Virginia Is for Higher Taxes—and Gerrymanders

Gov. Spanberger’s popularity takes a hit as she abandons the center

WSJ editorial. Excerpts:

"Unlike in private industry, collective bargaining in government isn’t adversarial. Public unions sit on both sides of the table since they fund the campaigns of the politicians with whom they “negotiate.” The incentive is to give away the store to union allies"

"Wisconsin Republicans in 2011 ended this cycle by limiting government collective bargaining, which has saved taxpayers some $35.6 billion, according to the MacIver Institute. Studies have also found that the law improved student test scores, in part by allowing schools to pay teachers more for performance."  

Los Angeles Schools Can’t Do Math

Teachers get a rich new union contract despite awful student results

WSJ editorial. Excerpts:

The contract "increases salary scales by 11.65% over two years—double the rate of inflation—plus four weeks of paid parental leave and expanded student support services that will invariably require more hiring. Pay for new teachers will jump nearly 12% to $77,000."

"state per-pupil spending has soared in recent years to $27,418"

They will "have a workforce that is larger than when the district had 40% more students than we have today"

"the district and state are required to make payments equal to 30% of teacher salaries for their pensions. Teachers can retire at age 63 with a pension worth 85% of their final pay, plus free health benefits for life."

"Only 18% of Los Angeles eighth-graders scored proficient in math on the National Assessment of Educational Progress, compared to 27% nationwide." 

The Truth About the Cuban Blackouts

By Mary Anastasia O’Grady. Excerpts:

"Blaming the U.S. embargo for Cuba’s economic disaster has lost its political firepower because the law has been watered down. Today Cuba can buy, with cash, all the food, medicine and construction materials it wants from the U.S. It can get lots of other stuff from the rest of the world."

"Cuba’s economic crisis is caused by a hard-currency shortage. Output from once-vibrant export industries like sugar, tobacco, coffee and fruit can’t even supply the domestic market. Barren agricultural fields are covered in weeds. Manufacturing is gone. Even tourism, which the regime has tried to hype since the 1990s, is in bad shape. Handouts from the Soviet Union, bilateral lenders and Venezuela, which kept the country afloat for decades, are no more."

"Even before January, . . . the monthly Cuban ration book supplied food for less than two weeks." 

"If not for remittances, families would suffer even greater privation." 

"he cause of the power failures is the antiquated grid which, . . . requires an investment of $8 billion to $10 billion over three to five years."

"new power plants have to be built because the existing ones sit on polluted land." 

Around 14% of Enrollees in ACA Plans Failed to Make Payments, Data Shows

Decline in January payments is driven by loss of federal Affordable Care Act subsidies

By Anna Wilde Mathews of The WSJ. Excerpts:

"Normally, the rate of falloff in ACA plan membership early in the year is in the midsingle-digit range.

ACA enrollment was already declining."

"Many ACA policyholders saw their insurance bills mushroom after expanded federal subsidies that started during the pandemic lapsed at the start of January, when insurers were already implementing major rate hikes largely because of rising health costs."

"When health-insurance prices rise, younger, healthier people are more likely to drop coverage, leaving a greater proportion of sicker people who are costlier for insurers.

Among people who signed up with the same ACA insurers in 2026 that they had last year, Wakely data showed that those who made their initial premium payments were about 10% less healthy, based on an estimate of their expected healthcare costs, than those who didn’t pay their January bills.

When healthier people leave a market, insurers project higher average healthcare costs per enrollee and raise their premiums to cover them. That happened this year, when insurers made steep rate increases, but it couldn’t yet be determined if they correctly gauged the pattern—or if they will raise premiums again next year partly as a result of the ever-costlier pool of enrollees."

"some of the HealthCare.gov states saw rapid growth of low-income enrollees after the introduction of enhanced subsidies in 2021, with many on plans that didn’t require any premium payments. That expansion might now be melting away." 

The Growing State Tax and Jobs Divide

On April 15, see how job growth has changed in high- and low-tax states

WSJ editorial. Excerpts:

"progressive states . . . tax their rich and middle classes more. 

"small businesses . . .typically pay tax at their state’s individual rate."

"Eight states—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming—have no income tax. On the other end of the spectrum are New York (top state and local individual rate 14.8%), Oregon (13.9%), California (13.3%), Hawaii (11%), Minnesota (10.85%), New Jersey (10.75%), Massachusetts (9%), Washington (9%) and Vermont (8.75%)."

"Private job growth outside of social assistance and healthcare—which rely heavily on government funds—has been paltry in these states since January 2020: Hawaii (-3.8%), Oregon (-3%), Vermont (-1.7%), Massachusetts (-1.4%), New York (-1.3%), California (-1.2%) and Minnesota (-1%)."

"stronger job growth in lower-tax states: Texas (10%), Florida (8.5%), North Carolina (7.9%), Arizona (7.3%), Tennessee (5.7%), Alabama (4.3%) and New Hampshire (1.6%)." 

America’s industrial capacity has continued to grow during a time of free trade agreements and trade deficits

See “As Compared to What?” – Exhibit #3,4593e17 by Don Boudreaux. Excerpt:

"Oren [Cass] laments “our failure to attend to industrialization.” What failure? When Pres. Trump returned to the White House in January 2025 America’s industrial capacity had been on the rise since the pandemic and that month reached an all-time high. This capacity has continued to grow. Today, America’s industrial capacity is 13 percent larger than when China joined the World Trade Organization in December 2001, 66 percent larger than when NAFTA took effect in January 1994, and 148 percent larger than in 1975, the last year the U.S. ran an annual trade surplus.

Oren might respond that the precise kind of capacity that we now have prevents us from producing the most-important stuff. Using the example featured in the piece you sent, Oren would likely point out that because we import many transformers of the sort used in data centers, our reliance on foreign producers for transformers is slowing our completion of data centers and, hence, hampering our development of AI. Perhaps. (Never mind that domestic politics is now the highest obstacle to data-center construction, and also threatens to thwart AI directly.) Oren’s solution is to produce more transformers domestically.

How simple! This conclusion appears to be a no-brainer. But appearances here deceive. Like all protectionists, Oren never asks: What outputs will America therefore produce less of? He supposes that the capital and resources that tariffs or subsidies draw into transformer production will be drawn away only from domestic industries producing goods or services that are less important (according to criteria preferred by Oren) than are transformers. But Oren can’t possibly know just what other domestic industries will shrink as a result of transformer tariffs or subsidies, or by how much they’ll shrink.

We might all agree that an engineered increase in the production of transformers would be worthwhile if the only consequence were reduced American production of deodorant and dog biscuits. But what if increased production of transformers reduces American production of semiconductors or jet engines or software for running AI?

Of course, I have no idea what we Americans would produce less of if the government uses tariffs or subsidies to increase American transformer production. But nor does Oren have any idea. He naively points to something – transformers – that would be good to have more of were that something costless, and then he leaps to the unwarranted conclusion that free trade has failed because we currently don’t have more of that something.

To overcome, for any product, the strong presumption in favor of a policy of free trade – a policy with a proven record not only of raising living standards but also of enhancing national defense – requires compelling argument and solid evidence. But all that Oren gives here, as in his other writings, are half-told tales detached from the important considerations that serious economists habitually take note of."

FAR too restrictive: Time to repeal floor area ratio limits

By Steve Swedberg of CEI.

"In cities across the world, fights over housing affordability come down to a simple question: how much can be built on a single lot? In Chandigarh, India, officials are debating whether to double that limit, while Sydney, Australia has seen public clashes over proposals for increased housing density.

Back in the United States, lawsuits in Virginia suburbs, protests in San Francisco, and contentious hearings in cities such as Baltimore and Austin show that zoning has become a central flashpoint in local politics. One zoning law that has played a role in these disputes either directly or indirectly is the floor area ratio (FAR).

FAR limits how much total building space can be constructed on a lot, and it applies to both residential and commercial structures depending on the zoning district. It is calculated by dividing the total building floor area by the total lot area. For example, a 5,000-square-foot lot with a FAR of 2.0 allows 10,000 square feet of building space. That could take the form of a single large home, several smaller units, or some combination. In all cases, total floor area cannot exceed the FAR limit.

FAR may seem like a technical, math-heavy zoning rule disconnected from everyday life. In practice, it sets a limit on building size that strongly influences what housing gets built and who can afford to live in which neighborhood.

The faulty logic behind the limit

FARs in the US can be traced back to early 20^th-century New York City. The city initially used height limits to prevent skyscrapers from obstructing air and light to the streets. In the mid-20^th century, planners concluded that height restrictions were inadequate and began supplementing them with FAR regulations to control overall building bulk.

For housing, FAR rules effectively acted as a proxy for height limits by setting a maximum total building volume relative to lot size rather than a fixed vertical cap. Other cities followed suit by adopting similar approaches. Decades of development under FAR rules suggest that the logic behind the limit is flawed. FAR sets a maximum on total building volume relative to lot size, but it does not control how that space is used.

A building can fully comply with FAR yet still cast long shadows, crowd neighboring properties, or occupy most of the lot. Two buildings with the same FAR can look entirely different: one tall and slender, another short and bulky, covering most of the lot. Because FAR regulates size instead of form or placement, its impact on sunlight, airflow, and open space is inconsistent at best.

The other rationales do not fare better, especially that of “maintaining neighborhood character.” While often invoked to reflect residents’ preferences about scale and appearance, the concept of “neighborhood character” largely refers to a subjective sense of visual appearance or feel, not a clearly defined metric of public harm. The term is used to express general opposition, as opposed to something that is easily quantified or tied to a specific land-use concern.

Another justification is infrastructure capacity. By limiting building volume, planners aim to prevent overloading streets, utilities, and schools. However, infrastructure demand depends more on the number of units and occupancy patterns than on floor area alone. A large single-family home may place fewer demands on infrastructure than a smaller multi-unit building with the same square footage.

Many cities can address these challenges more directly through market-based alternatives such as user fees, impact fees, or private investment, which allow growth while ensuring that those who consume or benefit from infrastructure help cover its costs without resorting to distortive zoning regulations.

Fewer buildings, pricier homes

Beyond faulty rationales, FARs produce unintended consequences. To quote the Cato Institute, FARs “restrict the number of developable square feet of residential space for a given lot size, and thereby limit the density of co-living buildings.” By capping total buildable volume, FARs force developers to make trade-offs about how much to build and how to allocate space among units. This reduces the number of housing units, discourages mid-sized projects, and contributes to higher prices.

Direct studies of FARs are limited because they are usually bundled with other zoning rules, which makes their independent effects hard to isolate. Nevertheless, there are some FAR-specific case studies.

Zurich pursued a policy of upzoning, which is a change in zoning rules that allows more building space on a lot. By increasing the allowable FAR, Zurich boosted the number of housing units by 9 percent over a decade. A 17 percent increase of allowable FAR in Mumbai, India, resulted in a 58 percent increase in housing supply, as well as a 24 percent decrease in housing prices in affected areas.

Broader research on density limits reinforces these findings. Allowing more building space increases housing supply and takes pressure off of housing prices, while restrictive land-use regulations limit housing construction and drive up housing prices. An estimate from a Cato Institute policy paper attributes about 20 percent of housing growth variation to density regulations, including FARs.

Scrap the cap

FARs act as an invisible barrier to housing. They do not reliably protect sunlight, air, neighborhood character, or infrastructure capacity. Meanwhile, FARs constrain how many units can be built and raise costs for renters and buyers alike. Moreover, the decision about how much floor space to build and how to distribute it should be determined by those with the most at stake: the property owners, the lenders, and the residents.

While some cities might consider partially relaxing FAR limits as a short-term measure, the most effective solution is full repeal. Repeal would free developers to respond to demand, allow more housing units to be built where people want to live, and make housing more affordable without relying on burdensome regulations like FARs. It is time to stop letting this flawed formula dictate who can live where."