Source: Wall Street Journal
July 24, 2017

The mortgage interest deduction, a sacred cow in the U.S. tax code, does nothing to promote homeownership, according to an academic paper released Monday, a finding that undermines one of the core justifications for the tax break. Letting taxpayers deduct mortgage interest encourages them to buy bigger homes and more expensive homes – but it doesn’t change that fundamental decision about whether to buy in the first place

July 21, 2017

Even as Wall Street bulls tout Tesla’s stock, almost a conspiracy of silence has surrounded the most interesting questions. One of these concerns what happens when 300,000 customers who deposited $1,000 each for the forthcoming Tesla Model 3 learn that the $7,500 federal tax credit will expire before they can get their hands on it. Now we know. Tesla may not be too big to fail as far as the federal government is concerned, but it certainly is too big to fail as far as California politicians are concerned. As enthusiast site says frankly of AB 1184, a bill recently passed by the state Assembly and awaiting Senate action: “CA bill would make up for federal electric-car incentives as they expire.”

July 20, 2017

For the first time in years, pay for the lowest-income Americans is rising faster than for other groups. Weekly pay for full-time earners at the lowest 10th percentile of the wage scale rose at a faster rate last quarter, year-to-year, than for any other group measured by the U.S. Labor Department—including those at the top of the income scales who earn five times as much. The shift for low-income workers—including restaurant workers and retail cashiers—who make about $10.75 an hour, is a sign that a tightening labor market is delivering better pay to workers who largely haven’t shared in gains since the recession ended eight years ago, according to economists and government data. Last quarter marked the first time since late 2010 that this earning group’s gains outpaced all others, including the 90th, 75th, 50th and 25th percentiles.

July 13, 2017

Like many close observers of the shipping business, I know a secret about the federal government’s relationship with Amazon: The U.S. Postal Service delivers the company’s boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon. . . In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.
July 10, 2017

Tesla Inc.’s sales in Hong Kong came to a standstill after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company’s performance can be to government incentive programs. Not a single newly purchased Tesla model was registered in Hong Kong in April, according to official data from the city’s Transportation Department analyzed by The Wall Street Journal. In March, shortly after the tax change was announced and ahead of the April 1 deadline, 2,939 Tesla vehicles were registered there—almost twice as many as in the last six months of 2016.

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