Democrats Revive a Jimmy Carter Tax Mistake on ‘Windfall’ Profits

They want to reduce the price incentive to boost oil and gas production.

WSJ editorial. Excerpt:

"U.S. producers have benefited from higher prices caused by the war, but much less than the left claims. Some frackers began pulling back rigs last year as prices fell below what they needed to break even on their investments. Producer margins last year were squeezed by inflation, higher interest rates and tariffs.

The price of Brent crude has been bouncing around north of $100 a barrel, though U.S. shale blends trade at a steep discount in part because they are more costly to refine. At a Brent price of $112 under the Whitehouse-Khanna bill, the government would extract $22 in tax for every barrel sold. That’s more than what some producers have been earning in profit.

Higher prices enable companies to boost supply. Taxing production does the opposite. The short-lived U.S. experiment with a windfall oil profits tax from 1980 to 1988 reduced domestic production and resulted in 80% less tax revenue than projected. Congress finally repealed the tax because it made the U.S. more dependent on foreign oil."

Blue-State Residents Are Reaping Big Refunds From Trump Tax Law’s SALT Cap

Raising deduction limit to $40,000 eases burden in higher-tax states such as New York

By Richard Rubin and Ashlea Ebeling of The WSJ. Excerpts:

"Millions of taxpayers—largely those who earn between $150,000 and $600,000—are starting to reap the benefits of a change that lets them deduct far more of their state and local taxes, or SALT, from their federal taxable income. In last year’s tax law, Congress raised the cap for that deduction to $40,000 from $10,000.

That means people with high state income taxes and local property taxes can pay less to the federal government, and those people are concentrated in such states as New York, New Jersey and California."

"refunds for people in some higher-tax states have been growing faster than the national average"

"In California, Virginia and Maryland, average refunds are up 21%, 13% and 12% from 2025, respectively, compared with an average of 11% nationally"

"In Florida and Texas . . . refunds are up just 6% and 5%, respectively." 

"in dollars, SALT is the biggest new tax break for individuals and is expected to save taxpayers about $29 billion" 

Why Won’t Mamdani Take On Educational Redlining?

Neighborhood school zoning has its origins in the 1930s practice of residential discrimination.

By Derrell Bradford. Excerpts:

"In most places, students are arbitrarily assigned to a school on the basis of geography. This policy has its roots in “redlining”—the outlawed practice of keeping disfavored racial groups out of certain neighborhoods."

"In the 1930s, the federal Home Owners’ Loan Corp. issued color-coded maps identifying neighborhoods with high concentrations of minorities. People who lived there were denied access to mortgages. The Federal Homeowner’s Administration also declared that if children were “compelled to attend school where a majority or a considerable number of the pupils represent a far lower level of society or an incompatible racial element, the neighborhood in question will prove far less stable and desirable.”" 

"children are prevented from enrolling in better public schools—in some cases, schools closer to their homes—solely because of attendance zones. These better schools, typically majority white and Asian, have attendance zones that box out lower-income families." 

The Timeless Fear of Corrupting the Youth

From Socrates to social media, society has always worried about protecting the young. But the latest ruling about Meta and YouTube overlooks the upsides of free speech

By Jacob Mchangama and Jeff Kosseff. Excerpts:

"In 2024, a review of the scientific literature by a committee at the National Academies of Sciences, Engineering, and Medicine had found that despite some “potential harms,” the review “did not support the conclusion that social media causes changes in adolescent health at the population level.” A 2026 longitudinal study in the Journal of Public Health reached a similar conclusion."

"“Social media has the potential to connect friends and family. It may also be valuable to teens who otherwise feel excluded or lack offline support,” according to the National Academies of Science report. It also highlights the possible benefits of online access for “young people coping with serious illness, bereavement, and mental health problems” as well as opportunities for learning and developing interests."

"U.K. Reddit users found themselves locked out of age-gated content without first submitting a photo of their government ID or uploading a selfie to a third-party vendor. As the Electronic Frontier Foundation has reported, subreddit communities on topics from LGBTQ+ issues, reporting on the conflicts in Ukraine and Gaza, and public health were blocked for unverified users, including adults who wanted to discuss these topics while remaining anonymous." 

California’s Golden Goose Is Already Flying the Coop

The state’s tax base is being hollowed out even before the ‘wealth tax’ qualifies for the ballot

By Hank Adler. He is a professor of accounting at Chapman University. Excerpts:

[they would] "would impose a 5% one-time tax on the wealth of individuals who were California residents on Jan. 1, 2026, and whose net worth exceeds $1 billion"

"the top 1% of taxpayers generate roughly 40% of the state’s personal income-tax revenue"

"Although California doesn’t currently tax wealth directly, it heavily taxes the income generated by wealth—particularly capital gains"

"Earlier this decade, Larry Ellison and Elon Musk—then among California’s wealthiest residents—relocated to Hawaii and Texas respectively. Apparently in reaction to the proposed billionaires tax, Sergey Brin and Larry Page late last year became Florida residents, and Mark Zuckerberg reportedly established a residence there early this year. Together these five men once accounted for roughly $1.7 trillion of the more than $1.8 trillion net worth held by California’s six richest residents earlier in the decade."

"The ballot measure would amend the state constitution to lift California’s limit on taxes on wealth, opening the door to future levies"

"Supporters suggested the tax could raise as much as $100 billion, which the bill pledges to fund education, food assistance and healthcare. The Hoover Institution estimated a much lower figure, about $40 billion, largely because of taxpayer mobility and the likelihood that wealthy residents have and will relocate regardless of whether such a tax is imposed. The facts so far support Hoover’s estimate much more than the tax’s supporters’ figure."

‘Liberation Day,’ One Year Later

Trump’s tariffs didn’t spur economic growth but did encourage trade between spurned U.S. partners

By Phil Gramm and Donald J. Boudreaux. Excerpts:

"our trading partners  . . . pivoted toward other trading partners"

"they have mutually lowered barriers and increased trade with each other" 

"“the world [is] . . . reglobalizing around partners who commit to rules" 

"U.S. households, denied access to the lowest-priced goods on global markets, will have less purchasing power"

"tariffs will also make American goods less competitive globally and more expensive at home" and 

"raise the prices of inputs used by U.S.-based producers"

"more than half of U.S. imports are inputs used in producing goods and services in America"

[Tariffs] "divert capital and labor away from uses that would have yielded higher returns to capital and higher wages for workers" 

"in 2025 the three major U.S. stock indexes underperformed"

"2025’s 1.2% increase in inbound foreign direct investment was considerably less than the 2.7% increase in 2024 and the 7.6% increase in 2017, the first year of Mr. Trump’s first presidency"

"Real gross private domestic investment last year grew by only 2% after growing in 2024 by 3% and 4.4% in 2017"

"Real U.S. gross domestic product grew by only 2.1% in 2025, compared with 2.8% in 2024 and 2.5% in 2017"

"job growth in 2025, at 0.5%, was slower than job growth of 1.2% in 2024 and 1.6% in 2017"

"in 2025 the pace of losing manufacturing jobs accelerated to 1.2%, faster than the decline in 2024 of 0.7%. In 2017 manufacturing jobs actually increased by 0.7%" 

Mega-Events, Minimal Returns: The High Cost of Hosting Global Spectacles

By Mohamed Moutii of AIER. Excerpts:

"The economic case for hosting mega-events relies heavily on impact studies predicting large multiplier effects. Organizers argue that visitor spending will ripple through the local economy, boosting tourism, creating jobs, and generating lasting growth. In practice, however, these projections rarely materialize. 

Since 1960, every Olympic Games has gone over its initial budget — a pattern revealing a systemic underestimation of costs. A University of Oxford study found that all 23 host cities examined exceeded their budgets, with Rio and Tokyo experiencing significant overruns of 352 percent and 128 percent, respectively. Thirteen cities faced cost overruns exceeding 100 percent of planned spending.

These overruns are worsened by poor financial returns. The London 2012 Games cost about $14.6 billion but brought in only $5.2 billion; Beijing 2008 cost roughly $42 billion while earning just $3.6 billion; and Tokyo 2020 about $13 billion in costs generated just $5.8 billion. As economists Robert Baade and Victor Matheson have shown, Olympic benefits are consistently overstated while costs are systematically underestimated.

The World Cup follows a similar pattern. FIFA regularly promotes large economic gains — projecting roughly $40 billion in impact for the 2026 tournament in North America — but historical results suggest otherwise. Twelve of the last 14 World Cups since 1966 have resulted in financial losses for host countries.

Recent tournaments highlight the gap between costs and returns. Brazil spent $15 billion to host the 2014 tournament, yet it generated only about $3 billion from visitor spending. Russia invested over $11 billion for the 2018 World Cup, but visitor spending reached just about $1.5 billion. Qatar’s 2022 World Cup cost an estimated $220 billion, making it the most expensive in history, yet tourism and event-related spending brought in only about $2.3–4.1 billion.

Beyond these financial shortfalls, these events often leave behind “white elephants” — costly facilities with little long-term use. For example, Beijing’s Bird’s Nest stadium costs an estimated $10 million a year for maintenance, while Montreal took until 2006 to pay off its 1976 Olympic debt after nearly bankrupting the city. Athens’ 2004 Olympic facilities now stand abandoned, contributing to Greece’s debt crisis, and Rio de Janeiro’s 2016 Games left Brazil with crumbling infrastructure and mounting debt. These outcomes underscore a persistent reality: mega-event investments rarely deliver lasting economic value, but often impose long-term financial burdens.

Despite their disappointing track record, mega-events continue to be promoted through optimistic studies that often rely on unrealistic assumptions. These projections frequently overlook the crowding-out effect, in which regular tourists and locals avoid host cities due to congestion and higher prices, thereby reducing overall economic gains. They also ignore revenue leakage, as much of the income flows to international governing bodies rather than remaining in local economies.

Consequently, the economic benefits are often greatly overstated. Evidence from past events illustrates this gap: the 2002 Salt Lake City Olympics created only about 7,000 temporary jobs — just 10 percent of projections — and during the 2012 London Olympics, only 10 percent of the 48,000 temporary jobs went to the unemployed. In Salt Lake City, general retailers even lost $167 million, despite tourism-related businesses earning $70 million during the event. These outcomes demonstrate that the expected economic gains often fail to materialize.

Hidden costs further weaken the economic argument for hosting these events. Stadium construction and upgrades have traditionally been among the costliest aspects of mega-event planning, often totaling billions and leaving venues that struggle to generate revenue after the event ends. Even when new stadiums are unnecessary, operational costs — like policing, transportation services, emergency services, and fan zones — can impose a heavy financial burden on city budgets.

The preparations for the 2026 FIFA World Cup already highlight these issues. US host cities have requested $625 million in federal aid for security, but they might still face $100–200 million each for stadium upgrades, policing, transportation, and public services — while mandated fan festivals alone can cost up to $1 million per day. According to The Independent, host cities are collectively facing at least $250 million in shortfalls, which has led major cities to recently reduce or cancel large fan festivals due to rising costs, security concerns, and stalled federal funding. 

Meanwhile, FIFA controls the tournament’s most profitable revenue streams — broadcasting rights, global sponsorships, ticket sales, and in-stadium advertising — leaving cities to cover much of the costs while earning only a small share of the financial gains."