Half of Americans Hate on the First Amendment: Why We Need a First Amendment More Than Ever

Earlier this month, Vice Presidential candidate Tim Walz was on MSNBC when he said something I found shocking: "There's no guarantee to free speech on misinformation or hate speech, and especially around our democracy." As I covered in 2017, there is no hate speech exception to the First Amendment. Even "hate speech" is constitutionally protected. Reason Magazine brings up how misinformation is more complicated. Libel, lying to a government official, or fraudulent charitable fundraising are punishable. Conversely, some lies are protected (e.g., New York Times v Sullivan, 1964; United States v. Alvarez, 2012).

Sadly enough, Tim Walz is hardly alone in this authoritarian view and using "misinformation" as a pretext to want to stifle First Amendment rights. According to a recent survey from the Foundation for Individual Expression (FIRE), 53 percent of Americans believe on some level that "The First Amendment goes too far in the rights it guarantees." That partisan breakdown is over 60 percent of Democrats and 52 percent of Republicans. This is a perturbing trend given that the U.S. Left had been a major advocate for freedom of speech, especially during the birth of the Freedom of Speech movement in the 1960s. Although Republicans are less likely to take issue with the First Amendment, it is a more prevailing view that has taken over.  

What a majority of American citizens are really saying is that they wish they had fewer civil liberties. Benjamin Franklin once said that "those who would give up essential Liberty, to purchase a little temporary Security, deserve neither Liberty nor Safety." The feeling of security not only applies to national security, but also the security blanket that one's beliefs or worldviews holds. 

Not everyone believes, thinks, speaks, or acts the same way as you do. There is no constitutional right to not be offended. I cannot stand pro-Palestine protesters and their blatant lies. Given their anti-Semitic vile, I view them as modern-day Nazis. Nevertheless, I still believe in their First Amendment rights to [peaceful] protest and freedom of speech. Why would I take such a view? A few reasons:

1. As I brought up in 2017 with political correctness, the list of triggers is subjective and never-ending. If Woke people have taught us anything in the past few years, it is that there is always something that could be deemed offensive, whether that is using a non-preferred pronoun or something from an increasingly voluminous list of things that has been since deemed racist. If being offended were a right, there would be no upper limit on what could be banned or prohibited.
2. Freedom of speech is indivisible. For freedom of speech to work, that right has to apply to those with whom I emphatically disagree, as well as those as with whom I agree.
3. To support freedom of speech means understanding that diverging viewpoints exist. Allowing for those viewpoints and beliefs to be expressed means fostering tolerance towards those who are different from us. 
4. Historically, the government has wielded its raw power to silent dissidents and those who speak truth to power. Freedom of speech, religion, and protest are almost always the freedoms that authoritarian governments stifle first. It is no coincidence that authoritarian governments commonly and often coerce and silence journalists. That is because those that are too insecure in their own beliefs or ideas feel the need to strong-arm those that disagree or reveal information that is unflattering to an authoritarian's worldview. 
5. Freedom of speech is neither inherently "left-wing" or "right-wing." It is for everyone, regardless of one's political views, religion, race, gender, ethnicity, or sexual orientation. Having an intellectual marketplace allows to advance new ideas and find like-minded individuals to inculcate social and political change. 
6. The First Amendment gives us the ability to express ourselves openly. As long as people are not harming others vis-à-vis the non-aggression axiom, I want people to live their lives as freely and happily as possible. That includes their freedom of speech, religion, press, assembly, and petition. To quote Supreme Court Justice Thurgood Marshall, "the human spirit...demands self-expression. Such expression is an integral part of the development of ideas and a sense of identity. To suppress expression is to reject the basic human desire for recognition and affront the individuals's worth and dignity." 

Many Americans seem to view freedom of speech with a "fine for me, but not for thee" mentality. When they can express themselves, it is acceptable. However, when it is someone with whom they disagree expresses their views and opinions, it is a whole different scenario. This attitude comes from a society that prefers to avoid or silent dissent instead of learning how to have difficult conversations on controversial issues. What is unnerving is that Americans have more tolerance for unprotected conduct than they do various forms of protected speech, much as we have seen with the recent pro-Palestine protests on college campuses.  

When I criticized the Danish government last December for banning Quran burnings, I was dismayed at how the "free world" is putting the kibosh on free speech. However, I at least had a sigh of relief saying "at least the United States still has a First Amendment." One of the reasons that the United States has historically been a great country is because of the First Amendment rights that it offers. Yet the trend towards hating the First Amendment makes me wonder where my country has gone. If the government starts choosing which ideas or beliefs are "hate speech" or "misinformation," we will find ourselves in an Orwellian state in which 2+2 = 5. I do not want that. 

As long as people want more power and/or money, freedom will always be on the defensive. I want to be free. So many revolutions across history were fought because of a desire to be free. With snowflakes on both sides of the political aisle, we need to fight against those who want to censor and make cancel culture woven into the fabric of U.S. society. More than ever, we need to reignite the part of society that values the freedoms that the First Amendment enshrines and have historically made the United States a shining city on a hill. Otherwise, the United States will become an authoritarian hellhole that is negatively depicted in so many dystopian movies. 

Harris' Corporate Tax Hike Would Hurt Everyday Workers: A Lesson on Who Actually Pays Corporate Taxes

As Vice President Kamala Harris gets momentum on being the Democratic nominee for president, she has unveiled more of her policy ideas. Last week, Harris proposed her first policy idea to raise revenue: raising the corporate tax rate from 21 percent to 28 percent. She said that this is "a fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share." 

If business taxes were primarily paid by the business owners, this could be a way to raise money from high-income Americans. As recent analysis from the libertarian Cato Institute shows, it does not work that way. The business owners or the stockholders do not bear the majority of the tax incidence: it is the everyday workers. Cato Institute pointed out one research paper from the Right-leaning Tax Foundation (Entin, 2017) concluding that "Labor bears between 50 and 100 percent of the burden of corporate income tax, with 70 percent or higher the most likely outcome." 

The Cato Institute brings up another bit of bad news. The loss of societal economic welfare, referred to as deadweight loss, could very well be higher than the government revenue earned. Historically, a tax increase in the United States of $1 has decreased GDP by $3 (Romer and Romer, 2010). Because high corporate taxes depress wages of laborers (Hasset and Matthur, 2011), that could be high as 400 percent of the revenue collected, as one study from the Federal Reserve Bank of Kansas City found (Felix, 2007). 

Conversely, economic results from the Tax Cuts and Jobs Act (TCJA), which included a corporate tax cut, showed a 0.9 percent increase of GDP in the long-run, as well as an average increase of labor income of $700 per employee (Chodorow-Reich et al., 2024). I actually wrote on the topic of corporate taxes cuts boosting economic growth in November 2023, which means the damage caused by corporate taxes is nothing new here. 

I have covered how awful the corporate tax is in 2014, in 2017, in 2021, and in January 2023. The Organization for Economic Cooperation and Development (OECD) is hardly for limited government, yet the OECD found that the corporate tax is the most harmful for economic growth. Corporate taxes depress wages of laborers, disincentivize savings, create a huge tax burden, and reduce productivity of labor. 

There are two silver linings I have for Harris' proposal. One is that the increase is only to 28 percent (see above). I keep this in mind given that it was 35 percent pre-TCJA. Even so, 28 percent would bring the United States to the highest corporate tax rate in the developed world. Two is that the Republicans are likely to gain a majority in the Senate come November, which means that this will likely be shot down before it sees the light of day. But if she does get her way, what the empirical research does make clear is that her corporate tax hike would depress wage growth for everyday workers, damper investment, and lower economic growth. 

Harris' Price Controls on Grocery Stores Are a New Level of Economic Illiteracy, Even for Her

It is true that I am not a fan of many of Trump's economic policies. This year, I criticized his proposed tax exemption on Social Security benefits, tax exemption on tipping (which Harris later copied), his past steel tariffs, and his proposed 60 percent tariff on China. Trump has delved into economic illiteracy more than once, but it looks like Harris could very well outdo Trump in terms of economic lunacy. 

Harris previously advanced certain economic idiocies, such as the Green New Deal, Medicare for All, abolishing private health insurance, and a federal subsidy for rent payments. Now we can add more items to that list of insanity. Last week, Harris released her economic plan for what she would do to lower prices if elected. One of the items in her plan was to "advance the first-ever federal ban on price gouging on food and groceries," which I think takes the cake (pun intended) for dumbest policy proposal during this presidential election cycle.

Forget for a moment how in the world a Harris administration would even begin to determine what constitutes a "fair price" in a complex market with a myriad of grocery items and price differentiation in different regions of the country. It is unclear as to why Harris wants to apply "price gouging" laws to the grocery industry specifically. 

The grocery market has a profit margin of 1 to 3 percent, which is lower than other retail markets. I dispelled the notion of "greedflation" in late 2022. More specific to this particular market, if grocery stores were really trying to gouge consumers, their profit margins would be much higher. In reality, grocery stores are operating on razor-thin profit margins, which implies a lack of price gouging. How much more difficult do you think it would be if a Harris administration would squeeze these small profit margins even further? 

The lack of profit margins is not the only reason that Harris' plan is a solution in search of a problem. Jason Furman, who is a Harvard economist and was the chair of Obama's Council of Economic Advisors, told the New York Times that prices have stabilized and that price controls were unnecessary. This assertion will be confirmed with food inflation data shortly. If that were not enough, the Federal Reserve Bank of San Francisco released a research paper in May of this year showing the lack of correlation between the alleged price gouging and inflation (Leduc et al., 2024).

Then there is food as a percentage of income to consider. As data from the U.S. Department of Agriculture illustrate, food has accounted for about 11 percent of income for the past couple of years. Food has accounted for the highest percentage of income that it has been in about a decade. However, I want to bring up two points about food as a percent of income. 

One, people on average are spending more on eating, which is important given that it is more expensive to eat out than it is to eat at home. This is even more important given that inflation on food at home increased by 1.1 percent in the past 12 months, whereas it increased by more than triple for food out, at 4.1 percent (Bureau of Labor Statistics; see below). If people are worried about food prices, they should eat out less. 

Second, what we spend on food as a percent of income is lower than it has been in the past. That is not only evident in the graph below. Left-leaning economist Dean Baker brings up that food accounted for nearly a quarter of one's budget back in the mid-1940s.

Most importantly, her "price gouging" proposal is nothing more than a price control limiting how much grocery stores can charge for groceries. Rather than make groceries cheaper, price controls on groceries would make groceries more expensive. 

How do I know this? Over the past four millennia, price ceilings have been a disaster when implemented, whether it is drug pricing, an overdraft cap, fixed exchange rates, price-gouging laws during natural disasters, consumer loan interest rate caps, and Harris' beloved rent control. You can read more at this article from the Cato Institute here. To quote a 2020 research paper from the World Bank:

"Although they are sometimes used as a tool for social policy, price controls can dampen investment and growth, worsen poverty outcomes, cause countries to incur heavy fiscal burdens, and complicate the effective conduct of monetary policy." 

Groceries are not exempt from the law of supply and demand. In her plan, Harris stated that market consolidation is what is causing the high grocery prices in the first place. When I analyzed this topic in March, I concluded that the Federal Trade Commission (FTC) should not get in the way of the Albertsons-Kroger merger. I brought up how that given the ever-evolving nature of the grocery market, the merger is actually an example of increased competitiveness. If Harris succeeds in limiting prices, it limits a company's ability to grow and its willingness to operate, especially in less populated areas. As we see in the chart above, a price ceiling limits supply, thereby increasing prices.

This is not only criticism from a libertarian/fiscal conservative/capitalist such as myself. When the Left-leaning Washington Post, CNN, New York Times, and Newsweek all comment on its considerable flaws, you know Harris' plan of implementing price controls on groceries is a terrible idea. Rather than lower grocery prices, a price ceiling on groceries would limit the supply of groceries while exacerbate the inflation she is trying to prevent. Since Harris has not specified the extent to which she would like to meddle in the market, we do not know the exact magnitude of harm. However, if past price ceilings have taught us anything, her "price gouging" proposal will not help the everyday shopper.

I believe it is hard for Harris to have a clear view when she is defending Bidenomics instead of acknowledging the administration's role in exacerbating inflation. She might be proposing this price-gouging law to tacitly compensate for the Biden administration's failures in this respect, although she is trying not to be too critical since Biden is the incumbent and she was an ardent supporter of Bidenomics. It was actually both expansionary monetary policy and expansionary fiscal policy that got us into this inflationary mess. Given the size of the money supply and the amount of debt incurred during the pandemic, we unfortunately are not going to see pre-COVID prices anytime soon.  

What worries me about this proposal, along with the rest of her economic plan, is that she wants a government that is even more heavy-handed than the Biden administration has been. With this "price gouging" law, she wants to blame a nonexistent boogeyman (Sorry, it's 2024...that should be boogey-person) of "greedflation." She should read this report from the John Locke Foundation, which illustrates such causes of food inflation as supply chain issues from the pandemic that have not resolved, labor shortages, and increased production costs. By addressing the root causes of food inflation, she would at least better target her concerns instead of using an economic policy that has failed time and time again. 

Milei Eliminates Rent Control in Argentina, the Housing Market Booms: When Will the U.S. Political Left Learn?

Javier Milei has grabbed my attention not only because he is the President of Argentina, but more notably because he is the first libertarian head of state. In January, I was excited about his push to deregulate one of the most highly regulated countries in the world. In February, I got to write about how Milei's austerity created the first budget surplus in Argentina in over a decade. Today, I have the pleasure of featuring another one of Milei's victories, aside from having a 55.4 percent approval rating.

In 2020, Argentina introduced a form of tenant rent control. Aside from requiring tenancies to last a minimum of three years, rent was capped at a weighted average of inflation and wage growth. Deposits were capped and rent had to be paid in Argentinean pesos (ARS). Contract length regulations increased the risk of landlords acquiring troublesome tenants. Landlords forewent expensive maintenance while evictions soared. While the rent cap helped a small number of landlords sell property, the truth is that one in seven housing units laid empty. As a basic microeconomics course would teach, reducing the supply actually increased prices. Rent for a two bedroom in Argentina soared from 18,000 pesos a month in 2019 to 334,000 pesos in early 2024. 

To respond to this housing nightmare, one of the Milei's first acts as President of Argentina was to do away with rent control. How has that fared since he enacted that decree in December 29, 2023? The effect on the housing market was immediate. As the libertarian Mises Institute pointed out in April, housing began to rise as prices began to fall. According to an article from Newsweek published last week, the supply of rental housing in Buenos Aires boomed by 195.23 percent since December 2023. 

While encouraging, this news hardly came as a surprise. When I first lambasted rent control on this blog back in 2014, I laid out the economics of rent control and showed how rent control constricts housing supply. I brought up the topic again in 2022 when Pasadena passed rent control. This past June, I covered a meta-study on all the harms of rent control, including less mobility, lower quality of rental units because of disincentive to perform regular maintenance, bringing down property value and neighborhood quality, decrease in new construction, and higher rents in the overall market.

Yet Western politicians on the Left rave about it and are attracted to it as palatable, even though economists on all sides of the aisle can agree that it makes for foul economic policy. Last month, I illustrated how Biden's rent control proposal would have screwed over the U.S. housing market. Earlier this month, presidential candidate Kamala Harris embraced the harebrained idea of rent control. Politicians in Europe do not seem to know any better, including Sweden, Ireland, and Germany. As socialist economist Assar Lindbeck once stated, rent control is one of the most effective ways to destroy a building short of bombing it. Argentina serves a fine example of what happens when you remove rent control. What are the odds that other Western politicians will actually listen? 

Here's a Tip for the U.S. Presidential Candidates: Exempting Tips from Taxation Is Poor Policy

As the election cycle progresses, it is becoming clearer that both candidates are pandering to buy votes, particularly when it comes to tax policy. Last month, Trump proposed exempting Social Security from income tax as a way to buy senior votes, which I criticized as a budgetary blunder. There is another tax exemption under fire: exempting tips from taxes. Why bring up this exemption? 

In part, Nevada has a disproportionate amount of workers who work for tips and happens to be more of a swing state this election cycle. Trump proposed the idea back in June, saying that people who earn their money should keep their money. Harris saw the political strategy enough where she decided to copy Trump's idea last week. This is being passed as tax relief either for working families or boosting take-home pay for "the little guy." It makes political sense, especially since more industries are trending towards tipping since the COVID pandemic. Forget for a moment I scrutinized the practice of tipping in 2014 and pointed out how it does not make economic sense. This policy to exempt tips from income and payroll taxes comes up short for a few reasons. 

It is poorly targeted policy. This criticism is similar to one I have for the minimum wage. Minimum wage is not effective at poverty reduction because it targets individual income, not household income. For one, only 2 percent of workers work for tips. This figure is 5 percent for the bottom 25 percent of earners. Leaving most low- and middle-income earners out is not the only issue. According to Yale University's Budget Lab, 37 percent of tipped workers do not pay income tax because they do not earn enough to reach the threshold. If that is not enough, customers might react by reducing their gratuities, thereby hurting low-income workers in the process. 

A shift towards tip income could create problems. How much will tip income increase? That is a good question. High-end earners, such as financiers, could see it as a loophole to recategorize their income as tips and shield it from taxation. By making one type of income taxable (e.g., wages) while making another type of income tax-exempt (e.g., tips) could incentivize a tip-based payment approach. Some tipping industries could rely on it, whereas other non-tipping industries could become tipping industries. Providing this carve-out has no clear rationale while creating real potentials to cause greater distortion in the tax code. In the worst-case scenario, it could put downward pressure on service sector wages. 

This exemption would pile onto the federal deficit. In June, the bipartisan Committee for a Responsible Federal Budget (CRFB) calculated that Trump's proposal would reduce federal revenue between $150 billion and $250 billion between fiscal year 2026 through fiscal year 2035. The Right-leaning Tax Foundation had a low-bound estimate of $107 billion over a decade. Since Harris is looking to have tips remain subject to payroll tax, the CRFB estimates that Harris' version will have about half the impact on the federal budget as Trump's version. Neither candidate has proposed corresponding spending cuts to offset the tax reduction, which means that the U.S. government would be borrowing more heavily to pay for this exemption. Both Harris and Trump are acting irresponsible given how much out-of-control government spending has caused the current fiscal state the U.S. finds itself in. 

Conclusion. To recap, exempting tips from taxation has no clear rationale, has the potential to be highly distortive by adding complexity to the tax code, and could be abused by those looking for loopholes. Even if there are safeguards, it does not help out the vast majority of low- and middle-income workers. What could help? Raising the standard deduction would be a better approach that does not discriminate against sector or job type. Expensing for capital investment would also increase investment, which would boost worker productivity and wages. A balanced budget or a less complex tax code would do more wonders. If we care about sound tax policy, exempting tips from taxation is something we should avoid. 

People in the U.S. Trusting Doctors Less Is What Happens When Pandemics Are Politicized

While there has been much written about the U.S. presidential elections as of late, I want to turn our attention to a different topic. According to a 50-state survey recently published in the medical journal JAMA Network, trust in physicians and doctors dropped from 71.5 percent in April 2020 to 40.1 percent in January 2024. That is a 43.9 percent decrease in about four years (Perlis et al., 2024). The survey sample size of 443,455 respondents makes the findings of this research paper even more shocking. 

When respondents were asked why there was low trust, the main responses were financial motives over health care, poor quality of care and negligence, influence of external entities and agendas, and discrimination and bias. As was stated in the abstract of the research paper:

"Trust in physicians and hospitals has been associated with achieving public health goals, but the increasing politicization of public health policies during the COVID-19 pandemic may have adversely affected such trust." 

I do not think that is a "maybe." Politicization of the pandemic most certainly played a role. I was already worried that the pandemic began during the election cycle, especially when it entailed the potential reelection of a president as polarizing as Donald Trump. It only got worse from there.

Stay at home" was a popular mantra. That was later proceeded by "follow the science," even though the "Follow the Science" crowd was doing nothing of the sort. Public health officials embraced positions that were at odds with scientific evidence, some of which included the following: 

• They were ignoring the pandemic guidance that prominent health authorities released shortly before the COVID pandemic saying that lockdowns would be ineffective while causing considerable harm. 
• The government pushed the six-foot social distancing rule, although Fauci admitted earlier this year that it was not based on science and probably made up.
• School closures were implemented in many schools throughout the United States even though it was obvious in Europe as early as summer 2020 that they were unnecessary. 
• Public health officials have been unable to acknowledge the importance of natural immunity, the high costs of lockdowns that by far outweighed the benefits, or the fact that face masks did nothing of statistical significance to prevent COVID transmission.

While the aforementioned examples pertain more to public health officials and politicians, the sad truth is that such irresponsibility with touting "Follow the science" had a spillover effect on doctors and hospitals. In March 2024, I highlighted how COVID vaccine mandates caused people to be more skeptical of all vaccines. Some of the unintended consequences of the vaccine mandates included erosion of key principles in public health principles and erosion of trust in regulatory oversight. 

There was a certain reactance that became more potent as it became more obvious that what the public health and medical authorities were recommending was not based in science. I remember going to doctor's offices in 2022 and 2023 that would make you wear face masks or would have single-use pens, even though it was proven by Spring 2020 that surface transmission was not a prominent form of COVID transmission. 

I cannot say that I am surprised that more people are less willing to trust doctors. When doctors are peddling the anti-science bullocks that public health officials are erroneously peddling, then you get sick of it after a while. It can be easy to build trust. However, once trust is destroyed or harmed, it is difficult to rebuild. Regrettably, that is what the medical profession faces. 

I will concede that there were other reasons prior to the pandemic as to why people did not trust doctors. Ballooning health care costs, a less personalized experience due to less time spent with patients, greater availability of medical information, a lack of transparency and communication, and burnout in the profession all attributed to the mistrust pre-pandemic. But make no mistake: politicizing healthcare during the pandemic made matters worse. 

To quote the World Economic Forum, "Health workers are increasingly disillusioned by the politicization of health, exemplified by the COVID-19 pandemic. This skepticism hampers the prospects for meaningful reform and transformative progress within our health systems." The health workers are increasingly disillusioned, as are the patients. It will take time to rebuild that trust. I simply hope that the trust could be rebuilt well before the next pandemic so that people do not have to needlessly die.

Study Shows Undocumented Immigrants Pay Nearly $100B Annually in Taxes

Immigration has been a major topic in the election cycle. President Trump likes to be on tough on immigration by proposing such wild and crazy alternatives as deportation while pointing out Vice President Kamala Harris' ineptitude as the unofficial Border Czar. I can point out how Trump has been too tough on immigration at the country's detriment by being against all forms of immigration. Although the United States can attribute its historic economic success to immigration, this country has been become more anti-immigration in recent years (Gallup). 

One of those anti-immigration myths that never seems to die is that immigrants do not pay taxes. The premise behind this myth is to make undocumented workers (also known as illegal immigrants) look like all they do is take without giving anything back, especially those who work "under the table." In spite of this pervading myth, the truth of the matter is that undocumented immigrants pay taxes. In fact, they pay a lot in taxes. According to a report from the Left-leaning Institute on Taxation and Economic Policy (ITEP) that was released last week, undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. 

To give you an idea of a further breakdown of what that looks like, here is a list of the main taxes that undocumented workers pay: 

• Social Security tax: $25.7 billion
• Federal income tax: $19.5 billion
• Sales and excise tax: $15.1 billion
• Property tax: $10.4 billion
• Personal and business income taxes: $7.0 billion
• Medicare tax: $6.4 billion
• Unemployment insurance tax: $1.8 billion

To put this in perspective, ITEP found that undocumented workers paid an average effective state and local tax rate of 8.9 percent, which is higher than those in the 1 percent of the income scale who paid 7.2 percent. Although I wrote on the topic of "undocumented immigrants and taxes" back in 2014, it feels like it merits repeating. Rather than the moocher stereotype that nativists like to portray, immigrants are hard workers who pay taxes and contribute. As a 2023 research paper from the libertarian think tank Cato Institute illustrates, immigrants make a net positive fiscal impact to the United States (see below). 

Not only do immigrants pay taxes, but allowing for more immigrants could help reduce the budget deficit. This means that the taxes that undocumented workers pay fund government programs without straining government welfare or entitlement programs. If anything, legalizing the undocumented workforce would help bring even more government revenue into the coffers instead of having it spent in the underground market. 

Furthermore, allowing for immigrants would not only be good for the federal budget. The other benefit of letting in more immigrants is that it positively contributes to the economy as a whole for native-born citizens and immigrants alike. Fixing the United States' broken immigration system is going to be a long and arduous road. In order to do it, we should at least approach it with the facts on the ground instead of half-baked theories.  

Trump's Idea to End Taxation of Social Security Benefits Would Be a Budgetary Blunder

As we get closer to the elections in November, we will see more pandering from both Donald Trump and Kamala Harris in the hopes of winning the Electoral College. In an attempt to woo elderly voters, Trump posted the following on his alt-tech social media platform Truth Social: "Seniors should not pay tax on Social Security!" Trump's call to exempt senior citizens from paying taxes on Social Security sounds like a great political message. From a political tactic vantage, it makes sense because there are a lot of seniors out there and they are more likely to vote than younger generational cohorts. 

How is it from a policy or budgetary standpoint? You would think that being a libertarian, I would be inclined towards supporting this policy. As I have brought up as early as 2017, tax policy cannot be simplified into "tax cut = good." Last February, I discussed the argument for eliminating the grocery tax. Eliminating the grocery tax might sound like a positive from a viewpoint of making government smaller, but it actually caused more problems. As we will see shortly, a similar argument can be made about exempting Social Security benefits from taxation. 

What about those poor seniors? As current Social Security policy stands, taxpayers with a Modified Adjusted Gross Income (MAGI) between $25,000 and $34,000 are required to report up to 50 percent of their benefits as taxable income. For those with greater than $34,000, that goes up to 85 percent of their benefits being taxable. Part of where Trump's argument gets diminished is that about 60 percent of Social Security beneficiaries do not pay taxes on their Social Security benefits because their MAGI is less than $25,000. Given the progressivity of the Social Security tax rate structure, it means that higher-income households are paying this tax. Removing this tax would mainly benefit higher-income households (see modeling from the Tax Foundation to see that effect), not the seniors who primarily or solely rely on Social Security for retirement income.

As a side note brought up by the American Enterprise Institute, it makes even less sense to create the tax exemption when the tax treatment of private pensions is roughly equivalent to that of Social Security benefits. Why should two retirees with two identical MAGIs have two different post-tax incomes simply because they have different mixes of retirement savings? 

Isn't taxing Social Security benefits a form of double taxation? Representative Thomas Massie (R-KY) is claiming that taxing Social Security benefits is a form of double taxation. If it were a form of double taxation, like it is with the corporate tax or wealth tax, I would take issue with the double taxation effect and criticize accordingly. Here is the issue. According to a report from the Social Security Administration, 85 percent of Social Security benefits are funded with pre-tax dollars. This would make Massie's double taxation claim largely false. The Right-leaning Tax Foundation, which has no love for double taxation (see here, here, and here), argues that Social Security income should be subject to the income tax. 

Trump's proposal will exacerbate federal budgeting. The income tax from those Social Security benefits currently funds the Social Security and Medicare Hospital Insurance (HI) trust funds. Unless Trump provides an alternative revenue source to replace those funds, we have to assume that a shortfall is created in the process. The bipartisan Committee for a Responsible Federal Budget (CRFB) estimates that the following would occur over the next decade if Trump's plan is enacted:

• Increased deficits by anywhere between $1.6 trillion and $1.8 trillion
• Increase Social Security's 75-year shortfall by 25 percent while increasing Medicare's 75-year HI shortfall by nearly triple
• Advance the Social Security and Medicare HI trust fund insolvency dates by one year and six years, respectively 

This tax cut would not do a good job at fostering economic growth. The Tax Foundation uses both static and dynamic modeling to measure the effects of Trump's proposal. Even when factoring the boost in economic growth and increased incentives to work, save, and invest, the dynamic model estimates that it would still create a $1.3 trillion shortfall over the next decade. What is implicit in these findings is that this tax cut would not be a great way to boost the economy. 

Conclusion: In concept, it sounds lofty to want to lower taxes. However, we cannot look at this policy prescription in isolation. Trump did not make any significant Social Security reforms in his first term as president. In March 2024, Trump said that he would not do anything to "jeopardize or hurt Social Security or Medicare." The truth of the matter is that there is even less appetite from either political party to make reforms on Social Security than there has been in decades past.

To fund the shortfall that Trump's tax exemption would create, the main solutions would be to raise taxes elsewhere or to lower benefits. All Trump would be doing is narrowing the income tax base while exacerbating federal fiscal woes. As I pointed out last year, Social Security is such an insolvent mess that I argued for its privatization. Social Security also has been a major driver in the U.S. federal budget for quite some time. We need more salient solutions than Trump's political pandering if we want true Social Security reform. 

Israel Is Not a Settler Colonizer, No Matter What the ICJ Ruling on West Bank Settlements Opines (Pt. II)

Last week, I began offering a critique of the argument that the settlements in what is known as the West Bank are illegitimate and that Israel is allegedly a settler colonizer. I discussed such salient points as the Jewish people being indigenous to Israel and the Levant region generally, that a sovereign Arab nation of Palestine has never existed, that Israel is not trying to replace the Arab population (which would be a key criterion of a settler colonizer), or that settlements are not an obstacle to peace. In this Part, I am going to illustrate the finer legalese and how Israel has legal claims not only to Israel, but also the West Bank. 

Israel acquired the West Bank fair and square. For Israel to be considered a settler colonizer, it would have to be an occupier of foreign land. To understand Israel's legal claim to the land, we need to go back to 1922, which is when the Mandate of Palestine was signed. This Mandate gave the Jews their own state, as well as established most of the current borders in the Middle East. The British gave the Jews everything west of the Jordan River, which would include the land now known as the West Bank. Article 5 of the Mandate states that none of the territory [of what is now Israel] shall be ceded to a foreign power. Article 80 of the U.N. Charter de jure enshrined the Mandate in international law and the Mandate has thus not been countermanded to this day. Both the State of Israel and the United Nations' General Assembly and Security Council accepted Israel's claim to the land relinquished by Great Britain as of May 1949. 

Jordan's illegal occupation of the West Bank. In reality, it was Jordan who belligerently and illegally occupied the West Bank from 1948 to 1967. With the exception of Pakistan and Great Britain, Jordan's annexation was not recognized by the international community. This is why the Green Line (also known as the armistice line) established neither a political nor territorial boundary that has a claim in international law, per the Armistice Agreement that Israel and Jordan signed in 1949 (Article II.2). 

Israel ended Jordan's illegal occupation by taking control of the territory in a war of self-defense in 1967, a war which was legal and proper under jus ad bellum because Article 51 of the U.N. Charter permits a nation to defend itself from an attack. And no, UN Resolution 242 does not obligate Israel to withdraw from the West Bank because certain language was deliberately eschewed to avoid that outcome. This means that Israel is NOT an occupier of the West Bank. If anything, Israel won back territory that legitimately belonged to Israel in the first place. You cannot be an occupier of your own land. This, of course, forgets the reality that nearly any piece of territory held in sovereignty throughout human history was gained through war and military conquest. You can view legal expert and George Mason University Professor Eugene Kontorovich's explanation of the land dispute in the video below.

Even if Israel did not have legal claims to the land with the Mandate of Palestine, it does not matter. Why would I say this? The Fourth Geneva Convention provides the legal basis for occupied territory. For a territory to be recognized as occupied under the Convention, the territory would have to change hands in a way where one country takes control of foreign territory. We established in a previous point that Israel had legal claims. But even if it did not, there was only one other country that controlled the territory: Jordan. 

Even if one erroneously considers Israel's 1967 annexation of the West Bank as occupation, Jordan had already relinquished its claims to the West Bank in 1988. Moreover, Jordan recognized the West Bank as a part of Israel in the 1994 peace treaty between Israel and Jordan (see Article III of the agreement here). Palestine never controlled the territory because as previously mentioned in Part I, the Arab state known as Palestine has never been a sovereign nation-state. Plus, the entity known as Palestine is not a signatory to the Geneva Convention, which means the Geneva Convention does not apply to the West Bank or the settlements. Even if the Geneva Convention were to apply to Palestine, it still does not matter because per the Oslo Accord, Israel has full jurisdiction over 60 percent of the West Bank (also known as Area C) to live and build on the land. 

The ICJ has ignored other similar cases in other countries. We have shown that Israel has solid legal claims and that the Geneva Convention does not apply. Even if the Geneva Convention were to apply to this case, the West Bank is not the only instance in which such conduct with settlements occurred. There are other places throughout the world where comparable conduct has taken place, whether it has been Morocco in the Western Sahara, Indonesia in East Timor, Turkish-occupied northern Iraq, or Vietnamese-occupied Cambodia. It is funny how the United Nations has declined to invoke Article 49(6) of the Geneva Convention in those other cases while only invoking it in the case of Israel. I wonder why that could be. 

Conclusion. Nothing in the U.N. Charter makes it a decider of international law. It is a relief for Israel since the United Nations has had an axe to grind with Israel at least since 1975 when the UN General Assembly voted that Zionism is racism in UN Resolution 3379, which was later reversed in 1991. With such animus, it makes sense why Israel never signed the treaty to establish the ICJ, thereby not being under the jurisdiction of the ICJ. But it is more than that the United Nations' anti-Israel bias (especially with UNRWA) where I can tell the ICJ it can go pound sand. 

By and large, Israel's settlements are far from being illegal. Israel has the strongest legal and historic claim to the land known as the West Bank. The Jewish people have had a presence in Judea and Samaria for three millennia, which makes sense since Jews are indigenous to the land. The Jewish people have a standing in international law that dates back more than a century. Since Palestine has never been a sovereign nation, it does not have legal standing to the West Bank nor does it have standing under the Geneva Convention because Palestine is not a signatory. Plus, the PLO signed the Oslo Accords, which gave Israel jurisdiction in 60 percent of the West Bank to build settlements. 

The ICJ is quick to ignore historical, security, and legal complexities of the Middle Eastern conflict if it means making a political statement to put pressure on Israel in a volatile moment in the region. The ICJ's majority claim is nothing more than another attempt from the so-called "international community" to delegitimize the claim of the Jewish people on the land of Israel. In summation, the entity known as Palestine has no legal claims to the West Bank, which means that the settlements in the West Bank are legal and legitimate.