In his excellent post on taxes and the incidence of taxes, co-blogger Scott Sumner does not mention another important issue in taxation: deadweight loss. The deadweight loss from a tax is the part of the loss to those who bear the tax that does not go to the government. Thus the term "deadweight." (Scott's graph shows a small deadweight loss, but he does not elaborate on this.)

Donald Trump ran on a promise to bring back manufacturing jobs that have been shipped overseas, partly by using import tariffs to punish U.S. companies that move their operations abroad. He took the first step toward keeping that promise when Indiana manufacturer Carrier Corp., offered a package of state tax incentives (and possibly fearful of its corporate parent losing Pentagon contracts), agreed to retain 800 workers it had planned to lay off.

Hoover Institution fellow Ed Lazear talks about President-elect Trump's transition team's ideas for Treasury secretary as well as Lazear's ideas on keeping the Federal Reserve independent and whether the Fed should raise interest rates.