incentive

Extending Job Benefits: Irresponsible, Unfair and Unethical

/ Jack Marshall / 45 Comments

Last week, Republicans blocked yet another extension of unemployment benefits, and we can only hope they have the integrity and courage to do it again, in the face of predictable cries that they are cruel and heartless. The correct term is “fair and responsible.”

Well over a decade ago, President Clinton and a Republican Congress instituted welfare reform over similar accusations that it would spark tragedy and starvation. What it did was help end cycles of poverty and dependency. Hardly anyone except die-hard socialists argues that limiting welfare was a mistake today.

The serial extensions of unemployment benefits we have seen for two years, however, have become indistinguishable from welfare, and are now blatant political pandering to a large unemployed voter bloc in distress. The government is broke and in debt, and in no position to add an open-ended entitlement that pays Americans not to get jobs. Continue reading →

The Senate Closes an Unethical Tax Loophole

/ Jack Marshall / 5 Comments

When a defendant corporation is hit with punitive damages in a jury verdict, that means that in addition to causing the plaintiff’s injuries or damages, the corporation also was guilty of wrongdoing. Punitive damages are large amounts of money that the losing defendant must pay over and above compensatory damages, in order to make it too expensive for the company to keep doing what caused the original problem. This is one of the virtues of the civil justice system. Thanks to punitive damages, a lawsuit by a single injured party can result in a sufficiently painful financial penalty that the corporation has a significant incentive to reform.

So why do the tax laws allow companies to use punitive damages as tax deductions, since it 1) lowers tax revenues and 2) makes the damages less expensive, less painful, and less of an incentive to correct unsafe, dangerous or dishonest practices? Continue reading →