The honest answer is that it probably means nothing. I don’t think there’s been an election in my lifetime that was impacted by the second person on a presidential ticket.

And a quick look at Intrade​.com shows that Ryan’s selection hasn’t (at least yet) moved the needle. Obama is still in the high 50s.

Moreover, the person who becomes Vice President usually plays only a minor role in Administration policy.

With those caveats out of the way, the Ryan pick is mostly good news.

Here are the reasons why I’m happy.

• I think Ryan genuinely believes in small government, low tax rates, and free markets. Heck, he’s even read Ayn Rand, and is willing to admit that he likes her writings.
• Ryan put together a good budget and got the Republican Party to rally around the plan – a remarkable achievement considering that the same GOPers had just spent 8 years supporting the irresponsible fiscal policies of the Bush Administration.
• He understands that not all entitlement reform is created equal. Instead of supporting means-testing (which produces implicit higher marginal tax rates) and unsustainable price controls, Ryan got his colleagues to support Medicaid block grants and premium support (or vouchers) for Medicare.
• Ryan is a proponent of the flat tax and can competently discuss not only the importance of low tax rates, but also why double taxation is misguided and why it’s wrong to use the tax code to pick winners and losers.

Here are two reasons why I’m worried.

• Both Romney and Ryan are somewhat sympathetic to a value-added tax. My worst-case scenario is they win the election, but then can’t get a good budget approved because of some squishy Republican senators who put self interest above national interest. Romney and Ryan then decide that this European-style national sales tax is the only way – on paper – of making the budget balance. In reality, of course, we’ll suffer the same fate as Europe since the VAT revenues will be used to finance ever-larger government.
• Ryan has some very bad votes in his past, including support for TARP, the auto bailout, the no-bureaucrat-left-behind education legislation, and the reckless Medicare prescription drug entitlement. Everyone says to ignore those votes because Ryan knew he was voting the wrong way, but if he’s already made some deliberately bad decisions for political reasons, what’s to stop him from making more deliberately bad decisions for political reasons?

But as I said above, don’t read too much into Ryan’s selection. if Republicans win, Romney will be the one calling the shots.

Though this does give Ryan a big advantage the next time there’s an open contest for the GOP nomination – either 2016 or 2020.

Paul Ryan is an excellent choice as running mate for Mitt Romney. He understands federal spending and tax policies in enormous detail. He has said that he started reading federal budgets when he was in high school. He’s also read Global Tax Revolution, my book with Dan Mitchell about the implications of globalization and tax competition. He knows that the American economy will not thrive with high tax rates, especially on business income and capital. He shares Mitt Romney’s goal of chopping the corporate tax rate to revive investment and job creation.

Ryan is an articulate defender of free enterprise, and he consistently argues not just for the practical advantages of smaller government but also about the moral imperative to cut. America will face giant fiscal and economic emergencies unless we make major reforms to the government. Mitt Romney, of course, has had a rather mixed record regarding free markets and limited government. And Ryan–as a good politician–has compromised many times as well. But if the next administration is Republican, and if it decides it wants to push major reforms, Paul Ryan is uniquely qualified to lead the charge.

Average private sector wages in the United States rose 3.0 percent in 2011, which was more than the 1.2 percent average increase for federal government workers. This was the second year in a row that average private pay rose faster than average federal pay, but that comes after many years of an escalating federal pay advantage.

Figure 1 shows average wages for private and federal workers, based on newly released data from the federal Bureau of Economic Analysis (see Tables 6.2D, 6.3D, 6.5D, and 6.6D). Federal pay has generally grown faster than private pay since the early 1990s, which is reflected in the widening gap between the two lines in the figure. The good news is that the gap has narrowed slightly the last two years, partly as a result of the recent federal pay freeze, or quasi-freeze .

Figure 2 shows similar trends for total compensation—wages plus benefits—of private and federal workers. On average, federal workers make twice the total compensation of private workers ($128,226 vs. $64,560).

The BEA data are just one way to compare pay between private and federal workers. The Government Accountability Office recently described some other comparison methods. I’ve summarized some of the issues regarding federal pay in this essay. However, we know for sure that we’ve got a $1 trillion budget deficit and that federal workers have done very well for themselves. It makes sense to keep the federal pay freeze in place, while also beginning to cut back on overly generous federal pension plans and other benefits.

This blogpost was co-authored by Cato legal associate Matt Gilliam.

An American energy company called PPL bought one of many state-owned British utilities privatized in the 1980s. In 1997, PPL thus became subject to the UK’s new “windfall tax,” which was based in part on “profit-making value”—the utility’s average annual profit multiplied by an imputed price-to-earnings ratio.

Various American energy companies subject to this tax filed claims with the IRS for a “foreign income tax” credit, which the IRS denied in 2007, asserting that the British tax was not a creditable one under the “foreign income tax” provision of the Internal Revenue Code (Section 901). The IRS claimed that the windfall tax did not satisfy the “predominant character” standard (was not predominantly an income tax) because the British statute used the term “profit-making value” instead of “net income” and “gross receipts,” and the tax rate was defined “as a percentage of an imputed value … rather than directly as a percentage of net income.”

After the federal tax court held that PPL was entitled to the foreign tax credit, the U.S. Court of Appeals for the Third Circuit reversed. Explaining that a tax exemption is a privilege extended by legislative grace, the appellate court held the tax not to be creditable because it reached beyond realized profit and did not tax actual gross revenue. In a different case last year, however, the U.S. Court of Appeals for the Fifth Circuit held that the British windfall tax was indeed creditable because (1) it reached realized income and (2) gross revenue was an inherent part of the calculation. The Fifth Circuit explained that the form and label of the foreign tax are not determinative and that the predominant character standard requires the IRS to analyze the history and intent of a tax to assess whether it tries to reach some net gain.

Cato now joins Southeastern Legal Foundation and Goldwater Institute on an amicus brief in urging the Supreme Court to take PPL’s case because it implicates fundamental issues of property rights, free markets, and the arbitrary exercise of government power—and the circuit split creates uncertainty for American businesses overseas. We argue that taxpayers have the right to be free from double taxation and that here the IRS and Third Circuit improperly disregarded the substance of the windfall tax and applied an overly rigid construction of its terms.

Ultimately, a foreign tax’s form or label cannot mask its substantive character and intent for legal purposes. American businesses operating overseas should be able to rely on a stable, substantive application of U.S. tax law instead of arbitrary interpretations and constructions manipulated to generate payments to the IRS.

The Supreme Court will decide this fall whether to hear PPL Corp. v. Commissioner of Internal Revenue.

The written testimony that Jonathan Adler and I submitted for the House Oversight Committee hearing on the Internal Revenue Service’s unlawful attempt to increase taxes and spending under Obamacare is now online. An excerpt:

Contrary to the clear language of the statute and congressional intent, this [IRS] rule issues tax credits in health insurance “exchanges” established by the federal government. It thus triggers a $2,000-per-employee tax on employers and appropriates billions of dollars to private health insurance companies in states with a federal Exchange, also contrary to the clear language of the statute and congressional intent. Since those illegal expenditures will exceed the revenues raised by the illegal tax on employers, this rule also increases the federal deficit by potentially hundreds of billions of dollars, again contrary to the clear language of the statute and congressional intent.

The rule is therefore illegal. It lacks any statutory authority. It is contrary to both the clear language of the PPACA and congressional intent. It cannot be justified on other legal grounds.

On balance, this rule is a large net tax increase. For every $2 of unauthorized tax reduction, it imposes $1 of unauthorized taxes on employers, and commits taxpayers to pay for $8 of unauthorized subsidies to private insurance companies. Because this rule imposes an illegal tax on employers and obligates taxpayers to pay for illegal appropriations, it is quite literally taxation without representation.

Three remedies exist. The IRS should rescind this rule before it takes effect in 2014. Alternatively, Congress and the president could stop it with a resolution of disapproval under the Congressional Review Act. Finally, since this rule imposes an illegal tax on employers in states that opt not to create a health insurance “exchange,” those employers and possibly those states could file suit to block this rule in federal court.

Requiring the IRS to operate within its statutory authority will not increase health insurance costs by a single penny. It will merely prevent the IRS from unlawfully shifting those costs to taxpayers.

Related: here is the video of my opening statement, and Adler’s and my forthcoming Health Matrix article, “Taxation without Representation: the Illegal IRS Rule to Expand Tax Credits under the PPACA.”

Zhubin Parang, a writer for the Daily Show with Jon Stewart, writes about this year’s presidential election:

The match is uneven, to be sure, but the stakes are high. Securing a second Obama victory is the only way we can be assured that our nation will not return to the dark era when it was choked in the grip of an imperial president who executed suspected terrorists with impunity and commanded lawless prison camps while drowning us in debt.

High stakes indeed. Let’s hope we can move beyond that dark era.

Parang’s essay appeared in the Spring 2012 issue of Tunnel Vision, a Vanderbilt University alumni publication that does not promptly post new issues online.

Like a lot of people these days, the actress Kathleen Turner is very concerned about polarization in Washington. She has a special reason to be concerned: She’s coming to Washington’s Arena Stage to do a one-woman show, “Red Hot Patriot: The Kick-Ass Wit of Molly Ivins,’ based on the life and writings of the sharp-tongued liberal columnist. She tells the Washington Examiner:

“One of these challenges may be getting a wide enough breadth of people to come, you know, because people are so closed-minded now, that if they think it doesn’t represent their point of view, they’re not interested,” she said. “I’m afraid it will be like — if you’re a Republican, don’t go to the show — it’s a real shame both artistically and as a reflection of our nation’s mentality.”

Fortunately, liberals from Hollywood don’t have that sort of us-against-them mentality:

But while Ivins became famous for mocking former President George W. Bush, nicknaming him “Shrub” and “Dubya,” Turner told us that her approach to dealing with the Bush years was a bit more subtle.

“I had to do some real dodging there once in a while, but I pretty much managed it,” she said, explaining that she “purposely” never met Bush. “I used to be on the Kennedy Center artistic, you know, selection board and those events are always held at the White House, and so then I had to bow out for a few years, didn’t I?”

It’s a real shame when Republicans are closed-minded.