As soon as the White House released its framework for tax reform, democrats who like to get media attention condemned it as a sell out that will mainly benefit the rich. This gives validity to what use to be a political joke but no longer is—How do you know when a politician is lying? When he/she starts moving his/her lips.
John Adams two centuries ago said, “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.” He was absolutely right as was the late Daniel Patrick Moynihan who said that we are all entitled to our own opinions; just not our own facts.
The case for tax reform has been evident since the end of the great depression as the economy has grown less than 2% annually. With an aging population and slow-down in productivity, achieving 4% growth would be quite a challenge but there is little doubt that we can do better. We need more domestic investment, we need our companies to be more competitive, and we need more good paying jobs.
That is where tax reform comes into play. Contrary to democrat assertions about only benefitting the wealthy. There is a strong analytical case for reducing the corporate tax rate and simplifying the tax code.
The Heritage Foundation just released a paper that is a review of the economic literature on the impact of taxes on workers’ pay. It starts with the seminal work of Arnold Harberger in 1962 and includes analyses in the 2000s. The case is compelling: cutting corporate taxes will lead to higher wages. Some analyses suggest that upwards of 75% of the benefits flow to workers.
These same democrat politicians also have a strange interpretation of fairness. Demanding that the tax code be made fairer conveniently ignores the fact that according to the Tax Foundation, the top 10% of taxpayers pay 70% of the individual income tax while the bottom 50% pay 2%. This does not mean that only democrats lie. Distorting the truth and water boarding facts until they confess to anything and everything is bi-partisan.
The erosion of truth by blind adherence to political ideology and expediency helps to explain why respect for politicians and Congress is so low, 20% in the latest Gallup poll. As a nation, we face a large number of serious problems, the economy being a major one. Problems will multiply and get worse until those chosen to govern put the national interest ahead of self interest.
The New York Times reported earlier this month that the Department of Interior is proposing to lift restrictions on seismic studies in the Arctic National Wildlife Refuge (ANWR). Predictably, this has caused the environmental community to become apoplectic. One enviro called the decision, which only involves finding out how much oil and gas might exist in an area called 1002, “reckless and irresponsible.” Another said “the arctic is the holy grail.”
Since the early 1980s, potential drilling in ANWR has been the equivalent of a casus belli for the environmental community. The claims that they have made about damage and harm to wildlife have been extreme and not credible given the experience at Prudhoe Bay where wildlife has flourished. Pictures of flowers, rabbits and other wildlife in fields of grass are designed to have an emotional impact by implying that is what is at risk from drilling. Those pictures are what Daniel Boorstin termed pseudo-events and what is now called fake news. Those pictures are not of the area where drilling would take place. They are of an area near the Brooks Range which is about 100 miles away.
ANWR is roughly 32,000 square miles in size. The size of the 1002 area where drilling would take place is roughly 19 square miles. To provide a clearer picture and comparison, ANWR is about the size of South Carolina and 1002 the size of Dulles Airport. Can any reasonable person really believe that drilling in such a small area would be environmentally devastating? Those assertions are mind boggling.
Drilling, if it eventually takes place, would be on the coastal plain which as anyone who has been there knows is a frozen desert. Although Interior proposes seismic research, many may not know or recall that one well has already been drilled there. In 2001, Chevron drilled an exploratory well at the edge of the coastal plain. Very few know the results of that drilling. It is one of our best kept secrets. Even Wiki-Leaks doesn’t know. That may suggest that the results were not encouraging but the results from one well are not conclusive. Before the oil at Prudhoe Bay was discovered, a number of dry holes had been drilled and there was talk of abandoning the enterprise as a result.
Even if the seismic tests are promising, drilling would not be immediate, assuming Congressional approval. Permitting and environmental impact analysis could take 7-12 years according to an EIA assessment in the early 2000s. Companies interested in bidding for drilling rights would base their decision on their best estimates of crude oil prices over a 20-30 year period. That is a tough calculus to make given the abundance of shale oil, potential advances in alternative energy technologies, and political risk.
Opposition to obtaining information represents a view that ignorance is better than knowledge. Indeed, it is always be better to err on the side of too much knowledge than too little. Future energy policy will be better informed if we are smarter.