Mario H. Lopez
President
Hispanic Leadership Fund

Andrew Langer
President
Institute for Liberty

Tom Giovanetti
President
Institute for Policy Innovation (IPI)

Ian Adams
Executive Director
International Center for Law and Economics

Seton Motley
President
Less Government

Matthew Gagnon
Chief Executive Officer
Maine Policy Institute

Charlie Sauer
President
Market Institute

Patrick A. McLaughlin
Research Fellow, Hoover Institution*
Visiting Research Fellow, Pacific Legal Foundation*
*Affiliation for identification purposes only

Roslyn Layton
Senior Fellow
National Security Institute

Pete Sepp
President
National Taxpayers Union

John Tamny
President
Parkview Institute

Daniel J. Erspamer
Chief Executive Officer
Pelican Institute for Public Policy

Paul Gessing
President
Rio Grande Foundation

Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council

Patrick Brenner
President and CEO
Southwest Public Policy Institute

Ross Marchand
Executive Director
Taxpayers Protection Alliance

Governments should have strategic reserves for the same reason families keep a spare tire or an emergency fund: not because it’s exciting, but because it’s useful when something goes wrong.

A real strategic reserve exists for a concrete, predictable reason: The thing you’re stockpiling is something you must be able to access in an emergency. Petroleum reserves hedge oil supply shocks. Medical stockpiles hedge shortages of critical supplies. Even foreign-currency reserves hedge a very specific risk: paying foreign-currency liabilities when markets seize up.

Bitcoin matches none of those use cases. There are no sovereign liabilities denominated in bitcoin, which means there’s no obvious emergency for which “having bitcoin on hand” is the solution. Reserves should be built around the liabilities and risks you’re trying to hedge — and bitcoin’s volatility tends to amplify risk rather than reduce it.

If you want an asset to be there in a crisis, it helps if it doesn’t routinely plunge 50 percent at the worst possible time.

Some proponents argue bitcoin is “digital gold” and will shore up dollar dominance. But that argument collapses the moment you ask the practical question: What liability does bitcoin help the United States pay? What emergency does it solve? We do not run a bitcoin-denominated economy.

In other words, a government bitcoin “reserve” is really government chasing fads and making highly speculative bets with taxpayer dollars. And gambling with taxpayer dollars is not a legitimate function of government.

In late 2025, Texas seeded its new bitcoin reserve fund with $5 million, buying bitcoin at a market price of $91,336. Less than two months later, that initial purchase has lost more than 28 percent of its value. Was that a good use of taxpayer dollars?

Of course, governments buying massive quantities of bitcoin would drive up the price, creating a windfall for existing holders. That’s undoubtedly why some crypto bros are pushing the idea — but that’s cronyism and wealth transfer, not sound strategy.

If a government comes into possession of bitcoin through forfeiture, it should be disposed of transparently and applied to legitimate public priorities. Locking it away indefinitely under an executive order that declares it must not be sold is the opposite of sober stewardship.

America’s strength is not that Washington is a better speculator than the market. It’s that we have the rule of law, deep capital markets, and an innovation economy that doesn’t require the federal government to run a hedge fund.

For Immediate Release

Dallas--The Institute for Policy Innovation (IPI) is pleased that the Supreme Court has correctly decided that President Trump improperly used the 1977 International Emergency Economic Powers Act to impose harmful, capricious, sometimes malicious and often incoherent tariffs on goods purchased by American businesses and consumers. And we await the comedy of a response from the Trump administration.

All tariffs thus unconstitutionally collected by the U.S. Government should automatically and immediately be refunded to those who paid them, without challenge and without delay. Anything less can only be interpreted as the Trump administration refusing to comply with a Supreme Court ruling, and would continue the ongoing economic harm caused by tariffs. Essentially, a chunk of private sector capital was unconstitutionally removed from the private economy and transferred to government. Conservatives have never believed that government is a wiser and more efficient steward of resources than is the private sector.

We are disappointed that it apparently did not trouble three supposedly textualist justices that the word “tariff” appears nowhere in the text of IEEPA.

We look forward to future occasions when the other party attempts to similarly impose tariffs and we will be able to point out that progressive Supreme Court justices found otherwise.

We realize that the President will undoubtedly attempt to reimpose as many of the tariffs as possible under different legal justification, but we also have no doubt that he will similarly misuse those statutes as well, ignoring conditions, limitations, and time durations. We similarly expect Congress to refuse to accept and exercise its constitutional duty over such policies. Still, today was a good day for the Constitution, for the rule of law, and for the economy.

Governments should have strategic reserves for the same reason families keep a spare tire or an emergency fund: not because it’s exciting, but because it’s useful when something goes wrong.

A real strategic reserve exists for a concrete, predictable reason: The thing you’re stockpiling is something you must be able to access in an emergency. Petroleum reserves hedge oil supply shocks. Medical stockpiles hedge shortages of critical supplies. Even foreign-currency reserves hedge a very specific risk: paying foreign-currency liabilities when markets seize up.

Bitcoin matches none of those use cases. There are no sovereign liabilities denominated in bitcoin, which means there’s no obvious emergency for which “having bitcoin on hand” is the solution. Reserves should be built around the liabilities and risks you’re trying to hedge — and bitcoin’s volatility tends to amplify risk rather than reduce it.

If you want an asset to be there in a crisis, it helps if it doesn’t routinely plunge 50 percent at the worst possible time.

Some proponents argue bitcoin is “digital gold” and will shore up dollar dominance. But that argument collapses the moment you ask the practical question: What liability does bitcoin help the United States pay? What emergency does it solve? We do not run a bitcoin-denominated economy.

In other words, a government bitcoin “reserve” is really government chasing fads and making highly speculative bets with taxpayer dollars. And gambling with taxpayer dollars is not a legitimate function of government.

In late 2025, Texas seeded its new bitcoin reserve fund with $5 million, buying bitcoin at a market price of $91,336. Less than two months later, that initial purchase has lost more than 28 percent of its value. Was that a good use of taxpayer dollars?

Of course, governments buying massive quantities of bitcoin would drive up the price, creating a windfall for existing holders. That’s undoubtedly why some crypto bros are pushing the idea — but that’s cronyism and wealth transfer, not sound strategy.

If a government comes into possession of bitcoin through forfeiture, it should be disposed of transparently and applied to legitimate public priorities. Locking it away indefinitely under an executive order that declares it must not be sold is the opposite of sober stewardship.

America’s strength is not that Washington is a better speculator than the market. It’s that we have the rule of law, deep capital markets, and an innovation economy that doesn’t require the federal government to run a hedge fund.

Every major innovation seems to inevitably generate an infrastructure fight—generating public and political opposition right up until we can’t imagine life without it. Railroads divided farms and ranches. Telegraph lines “uglified” streetscapes. Highways carved through neighborhoods. Pipelines, cell towers, wind farms, transmission lines—each sparked a familiar chorus: too big, too ugly, too loud, too much. And yet, in the end, the public benefited tremendously because economic growth requires a growing infrastructure.

Today’s favorite target for such opprobrium is the data center.

Just a couple of years ago, policymakers competed to attract data centers. They were symbols of growth, high-value investment, better tax bases, and the digital backbone of modern commerce. Now many of those same policymakers speak as if data centers are some kind of social evil—because they consume power and water, and because the AI boom is making that demand visible. You can see the shift in the sudden wave of proposed moratoriums and “pause” bills rationalized by energy, water, and ratepayer concerns.

Let’s be clear about what a data center is: critical infrastructure. It is the physical home of the digital services we rely on for banking, ecommerce, logistics, emergency communications, healthcare records, education, and—yes—national security. If policymakers are serious about economic competitiveness, they should treat data centers the way they treat ports, rail spurs, and power plants: as necessary facilities that must be sited responsibly, not demonized reflexively.

Critics raise legitimate issues—grid capacity, water use, noise, backup generators, local land-use impacts. But the policy response should be responsible and data-driven, not reactionary.

Start with electricity. Data centers don’t “steal” power; they buy it—often at industrial rates with long-term contracts—and their presence as a predictable buyer can justify new generation and transmission investments that benefit everyone. A rapidly growing load is not a moral failing; it’s a planning challenge. The right answer is to build abundant energy—more natural gas, more nuclear, more renewables where they make sense, more transmission—so that families aren’t pitted against servers in a zero-sum political drama. Lawmakers across the country are already debating how to protect ratepayers while accommodating growth, which tells you the debate is about policy design, not existential threat.

On water: in most cases, data centers use closed-loop systems for cooling, so it’s like filling a swimming pool one time. Over time, data centers consume less water than a car wash. Policymakers can require transparency, recycling, and closed-loop systems rather than discouraging new investment. Indeed, multiple states are moving toward water-use reporting requirements—exactly the kind of targeted, pro-information approach that beats panic.

The broader point is this: America’s economy won’t continue to innovate and remain prosperous by making infrastructure buildout difficult. We stay prosperous by insisting on sensible rules, clear property rights, and predictable permitting—and by letting private capital build the backbone of the next economy, instead of letting political panic veto it.

To ensure freedom of movement and freedom of commerce across state lines, the Constitution grants the federal government the power to regulate commerce among the states. This power, granted under the Commerce Clause, essentially established the United States as a free trade zone, where states are prohibited from enacting laws, taxes or regulations that inhibit or create unnecessary friction on economic activity between the states.

Under the Articles of Confederation, the original governing document of our republic, the 13 states tended to enact harmful populist policies designed to protect their own farmers and businesses from competition from other states. State tariffs and other protectionist measures hindered interstate commerce and contributed to a nationwide economic downturn that, in turn, led to the convening of a Constitutional Convention to remedy the problem.

It remains critical today for the federal government to preempt the states from their natural tendency to impose popular rules and regulations that affect businesses and consumers in other states or create friction for interstate commerce. The principle remains the same, though the Internet and e-commerce present new challenges and temptations the states are finding hard to resist.

Anything that happens over data networks is inherently interstate. The old analog phone network could distinguish between local and long-distance calls, but packets fly around the world at the speed of light, even if you are emailing someone in the room next door. Technology has made more of commerce interstate, such as voice communications, data exchange, e-commerce, and data hosting. Allowing the states to regulate inherently interstate commerce will simply slow commerce, the adoption of technology, and our global competitiveness.

As federalists, we need to recognize that there are legitimate roles for local, state, and federal governance, and while the states have allowed the federal government far too much regulatory control of functions that should be left to the states, regulating interstate commerce isn’t one of them.

That’s why at the Institute for Policy Innovation (IPI) we have consistently advocated federal, not state regulation of internet taxation, social media speech regulation and age verification, online privacy, VoIP regulation, and now artificial intelligence (AI). It makes no sense for there to be 51 different regulatory regimes for a business that travels across state borders at the speed of light.

It's just as much a violation of our constitutional, federalist republican system for a state to regulate AI as it is for the federal government to regulate state education. The Commerce Clause limits federal authority to interstate commerce and empowers the federal government to prevent states from burdening interstate commerce. Those of us who believe in limited government should insist on both.

From the Fort Worth Stockyards website:

Between 1866 and 1890, drovers trailed more than four million head of cattle through Fort Worth. The city soon became known as “Cowtown.”

When the railroad arrived in 1876, Fort Worth became a major shipping point for livestock, so the city built the Union Stockyards, two and a half miles north of the Tarrant County Courthouse, in 1887. 

. . . 

And with the construction of the Livestock Exchange Building, which housed the many livestock commission companies, telegraph offices, railroad offices and other support businesses. It became known as “The Wall Street of the West.”

And in 1907, the Fort Worth Stock Show and Rodeo began.

But today, a different kind of stock market is stampeding to Texas.

The Texas Stock Exchange (TXSE or “Y’all Street”) is officially registered and plans to begin trading in 2026. More than 50 years ago, the Texas Legislature commissioned a study into the feasibility of a Texas securities exchange. And, of course, in the intervening time, the Texas economy has diversified, and Texas has become a go-to destination for corporate relocations as well as new start-ups. 

With more business-friendly regulations, a belief in both the freedom to succeed and the freedom to fail, and with one of the best airports in the world centrally located midcontinent, Texas is the place to be.

Not to be left behind, the New York Stock Exchange has moved quickly to have a presence in Texas as well. NYSE Texas obviously has a head start on the Texas Stock Exchange, so it will be interesting to see how that competition shakes out.

And just a few days ago, Nasdaq announced Nasdaq Texas at an event with several leaders in the oil and gas industry.

None of this is an accident. The Texas Constitution now bans taxes on securities, and other recent laws make it more difficult for political activists to harass corporations through ideological shareholder resolutions.

And the new specialized Texas Business Court system is designed to handle complex business disputes in an expedited manner separate from the overburdened district courts. Judges have commercial litigation experience, and this provides Texas businesses with streamlined processes and reliable outcomes.

Many companies, including Tesla but most recently Coinbase, have announced that they are abandoning Delaware and reincorporating in Texas because of lower costs and better legal protections. 

As Democrat-led cities and states become increasingly inhospitable to wealth creation and business formation, and even unsafe and unpleasant for daily life, Texas is reaping the benefits. Of course, this will present challenges as well, but signs are good that Texas is up to the job.

March 13, 2025

Dear Secretary Yellen:

We represent a broad coalition of free-market, conservative, and individual liberty organizations united in our support of a market free of government interference – in this case Nippon Steel’s proposed acquisition of U.S. Steel.

Nippon Steel is paying $14 billion for U. S. Steel because free market tax and regulatory policies pursued over time have made the United States an attractive destination for foreign investment. In particular, lowering the corporate income tax rate from 35 percent (the highest in the developed world) to 21 percent, along with providing full business expensing, neutral treatment of interest derived from investment debt, and full research deductibility (all vital to steel manufacturers) have vastly improved the U.S. investment climate.

Additionally, if Nippon Steel purchases U. S. Steel it will maintain all plants and workers in the United States, a big improvement over a status quo where the American steel industry lost workers nearly every year since World War II. If U.S. Steel is acquired by a competitor other than Nippon Steel, there is no doubt these job slides will continue.

The combination of Nippon Steel and U.S. Steel will create one of the world’s largest and most globally competitive steel companies. Finally, the United States–along with our longtime allies in Japan–will be able to challenge the socialist, government-subsidized Chinese steel industry anywhere in the world. A free market steel industry that comes from democratic republics will give emerging countries a better choice against China than they have today. There is no understating both the soft and hard power advantages to this for the United States.

The acquisition of U.S. Steel by Nippon Steel is a good outcome from our perspective, and we urge the Administration to let it proceed without political interference.

Sincerely,

Charles Sauer
Market Institute

Grover Norquist
Americans for Tax Reform

John Tamny
Parkview Institute

David McIntosh
Club for Growth

Gerard Scimeca
Case for Consumers

Steve Moore
Unleash Prosperity Network

James Martin
60 Plus

Dan Mitchell
Center for Freedom and Prosperity

James Edwards
Conservatives for Property Rights

Jason Pye
Freedomworks

George Landrith
Frontiers of Freedom

Jeff Cargerman
Inventor’s Project

Terry Neese
National Grassroots Network

Yael Ossowski
Consumer Choice Center

Tom Giovanetti
Institute for Policy Innovation

Ryan Ellis
Center for a Free Economy

Pete Sepp
National Taxpayers Union

Phil Kerpen
American Commitment

Angela McArdle
Libertarian National Committee

Ryan Young
Competitive Enterprise Institute

Jeff Mazzella
Center for Individual Freedom

Saul Anuzis
American Association of Senior Citizens

Julie Cho
Fairer America

James Davis
Fans for Fair Play

Colonel Rob Maness
Gator PAC

James Golden
New Journey PAC

Norm Singleton
US Policy

Mario H. Lopez
Hispanic Leadership Fund

Ralph Benko
Capitalist League

Steve Pociask
American Consumer Institute

Tom Hebert
Open Competition Center

Lisa Cathy
African American Education Alliance

Donny Ferguson
Americans for a Better Economy

Donna Jackson
Project 21

Joshua Delano
Southeast Texans for Liberty

David Williams
Taxpayer Protection Alliance

Gene Mills
Louisiana Family Forum

Karen Kerrigan
Small Business and Entrepreneurship Council

Paul Gessing
Rio Grande Foundation

Patrick Brenner
Southwest Public Policy Center

Autry Pruitt
MAGA Black

Casey Given
Young Voices

Jerry Rogers
Institute for Liberty

May 5, 2025

The Honorable Scott Bessent
Secretary
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington DC. 20220

Kevin Hassett
Director
National Economic Council
1600 Pennsylvania Avenue, NW
Washington DC  20500

The Honorable John Thune (R-SD)
Senate Majority Leader
United States Senate
Washington DC 20510

The Honorable Mike Crapo (R-ID)
Chairman Senate Finance
United States Senate
Washington DC  20510

The Honorable Mike Johnson (R-LA)
Speaker of the House
U.S. House of Representatives
Washington DC. 20515

The Honorable Jason Smith (R-MO)
Chairman, House Ways and Means Committee
U.S. House of Representatives
Washington DC  20515

We write today in opposition to any limits on the ability of businesses to deduct state and local taxes paid, unless offset dollar for dollar by new, broad-based, and permanent pro-growth tax reforms.

The ability of businesses to deduct state and local taxes paid on their profits is a longstanding “ordinary and necessary expense” embedded in the U.S. tax code. Corporations have been able to deduct state corporate income tax paid for as long as such taxes have existed. “Pass through” entities like Subchapter-S companies, partnerships, etc. were confirmed in their ability to deduct state and local profit taxes paid at the entity level in the 2017 “Tax Cuts and Jobs Act.” And businesses have always been able to deduct all other state and local taxes, such as property taxes and severance/extraction taxes.

The challenges businesses face in the current economic environment means that tax hikes on them should be avoided. Tariffs, wild stock and bond market swings, and widespread predictions of a recession mean that now is the wrong time to raise taxes on businesses.

President Trump and the Congressional Republican majority did not run on business tax increases. In fact, the GOP trifecta was achieved with the opposite promise–to stop tax increases across the board, and to make the Trump tax cuts permanent. Eliminating longstanding, ordinary and necessary business deductions raises average effective income tax rates.

Business taxes paid on business profits are fundamentally different from the individual SALT cap debate. Businesses deduct costs incurred for all ordinary and necessary expenses–rent, salaries, equipment, and state and local taxes. This has nothing to do with how much personal income tax, sales tax, and property tax an individual or family gets to deduct on their tax return. The two issues are only loosely connected because income taxes on businesses are apportioned based on where transactions take place, not where businesses are located.

It’s vitally important that all the provisions of the 2017 Tax Cuts and Jobs Act be made permanent. We look forward to working with you in the coming weeks to enact permanent, pro-growth tax reforms for American families and employers.

Sincerely,

Ryan Ellis
Center for a Free Economy

Kent Kaiser
Trade Alliance to Promote Prosperity

Patrick M. Brenner
Southwest Public Policy Institute

David Wallace
Fair Energy

Tom Giovanetti
Institute for Policy Innovation

James Davis
Fans for Fair Play

Paul Gessing
Rio Grande Foundation

Terry Neese
National Grassroots Network

Casey Givens
Young Voices

J.W. Delano
Southeast Texans for Liberty

S Corporation Association

National Ready Mixed Concrete Association

The Association for Hose and Accessories Distribution

Air Conditioning Contractors of America

National Roofing Contractors Association

National Wooden Pallet & Container Association

Hartz Mountain Industries

National Association of Convenience Stores

Saulius “Saul” Anuzis
American Association of Senior Citizens

Colonel Rob Maness
Gator PAC

The Sheet Metal and Air Conditioning Contractors National Association

Glass Packaging Institute

Air Conditioning Contractors for America

National Tooling and Machining Association

Precision Metalforming Association

Performance Racing Industry

Charles Sauer
Market Institute

John Goodman
Goodman Institute

Susan Carleson
Carleson Center for Welfare Reform

Jeff Cargerman
Inventors Project

George Landrith
Frontiers of Freedom

Norm Singleton
US Policy

Jeffrey Mazzella
Center for Individual Freedom

C. Preston Noell III
Tradition, Family, Property, Inc.

Ryan McGowan
Institute for Legislative Analysis

Larry Ward
Constitutional Rights PAC

Palmer Schoening
Family Business Coalition

Associated Equipment Distributors

National Lumber & Building Material Dealers Association

American Subcontractors Association

Small Business & Entrepreneurship Council

Forest Resources Association

National Association of Insurance and Financial Advisors

North American Association of Food Equipment Manufacturers

James L. Martin
60 Plus Association

Chadwick Hagan
Founding Principles PAC

International Foodservice Distributors Association

Jim Pfaff
Conservative Caucus

Water and Sewer Distributors of American

North American of Food Equipment Manufacturers

Precision Machined Products Association

Pete Sepp
National Taxpayers Union

Patrice Onwuka
Independent Women’s Voice

Jim Edwards
Conservatives for Property Rights

Andrew Langer
Institute for Liberty

Gabriel Llanes
Legacy of Liberty PAC

Bartlett Cleland, Innovation Economy Alliance

Kevin Kearns
US Business and Industry Council

Julio Rivera
Reactionary Times

Autry Pruitt
New Journey PAC

Matthew Kandrach
Case for Consumers

Angie Wong
Capitol Hill Fight Club PAC

Independent Electrical Contractors

Energy Marketers of America

Leading Builders of America

National Association of Professional Insurance Agents

Specialty Equipment Market Association

National Council of Farmer Cooperatives

National Propane Gas Association

Ralph Benko
Capitalist League

Structural Insulated Panel Association (SIPA)

Wholesale Florist and Floral Supplier Association

Irrigation Association

National Utility Contractors Association

National Retail Federation

FCA International

When President Donald Trump returned to office in January, nearly everyone in his circle agreed on the top priority: renewing the 2017 Tax Cuts and Jobs Act. Without action, a crushing 22% tax hike looms, threatening to undo the economic gains of the past decade.

Extending the tax reform would also give businesses and investors the long-term stability they need to plan, expand, and hire.Repealing the C-SALT deduction would hammer small businesses — the backbone of the American economy.Instead, the administration has sent mixed signals. Daily shifts in tariff policy have rattled markets and injected uncertainty into every sector of the economy. Investors are jittery. Business leaders are holding back. And analysts are already warning of a potential recession.

These mistakes make it even more important to switch the focus to the tax package. The Trump administration should stop talking about tariffs and focus, along with Congress, on stabilizing markets and laying the foundation for economic growth by getting taxes down.

C-SALT: A conservative’s dream

The Tax Cuts and Jobs Act delivered everything conservatives had long demanded: 100% expensing for business property, a 21% corporate income tax rate, and a child tax credit that rewarded work. It stood as the defining achievement of Trump’s first term. Making it permanent could help revive the pre-COVID economic boom.

But lawmakers must resist the temptation to gut the law’s pro-growth provisions to fund unrelated priorities. That includes rejecting the misguided push to repeal or limit the corporate state and local tax deduction, known as C-SALT.

Debates about the individual SALT deduction cap have dominated headlines in Washington. Some reforms to that cap may make sense. But individual SALT and C-SALT are not the same issue, and they shouldn’t be treated as interchangeable.

C-SALT promotes growth by preventing double taxation on businesses. It lets employers reinvest earnings, stay competitive, and create jobs. Rolling it back would hit business owners hard, slow hiring, and weaken America’s edge in the global economy.

Policy groups like Americans for Tax Reform and the Tax Foundation agree: Gutting C-SALT would put long-term growth at risk — and betray the core economic agenda that fueled Trump’s first-term success.

For businesses, state and local taxes are an operating expense. If businesses lose the ability to deduct these taxes, they will be paying taxes on taxes.

Small businesses pay the price

Repealing the C-SALT deduction would hammer small businesses — the backbone of the American economy. Many already struggle under heavy corporate, state, and local tax burdens, especially in rural and Republican-leaning states. Removing this deduction would force them to shoulder a disproportionate share of the pain.

No serious conservative case exists for eliminating or capping the C-SALT deduction. Some Republicans seem confused, conflating C-SALT with the personal SALT deduction, which overwhelmingly benefits wealthy taxpayers in high-tax blue states. But they are not the same. As the Tax Foundation notes, capping C-SALT won’t “reduce distortive tax benefits or enhance state competition” the way a cap on the personal SALT deduction might — because corporate and individual tax systems function differently.

In 2023, American businesses paid nearly $1.1 trillion in state and local taxes. Stripping away their ability to deduct those taxes from federal corporate income tax amounts to a massive tax hike — potentially hundreds of billions of dollars over the next decade.

That kind of tax increase would erase much of the economic progress since the 2017 tax law was passed. It would punish the very job creators conservatives claim to champion.

Lawmakers in Congress — especially Republicans who support free enterprise and pro-growth tax reform that spurs economic growth — should focus on restoring and making permanent the 2017 Tax Cuts and Jobs Act’s tax cuts without jeopardizing the benefits that the C-SALT deduction provides for American businesses of all sizes.

First, some context: Projected federal revenue for 2025 is $5.42 trillion. That’s where all budget and spending discussions should begin, and it’s how most states begin their budget discussions—with a revenue projection.

But that’s not how we do it at the federal level. Regardless of which party controls Congress or the Executive Branch, the federal government starts by asking “how much more spending can we get away with?” 

Here’s another data point: Total federal spending in 2019 was $4.45 trillion—about $1 trillion below 2025 revenue. That means if we could return spending to something just above 2019 levels, we would have a balanced budget—NOW. Instead, it looks like the Republican Congress and President Trump are going to add around $3 trillion in budget deficits (over ten years) to our almost $37 trillion national debt.

The experience of the past forty years tells us that both parties care more about “owning” each other than they do about fiscal responsibility. When one party controls both Congress and the White House, spending goes up more than it does when government is divided. It’s as true of Republicans as it is of Democrats, as we found out this week when the Republican House, filled with members who aspire to become social media influencers, podcasters, and Fox News commentators, voted to increase spending (and thus budget deficits) by supporting the “One Big Beautiful Bill.” Only two out of 220 Republicans voted against it.

Now, the 2017 tax cuts had to be extended. For one thing, they were great, and if they hadn’t been extended, the result would have been an enormous tax increase that would have harmed economic growth. But Congress must include the tax cut extension in the Senate’s budget reconciliation process to avoid filibuster and be able to pass it with their simple majority. And the budget process includes spending, which is where things go off the rails.

Because the problem, as always, is spending. Federal revenue grows at a remarkably steady pace. It’s reasonably predictable. But there is no political will to control spending, and that includes President Trump, who urged Republicans against further spending cuts.

There are a lot of good proposals in the One Big Beautiful Bill, and a lot of bad ones. There are ways the Senate can improve the bill, and we hope Senate Republicans will take up the task with boldness.

It’s also possible that, once the budget process is over, President Trump will ease his objections to entitlement reform and Congress can put us on a track to fiscal responsibility before Republicans lose their majority in 2026.

It’s also possible that pigs will fly. 

There’s an interesting tension in free-market economics related to businesses.

First, businesses are forms of free association in which people voluntarily pool their resources to accomplish more together than any of them could separately.

Second, businesses profit most by serving customers, not by abusing them. So we start with an assumption that businesses are good things, not bad things, because businesses allow people to better themselves by serving others with products and services they want.

So business is good. Generally.

But, as even Adam Smith observed, sometimes businesses misbehave. Smith wrote “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

That’s why we at the Institute for Policy Innovation assert that we are “pro-market, not pro-business.” We want easy business formation, but we also want competition and the freedom of success or failure.

In a free market, with competition, ease of entry, and possibility of failure, businesses can only harm consumers if enabled by government protection and regulation.

That’s why conservatives and free-market advocates support the consumer welfare standard for government regulation, rather than a European style competition policy.

Which brings us to Texas, and tickets.

Those who buy tickets to live events are generally pretty unhappy with the fact that they are held hostage to Ticketmaster\Live Nation tyranny. In retrospect, this is a merger that has harmed consumers. But beyond their control of the first sale of tickets for live events, the Ticketmaster/Live Nation colossus does everything it can do prevent ticket purchasers from reselling their tickets, or to make it prohibitively troublesome or expensive.

This was an emerging issue twelve years ago, when IPI wrote a paper on the issues of the importance of secondary markets for tickets. If anything, the problem has only gotten worse.

Secondary markets are an important component of a free market, and if you buy a legitimate ticket to a live event, you should be able to transfer it to whomever you choose, however you choose. But the Ticketmaster/Live Nation demogorgon wants to control that as well.

Thankfully, excellent bills have been introduced in the Texas Legislature during the current session that would protect the rights of ticket purchasers to both buy and sell tickets on secondary markets, and make all fees included in “up front” pricing. House Bill HB 3621 had its first hearing Wednesday April 23^rd, while it’s Senate companion SB 1820 awaits a hearing.

Issues like preserving secondary markets for tickets are important because they force elected officials to choose between being pro-business or pro-market. More cynically, between being pro-entrenched interests or pro-economic liberty. The Texas Legislature should choose markets and economic liberty.

When it comes to housing affordability, the U.S. Department of Justice (DOJ) must reevaluate harmful actions established by the previous administration. Housing became increasingly out of reach for millions of working-class Americans during the Biden administration. President Trump and his administration have a golden opportunity to prioritize American homeownership. 

President Donald Trump has been quick to take aggressive action to slash bureaucratic red tape, streamline government, and curtail the government overreach that defined the Biden administration.

To that point, the Trump administration, including Attorney General Pam Bondi, should take corrective action at the DOJ, which has continued to push Biden administration policy through litigation in the weeks before Trump’s inauguration. It would not be without precedent for an incoming AG to pause and reverse litigation pursued by the previous administration. In the past few weeks, acting Solicitor General Sarah Harris has filed motions requesting the Supreme Court to hold appeals in cases regarding federal policy that is expected to change.

In the case of Department of Education v. Career Colleges and Schools of Texas, Acting Solicitor General SarahHarris requested a hold in “abeyance” due to the Trump administrations likely reevaluation of student loan repayment policy. Until federal regulations and law change to match Trump’s agenda, it does not make sense for the Supreme Court to rule on this case. Additionally, Harris filed a motion in Diamond Alternative Energy v. US Environmental Protection Agency, a suit centered around regulation in carbon emissions and ozone pollution, because the EPA is likely to reassess the basis and regulatory policies surrounding this case.

For homeowners, one of the most dangerous political actions by the Biden administration, was their attempt to rewrite housing law. This is most clearly exemplified in the DOJ’s case against Rocket Mortgage – the nation’s largest mortgage lender – Solidifi US, Maverick Appraisal Group, and appraiser Maksym Mykhailyna.

The DOJ’s lawsuit alleges racial discrimination against a black homeowner in the appraisal process. The lawsuit argues that Rocket should have intervened and done more to correct the allegedly biased appraisal. Rocket has hit back, arguing that it was blocked from getting involved by federal law – specifically, the Dodd-Frank Wall Street Reform and Consumer Protect Act.

Dodd Frank was intended to keep appraisers independent from mortgage lenders to protect the integrity of the housing market and avoid inflating housing costs. This was passed to protect American homeowners and prevent future housing bubbles in the wake of the 2008 financial crisis. 

By contradicting this legal precedent and insinuating the connection between appraisers and mortgage lenders, Biden’s activist lawyers in the DOJ prioritized political motives instead of making homeownership more affordable by supporting homebuilders and others seeking to boost the country’s housing supply. If the Trump administration wants to continue to meet the needs of the American voters and make housing more affordable, reversing this action is critical.  

In his inaugural address, President Trump said that he “will direct all members of his cabinet to marshal the vast powers at their disposal to defeat what was record inflation and rapidly bring down costs and prices.” This includes housing costs. Housing affordability harmed millions of Americans under the Biden administration and could only be made worse by the unlawful action brought on by Biden’s bureaucracy in the waning days of his presidency. 

The American people voted for change, and the current Trump administration is working its way through all corners of American life to evoke that change. As his administration continues to take shape, the housing industry —something that affects all Americans— must be front and center.

Artificial Intelligence (AI) is the latest technological “thing” that’s going to change the world—unless it destroys it.

Or at least, that’s the impression most people get from major media and social media channels.

Today's TaxByte was written by IPI President Tom Giovanetti.

• Who Pays Tariffs?
• Trump’s Tariffs Will Refill the Swamp
• Trump’s Astonishingly Wrongheaded Notions about Trade and Tariffs
  ______________________________________

Today's TaxByte was written by IPI President Tom Giovanetti.

In public policy there are, as the economist Thomas Sowell has said, no solutions, only tradeoffs.
 
Except, apparently, for tariffs. It turns out that tariffs are magic.
 
Consider: 

• Though tariffs are paid by American importers when foreign goods arrive in the United States, and those higher costs are passed through to consumers, it turns out that other countries are actually paying the tariff. Magic!
  
  
• Though tariffs are described as an endless source of federal revenue from imports, tariffs are intended to reduce the number of imports coming into the country. So, somehow, tariffs will reduce imports while maintaining steady federal revenue. Magic!
  
  
• Everyone knows that imposing tariffs will result in new retaliatory tariffs imposed by other countries on U.S. exports, and that federal spending will increase in order to provide relief. Yet tariff revenue is a freebie that comes without cost. Magic!
  
  
• In a time when inflation and high consumer prices helped turn an election, tariffs will somehow raise the cost of imports without being passed through to consumers, without further raising prices, and without causing political problems for the new administration. Magic!
  
  
• An administration that wants to root out corruption and the Deep State can impose tariffs while also entertaining a constant parade of lobbyists and well-connected businesses asking for exceptions from tariffs imposed by that administration. Magic!

Hopefully the sarcasm is obvious. Tariffs are an example of magical THINKING, not magic.

There is a reason why trade liberalization in latter half of the 20^th Century raised living standards and helped reduce poverty across the globe. Adam Smith is still right, comparative advantage is still a thing, and consumer benefit should always be prioritized above producer benefit.

Thinking that tariffs will not incur significant tradeoffs and unanticipated consequences is magical thinking, not magic.

When Bill Clinton ran for president in 1992, it was clear that if he won the election the country would be getting a two-fer — Hillary Clinton would play a major role in a Clinton administration. Most people viewed that possibility negatively, and Bill won with only 43 percent of the popular vote. Today, it seems clear that voting for Donald Trump also gets the country a two-fer — Elon Musk will likely play a major role in a Trump administration. While some won’t like that, it’s one of the best reasons to vote for Trump. 

The Trump-Musk bromance has grown, especially over the last several months. They have a lot in common, but there are also some important differences. 

On the in-common list are: They’re both billionaires, though Musk is much richer; they’ve both been very successful businessmen; they both graduated from the University of Pennsylvania; they both generally aligned with the Democratic Party until it went too far left for them; and they both have eccentricities that defy and upset conventional norms, and yet they still appeal to and even inspire millions of Americans. 

Among the important differences: Musk is a self-made success while Trump started out with a multi-million dollar bump from his father; after graduating, Musk went to the liberal West Coast while Trump stayed on the liberal East Coast, yet both later moved to low-tax, red states; Musk is a serial entrepreneur with wide-ranging interests while Trump has never strayed far from real estate and his self-promotion efforts; Trump is a life-long teetotaler while Musk reportedly parties regularly and partakes of a number of “enhancements.” And importantly, Trump is a “natural born citizen” under the Constitution, while Musk is a native of South Africa and a naturalized citizen and so can never be president. 

Given their similarities and differences, strengths and weaknesses, and their healthy egos, a Trump-Musk relationship could be volatile. But there is reason to believe it could be complimentary and very beneficial to the country. 

If he wins the election, Trump reportedly has suggested he would put Musk in charge of a government efficiency commission. That would be a great assignment for an outside-of-the-box innovator like Musk. Few things are more resistant to reform and efficiency than a massive, bloated, wasteful bureaucracy, which is what the U.S. government has become. 

It’s hard to fathom how much taxpayer money could be saved by a thorough government housecleaning — what we might call “draining the swamp.” But the resistance from entrenched bureaucrats, who have come to think that the public exists to serve the bureaucracy rather than the other way around, will be brutal. 

There are some 2.95 million federal workers — a number that has remained relatively flat for 30 years (with decennial exceptions when people are hired temporarily to help take the census). But it’s widely recognized that the government could perform its key functions with a lot fewer people, many of whom get paid a lot for not doing much of anything.  

Remember when working for the government was considered a “public service” rather than a ticket to the good life? No longer. Zip Recruiter says that the average federal employee makes $106,462 a year. The combined salaries for a couple, both of whom work for the government (not uncommon in Washington), could easily put them well above the top 10 percent in household income. In addition, employee benefits are some of the best available.  

The government could significantly downsize if Trump, through Musk’s efficiency efforts, were to eliminate unneeded agencies and employees, combine agencies where duties and responsibilities overlap and slash regulations and red tape, something Trump did in his first term and promises to do again.  

But the entrenched and entitled bureaucracy, backed by progressives and the media, won’t stand for any effort to make the government more efficient, affordable and accountable. 

It’s a big job that will take a big individual to make happen, and Musk is about as big as they come. As an innovator, Musk sees possibilities that most people don’t. With Tesla, SpaceX and Starlink, to name a few of his organizations, Musk found a private sector way to do something successfully that no one, including the government, had done successfully and efficiently.  

Of course, government isn’t a business. But the government could be run more like a business with the right person in charge. Unproductive people could be removed, employee rolls trimmed, realistic budgets set and met, and innovative and more technologically advanced ways to perform the valid functions of government could be established. It’s hard to imagine a person better suited for that task than Elon Musk. 

In the run-up to the 2010 passage of the Affordable Care Act (ObamaCare) then-House Speaker Nancy Pelosi (D-Calif.) said, “We have to pass the bill so that you can find out what is in it.” Now many Democrats are urging that same approach with respect to electing Democratic presidential candidate Kamala Harris: Voters have to elect her to find out what she’ll do. 

You won’t find out much about her policies from the unveiling of Harris’s economic plan last Friday. It would be more accurate to call her speech an “economic platitude.” The dictionary defines a platitude as “a flat, dull, or trite remark, especially one uttered as if it were fresh or profound.” And that pretty much sums up Harris’s economic plan so far. 

She promised she would provide more detail in the coming months, but that may mean after the election. Politico says many Democrats would prefer she stick with her detail-free campaign.   

According to Politico reporters Nicholas Wu and Daniella Diaz, Harris is “leaning into a general positive message that has wider appeal, specifically because it’s light on the details.” And they report that’s just fine with Democrats: “Democratic lawmakers call it a savvy strategy. They’d rather lay out a specific plan post-November, when a potential President-elect Harris would have to staff up her administration and determine her governing priorities.” 

Get it? Don’t confuse the voters with details about how Harris would achieve all the promises she made in her speech. Better to keep the voters ignorant of any facts that might raise embarrassing questions — questions that Harris can’t answer. 

There are at least three reasons why the Harris campaign is “light on the details” of her policies. 

First, the generous explanation. It has been only a month since President Biden announced he wouldn’t be running for reelection and threw his support behind Harris. That’s not much time to develop a comprehensive agenda. That said, she no doubt saw Biden’s physical and mental decline better and sooner than most — though she repeatedly denied it — and surely was working behind the scenes with her closest advisers to develop a contingency plan. 

Second, she has no idea how to implement all the policy platitudes she’s proposing. For example, she says she will initiate the “first-ever federal ban on price-gouging on food and groceries.” But how would Harris actually impose price controls on food? Are we talking about prices at the wholesale or retail level? Can she force grocery stores to not raise their prices while ignoring the prices charged by their suppliers? Or would she target the wholesale companies that buy and process food from farmers and ranchers and sell it to the grocery stores?  

And when would she implement her price-gouging restrictions? Prices often rise briefly in the wake of natural or manmade disasters, but they usually return to normal long before bureaucrats are able to act. And what if prices rise because of arbitrary shortfalls created when her union backers go on strike? For that matter, since wages are the price of labor, is it price-gouging when unions demand unreasonably high wage increases? 

Even as Harris proposes to monitor and micromanage the prices of what could be thousands of food and grocery items, she claims “I will focus on cutting needless bureaucracy and unnecessary regulatory red tape.” But then, who is going to be monitoring nationwide grocery prices? Who’s going to decide if they’re a result of price-gouging?  

Harris’s policy platitudes raise lots of other questions. She wants to expand the child tax credit from the current $2,000 per child to $3,600, and perhaps $6,000 for families with newborns. The Tax Foundation estimates that proposal would cost taxpayers $3 trillion over 10 years. How does Harris plan to pay for that proposal? With bigger federal deficits? Higher taxes? The answer is almost certainly both. 

When a reporter posed that question, her answer was a rambling word-salad that made no sense with respect to the question asked.

The third and most disturbing reason Harris will be light on specifics is that she and her party need low-information voters. Informed voters ask too many questions and demand too many answers — answers this presidential candidate is not capable of providing.  

For years, we’ve heard Biden, Harris and the Democratic Party whine about the growing threats to democracy. Well, one of the biggest threats to democracy is low-information voters. Now we learn that that’s exactly what Democrats want and need.  

What are the economic policies being proposed by Vice President Kamala Harris, the Democratic presidential nominee? We don’t actually know what “Kamalanomics” looks like because the veep has been more focused on offering platitudes with attitude. Will Kamalanonics be similar to Bidenomics? Or is it just Bidenomics on steroids?  

So far, her campaign website has zero policy proposals, so that’s no help. But you can buy a Harris-Walz camo hat the media have been effusing over. Wait until someone tells the candidates that “camo” is short for camouflage, which is something typically worn by hunters and soldiers who carry…guns. 

Probably the best we can do at this point is drill down on her platitudes. 

Harris recently said at a campaign rally, “We fight for a future with affordable housing, affordable health care, affordable child care, paid leave.” So let’s start with those. 

Housing: Housing costs have risen significantly under the Biden-Harris administration. There are several factors behind those increases, including house prices, rising interest rates and insurance costs, property taxes, etc. Fortunately, a recent paper from Harvard University’s Joint Center for Housing Studies looked at monthly payments for a median-priced home, including taxes and insurance. It estimates the current monthly payment at $3,096. That’s down from about $3,300 in mid-2023, but significantly higher than $2,100 at the beginning of the Biden-Harris administration.

In short, all-in monthly housing costs have increased about 50 percent under Biden-Harris. No wonder the president and now Harris have started talking about addressing high housing costs. They realize it’s an election-year liability.

The way to lower housing costs is to reduce regulations, allow builders to charge a fair price that covers costs and makes a profit, and reduce interest rates (which the Federal Reserve Bank will likely do soon). But Harris would almost certainly do the opposite, increasing regulations and attempting to impose price controls, which would lead to fewer houses and higher prices. 

Health care: Virtually all progressives want a government-run, single-payer health care system. That includes Harris. 

She was quick to support Sen. Bernie Sanders’ (I-Vt.) “Medicare for All” bill when she was in the Senate, though that title is misleading. The bill does not put everyone in the federal Medicare program. Rather, the government takes over the health care system, raising taxes to pay for it. You would not be able to keep your employer-provided health insurance nor opt out of the government system. “Kamalacare” would likely be very similar.   

Now would be a good time to recall humorist P.J. O’Rourke’s famous observation, “If you think health care is expensive now, wait until you see what it costs when it’s free.” 

Before you decide on whether Kamalacare is a good idea, look at the challenges in the two countries most often pointed to as models for U.S. reform: England and Canada.  

Childcare: Progressives don’t want to reduce the cost of childcare. Rather, they want the private sector or government to pay for it. Indeed, the Biden-Harris CHIPS and Science Act requires companies taking government subsidies to “include child care plans that meet the Department of Commerce’s standards for affordable, accessible, reliable, high-quality care that is responsive to employees’ needs.”  

The way Harris would make childcare “affordable” is by having the government hand out even more money directly to families, or by attaching strings to corporate subsidies so that companies pay for it. 

Paid leave: What is it with progressives’ obsession with paying people not to work?  According to the Department of Labor, “Thirteen states and the District of Columbia have laws that create paid family and medical leave programs for eligible workers.” In addition, many employers provide paid leave. But Harris wants to create a new federal entitlement program. 

The Green New Deal: Harris fully embraces the Green New Deal, a massive social justice program disguised as a way to save the planet from greenhouse gases. As the New York Times explains, “Supporters of the Green New Deal also believe that change can’t just be a technological feat, and say it must also tackle poverty, income inequality and racial discrimination.”

But Biden-Harris, like Obama-Biden before them, have poured trillions of taxpayer dollars into their green dreams, and yet consumers are increasingly shunning electric vehicles and numerous subsidized green energy companies have either gone belly up or soon will. 

Fiscal Policy: Here’s one facet of Kamalanomics you can be sure of. She will increase federal spending at an even faster rate than Biden and try to pay for it with higher taxes. If you liked Biden’s  $8 trillion total in annual deficits and $35 trillion federal debt, you’ll love Harris. 

There are obviously many as-yet unannounced policy positions, and you can be sure they all will give the government much more control over our choices and our lives. But Harris will likely stick to unoffensive platitudes as long as voters, and especially the media, don’t demand specifics. 

In our last PolicyByte we began to make the case for an Article V convention of states for the purpose of amending the Constitution to rein in the federal government and restore fiscal controls.
 
Many grassroots conservatives have opposed the idea of an Article V convention out of misplaced concern about a “runaway convention.” We’ll explain in the next PolicyByte why a runaway Article V convention is impossible. But many conservative thought leaders, including people respected by the grassroots like radio and TV host Mark Levin, support the idea. In his book, Levin even proposes 11 amendments intended to “restore our founding principles.”
 
The Founders expected and anticipated the need to amend the Constitution, and in Article V created two means for doing so. While both methods require the approval of three-quarters of the states (now 38), the first method originates with Congress and is run by Congress.
 
But the second method, which has never been used, is initiated and run by the states, with Congress having only the ceremonial role of calling the convention. The states themselves would determine the scope of the convention and its rules, but of course all within the text and limits of Article V.
 
The Founders wisely understood that there might come a time when the states had to take action in the face of an unresponsive federal government that, for whatever reason, needed to be acted upon. A convention of states is a way of doing an end-run around Congress, rather than leaving the states powerless, since powerless states were the last thing the Founders intended.
 
Remember, it was the states that created the federal government, and not the other way around. Had we adhered to the Ninth and Tenth Amendment reservations of power to the states, an amending convention would probably not be necessary, but thankfully the Founders supplied us with a means of remedy.
 
In other words, an Article V convention of the states is legitimate, was designed by the Founders, and was intended to be used. And those who think it’s a terrible idea, well, they disagree with the Founders and think the Constitution is flawed, at least in Article V.
 
Now, ask yourself this question: Have you seen any evidence that the federal government is capable of reforming itself? That it’s capable of reducing its power and returning power to the states? That it intends to get spending under control and set its fiscal house in order? Neither have I.
 
There’s never going to be a magic election where Republicans win enormous majorities in the House and Senate, win the White House, AND then are willing to voluntarily reduce their power. Not gonna happen.
 
If change is to happen, it will have to be the states that do it.

Reporters expressed some surprise at a recent Guardian-Harris poll revealing that 56 percent of those surveyed believe the country is in an economic recession, and that President Biden’s policies are to blame. And 49 percent believe the S&P 500 stock index is down for the year. Why doesn’t the public understand, reporters mused, that most of the macroeconomic numbers are really quite good? Biden, whose polling numbers are in the tank, has been wondering the same thing. 

But average Americans, those who are not economists or vote-seeking politicians, tend to focus on a different set of numbers. Let’s call them personal economic indicators, the ones individuals and families confront daily. And those numbers tell them a different story. What are they saying? 

Savings are gone. A new report from LPL Financial, based on San Francisco Federal Reserve Bank data, shows that families’ excess savings that accrued as a result of the government’s pandemic-related stimulus peaked at $2.1 trillion in August of 2021. But those savings have steadily declined and have now been exhausted.  

That money allowed families to keep up spending levels. “Throughout the more recent spending splurge, households drew down their savings by roughly $85 billion over the past year,” writes LLP. 

But with those savings gone, consumers face more difficulties in maintaining their lifestyles. Will they slow their spending, which could move the economy toward a recession? Probably not, at least not immediately, because of the next personal economic indicator. 

Credit card debt is way up. When there are no savings consumers turn to credit, especially credit cards. Time magazine writes, “According to the Federal Reserve Bank of New York, borrowers loaded an additional $50 billion onto their credit card balances in the last three months of 2023, an increase of nearly 5% that brings the total to a record high of $1.13 trillion.” (Emphasis added) 

So not only are savings gone, but credit card debt is at a record high. 

Living paycheck to paycheck. Here’s another negative for the Biden economy. Living paycheck to paycheck generally means “a financial scenario in which an individual or family’s income barely covers essential living expenses like housing, utilities, groceries and transportation.”  

According to a Forbes Advisor survey, “nearly 70% of respondents either identified as living paycheck to paycheck (40%) or — even more concerning — reported that their income doesn’t even cover their standard expenses (29%).”  

And one factor that has made living paycheck to paycheck an even greater challenge is inflation. 

Inflation lives. Biden and the media will sometimes talk as if inflation has gone down over the past year or so. For example, that Guardian news story claims “72% indicated they think inflation is increasing.” The reporter begs to differ, “In reality, the rate of inflation has fallen sharply from its post-Covid peak.”  

In fact, the public is correct. While the “rate of inflation” increases have fallen, inflation continues to grow, just at a slower pace. Those month-over-month inflationary increases are cumulative. That is, new inflation numbers are added on top of the old numbers.  

So, for example, the U.S. Department of Agriculture says that in 2021, Biden’s first year in office, “all food prices” increased by 3.9 percent. In 2022, by contrast, “food prices increased by 9.9 percent, faster than in any year since 1979.” Ouch! And they increased another 5.8 percent in 2023.  

That’s why shoppers aren’t wrong when they claim that some of the items they typically buy at the grocery store are 25 percent or even 50 percent higher than they used to be. Those yearly increases add up, forcing even more people to live paycheck to paycheck. 

Of course, many of the broader economic indicators have improved significantly. The country isn’t in recession, the stock market has recently hit record highs, and unemployment is still quite low by historical standards.  

The point that needs to be understood is that consumers see these personal economic indicators every day. They can turn off the news and tune out Biden’s economic self-backslapping. But they can’t ignore their own financial conditions. And these indicators are weighing heavily on voter confidence in the economy — and Biden’s presidency. 

The past couple of decades have been a stark reminder that major problems can come out of nowhere and blindside us. These are the “unknown unknowns,” in the taxonomy of former Defense Secretary Donald Rumsfeld. 

COVID-19 pandemic is an obvious example. No one anticipated a global pandemic would sweep the world in 2019 and 2020, killing more than 5 million people, disrupting supply chains, changing work patterns, requiring massive government relief programs, delaying educational development for children, eroding trust in government and institutions and causing immense stress in the commercial real estate business that has yet to work its way through the economy. 

The 2008 financial crisis was another unknown unknown. The movie “The Big Short” highlights a few investment analysts who saw the patterns, and there were voices in the policy community, including my organization, the Institute for Policy Innovation, that warned government housing policy would eventually cause a crisis. But no one anticipated when and how it would manifest. 

I have criticisms of how governments handled both of these unknown unknowns, especially the bank bailout created in 2008 and the closing of schools during the pandemic, but we should be able to at least understand that mistakes will be made in the fog of the unknown. What about the known knowns, though? What about the problems that everyone is aware of but that government refuses to address?  How will future generations judge us for ignoring the known knowns that we face? 

There is no lack of understanding about some major imminent problems. While Congress rushes to legislate on the hot issues of the moment, such as social media regulation, artificial intelligence and naming post offices, our elected officials actively avoid dealing with known disasters lurking around the corner.  

We know, for instance, that our porous southern border is allowing people listed on the terrorist watch list to sneak into the country.  

But when a group of senators made an attempt, however flawed, to begin to address the problem, they were ridiculed. Oklahoma Sen. James Lankford was actually censured by his own political party for stepping up to the plate and attempting to solve a problem. 

Even more obvious, the United States is facing a fiscal crisis, and everyone knows it. Social Security will become insolvent in nine years, forcing a 23% cut in benefits if nothing else is done. Social Security and Medicare shortfalls are responsible for 97% of projected budget deficits over the next 30 years. Unless the nation reforms the programs, we face more than $100 trillion in budget deficits that will drive interest on the national debt to unserviceable levels.  

Yet both Republicans and Democrats have not just refused to deal with this known known, they actively promise voters they won’t touch entitlements. And when you add interest on the debt, which cannot be avoided, about 75% of all federal spending is off the table for reform. 

In other words, only 25% of federal spending remains to pay for the basic functions of the federal government. And it’s mathematically impossible to solve our fiscal crisis while refusing to even discuss changes to three-quarters of the budget. 

Our Congress and presidents refuse to make the hard choices, establish priorities and deal with the known knowns. And future generations — the next generation — will judge them for it.

 A government that was serious about dealing with the coming fiscal crisis would make hard choices. Here’s an example: In 2023, Congress appropriated more than $1.2 trillion for “infrastructure” improvements. Last week, the Francis Scott Key Bridge in Baltimore collapsed because of an unknown unknown, a collision by a ship. Everyone — literally everyone — assumes that a new, additional spending appropriation will pay for the reconstruction of the bridge.  

But a government serious about dealing with our imminent fiscal crisis would conclude that some of that $1.2 trillion should be reallocated toward rebuilding the Key bridge, rather than spending additional funds above and beyond what’s already appropriated. Maybe some airport modernization or broadband subsidies are not as important as replacing a major bridge. 

Not too long ago, responsible policy makers and opinion leaders were stepping up to the plate. Rep. Paul Ryan notably put forward a framework for entitlement reform, and his reward was to be run out of office. The way to succeed in politics, it seems, is to promise voters you’ll ignore the known knowns that are just around the corner. 

The next generation — our children — will curse us for handing them this mess and refusing to deal with problems we can see are coming. And we won’t be able to claim ignorance.

A California man walks into a Phoenix, AZ, fast-food restaurant and asks for the manager.
 
“I saw the sign in the window that says you’re hiring. I’d like to apply for a job,” the traveler tells the manager.
 
“Sure,” the manager replies. “Have you ever worked in a fast-food restaurant?”
 
“Of course, for several years.”
 
“Great,” says the manager, “Can you start tomorrow?”
 
“You bet, and thank you. Oh, what’s the pay?”
 
“Why, $15 per hour. That’s the best you’ll find in the fast-food business around here, and 65 cents more an hour than Arizona’s new minimum wage of $14.35,” the manager boasts.
 
“What!?” responds the applicant. “In California, where I’m from, the state government requires fast-food restaurants to pay $20 per hour.”
 
“Ah,” wonders the manager, “Then why don’t you go back to California and get a job there?”
 
“I had one until recently,” the applicant laments, “but the restaurant had to lay off staff.”
 
California has just raised the minimum wage for fast-food workers to $20/hour. And the result is what any rational economist—which does not include progressives—would expect. Businesses have started laying off staff. Or in some cases cutting hours or raising prices.
 
And some fast-food restaurants are increasing the availability of kiosks, which don’t demand raises or health insurance.
 
According to the Wall Street Journal: 

• “Franchisees for Pizza Hut and Round Table Pizza, a chain of around 400 units founded in Menlo Park, Calif., have said they plan to lay off around 1,280 delivery drivers this year.”
   
• “Excalibur Pizza, owner of Round Table Pizza locations in California, said in a state filing that it would eliminate 73 driver positions, or 21% of its workforce, by mid-April.”
   
• An owner of 10 Auntie Ann’s and Cinnabon restaurants “has reduced his staff by about 10, and his 73-year-old parents have returned to working in the business to help shave costs.”

Those who are fortunate enough to keep their job may earn more money, but the work load may be expanded and customer satisfaction may decline.
 
News stories often suggest economists disagree about the job-losing impact of government-imposed minimum wage increases.  But there really isn’t a debate. If a mandated minimum wage increase is small—around or just a little more than what most employers are already paying for low-skilled labor—the increase probably won’t have much of a negative impact.
 
But if the increase is significant, it absolutely will have a negative impact—on employers, customers and workers. Just ask the thousands of former California fast-food workers who are looking, or soon will be looking, for a new job.

What do you call it when a reform-committed new president of a once prosperous but now largely failed socialist-led country plans to cut 70,000 government jobs as part of his efforts to return the country to fiscal sanity? A darn good start! 

Or maybe, a model for the United States! 

President Javier Milei of Argentina took office Dec. 10 to much fanfare from Argentines and general skepticism and disdain from the left and the media, including the U.S. media.  

A libertarian economist who describes himself as an “anarcho-capitalist,” Milei campaigned with a chainsaw pledging to cut the size of government, lower inflation, switch currencies from the Argentine peso to the U.S. dollar and shutter the country’s central bank. Milei won the presidential election with 56 percent of the vote, including an impressive showing of young voters.  

Here’s what he was up against when he entered office. Inflation over the past year was up 276 percent, the highest in the world, according to The Economist. The government owed $263 billion to foreign creditors. And an estimated 50 percent of Argentines were in poverty. 

So, how’s Milei doing just a few months into his presidency? Promises made, promises kept. 

Voice of America writes, “Once in office, he cut the Cabinet in half, to nine ministries, slashed 50,000 public jobs, suspended all new public works contracts and ripped away generous fuel and transport subsidies.” I like this guy! 

And now he plans to cut another 70,000 government jobs, though that’s a fraction of the country’s 3.5 million public sector workforce, and end more than 200,000 social welfare programs because of corruption. 

Importantly, Milei has slashed government spending in an effort to balance the budget, and foreign reserves have grown to $7 billion. 

Inflation was 25.5 percent for December, dropping to 20.6 percent in January and 13.2 percent in February. Still outrageously high, but moving quickly in the right direction.  

Public confidence has grown from 20 percent in December to 47.7 percent in mid-March. 

While Milei’s reforms have been a shock to Argentina’s economic system — including some economic pain for many families — it had to be done, and done quickly so the public could begin seeing positive results. 

Soon, Milei plans to shutter the country’s central bank, which won’t be needed if he dollarizes the economy. Central banks should act independently of politics. When politicians largely control central bank policies — as they typically do in socialist and autocratic countries, including Argentina — the politicians tell the bank to print more money so they can spend (or steal) it. That’s one reason why Argentina has such a high inflation rate. 

But how did Argentina, which was once one of the most prosperous countries in Latin America, became such an economic basket case? The short answer is: Juan Peron, a populist, socialist autocrat. 

Peron became president of Argentina in 1946, though he was overthrown in 1955. He won the presidency again in 1973, but died in office in 1974, whereupon his wife, who was vice president, became president. 

Peron expanded the power of unions, arbitrarily raised wages, nationalized a number of industries (including railroads, utilities, public transport, etc.), initiated government-provided retirement and health care benefits, and he tried to reduce foreign trade in favor of domestic manufacturing. In other words, he pretty much embraced the same policies as Sen. Bernie Sanders (I-Vt.), Rep. Alexandria Ocasio-Cortez (D-N.Y.) and all the other progressives — including President Biden. 

Peron had to find the money to pay for his expansion of government, wages and benefits, which means raising taxes on the wealthy, spending more money than the government takes in and getting the central bank to print money to cover the deficits.  

Sound familiar? It should. That’s similar to what Biden’s been doing or trying to do.

Of course, Peron has been gone for decades. But Peronist Nestor Kirchner was elected president in 2003, and in 2007 his wife, Cristina Kirchner, ran for president and won. She remained in office until 2015, and from 2019 to 2023 served as vice president.  

After so many years of populist and socialist corruption and financial mismanagement, Argentina’s voters decided they’d had enough and gave Milei’s free market economics, limited government and fiscal responsibility promises a chance.  

His first three months have been encouraging, but Milei has a long way to go, with roadblocks at every turn, especially from labor unions. But if he’s successful, he may provide a model for U.S. politicians who want to challenge the Peronist-like policies of Biden and his fellow progressives.  

If Argentina can return to free markets and fiscal responsibility, maybe the United States can, too. 

April 2, 2013 

Protecting Secondary Markets for Tickets 

HB 3041 / SB 1558

Mr. Chairman, and members of the Committee, my name is Tom Giovanetti, and I am the president of the Institute for Policy Innovation, a 25 year-old free-market think tank in Dallas. IPI does not lobby, and we do not represent clients, but we do appreciate this opportunity to share our thoughts with you on HB 3041 / SB 1558. 

IPI commends this committee and the bill’s sponsor for taking action to protect secondary markets in tickets. 

The basis of the belief in limited government and free markets is our recognition of spontaneous order and the ability of people to self-organize and to self-govern. Our founders recognized that free people naturally create markets and organize themselves for the betterment of the community and for economic efficiency. We don’t need governments to do this for us. Government doesn’t create markets—markets happen naturally. We are not suspicious when a market naturally, spontaneously appears “out of nowhere”—that’s simply the latest example of natural self-organization of people into markets. Rather, our suspicions are aroused when somebody tries to squash or monopolize such a naturally occurring market. 

The secondary market for tickets is a great example of a natural, spontaneous market. People have always given away or resold tickets that they didn’t want or couldn’t use. It’s a natural, spontaneous, secondary market, and it’s the kind of self-organization that it is our duty to preserve, if we believe in spontaneous order, self-organization, and limited government. 

And secondary markets create greater economic efficiency, for all parties involved. The original ticket purchaser can be made whole, and the seats will still be filled, which is in the venue’s best interests. And no one is harmed. 

The folks on the other side of this issue may try to bring up licensing as a way to try to cloud the issue. We at IPI also do a lot of policy work on intellectual property. In fact, I’m an accredited observer with the World Intellectual Property Organization in Geneva, Switzerland. Arguing that the ticket is a license and not real property doesn’t actually change anything in this argument. It is still improper for them to try to extend their envelope of licensing such as to kill or monopolize the secondary market. And it’s completely appropriate for the legislature to define the rights of ticket purchasers and to make sure that licensing terms and conditions are not used improperly to kill or monopolize the secondary market. 

There are, of course, reasonable terms and conditions for venues to place upon ticket purchasers. But as venues, promoters and ticketing companies increasingly try to extend the terms and conditions for a ticket beyond those reasonable and necessary for the first sale of those tickets in order to eliminate or monopolize the secondary market, it’s important for government to step in and clearly define the rights of ticket holders to participate in secondary markets. 

The legislation before you (HB 3041 / SB 1558) is an attempt to protect these natural secondary markets for tickets against those who seek to extinguish or monopolize them. It is a perfectly appropriate consumer protection, especially since no one is harmed from a vibrant secondary market for tickets, as venues have already received whatever price they chose for the ticket. It is appropriate for governments to protect these markets by limiting the attempts of venues to improperly extend their fine print restrictions so as to squash these secondary markets. 

The Institute for Policy Innovation (IPI) commends you for taking up this important legislation and for moving to ensure that vibrant secondary markets for event tickets are protected in Texas. This legislation is a win for Texas consumers, for free markets, and don’t forget that no one is harmed by this legislation. 

IPI would be delighted to work with you as you continue to work on this important legislation. Thank you.

As IPI’s own Merrill Matthews has so ably reported, the federal Congressional Budget Office now estimates that the federal budget deficit will exceed $1 trillion annually over the next 10 years.
 
Almost all the news is bad. But there’s one little bit of good news in the CBO’s February report. The CBO’s economists estimate that because of higher immigration, growth of real GDP will be higher. Specifically, says the CBO:
 
Most of the increase in the projected population reflects larger net immigration. That greater immigration is projected to boost the growth rate of the nation’s real gross domestic product (GDP) by an average of 0.2 percentage points a year from 2024 to 2034, leaving real GDP roughly 2 percent larger in 2034 than it would be otherwise.
 
Immigrants tend to be younger and, therefore, tend to be employed. Without this higher number of immigrants, estimates the CBO, economic growth over the next 10 years would have averaged about 1.8 percent annually. But higher immigration would increase economic growth during those years to a slightly less anemic annual rate of 2 percent. In other words, we pay a price in terms of economic growth for a lower supply of labor.
 
With higher growth, of course, come higher tax revenues, although reading the CBO’s report is like looking at the output of a black box. CBO Director Phill Swagel elaborated on the effect of immigration earlier this month. He stated:
 
The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration. As a result of those changes in the labor force, we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise. We are continuing to assess the implications of immigration for revenues and spending.
 
A $1 trillion reduction in the federal debt is no longer a lot, but it’s nothing to sneeze at.
 
Of course, the status quo is highly dysfunctional: Allowing immigrants to come into the country while forbidding them to work. We could do much better: get rid of the regulation that says people seeking asylum—unless they’re from Cuba, Ukraine, Haiti, Nicaragua, or Venezuela—must wait six months before working. If other asylum seekers were put on the same footing as people from those five countries, they could work right away and would be contributing to economic growth even sooner. That would also save on a lot of food and housing expenses paid for by local governments.
 
There are, of course, other factors in the debate over immigration. But it’s good to see the CBO acknowledges that immigration is a net plus for economic growth.