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Good morning! Here’s your PolicySphere morning briefing! If you were forwarded this, here’s more about who we are and what we’re doing and, of course, don’t forget to sign up and tell your friends.
Here are some of our latest articles you may have missed:
Interesting New Paper On How The Fed Produces Disinflation
Analysis: Excellent New Paper Makes National Security Case for Free Trade
Kamala’s ‘No Tax on Tips’ Caper
Your regular correspondent, Pascal Emmanuel Gobry, is out today with a (non-life-threatening, we are happy to say) surgery. He will be back soon, but the morning briefing will continue… written by PolicySphere’s mysterious special correspondent.
A month ago, PolicySphere discussed President Trump’s proposal to allow service workers to deduct tips from their taxes. We noted that this policy, derided by many wonks as a inefficient carve-out in the tax code, had the potential to make a real difference in the lives of ordinary workers–thus its appeal.
Of course, there is also an important political dimension to the policy. Service workers are a powerful constituency in Nevada, a swing state that Trump wants to flip. Nevada’s Culinary Union, a powerhouse in state Democratic politics, supports the proposal.
Now, Kamala Harris wants in on the action. At a rally over the weekend, Harris announced that she, too, supports ending taxes on tips. Evidently her campaign recognized the populist appeal of the policy—and decided to neutralize it through embrace. All’s fair in love and war.
It remains to be seen how this caper will affect the race. Harris has already been endorsed by the Culinary Union, but maybe matching Trump’s promise on tips will lure back some service workers tempted by other aspects of his agenda.
On the other hand, ripping off one of Trump’s proposals could contribute to the impression, felt by many voters and encouraged by the GOP, that Kamala is a chameleon who will do and say anything to win office.
An equally important question, which now applies to both candidates, is whether this is an election-year shiny object, to be dangled and then retracted once it has served its purpose, or if it is a real priority they will push for in next years’s tax negotiations.
We shall see.
Policy Links
#Tech #Regulation – California is considering a bill that would open web developers and Internet vendors to lawsuits if their web sites do not meet strict compliance standards for the visually impaired (think text-to-voice options and easy-to-read, large fonts). City Journal’s Jordan McGillis explores how this law would hurt business owners, particularly small business owners who don’t have an army of compliance managers and web designers.
#DEI – John Miltimore has an article in the American Institute for Economic Research discussing corporate America’s retreat from Diversity, Equity, and Inclusion. Apparently HR departments are dropping the ‘E’ and attempting a re-brand as ‘D&I.’ Miltimore explores the roots of DEI in Corporate Social Responsibility and ‘stakeholder capitalism’ and argues for a return to focusing on profit.
#Immigration – The pseudonymous blogger Inquisitive Bird has a thought-provoking article on Sweden’s “taboo” against studying the effects of immigration on their country–and has punished researchers who have tried. Data can be interpreted and argued about, of course. But Sweden, like many European countries, would prefer you not talk about them.
#Chyna #Drones – China revolutionized the small commercial drone business. Now the South China Morning Post reports that China’s military is investing heavily in anti-drone technology, such as laser beams. They are drawing lessons from the battlefield in Ukraine and Gaza.
#Energy – John Fund of National Review writes that anti-nuclear hysteria appears to be easing, on both sides of the aisle. Even Tim Walz, who we recently noted has an extreme record on energy, has taken steps to boost nuclear. If we want a future of abundant, clean energy, this is a necessary step.
#Chips – Intel’s disastrous earnings report caused its stock to plunge, and critics of industrial policy like the CHIPS Act are taking a victory lap. Not so fast, says Oren Cass at American Compass. There’s evidence that CHIPS Act funding is helping the United States’s re-establish the industrial ecosystem for making advanced chips. As a bonus, you can read American Compass’s deep dive into the implementation of the CHIPS Act here.
#ForeignPolicy – Kamala Harris has been hard to pin down on policy, so Jay Solomon’s profile of Harris’s foreign-policy whisperer, Philip Gordon, is especially interesting. In brief: he is a skeptic of American power and an advocate of rapprochement with Iran.
#Politics – Matthew Continetti of the American Enterprise Institute has a typically insightful column on Kamala Harris’s polling bump and what Donald Trump must do to bring her back to Earth: namely, force her to answer for her flip-flops, left-wing positions, and cover-ups for a declining President Biden.
Chart of the Day
Today’s chart, from this excellent article in the Wall Street Journal, shows the change in consumer price index for various subsets of goods and services. As you can see, inflation in key areas like housing, transportation, and services (think childcare) are outstripping headline CPI. These are not areas where substitution is easy or even feasible. Most people still need cars to drive to work. Until the unlikely day that changes, inflation will rank high on the list of voters’ concerns.
Meme of the Day
