Tepper to Florida

April 5, 2016 at 1:12 pm

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Somehow I missed this last month, but it's worth passing along even a couple of weeks late. From Bloomberg News:

New Jersey lost its richest resident late last year when billionaire David Tepper decamped to the tax friendly climes of Florida.

Tepper registered to vote in Florida last October, listing his residence as a Miami Beach condominium, and followed up in December by filing a court document declaring that he is now a resident of the state. He also carried out a business reorganization on Jan. 1 that relocated his Appaloosa Management from New Jersey to Florida, which is free of personal income and estate taxes....New Jersey is one of two states that levy both an estate tax on the deceased and an inheritance tax on their heirs. The state income tax rate for top earners is 8.97 percent, and the state's Democratic legislators have repeatedly pushed for a so-called millionaire's tax that would increase the levy to 10.75 percent.

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The Times Finally Finds a Public Sector Union It Dislikes

April 5, 2016 at 12:08 pm

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(And public sector unions finally find a Republican they like, and Republicans finally find some government employees they want more of). The New York Times has a pretty amusing editorial about the decision by the union representing 16,500 federal border patrol agents to endorse presidential candidate Donald Trump.

Not to belittle the issues involved, just to notice some of the ironies.

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Where's the Campaign for War Authorization?

April 5, 2016 at 11:59 am

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President Obama is promising a full-court press to get Congress to confirm Merrick Garland to the Supreme Court. There's no parallel presidential public relations effort to get Congress to authorize the use of force against the genocidal terrorists of the Islamic State. The situation is the topic of my column this week. Please check the column out at the New York Sun (here) and Newsmax (here).

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Krugman Makes a Good Point

April 4, 2016 at 10:23 am

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Paul Krugman, in his current incarnation as New York Times op-ed page columnist, isn't someone I often agree with. But he makes a good point in today's column about how regulation hurts the poor:

Upper-income Americans are moving into high-density areas, where they can benefit from city amenities; lower-income families are moving out of such areas, presumably because they can't afford the real estate.

You may be tempted to say, so what else is new? Urban life has become desirable again, urban dwellings are in limited supply, so wouldn't you expect the affluent to outbid the rest and move in? Why aren't urban apartments like beachfront lots, which also tend to be occupied by the rich?

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GM in China

March 31, 2016 at 1:30 pm

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A dispatch from Shanghai in the New York Times gives an amazing glimpse into the workings of General Motors, the automaker that received a multi-billion-dollar bailout from taxpayers. The Times reports from a billion-dollar GM factory in China that appears to be staffed mainly by robots:

Hundreds of robots bend, arch and twist to assemble the body of Cadillac's new flagship CT6. Lasers seal the car's lightweight aluminum exterior using techniques that the carmaker, General Motors, has only just introduced in the United States. Yardlong, bright yellow robots like mechanical Alaskan huskies tow five-foot-tall carts of auto parts to the assembly line.

The cars made by robots in China will be shipped to America for sale to American customers, the Times reports.

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IRS Passport Rule

March 31, 2016 at 1:22 pm

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The Republican Congress and President Obama teamed up on a new law that allows the U.S. government to revoke the passports of people who owe back taxes, Bloomberg News reports:

In an effort to fight tax evasion, the IRS recently began forcing expatriates to report not just their income, but additional information on savings and investments—rules that have made it harder to open bank and brokerage accounts overseas. More ominously, the IRS and the State Department are also implementing a provision approved by Congress in December that could revoke the passports of Americans who owe too much–raising the prospect of being stranded abroad on account of poor arithmetic....

The new passport-revocation rule, slipped into a transportation funding bill signed by President Barack Obama, raises the stakes. It allows the U.S. to revoke the passport of any American whose tax debt exceeds $50,000.

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Socialism on Campus

March 31, 2016 at 1:06 pm

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The Harvard Crimson has published, as a "special report," an admiring profile of Soviet dupe John Reed. The article concludes with a discussion of how the presidential campaign of Bernie Sanders has made socialism fashionable on campus:

One of the long-lasting impacts of Bernie Sanders' campaign is the way that... he's been able to change the conversation around "the s-word," Tyrik LaCruise '17, an avid Sanders supporter, said. "Running as a democratic socialist, people are like 'Whoa, wait a second. It's not as dirty as I thought. The post office is socialism. Public schools? Socialism. We have roads. That's socialism.'"

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California Minimum Wage

March 30, 2016 at 2:28 pm

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The New York Times reports on the drive to impose a $15 an hour minimum wage across California:

the state could raise living standards for millions of workers. But it could also increase unemployment among some of the very same economically marginal workers the wage increase is intended to help.

Many economists, even some on the left, worry that a potential loss of jobs in a number of cities where wages are comparatively low could largely offset, and perhaps even more than offset, the boon of higher incomes at the bottom of the wage scale....

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Debranching

March 30, 2016 at 2:11 pm

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The blog of the Federal Reserve Bank of New York reports:

U.S. banks closed 4,821 branches between 2009 and 2014, reducing the total number of branches by about 5 percent (see chart below). Since branches per capita are declining, this isn't simply a story of shifts in population among regions. The forces driving the trend are not entirely clear, but as usual (in the view of economists), they could be demand- or supply-driven; banks may be closing branches that have become unprofitable because the demand for physical branch services has decreased (owing to slower economic growth since the crisis or increased online banking) or because the cost of supplying those services has increased (owing to more stringent bank regulation or other factors).

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SunEdison Shakeout

March 30, 2016 at 1:50 pm

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USA Today reports:

Shares of renewable power firm SunEdison plummeted 55% Tuesday as it teetered on the edge of bankruptcy amid slumping oil prices and swirling questions over the company's accounting practices.

SunEdison faces a "substantial risk" of bankruptcy, according to the U.S. Securities and Exchange Commission filing by a subsidiary, TerraForm Global. SunEdison develops, installs and operates alternative energy projects.

The company reportedly has gotten $4.59 million from the federal Department of Energy and $1,874,901 from the Obama "stimulus." If it does go bankrupt, it would join Satcon, Evergreen, Solyndra, and Abound on the list of government-backed alternative energy companies that have done so.

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Globe on Yale Move to Boston

March 30, 2016 at 10:21 am

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The Boston Globe has published an entire news article, complete with official comment from Yale, about my suggestion, inspired by the Cato Institute's Walter Olson, that that university move to Boston. Pretty funny, at least from a Harvard perspective. As of this morning it was one of the top 10 trending articles on the Globe web site.

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Why Yale Should Move to Boston

March 28, 2016 at 9:58 pm

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Connecticut's effort to tax Yale's endowment is the topic of my column this week. I suggest that the university consider following in GE's footsteps and decamping to Boston. Please check the column out at the Hartford Courant (here), the New York Sun (here), Reason (here), and Newsmax (here).

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Google and Citizens United

March 25, 2016 at 1:41 pm

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Google is getting a lot of attention, mostly positive, on the left today for its direct statement opposing what it calls a "misguided & wrong" North Carolina law. I haven't studied that law deeply, but as portrayed by Google, and as viewed from a distance, it seems aimed at depriving transgender people access to the bathrooms they want to use.

It's ironical, because a lot of the ones cheering Google for its corporate political speech opposing the North Carolina law are the same ones denouncing the Citizens United Supreme Court decision striking down as unconstitutional restrictions on political speech by corporations. A lot of the opposition to corporate political speech, in other words, seems to depend on who is doing the speaking. If it is the Koch Brothers spending on lower taxes or less environmental regulations, the left wants to ban it and attacks the Supreme Court for permitting it. But if it's Google defending transgender bathroom access, the left is okay with it. The objection isn't to corporate political speech, but to the content.

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Brookings on the Fight for $15

March 25, 2016 at 1:10 pm

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In an article from last year issued by the Brookings Institution that is being recirculated by the think tank in response to current events, Harry J. Holzer argues that the $15-an-hour minimum wage being demanded by activists and imposed in some jurisdictions is too high:

In job markets where young or less-educated workers already have difficulty finding jobs and gaining important work experience, such mandates will likely make it much harder.

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Richard Epstein on Insider Trading Law

March 23, 2016 at 10:28 pm

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The Yale Law Journal has posted Richard Epstein's characteristically thoughtful article on insider trading law after the Second Circuit's United States v. Newman decision. Professor Epstein argues that, as the abstract of the article puts it, "in some instances the law does not reach far enough, while in other instances the law reaches too far." Crucially, "contractual solutions work better than regulatory solutions to constrain various forms of misrepresentation, concealment, and nondisclosure that arise in connection with insider trading." (A principle that applies to a lot more things than just insider trading, but that's for another day.)

Professor Epstein agrees with the outcome in Newman but not the reasoning.

The article includes a discussion of the SEC's Regulation FD, or "fair disclosure," which Professor Epstein recommends scrapping.

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