Sunday, December 8, 2013

Rand Paul's "Detroit Plan" One Big Step Forward, A Few Small Steps Backward

Rand Paul has released details of his Economic Freedom Zone Act of 2013. From a libertarian perspective, it is a mixed bag. The big plus is that Rand calls for a series of cuts in taxes in what he call "Economic Freedom Zones."

In these zones, Rand calls for the following tax cuts:

A reduction in the Individual Income tax to a single, flat rate of 5 percent.

A reduction in the Corporate Income tax to a single, flat rate of 5 percent.

A reduction in the  payroll tax by 2 percent for the employer, and 2 percent for the employee.

Doubling the amount of 100 percent expensing through Section 179 expensing---which would reduce taxes.

Suspension of the capital gains tax.
All these proposals must be considered positively by libertarians. Although they don't eliminate taxes, they move in the direction of reducing the tax burden, which is always a good thing.

Unfortunately, Rand mixed this proposal with a number of other minor proposals that simply change methods of government meddling and do not advance the libertarian cause.

In his proposal, he calls for:

States to have Title I portability for Economic Freedom Zone areas.In other words, instead of calling for the elimination of educational funding to the states via Title, he calls for the funding to be directed more broadly and to include private schools. But this keeps government in the game and will, of course, result in MORE government influence over education and thus must be objected to by libertarias.

He also calls for the suspension EPA non-attainment designations in areas eligible for EFZ status, which he notes will reverse the limitations on  federally funded highway and transit projects. The government, from a libertarian perspective, should not be involved in highway funding (See:Walter Block). Thus, for the libertarian, removing impediments to government highway funding is not a positive.


  1. This begs the question, if his proposals are good for Detroit why isn't it good for the rest of the US?

    1. They are good for the rest of the country. Those policies don't have a chance of being implemented in the rest of the country though. We don't live in unicorn and fairy dust land. About 5% of people are libertarians and .05% are Rothbardians. Any increases in freedom are good and can be expanded when they are successful.

    2. Excactly.
      The very first paragragh of Rand,s Economic Freedom Zone Act of 2013 laments......"Government stimulus packages haven’t worked because they insist on
      picking winners and losers. '
      Well who is picking the "Freedom" zones?

  2. "So...How much of the chicken can I cut off to have fried chicken for dinner and still have the chicken able to lay eggs so that I may have a nice breakfast...?"

    To state it plainly, Maoism has triumphed. Our society cannot do without the Political Control Officers. We may advocate trimming around the edges but at the end of the day, we devolve power to one set of PCOs or the other.

    "Enterprise Zones" is a fiction, and a particularly obnoxious one at that.
    You want an Enterprise Zone? Then make one from Sea to Shining Sea. That would do for starters.


  3. Rand Paul's daydream about "Economic Freedom Zones" should not be supported by anyone. He would expand or introduce into statutes and case law extreme arbitrariness subject to the rubber stamp of Congress, as Charles suggested with his quip about "Political Control Officers". Further, in a very real sense RP would have the national government establish ad hoc provinces (allegedly zones of freedom). Of course, in practice this means a great expansion of the old capitalist tradition of government discriminating in favor of one region's well-connected poobahs against the poobahs of other regions. If you think capitalistic scam artists are motivated to bribe Congresscritters with campaign donations now, just wait until Randal's scheme is implemented.

    Now, would the special new ad hoc provinces be subject to interference from states' governments? If so, how much would they deserve to be described with the new slogan? If not, why call them "Economic Freedom Zones" at all unless the primary motive is to curry favor with credulous voters?

    Already we see how that fool's lazy-minded scheme would stimulate more pressure to neuter the states' governments through intervention by the national government. And, oh, by the way, you can kiss goodbye a good portion of what remains of predictability in the law, without which private planning by the poorly connected cannot be carried out safely. There will be daily intense pressure to tweak the borders of Rand Paul's freedom provinces, and if a D replaces an R in a seat of Congress, there could be dramatic movement of the borders.

    As Anon (10:57am) suggested, the new freedom zones are good for all of the USA or none of it. And Rand Paul shows once again that he's much worse than the common Republican hack. Libertarians should not support him but seek out cooperative leftists who are interested in neutralizing him.

  4. If there comes too many Freedom Zones what will happen to our Free Speech Zones?!

  5. Check out what happened when Detroit tried this as part of LBJ's "Model City" program: