Tag: Taxes

What Do We Actually Know About “Trickle Down” Economics?

A recent study by David Hope and Julian Limberg has been making the media rounds in recent weeks for its finding that “trickle down” economics doesn’t work. More specifically, the authors look at data from 18 countries and find that tax cuts for the rich have only led to a higher share of income going to the top 1%, but have on average had no significant impact on either GDP or unemployment. In other words, tax cuts help the rich, but do nothing to help everyone else.

The study was cited in just about every major newspaper (a quick google search brings up articles from the New York Times, Washington Post, Bloomberg, and many more). I read a few of these articles and what I found most striking (although unsurprising) was how definitive they make this finding appear. Taking a quote from the Washington Post article as an example, they write: “The Tax Cuts and Jobs Act did not pay for itself, failed to stimulate long-term growth and did not lead to sustained business investments. According to one of the most comprehensive studies to date on tax cuts for the rich, this should come as no surprise. A London School of Economics report by David Hope and Julian Limberg examined five decades of tax cuts in 18 wealthy nations and found they consistently benefited the wealthy but had no meaningful effect on unemployment or economic growth.” From the article, one would think it’s settled science that tax cuts don’t work.

I don’t blame the media for a lack of nuance in reporting and I certainly don’t want to downplay the significance of Hope and Limberg’s new paper. However, given the totally unbalanced nature of the discussion of these findings that I have seen I think it’s important to set the record straight. Hope and Limberg’s study provides one piece of evidence against using tax cuts as an engine for generating economic growth, but it is by no means the definitive account of the effect of taxes on growth in the way the media is portraying it. Other studies (conspicuously absent from media coverage) have found conflicting results and the nature of the question makes it difficult to get enough observations to even test the hypothesis at all.

In this case, the headline finding is actually reported pretty well by the media. From their abstract: “We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.” And the paper does appear to be well done overall. The authors should be credited for their contribution in collecting and analyzing a massive amount of data. Tackling a question of this magnitude is not an easy task. Their research design, which tries to match countries that look similar in almost every way except that one cut taxes and the other didn’t, seems to make sense for the question they are trying to answer.

While the media overall doesn’t seem to have misrepresented the paper, there is still reason to take the results with a bit of caution. Looking deeper into their data, the “5 decades of tax cuts in 18 wealthy nations” sounds a bit better than it really is. Maybe the most difficult challenge in tackling questions about tax policy changes is that tax policy doesn’t actually change that much. In their sample of 50 years and 18 countries, Hope and Limberg are able to pull out only 30 observations where taxes actually fell enough to count and that they could match with a country that looked similar enough but did not cut taxes. Even in simple applications, 30 observations sometimes isn’t enough to uncover effects even if they are there. With something as complicated as the relationship between taxes and growth and the number of factors needed to control for across a diverse set of countries, it is not much of a surprise that they can’t pick up a relationship in their small sample.

However, the bigger problem I have with the media (and Twitter) coverage of this study is the total lack of acknowledgement that this question has been asked before. An incredibly brief search pulled up a paper by Karel Mertens and José Luis Montiel Olea, published in the QJE in 2018 begins with the question “To what extent do marginal tax rates matter for individual decisions to work and invest?” and answers “Marginal rate cuts lead to increases in real GDP and declines in unemployment.” Looking specifically at tax cuts for the rich, they find that “Counterfactual tax cuts targeting the top 1% alone are estimated to have short-run positive effects on economic activity and incomes outside of the top 1%, but to increase inequality in pretax incomes.” In other words, a tradeoff. Tax cuts increase inequality, but do seem to positively effect economic variables for the economy as a whole.

My point in bringing up this other paper is not to suggest that it is better than Hope and Limberg’s or that we should ignore any new findings. But I was curious to find such a well published piece of research with opposing results because I don’t remember in 2018 reading a bunch of articles telling everyone that actually “trickle down” economics works. I searched around and was able to find one article in a mainstream source that mentioned the Mertens and Olea study – an op-ed in the Wall Street Journal by Robert Barro, who gives it exactly one sentence of attention (the article was mainly about Barro’s own research which also finds positive effects from tax cuts).

So a new study that has not yet been published or peer reviewed gets paraded around by the media as definitive evidence that “trickle down economics” has no positive effects. A published piece in a top 5 economics journal that finds positive effects of tax cuts gets essentially no media coverage. I’m not always sold on stories of media bias, but in this case it seems pretty clear. Don’t believe the headlines – the question of whether tax cuts for the rich benefit the economy is still very much an open question.

Krugman’s Weak Defense of High Marginal Tax Rates

Alexandria Ocasio-Cortez recently proposed a 70% marginal tax rate on top income earners. Given that this policy almost doubles the current marginal tax rate, many view the plan as a bit too much. Don’t worry though, because Paul Krugman is here to assure you that actually AOC’s proposal is just espousing standard economics. In fact, “there isn’t any body of serious work supporting G.O.P. tax ideas, because the evidence is overwhelmingly against those ideas.”

I don’t think Krugman is right about that, but before getting to him I should concede a couple points. First, I really don’t think the tax plan AOC is proposing would destroy the economy. Her 70% rate would only kick in at $10 million per year. That hits almost nobody. It’s also a marginal rate not an average rate so it doesn’t mean that rich people are giving 70% of their total income to the government, only income above $10 million. Most rich people aren’t making the majority of their money through wages anyway so the effects of this plan probably aren’t huge either way (note that also means it won’t raise very much revenue).

Krugman, however, is making a much stronger claim. He’s not only arguing that more progressive taxes are better, but that there isn’t any support for the idea that low taxes can be good. Here’s an excerpt from a 2009 JEP article summarizing key findings from the optimal taxation literature:

1) Optimal marginal tax rate schedules depend on the distribution of ability; 2) The optimal marginal tax schedule could decline at high incomes; 3) A flat tax, with a universal lump-sum transfer, could be close to optimal; 4) The optimal extent of redistribution rises with wage inequality; 5) Taxes should depend on personal characteristics as well as income; 6) Only final goods ought to be taxed, and typically they ought to be taxed uniformly; 7) Capital income ought to be untaxed, at least in expectation; and 8) In stochastic dynamic economies, optimal tax policy requires increased sophistication. For each lesson, we discuss its theoretical underpinnings and the extent to which it is consistent with actual tax policy.

Mankiw et al, 2009

Funny enough, 2, 3, 6, and 7 sound strikingly like those GOP tax ideas that Krugman says are entirely unsupported by the economic literature. So maybe he just meant the evidence he already agrees with. Of course, Krugman has his own evidence, which argues that the optimal top marginal tax rate for the US economy is 73%. I admit I haven’t read the paper he references. I’m sure they offer a better justification for that rate than Krugman. His would fail my Econ 1 class. Quoting the relevant section:

In a perfectly competitive economy, with no monopoly power or other distortions — which is the kind of economy conservatives want us to believe we have — everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it’s because each extra hour you work adds $1000 worth to the economy’s output.


In that case, however, why do we care how hard the rich work? If a rich man works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of everyone else doesn’t change, does it? Ah, but it does — because he pays taxes on that extra $1000. So the social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that extra effort — and conversely the cost of their working less is the reduction in the taxes they pay.


Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.

To summarize what Krugman is saying here: If we ignore the welfare of the rich themselves, we only care about how much they work to the extent that they pay taxes. In other words, if taxes were 0, there is no difference between rich people working 0 hours or a million. The welfare for the rest of us is unchanged.

To anybody but an economist this is obviously ridiculous. Does Krugman really think that if Bill Gates had never worked a day in his life we wouldn’t miss Microsoft or any of the products that it produced? We’d only lose out on the taxes he paid? I don’t think so.

So what’s wrong with Krugman’s analysis? Isn’t it true that all workers in a competitive market get paid their marginal product? And if that’s the case then doesn’t losing their efforts just mean that we only lose what we were paying them anyway? Not exactly. His logic is correct for an infinitesimal (virtually 0) drop in labor, but not for a large change. If rich people are actually doing valuable work and that stops because they are discouraged by taxes, the output of everybody else will fall. If Bill Gates works 1 second less, it’s true that that won’t impact anybody else’s welfare. If Bill Gates never invented Microsoft at all (because he thought the gains were too low to take the risk), hundreds of thousands of people would need to find other (less productive) work. The welfare benefits of Gates’s creations are far far above any compensation he has ever received.

Krugman also ignores the costs on the consumer side from reduced labor. Even if a worker gets paid their marginal product in nominal dollar terms, the output they produce is more valuable to the person who buys it than it is to the person who created it (otherwise the trade wouldn’t have occurred). If taxes reduce the amount people want to work and create new products, this consumer surplus is lost.

This isn’t the first time Krugman has tried to argue that when workers are paid their marginal product then their work has no value to the rest of society because they take everything they put in. Bob Murphy offers an excellent rebuttal in this post. John Cochrane also has a great recent post on the tax issue. His evaluation of Krugman’s argument:

Krugman gets the benefit of labor to society wrong in an astonishing econ 1 way

If you are paid your marginal product, as you are in a competitive market, then you are paid how much revenue your efforts add to your employer’s bottom line. But society benefits by the consumer surplus, the area under the demand curve, and loses that consumer surplus when taxes put a wedge between your effort and your wage. When Steve Jobs worked hard and sold us all Iphones, he made a ton of money, and apple made a huge profit. But we all benefitted by far more than we paid Apple for the phones.

No, the world is not a static, zero-sum game.

Tax policy is hard. I don’t know what the optimal tax rate should be. It could very well be higher than what we have now. But to say that it’s settled economics is misleading if not an outright lie.

Don’t Think About Money. Think About Stuff

There has been a lot of fuss in the last few weeks about the ridiculously large wealth of Amazon’s CEO Jeff Bezos. Bloomberg recently reported that Bezos has increased his wealth by $67 billion just this year ($8 million per hour!), which is about 8 times as much as the other 499 billionaires Bloomberg tracks have increased their wealth combined. So you could say he’s doing pretty well for himself.

Of course, this insane achievement has brought out the usual suspects (and even some unusual ones). Bernie Sanders has been on a crusade against Bezos for a while now and has proposed a bill to force Amazon to pay for its workers welfare benefits. It’s literally called the “Stop BEZOS” bill (BEZOS here is an acronym for “Bad Employers by Zeroing Out Subsidies” – how creative). While Sanders’s views are not surprising, Fox pundit Tucker Carlson is also getting in on the Bezos-hating action. Here’s Carlson:

Jeff Bezos, the founder of Amazon, is worth about $150 billion. That’s enough to make him the richest man in the world, by far, and possibly the richest person in human history. It’s certainly enough to pay his employees well. But he doesn’t. A huge number of Amazon workers are so poorly paid, they qualify for federal welfare benefits. According to data from the nonprofit group New Food Economy, nearly one in three Amazon employees in Arizona, for example, was on food stamps last year. Jeff Bezos isn’t paying his workers enough to eat, so you made up the difference with your tax dollars. Next time you see Bezos, make sure he says thank you.

I don’t want to get into the economics of Sanders and Carlson’s statements. Others have taken care of that (hint: Sanders’s tax isn’t going to do what he thinks it will). Instead, I want to touch on this point that the rich owe us something. That they should be thanking us. The reality is exactly the opposite. Next time you see Bezos, make sure you say thank you.

And I think the reason so many people have this concept exactly backwards is because we’ve been trained to think about everything in terms of money. Don’t think about money. Think about stuff.

Looking at Bezos’s monetary wealth on its own misses half of the equation. Sure Bezos has a ton of money. But the way he got that money was by creating an incredible business that revolutionized the retail market. Bezos gets $150 billion in pieces of paper (or more realistically, lines on a computer). We get Amazon. We get stuff (delivered across the country in 2 days or less). Now, of course Bezos does spend some of his wealth, and that’s not so good for our stuff. And his wealth does entitle him to a lot of our future stuff if he wants it. Maybe we’ll be worse off at the time. As for now, we’re making out like bandits.

Unfortunately I think what a lot of people have in mind when they think about the wealth distribution is a big pot of money. If Bezos takes $150 billion out of the pot that’s $150 billion the rest of us can’t use. This metaphor is absolutely the wrong way to think about wealth. Imagine Bezos never existed at all. His $150 billion is never created in the first place. The wealth doesn’t go back to the pot. It’s just gone. Half a million Amazon employees have to find other work. Hundreds of millions of consumers have to go back to shopping at Walmart. Now, there is another option, which is to redistribute Bezos’s wealth after he creates it. That’s a more justifiable policy than preventing him from ever earning it, but it can only be taken so far before it starts reducing the incentive to create – reducing the incentive to make stuff.

The same kind of mistaken thinking shows up in many other policy discussions. Take funding for higher education. Bernie Sanders’s solution is again focused on money. Pay for everyone to get a college education. But what about the stuff? Only so many people can go to Harvard. UCLA only has so many seats in a class. They already reject the vast majority of people who are willing to pay tens of thousands of dollars to attend. Making college free doesn’t do anything to change those facts (and actually it exacerbates the issue). Perhaps increased demand for education services would lead to an expansion of supply on the lower end, but college degrees only work by being somewhat exclusive (especially if the value of education is all signaling). It’s pretty hard to think of a solution that increases the supply of real educational services.

International trade is another good example. If the US imports from China, China gets a bunch of US dollars. The US gets a bunch of Chinese stuff. If we think about the US trade deficit, its essential to remember that it’s just a monetary deficit. But that money deficit gives us a huge stuff surplus. Is either side winning that transaction? China gets more dollars it can use to invest in US assets. US consumers get more cheap products from China. Unless you think you are getting ripped off by Amazon when you trade your dollars for a product, there’s no reason to believe the US consumer is getting a bad deal here either.

There is some nuance here that I’ve been deliberately avoiding. We don’t live in a pure exchange economy, which means money does matter. In economics, we sometimes make the mistake of going in the other direction by only worrying about stuff and never thinking about money. And sometimes it’s worth thinking about money, especially when it doesn’t work so well (as I’ve discussed in other posts). But even then, discussions of money should only be allowed if they’re in the context of figuring out how to get more stuff.

It’s really easy to get people more money. We can quite literally print it whenever we want. It’s a lot harder to get people more stuff. But stuff’s the stuff that really matters.

Talking Past Each Other on Math in Economics

Trump’s recently proposed plan to cut corporate taxes has opened a debate about whether corporate tax cuts are good for workers. Opponents of the plan argue that it will only help corporations increase their profit while supporters believe a large portion of the benefits will accrue to workers through increased wages. I don’t want to comment on that debate. Instead, I want to discuss a point made by John Cochrane in his attempt to prove that a lower corporate tax can increase wages (responding to a post by Greg Mankiw). You can find his post here. Please read it before continuing.

Cochrane shows in a simple model that a decrease in taxes will cause an increase in wages of \frac{1}{1-\tau} where \tau is the current tax rate. In other words, if the tax rate is 1/3, a decrease in taxes of one dollar increases wages by $1.50. Cochrane then says something that I find incredibly misleading:

“This is also a lovely little example for people who decry math in economics. At a verbal level, who knows? It seems plausible that a $1 tax cut could never raise wages by more than $1. Your head swims. A few lines of algebra later, and the argument is clear. You could never do this verbally.”

There are two issues with Cochrane’s statement. The first is that it is pretty easy to prove that a $1 tax cut could raise wages by more than $1. Assume the only two inputs are labor and capital and profits are zero. Assume the rental price of capital is fixed. Any change in taxes must therefore cause a change in wages. If production doesn’t change, this change has to be the exact amount of the tax (otherwise profit would change). Now assume that the tax caused some deadweight loss so lowering it will also increase production. Again wages increase so they must have increased more than one for one with the increase in tax.

Now you might say those assumptions are a bit ridiculous and I would agree. But Cochrane actually used the exact same assumptions (and more). He just hid them behind some math. And that brings me to the second problem with Cochrane’s statement. A few lines of algebra later, the argument is actually not clear at all unless you already know what’s going on (even Greg Mankiw admits he doesn’t have intuition for the result in the post that Cochrane is expanding on).

Let’s take Cochrane’s “proof” piece by piece and outline the assumptions he needed to get his result.

He writes: the production technology is

    \[Y = F(K,L) = f(k)L ; k=K/L\]

To just write this line, we need three strong assumptions

Assumption 1: There are only two productive inputs, labor and capital

Assumption 2: We can represent this economy by an aggregate production function (which is almost certainly impossible)

Assumption 3: The aggregate production function exhibits constant returns to scale (multiplying each of its inputs by some factor also multiplies its output by that factor)

The last assumption is necessary to write the function in its f(k)L form and also ensures that firms have zero profit.

Next we have that firms maximize

    \[\max (1-\tau\)[F(K,L) - wL] - rK\]

Again, we are implicitly making more assumptions here

Assumption 4: Firms maximize profits every period (the setup of the problem guarantees that this behavior also maximizes lifetime profits, but another model might not have that property)

Assumption 5: All workers get paid the same wage, which is taken as given by individual firms (i.e. labor markets are perfectly competitive)

Assumption 6: The rental rate of capital is exogenously set. Mankiw set up the problem as a small open economy so that the interest rate (the price of capital) is constant. Note that the US is obviously not a small open economy.

Continuing, the firm’s first order conditions are

    \[(1-\tau)f'(k) = r\]

    \[f(k) - f'(k)k = w\]

Again, more assumptions

Assumption 7: Workers get paid their marginal product (technically this one follows from 4 and 5 above so maybe I shouldn’t count it).

Assumption 8: Firms know their production function as well as the marginal products of labor and capital.

Assumption 9:  Wages are fully flexible and can be changed at any time.

Assumption 10: Capital can move costlessly between countries.

I’ll stop there but I’m sure there are plenty more (including the assumptions of no involuntary unemployment, no money of any kind, and that the economy is always in equilibrium – assumptions common to many macro models). My point in doing this exercise is to demonstrate that in order to even begin to write an economic model using math you need to make strong assumptions. Without them the problem quickly becomes either impossible to solve or impossible to interpret. By hiding these assumptions (either intentionally or not) behind fancy equations, they often go unnoticed.

Nobody that criticizes math in economics is literally criticizing the use of algebra or calculus to provide intuition about an economic result. What we criticize are the restrictions that using math places on the economic problem. Mises described math in economics as a “vicious method, starting from false assumptions and leading to fallacious inferences. Its syllogisms are not only sterile; they divert the mind from the study of the real problems and distort the relations between the various phenomena.”

I can’t help but think that diverting the mind from the real problem is exactly what’s happening here. The corporate tax debate is really about the incidence of the tax. Do workers bear most of the burden, or does it primarily serve to prevent monopoly profits and rents? Cochrane’s example avoids this question by assumption. Rather than being a nail in the coffin for people who want less math in economics, it serves as a perfect example of why those criticisms exist. In some ways math provides clarity over verbal reasoning, but it can also be deceiving. Behind the formal logic and the proofs is a fragile set of assumptions that in many cases drive the results.

P.S. I don’t usually agree with Paul Krugman but I think he gets this one right in this post. He also shows which assumptions are driving the result, and that they are not ones that make much sense.

P.P.S. Larry Summers has a nice response to the debate as well

P.P.P.S. Casey Mulligan claims Krugman and Summers still get it wrong. I haven’t fully wrapped my head around his argument. What was Cochrane saying about algebra making everything clear?

P.P.P.P.S. I’m still in favor of cutting the corporate tax precisely because it is so hard to determine the incidence. Even if we want to stop monopoly profits (and I’m not sure that we do), it seems better to me to just focus on preventing monopolies.

 

Some Thoughts on Universal Basic Income

People who oppose redistribution from the rich to the poor generally give two types of arguments against it. Perhaps the more obvious argument comes from a natural rights perspective – the person who created the wealth has a right to do whatever they want with it. However, if you don’t believe in free will (as I don’t), then this reasoning doesn’t make much sense. If you weren’t truly responsible for the circumstances that led you to create the wealth in the first place, why should you get to keep all of it? Shouldn’t some of it go to all of the people that had any influence on getting you to that position?

The stronger argument derives from incentives. Taking from the productive to give to the unproductive makes being unproductive far more attractive and we end up with a society where perfectly capable people choose not to work because they expect others to support them. Any attempt to solve poverty needs to deal with this issue, which makes designing anti-poverty measures difficult.

Our current welfare system has some checks in place that attempt to circumvent incentive problems, but it doesn’t solve them completely. Many of our current welfare programs involve cutoff levels where benefits begin to be reduced and eventually disappear altogether. This type of program introduces an implicit marginal tax on low income earners. Not only do they have to pay a higher official tax rate as their income rises, but they also lose some of the benefits they received at a lower income.

A simple way around this problem is to never phase out those benefits – to give them to everyone. This idea forms the backbone of the Universal Basic Income (UBI). One of the most complete proposals for a UBI comes from Charles Murray (yes, the same Charles Murray who gets kicked off college campuses because of his dangerous right wing ideas). In his version (laid out in his book In Our Hands), each American over the age of 21 would receive $13,000 per year in benefits unconditionally. Of this money, $3,000 has to be spent on health insurance, but the rest comes with no strings attached.

Of course, such a plan would be incredibly expensive. However, as Murray points out, our current system is already expensive. According to his calculations, if we eliminated our entire welfare system (including Social Security and Medicare), we could more than pay for the UBI. Getting rid of these programs would be difficult politically, but Murray offers several reasons why doing so would be desirable for almost everyone. Most notably, he estimates that poverty would be all but eliminated under his program vs the approximately 15% that remains under our own system.

Murray’s justification for some level of redistribution is similar to my own:

Inequality of wealth grounded in unequal abilities is different. For most of us, the luck of the draw cuts several ways: one person is not handsome, but is smart; another is not as smart, but is industrious; and still another is not as industrious, but is charming. This kind of inequality of human capital is enriching, making life more interesting for everyone. But some portion of the population gets the short end of the stick on several dimensions. As the number of dimensions grows, so does the punishment for being unlucky. When a society tries to redistribute the goods of life to compensate the most unlucky, its heart is in the right place, however badly the thing has worked out in practice
Charles Murray (2016) – In Our Hands

If we accept that some redistribution is desirable, a UBI seems like a more efficient way to carry it out than our current welfare setup. One common argument against the UBI is that it doesn’t make sense to waste resources on the rich. Bryan Caplan has given some arguments along these lines and argues that phasing benefits out gradually would avoid the implicit marginal tax rate problems without needing to give benefits to everyone. And it makes sense. If our goal is to eliminate poverty why not focus our efforts there?

But I don’t think that argument really works when you consider that a UBI is inextricably linked to the tax system. A UBI doesn’t look so universal after you consider that the rich are going to be paying for almost all of it. Everyone might get a check for $13,000, but top income earners pay far more than that in taxes. Their net benefit from government programs would still be strongly negative even after receiving the UBI. Depending on your perspective towards redistribution, this feature could actually be a negative, but given that redistribution is going to happen anyway, the UBI seems like a more efficient way of actually doing it.

It’s obviously not without fault, but I do think a UBI would be an improvement over our current system and I definitely recommend reading Murray’s book (it’s not that long) to anyone who wants to help the poor but believes we can do better than we do now.

 

How I’m Voting California Ballot Propositions

voting_united_statesCalifornia has 17 new propositions up for vote on the ballot next week (the link has longer descriptions as well as arguments for each one). I had to do some research to figure out how I’m going to vote on each one anyway, so I figured I’d write down some thoughts here as well. In general my instinct is to reject unless given a good argument to accept, so we’ll see if any of them can convince me. I spent approximately 5 minutes deciding on each, so this analysis probably isn’t the deepest. Let me know in the comments if I’ve missed any good arguments on either side.

Proposition 51: Public School Facility Bonds

What it Does: Allows $9 billion in new borrowing to be used to improve education in California

How I’m Voting: No

Reasoning: California may be doing better in terms of budget these days, but debt levels are still not so good. Even Gov. Jerry Brown says no. Maybe if the money was going to a good cause it would be worth taking on more debt. But it’s going to education:

education_spending
Source

The $3 billion allocated to “modernization of school facilities” is particularly concerning. The school system has problems. More money is not the answer.

Proposition 52: Continued Hospital Fee Revenue Dedicated to Medi-Cal Unless Voters Approve Changes

What it Does: I’m not entirely sure. Apparently there is a fee paid by hospitals that goes to MediCal (California’s version of Medicaid). This proposition would continue that fee and would only allow it to change if voters agreed. A no would allow legislators to change it and potentially divert funds away from MediCal to the general fund

How I’m Voting: Yes

Reasoning: It looks to me that either way the money is going to be spent. If I understand correctly, a yes vote makes sure it is spent on healthcare for the poor rather than whatever politicians think is important. That seems better to me.

Proposition 53: Voter Approval Requirement for Revenue Bonds above $2 Billion

What it Does: Requires any infrastructure project that requires more than $2 billion in funding through bonds to be approved by voters first

How I’m Voting: Yes

Reasoning: Supporters refer to it as the “No Blank Checks Initiative.” Sounds good to me.

Proposition 54: Public Display of Legislative Bills Prior to Vote

What it Does: Requires laws to be posted online for 72 hours prior to a vote by the legislature

How I’m Voting: Yes

Reasoning: The opposition says “Prop 54 will throw a monkey wrench into the ability of our elected officials to get things done.” I thought they were trying to convince me to vote no. But seriously, increasing transparency in legislation is a welcome change.

Proposition 55: Extension of the Proposition 30 Income Tax Increase

What it Does: Extends a tax increase on incomes over $250,000 passed in 2012 for 12 more years

How I’m Voting: No

Reasoning: How about a tax decrease?

Proposition 56: Tobacco Tax Increase

What it Does: Increases taxes on cigarettes by $2.00 per pack

How I’m Voting: No

Reasoning: Current taxes are 87 cents per pack so we’re looking at a 230% increase. Here’s what the first study that comes up when you google “Do cigarette taxes work?” says about cigarette taxes: “Estimates indicate that, for adults, the association between cigarette taxes and either smoking participation or smoking intensity is negative, small and not usually statistically significant.” I’m already opposed to higher taxes in principle. Taxes that hit the poor the hardest and are allocated to specific government programs which are sure to be highly inefficient are even less appealing. I’m all for reducing smoking. The government isn’t the one that should be leading the charge. (Also perhaps most importantly I need my roommate to be able to pay his rent.)

Proposition 57: Parole for Non-Violent Criminals and Juvenile Court Trial Requirements

What it Does: Increases parole opportunities for non-violent criminals and allows judges to decide whether to try juveniles as adults

How I’m Voting: Yes

Reasoning: Seems like a no brainer. We put way too many people in jail. The opposing argument makes some scary claims that this is going to put rapists back onto the streets. I don’t buy it.

Proposition 58: Non-English Languages Allowed in Public Education

What it Does: Repeals a previous proposition that required English to be used in all classrooms and non-English speakers to take an intensive English training class

How I’m Voting: Yes

Reasoning: Would it be better if all students knew English? Maybe. But the reality is they don’t. If I’m a science teacher and I can teach my Spanish speaking students in their native language better than in English I should be allowed to do so. Get politicians out of the classroom and let teachers make the decisions.

Proposition 59: Overturn of Citizens United Act Advisory Question

What it Does: Nothing as far as I can see. It will “Call on California’s elected officials to work on overturning Citizens United v. Federal Election Commission and other similar judicial precedents…Proposition 59 would not legally require officials to act as the measure advises them to”

How I’m Voting: No

Reasoning: What? This should not be on the ballot. It’s a poll not a law.

Proposition 60: Condoms in Pornographic Films

What it Does: Ahem, just read for yourself (Don’t worry, link is safe for work, just a description of the proposition)

How I’m Voting: No

Reasoning: No comment, except maybe they should have waited 9 more propositions before proposing this one (sorry)

Proposition 61: Drug Price Standards

What it Does: Regulates drug prices to ensure state agencies pay no more than the Department of Veteran Affairs

How I’m Voting: No

Reasoning: I think we should move closer to a free market in healthcare. This proposition moves us further away. Is this analysis too simple? Maybe, but unless there’s a crystal clear argument in support, I’m not voting for price controls in any situation.

Proposition 62: Repeal of the Death Penalty

What it Does: Self-explanatory

How I’m Voting: Yes

Reasoning: I don’t feel comfortable deciding whether another human being deserves to live or not. That’s already enough for a yes, but then I read the support argument and found out there’s been 13 executions since 1978, but they cost $5 BILLION?! and that “a death row sentence costs 18 times more than life in prison.” I can’t imagine why, but it makes my decision that much easier. Also, remember that even for the most heinous crimes, it’s not their fault.

Proposition 63: Background Checks for Ammunition Purchases and Large-Capacity Ammunition Magazine Ban

What it Does: Self-explanatory

How I’m Voting: No

Reasoning: I’m not necessarily opposed to the idea of increasing the difficulty of getting a gun, but this just seems like putting another layer of red tape on top of the red tape that’s already there

Proposition 64: Marijuana Legalization

What it Does: Legalizes marijuana for recreational use for adults over 21

How I’m Voting: Yes

Reasoning: The drug war costs a ton and puts a bunch of people in jail for doing something that doesn’t harm anyone. Marijuana is safer than alcohol. Anyone that wants it can already get it with ease (if anything, legalization might make it more difficult for minors to get it although probably effect would be small). Easy vote for me.

Proposition 65: Dedication of Revenue from Disposable Bag Sales to Wildlife Conservation Fund

What it Does: Diverts all funds from the sale of bags to the Wildlife Conservation Fund. Currently stores are allowed to keep them I believe.

How I’m Voting: No

Reasoning: I wish I could just eliminate the fee altogether, but I definitely don’t want to turn it into a tax.

Proposition 66: Death Penalty Procedures

What it Does: Reforms death penalty legal procedures, shortening time legal challenges can take to 5 years

How I’m Voting: No

Reasoning: Let’s just repeal. If this gets more yes votes than 62 it supersedes it. I much prefer 62.

Proposition 67: Plastic Bag Ban Veto Referendum

What it Does: Bans plastic bags

How I’m Voting: No

Reasoning: I like plastic bags