Jonathan Decker on May 20, 2019 | Fix the Tax Code

By Jon Decker

Thought experiment: If you were a mega-billionaire, how would you spend your earnings? Would you start a charity assisting those in need? Research and develop new cures for diseases?

Well, if you are former New York City Mayor Michael Bloomberg, you would put that money to work to perpetuate corruption.

In 2017, Philadelphia enacted a tax on sweetened beverages – purportedly in the interest of improving "public health." But as we now know through a meticulously detailed 116-count federal indictment, city officials were less interested in reducing calories than the number of political opponents.

 NBC reported:

Powerful Philadelphia union leader John "Johnny Doc" pleaded not guilty in federal court Friday after being accused of using union coffers like his "personal bank account" and keeping Councilman Bobby Henon on his payroll to push his agenda at City Hall…

The FBI said that Dougherty pushed the passage of the city's soda tax solely to exact revenge on the rival Teamster's Union, which feared the loss of bottling and delivery jobs; had city inspectors hold up the non-union installation of an MRI machine at Children's Hospital of Philadelphia; and had his ally on city council investigate a towing company that seized his car…

"Let me tell you what (Councilman) Bobby Henon's going to do," Dougherty told a union official in May 2015, according to the indictment. "They're going to start to put a tax on soda again, and that will cost the Teamsters 100 jobs in Philly."

The Philadelphia beverage tax is one of the most disturbing accusations of public corruption in recent memory. Working families in Philadelphia are paying more for groceries solely because they were collateral damage in an act of political retribution.

Many Philadelphians are outraged and demanding the immediate repeal of The Philly Mob Tax. But one obstacle standing in their way: New York billionaire Michael Bloomberg.

Bloomberg is dumping money into Philadelphia defending the corrupt tax. Last week that effort included a Bloomberg-funded study purporting to show a public health benefit. The study observes that sales of sweetened beverage purchases decreased within city limits and concedes they increase significantly in Pennsylvania ZIP codes bordering the city – but claims the latter effect only offsets about a quarter of the decline inside the city.

Notably, however, it entirely excluded purchases from all towns in New Jersey which is – literally – just over the river from Philadelphia. While there are tolls on the border crossings, there are also hundreds of thousands of people who are regularly on the New Jersey side for work or leisure activities and no doubt shifting their grocery purchasing to dodge the tax.

It is the poor – who are least mobile – who are most likely to pay the tax or cut their soda purchases.  But there is no evidence they shift to healthier options as opposed to say, ice cream or potato chips.

Indeed Bloomberg himself has openly celebrated the regressive effect of his beloved soda taxes:


By Phil Kerpen

With the $7500 tax credit for electric car buyers already in the phase out period for the two biggest manufacturers – Tesla and GM – it's no surprise that many Democrats in Congress are clamoring to lift the cap and keep the subsidies flowing.  Unfortunately, several Republicans are joining the effort, creating unfortunate bipartisan support for a piecemeal version of the crackpot Green New Deal they have been rightly mocking and ridiculing.

The so-called Drive America Forward Act would triple the existing cap on subsidies of 200,000 per manufacturer – massively expanding a program that was always supposed to be temporary and was originally premised on the national security rationale that it would lessen dependence on foreign oil – a now comically anachronistic concern when the United States has become a leading oil exporter.

Moreover, while the Green New Deal is a socialist income leveling exercise in the guise of environmental policy, electric vehicle subsidies use environmental delusion as a cover for a wealth transfer from poor and middle income Americans to the rich who buy electric hobby cars as their third or fourth vehicle.  Voters agree – with a recent poll showing 67 percent do not think their taxes dollars should help pay for electric vehicle subsidies.

The Pacific Research Institute looked at IRS data and found that more than half of the electric car buyers claiming the credit make more than $200,000 per year and nearly 80 percent make more than $100,000. Just 1 percent make $50,000 or less.

There is also a geographic dimension to the wealth redistribution.  The most recent industry data shows that nearly half of all electric vehicles sold in the United States are sold in California, which has its own lavish subsidies at the state level.

A September 2018 NERA Economic Consulting study looked at the economic impact of eliminating the cap and found that the costs outweigh the benefits.  The study finds total household income falling as a consequence of lifting the cap by $7 billion in 2020 and $12 billion in 2035, which is about $50 to $70 per household in lost income every year.

That's a cost of over $50 every year to middle-income Americans to pay for subsidies for rich people in California.

Orrin Hatch, the original sponsor of the bill, explained the logic behind the cap in 2007:

"I want to emphasize that like the tax credits available under current law for hybrid electric vehicles, the tax incentives in the FREEDOM Act are temporary. They are needed in order to help these products over the initial stage of production, when they are quite a bit more expensive than older technology vehicles, to the mass production stage, where economies of scale will drive costs down and the credits will no longer be necessary."

At the time, big subsidies for electric vehicles were justified based on the theory that they were needed to lessen American dependence on foreign oil.  A decade later, America...

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Photo Credit: Albert Lugosi, Mariordo

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