannot change every circumstance that has shaped us, but we can become more intentional about what shapes us next. We can examine our thinking, challenge unhealthy patterns, repair neglected relationships, and choose better responses.
The question is not merely, “What am I doing today?”
The better question may be, “Who am I becoming through what I am doing today?”
Tomorrow will eventually give us the answer.

Minimum Wages are Popular — and Unwise

As a Freedom Conservative, I recognize that some policies I favor are broadly popular, others draw mixed reviews, and a few are broadly unpopular. I also recognize that, as a commentator rather than candidate for office, I enjoy a greater latitude to advocate policies I think are wise even though most of my fellow North Carolinians do not (yet) agree with them.
One example is a minimum wage set by government diktat. The United States specifies a national minimum wage of $7.25 an hour for most jobs. Most industrialized countries set wage floors, often higher ones in real terms than America’s. Furthermore, most states set minimum wages within their jurisdictions that are higher than the federal floor, including Florida at $14 an hour, California at $16.90, New York at $17, and the District of Columbia at $18.40.
North Carolina is one of the states that hasn’t raised the legally required minimum. That is one reason the Tar Heel State fares well in national comparisons of state regulatory burdens. For example, in the Fraser Institute’s most recent Economic Freedom of North America Index, North Carolina ranks 7th. Among our neighbors, only Tennessee (2nd) is rated higher in economic freedom.
I think employers and employees should be free to strike their own bargains. If I offer you $5 an hour, you won’t work for anything less than $10, and I deem that too high a price to pay for your labor, then we make no deal. Or we might meet in the middle, at $7.50, and become colleagues.
That doesn’t mean I see no role for government. Recourse to the courts to resolve contract disputes is essential. Certain forms of regulation may also be necessary to deter fraud and other forms of abuse — to ensure that the explicit or implicit bargain struck represents a true meeting of the minds. But I don’t think that, in a free society, regulators or politicians possess either the requisite knowledge or the moral authority to determine what a “fair” rate of compensation is for any or all jobs.
Still, I freely admit that most North Carolinians, and very possibly most of my readers, do not agree with this view. They believe it is possible and prudent to set wage floors.
Over the decades, I have argued that even when judged on its own terms — making poor people better off — the minimum wage is ineffective. Many workers gain higher incomes, of course. But many of these beneficiaries of the policy are not poor. Among the ranks of minimum-wage workers are millions of teenagers, young adults, or retirees whose household incomes far exceed the poverty level. At the same time, a minimum wage clearly makes some workers worse off. Often young and inexperienced, they do not yet possess the skills required to produce enough output per hour to make it worthwhile to hire them at the minimum. In response, employers redistribute the workload among fewer, higher-paid employees or automate tasks such as greeting customers, taking orders, accepting payment, and delivering goods or services. The result is that folks who are, indeed, disproportionately poor fail to gain employment at all.
Whether minimum wages produce joblessness is a question scholars have explored for many decades. Until the 1980s, the vast majority of studies showed a negative relationship between minimum-wage hikes and job creation or employment rates. Over the ensuing couple of decades, some scholars employing new models and empirical techniques challenged the traditional view with papers that showed scant effects on or even increases in employment.
I still think the traditional view is correct. In a comprehensive survey published in the journal Industrial Relations in 2022, University of California-Irvine scholar David Neumark and economist Peter Shirley concluded that there was “a clear preponderance of negative estimates” in the scholarly literature, especially “for teens and young adults and the less educated.”
I also think citing such findings is unlikely to change many minds. That won’t stop me from trying.

Editor’s Note: John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).

Troy's Perspective: DSA promotes anti-capitalism

Democrats have often downplayed the presence of socialists within their ranks. However, the reality is that the Democratic Socialists of America is the largest socialist organization in the United States, with chapters in all 50 states. Furthermore, a CNN poll indicates that at least one-third of registered Democratic Party members identify as socialists, suggesting that socialist ideas are more deeply embedded in the party than some may acknowledge. With this significant percentage identifying as socialists, one might question the actual numbers.
The Democratic Socialists of America has several local chapters and organizing groups in North Carolina. One of the largest chapters in the state is the NC Triangle DSA, which serves Raleigh, Durham, Chapel Hill and the surrounding communities. Although DSA does not appear to have a direct presence in Fayetteville or Cumberland County, some of their ideas are clearly influencing our community. It is concerning to see responsible adults promoting anti-capitalistic rhetoric in an area that North Carolina has designated as a Tier 1 low-wealth county.
Anti-capitalists hold a variety of beliefs, which means that many people can find common ground with certain aspects of their philosophy. The main divide among them lies in the methods used to achieve specific goals and objectives. For instance, while the aim of reducing economic inequality by narrowing the wealth gap between the rich and the poor is commendable, the approach of bringing down the wealthy to assist the poor is not practical.
Many citizens likely support strengthening social safety nets to reduce poverty and economic insecurity, which aligns with mainstream socialist objectives. However, critics argue that capitalism is an important component of economic growth and improving living standards. Large corporations often exert significant influence over politics, labor markets and society, a phenomenon that some view as a normal cost of doing business.
Here are some clearer examples: We need data centers. While regulation is important, we must not try to hinder their development. We should also embrace new technology industries, including emerging drone manufacturers. Economic development should not be restricted to just restaurants and gas stations on every corner.
Can poverty be eradicated without capitalism? The short answer is no; no one has proven a reliable method for eliminating poverty without some form of market-based economic activity. While the idea of providing free resources may appeal to some, the concept of the "Robin Hood Syndrome"—taking from the rich to give to the poor—is fundamentally flawed and may even be considered morally wrong by some.
The government's role is not just to provide free resources. A more effective solution to poverty is allowing the working class to retain more of their earnings by reducing taxes.
Our community's greatest asset is our children, so let's invest in their future. Education is the most effective path out of poverty. As August approaches and students head back to school, let's show our support for them and the dedicated educators who are shaping America's future leaders. There's nothing to protest—only much to celebrate.

Latest Articles

  • Fascinate-U celebrates Worldwide Day of Play
  • Is pet insurance worth it?
  • Kutz for Kids is transforming youth empowerment
  • Arts Council's new exhibit celebrates world cultures
  • History takes the stage: Temple Theatre presents "1776"
  • Arts Council's 48th annual International Folk Festival to be celebrated in Fayetteville
Up & Coming Weekly Calendar
  

Login/Subscribe