Dan Mitchell fights for more freedom and less government (which is purposefully redundant).
A Bit More About Dan Mitchell
Daniel J. Mitchell is a co-founder of the Center for Freedom and Prosperity and the Center for Freedom and Prosperity Foundation. He is one of the nation’s leading experts on tax reform and supply-side tax policy. In addition to tax policy, Dr. Mitchell is a trenchant observer of economic developments and an expert on Social Security privatization – particularly the fiscal policy impact of reform and what the US can learn from other nations that have created personal retirement accounts. Dr. Mitchell’s by-line can be found in such national publications as the Wall Street Journal, New York Times, and Investor’s Business Daily. He holds a Ph.D. in Economics from George Mason University and master’s and bachelor’s degrees in economics from the University of Georgia. Mitchell was a senior fellow with the Cato Institute and The Heritage Foundation, and an economist for Senator Bob Packwood and the Senate Finance Committee.
Ed and Ron were honored to have the chance to interview economist Dan Mitchell. As former Presidential candidate Steve Forbes said of Mitchell’s 1996 book, The Flat Tax: Freedom, Fairness, Jobs, and Growth, “Mitchell marvelously demonstrates how the flat tax will rip away the principal source of political pollution in Washington.” He also is the nation’s leading opponent of tax harmonization schemes developed by the Brussels-based European Union, the Paris-based Organization for Economic Cooperation and Development (OECD), and the United Nations. His September 2000 analysis of the OECD’s “harmful tax competition” initiative was the opening salvo in a campaign that ended with the United States announcing it could no longer support international proposals to persecute low-tax jurisdictions. He has now turned his attention to the EU’s infamous “Savings Tax Directive” and a UN proposal to undermine the sovereign right of nations to determine their own tax policy.
Here are Ed’s questions from the interview:
First, Dan, how are you doing in these crazy times before we get into tax policy?
What is your overall evaluation of the federal government’s reaction to the COVID-19 crisis? The spending seems to be a crazy mish-mosh of stuff, isn’t it?
The first stimulus was $2.1 trillion and the second was $2.3 Trillion, there was no conversation about all this spending.
You refuted a claim by Dana Milbank at the Washington Post, who wrote: “Our response to the Corona virus was hampered because our government is too small.”
And yet the states themselves, which are the smaller governments, their fiscal burdens run the gamut in terms of debt and unfunded liabilities. [Ed quotes from Dan’s blog post, “Coronavirus and the States: Spending Restraint, Bailouts, Default, or Bankruptcy?” May 1, 2020]. Can you unpack that, there’s a lot there?
On the unfunded liabilities, a lot of those were caused by guaranteed pension plans that the state employees got, is that correct?
Then the question becomes, are the good people of Texas willing to bail out the good people of New Jersey, that’s the challenge.
Dan, I wanted to ask you one more corona virus related questions, and then move on to some other random topics. What would have been better: assuming we had to do something, what should have been done. Would have been direct deposits to individuals, or what, I’ll let you go from there?
To steal a phrase, is it really the spending stupid? Does it ultimately come down to the size and scope of government that’s the problem, and then taxation just becomes the result of that?
One way that has been proposed by some Libertarians, such as Charles Murray’s idea of a Universal Basic Income, along with a Constitutional Amendment to remove all other spending programs. What are your thoughts on UBI?
On the subject of not trusting politicians, what are your thoughts on Justin Amash potentially declaring for the LP candidate for president?
…and here are Ron’s questions:
I’d like to talk with you about tax policy, one of your areas of expertise. When you look at all the different type of tax systems we could have, such as a VAT, National Sales Tax, Consumption Tax, Flat Tax, if you were king for a day—knowing you’d probably turn down that role—what tax system do you favor?
Look at the history of the VAT in Europe, which started fairly low, and now look at their rates, on top of their confiscatory income tax rates.
Dan, is it true from a technical economic point of view, no matter what you call the tax, aren’t all taxes at the end of day income taxes because that is how most people have control over resources?
What would you do with the corporate and capital gains taxes?
The corporate tax incidence debate, I remember reading Kevin Hasset, who I’m sure you know, he believes nearly all the corporate tax burden is actually paid by the workers. What’s your take on that? How much do the workers versus the shareholders versus the consumers pay of the corporate tax burden?
I wish more people understood exactly what you just said. It seems there’s a feeling out there that we can keep taxing the corporation, and it’s no, only people pay taxes.
I used to be really young and naïve back when Newt Gingrich took back the House in 1994, I really thought we were going to see major tax reform. What is your assessment of real tax reform. Do you think we’ll ever live long enough to see it?
I think you’re exactly right on that. It took me about a decade to learn that.
Dan, I know you have a worldwide grasp on tax policy, and I’d love your opinion how this country should we go about privatizing Social Security. Which model works? Is it Chile’s, Singapore’s, Great Britain’s? How should we deal with the Social Security Crisis?
So you’re saying you’ll be the Yankee’s pitcher before we even attempt to fix Social Security or Medicare?
Yes, Clinton could have got it done because he was a Democrat, rather than when George W. Bush tried it.
I know you’re a big opponent of the tax harmonization schemes of the EU and the UN, and this oxymoronic notion of “harmful tax competition,” where do you stand on the EU in general, and this ties into Brexit, too. I would imagine you were for Brexit, is that safe to say?
I’m just such a pessimist with respect to the EU, it’s just a meta-mess, with their regulations, I just can’t imagine a country like Great Britain transferring its sovereignty to the EU.
Dan, should we be worried about inequality or poverty?
Bonus Content is Available As Well
Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.
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Here are a few topics discussed from the most recent bonus episode: