Although I avoid commenting on the goings-on in states other than the one in which I live, I like observing the coverage of my state in out-of-state publications. In this case the editors of the Wall Street Journal are quite critical of Gov. Pritzker’s new taxes. They remark:

Mr. Pritzker boasts that the budget increases spending on welfare programs, “all without raising taxes on working people.” How does he define “working people”? The broad-based digital taxes are sure to whack most of the state’s 12.7 million residents.

Start with a new progressive tax on social-media platforms that is levied based on their number of active monthly users in the state. The murky legislative language could sweep in Yelp, Nextdoor and Substack. Platforms with at least one million users would pay a top marginal rate of $6 a year per Illinois user, while smaller platforms would pay $1.20 for each user.

The tax will encourage companies to put more services behind paywalls, reduce creator monetization opportunities and raise prices on in-state advertising. “It turns the internet into more of a ‘walled garden,’ since free accounts become increasingly costly to provide,” the Tax Foundation says. Illinois residents will pay the tax one way or another.

I wonder whether the governor’s office asked companies such as Facebook or Yelp how they would respond to taxes of this sort. Businesses rarely absorb new costs indefinitely; they change prices, change services, or change where they do business. It is also worth asking how the administration would respond if some companies simply chose not to offer free services in Illinois or restricted access altogether. That would hardly help if Gov. Pritzker eventually seeks national office.

There are more:

The budget also includes a new 10% gross receipts tax on providers of targeted digital ads in the state. The tax is aimed at the likes of Google, Meta and TikTok, but it will invariably be passed along to businesses that buy ads. Think the mom-and-pop taqueria, bike shop or dry cleaner.

and

The state is also imposing a first-of-its-kind 0.2% tax on digital asset transfers in the state. Sell $10,000 in Bitcoin, and you will owe $20. Expect the tax rate to grow as Democrats scrounge for more revenue. Ditto a new 1.75% tax on sports bets made on prediction markets, and a 15% tax on receipts of fantasy sports operators.

Here’s the editors’ interpretation of these actions:

Democrats in Springfield like these digital taxes because they apply to activity that is less mobile than income or corporate taxes. They also figure that most voters won’t notice since they will occur on transactions mediated by business. But they tell you what Mr. Pritzker’s priorities are as he prepares to argue that Illinois policies are right for the entire country.

His priorities seem clear enough. Faced with growing expenditures, the administration has chosen to expand the tax base rather than restrain spending. On a side note Gov. Pritzker frequently notes that he has balanced the budget every year he has been in office. The Illinois Constitution requires him to do exactly that. I’ve never thought to list the misconduct I didn’t commit on my résumé but perhaps I’ve been underselling myself.

The recent Washington Post editorial is a fine example of how much the Post has changed in just two years. It is a critique of Gavin Newsom. Here’s a snippet.

California Gov. Gavin Newsom (D) called for a national wealth tax on Friday while opposing a ballot measure that would impose one in his own state. If it’s bad for the Golden State, it’s worse for America.

The Service Employees International Union got a measure onto the November ballot that would take 5 percent of all assets from every billionaire living in California. This supposedly one-time wealth tax would fund health care programs that employ SEIU members. The union offered to reduce the tax to 2 percent if the governor would get on board, but he said no.

Newsom says he opposes a California wealth tax because the money shouldn’t just go to health care, and he’s concerned about the continuing exodus of affluent residents to lower-tax states. He reasons that a federal version would be harder to escape.

Like most calls for taxing the super-rich, Newsom immediately broadens his pitch. In a social media video promoting his idea, he begins by saying, “It’s time for a national billionaire’s tax.” Then, in the very next sentence, he says, “Ten percent of people in this country own two-thirds of the wealth.”

The top 10 percent of income earners includes people earning roughly $140,000 annually, so Newsom has shifted from talking about billionaires to talking about a much broader segment of the population. There is a legitimate point to be made about the concentration of wealth. Fifty-five years ago, the top 70 percent of income earners owned roughly 70 percent of the nation’s wealth. Today, wealth is concentrated in far fewer hands. But that is a different argument from taxing billionaires, and Newsom appears to move from one to the other without acknowledging the distinction.

The editors then make economic and legal arguments against a wealth tax. Their strongest point is that wealth taxes have generally failed to achieve their stated objectives.

Other countries have tried out wealth taxes and found them wanting. As many as 12 OECD countries had a wealth tax in the 1990s. Today, only four do. Experience has shown that wealth taxes don’t raise as much money as proponents promise, and they are tremendously complicated to administer.

The OECD is hardly run by anti-tax libertarians, and even its researchers have found that wealth taxes aren’t a good idea. In a 2018 paper that argues tax codes should be used to reduce wealth inequality, OECD economists still find that wealth taxes are not an effective way to do so.

I would add another consideration. The “friction” involved in leaving the United States is far lower than it once was. Modern transportation, communications, and financial systems make it easier for wealthy individuals to relocate than in previous generations. In 2025 alone, roughly 5,000 Americans renounced their citizenship, many citing tax considerations among their reasons.

All of this reinforces a point I’ve made many times before: governments, like households, should strive to live within their means. Borrowing can postpone difficult choices, but it does not eliminate them. Eventually the bill comes due, often for people who had no role in creating it.

In a future post I’ll document how the editorial policy of the Washington Post has changed over the last two years. That won’t prove the case by itself, but it will at least provide evidence that the paper’s editorial direction has shifted.

I want to discuss a passage in James Joyner’s recent post:

I’ve only recently come to adopt the view that the courts, and certainly the Supreme Court, have to consider the policy implications of their rulings, not merely whether the question before them is technically legal.

Yes, the elected branches—Congress and the President—should make public policy and be granted wide latitude in doing so. In theory, if increasingly less in practice, the people can toss them out in the next election if they dislike the policy. But a justice system is supposed to ensure justice, not merely legality. Sending people who have done nothing wrong to die in countries they don’t know is not justice.

I think that answer deserves some reflection.

As I understand it our three branches of government are designed to operate as follows:

• The legislative branch enacts laws, governing appropriations and other policies.
• The chief executive executes the law and proposes policies.
• The judicial branch interprets and applies the Constitution and the laws enacted by Congress, resolving disputes according to the law rather than according to its own policy preferences.

If the judicial branch determines the appropriate policies on its own, doesn’t that necessarily diminish the policy-making role assigned to Congress? If judges are to substitute their preferred policies whenever they believe justice requires it, what meaningful policy discretion remains for the legislative branch?

Furthermore, if judges are expected to reach the “correct” policy outcomes, by what standard are they to be evaluated? Lifetime tenure makes sense for judges whose duty is fidelity to law. It is much harder to justify if judges are expected to function as policymakers insulated from electoral accountability. That has not been the case historically. It would be a significant departure from our original structure as designed.

I agree with James that our current system is producing troubling results. Where we differ is in the diagnosis. My concern is that asking the judiciary to remedy policy failures created by the political branches ultimately erodes the constitutional division of responsibilities rather than repairing it. I think that members of Congress, the executive, and the judiciary are all acting in the directions in which their incentives, as they’ve evolved over the last 60 years, motivate them. I’ll have more on that in a later post.

The temptation to ask courts to correct failures by Congress and the executive is understandable. My concern is that every time one branch assumes the responsibilities of another, it changes the incentives under which all three branches operate.

The overnight news suggests that reports of the end of fighting with Iran have been greatly exaggerated. Jon Gambrell reports at the Associated Press:

DUBAI, United Arab Emirates (AP) — Iran launched a drone assault targeting Bahrain while a ship in the Strait of Hormuz separately came under attack Saturday, in Tehran’s likely response to overnight airstrikes by the United States.

The attacks in the Persian Gulf show the danger of the Iran war again spinning out of control, even after Iran and the U.S. reached an interim deal to try and agree on a final accord to end the conflict.

The U.S. had launched airstrikes overnight in response to an Iranian drone attack on a container ship trying to leave the strait on Thursday, continuing a string of attacks that have shaken the war’s uneasy ceasefire.

Meanwhile, a multinational maritime body overseen by the U.S. Navy said Saturday that it would expand a route near Oman in the strait to allow for both inbound and outbound traffic. That likely sets up a new flashpoint with Tehran, which sees the strait as a key source of leverage in ongoing talks with the U.S.

I have opposed this war from the outset on just war grounds. Nevertheless, once a nation commits itself to war, strategic incoherence is about the worst outcome imaginable. There is an old strategic maxim that still holds true: when you set out to take Vienna, take Vienna.

What are the objectives of this war? Whatever they are, the overnight events strongly suggest they have not yet been achieved.

Has anyone found a good analysis of the law surrounding the Supreme Court’s decisions in Mullin v. Al Otro Lado or Mullin v. Doe? The media opinions I have read seem to focus on the policy rather than the law.

I almost agree with the editors of the Washington Post. In a recent editorial they say this in response to a proposal that FICA max be increased:

Even after all that pain, removing the cap would only close about half of Social Security’s funding shortfall. That’s because the fundamental problem with the program is not that it doesn’t tax enough. The problem is that its structure is based on demographic assumptions that no longer hold.

That’s almost correct. If they restated it “The problem is that its structure is based on demographic and income assumptions that no longer hold” I would agree completely. Notice the emphasis. Social Security was designed around two assumptions: the ratio of workers to retirees and the distribution of wages. The first has changed because Americans live longer and have fewer children. The second has changed because an increasing share of national income now goes to people earning above the FICA wage base.

The change is easy to see. Since 1980, incomes for the top 1 percent have grown at a dramatically faster rate than those of everyone else.

Note that the graph has two scales, one for incomes of the top 1% of income earners and the other for the bottom 99%. If the bottom 99% were shown on the same scale as the top 1%, the line for them would read as flat whereas it actually increased. Since earnings above the FICA wage base are exempt from the payroll tax, shifting more national income into those earnings automatically reduces the share of total wages subject to Social Security taxation.

I’m open to other suggestions for reforming Social Security than increasing FICA max. I know of several:

1. Just abolish it.
2. Supplement it with private accounts. Let individuals buy stocks or other investments. This was proposed during the Bush II Administration.
3. Supplement it with national accounts. Let the Social Security Administration buys stocks or other investments.

but let’s not pretend that each of those wouldn’t have adverse side effects as well. If you’d prefer one of those alternatives, explain how you’d mitigate the problems it would create.

#1 and #2 assume that we’d be satisfied if some retirees became destitute in their old age. Nearly 40% of Americans rely solely on Social Security Retirement Income. The problem with #2 is that it shifts investment risk to individuals. Some retirees would inevitably reach retirement with inadequate savings.

The problem with #3 is that over time the federal government would come to own an increasing percentage of the U. S. economy. My experience has been that most proposing #3 are strongly opposed to that.

As may be apparent I received my new prescription eyeglasses. They have improved my vision considerably. I’m taking things slowly. We’ll see how things work out.

I think that Steven Taylor has got out over his skis in this post. Said another way, I think he’s exaggerating. Here’s the passage from the post I’m questioning:

Second, because our system (i.e., plurality elections in single-seat districts, the usage of primaries, and a number of other structures) funnels us into two parties, and because primaries open the door wide for anyone who wants to be one of the two collectives (providing that they win enough votes), this means both parties are coalitional in nature. Further, because of the porous nature of the nomination system and because centralized leadership of consequence does not exist in either party, it is nonsensical to say that a person who won a Democratic primary isn’t a Democrat.

The reason I question it is that Steven overstates his case. If he’s saying that American political parties are weak relative to, say, European political parties and parties in parliamentary systems, I agree completely. If he’s saying that American political parties don’t and can’t limit their membership, he’s wrong.

In 2014 the Arlington County Democratic Party in Virginia expelled a member for opposing a Democratic candidate in a general election. In Texas the Republican Party uses a censure mechanism, Rule 44, against state legislators for inadequate fidelity to party principle and priorities. In addition both political parties parties have denounced members with views outside the mainstream, e.g. David Duke and Lyndon LaRouche.

There are many other examples from further back in history. Franklin Roosevelt attempted a purge of members who didn’t support his policies. There was actually a loyalty test during the Civil War and Reconstruction.

Our political parties have other tools that Steven did not mention including:

• They determine debate qualification rules.
• They determine delegate allocation rules.
• They determine convention rules.
• They have, at various times, changed superdelegate rules, primary calendars, ballot access requirements, and candidate qualification standards.

Whether those tools will be exploited remains to be seen.

Rather than being “nonsensical,” what is happening within the Democratic Party is a debate over the boundaries of party identity, prompted by the New York elections. I understand James Carville’s despair, for example. Whether the solution to the problem is resigning from the party, I’m less confident. I do think that Democrats should decide what they believe and don’t believe and not be afraid to declare their beliefs.

As is my custom I won’t comment on the results of the New York elections. Whom New York voters choose to represent them is none of my business.

I will comment on one thing. If New York City’s fiscal policies create a crisis, don’t ask taxpayers in the other forty-nine states to rescue it. New York voters are entitled to make their own choices but they’re also responsible for the consequences.

The same applies to New York State. Don’t bail it out, either. Money is fungible. A state bailout can become a city bailout by another name.