Another good idea from CBPP

Reforming the Tax Treatment of S-Corporations and Limited Liability Companies

Nineteen states impose only nominal taxes on businesses organized as subchapter S Corporations (S-Corps) or Limited Liability Companies (LLCs) even though these entities — which generate about one-fourth of all business receipts — benefit from state services just as businesses that are subject to state corporate income taxes do. In addition, many of the states that do impose meaningful taxes on S-Corps and LLCs would benefit by updating their tax laws in this area, such as by equalizing their tax treatment of the two kinds of entities. By reforming their policies toward S-Corps and LLCs, states can strengthen their revenue systems to help deal with budget problems states now face.

This makes sense because they recieve the benifits from the court systems and and education system just as much as anyone. Why shouldn't they assist in paying for these services?

Healthcare and Competitiveness

Greg Mankiw's Blog: Healthcare and Competitiveness:

"Ultimately, what matters to firms is the compensation they pay workers. The composition of compensation between cash wages and fringe benefits like healthcare does not matter for the firms' costs of production. In short run when cash wages are sticky, the cost of healthcare may affect competitiveness: Lower costs of fringe benefits would reduce compensation and thus reduce firms' cost of production. But in the long run, compensation is set by supply and demand in labor markets. If more compensation is paid in the form of fringe benefits like healthcare, less is paid in the form of cash. And if less is paid in fringes, more is paid in wages.*

Let me put the point in the context of General Motors: If, for example, the U.S. taxpayer were to assume all the workers' healthcare costs through a policy of national health insurance, GM would immediately become more competitive. Because cash wages would not be immediately renegotiated, compensation paid by the firm would fall, so costs would fall. But in the longer run, the workers via their union would most likely not be satisfied seeing GM pay lower compensation, so cash wages would start rising. (Those higher wages would help workers pay the higher taxes that would be needed to finance the national health insurance). GM would lose the competitive advantage it temporarily enjoyed."

the economists who can't get fired...

Finally somebody says it!

Economist, author and Audit pal Jeff Madrick has a piece on the Daily Beast that I’ve been hoping someone would write:

How the Entire Economics Profession Failed

Economics is probably unique among academic disciplines in the extent to which its academic debates end up affecting the lives of everyday people. Put it this way, art historians, comp-lit scholars, and anthropologists may be susceptible to the same academic pitfalls as economists—group-think, a focus on minutia, the lack of interaction with humanoid life forms, poor hygiene, etc.—but it doesn’t matter because policymakers don’t actually rely on them to make policy.

That’s not true with economics. This is a profession that could stand for some soul-searching, and some scrutiny. Come to think of it, that’s not a bad story idea for a business-news outlet.

If you screwed up flipping burgers as many times as some major economists have they'd be fired in a heart beat...

So I was thinking...

After learning a little more about regulation today, I started wondering--is pro-business regulation like rent-seeking?

And still I'm stuck with the question--how do you stop rent-seeking?