President Trump made a campaign promise that if elected, he would support legislation exempting tipped income from the federal income tax. On May 20, 2025, the Senate unanimously passed the “No Tax on Tips Act” with the House narrowly passing the “Big Beautiful Bill” on May 22 that also exempted tipped income from taxation. “No Tax on Tips” might make for a good political slogan, but it is lousy economic policy.

After peaking at nearly 45,000 points in early February, the Dow Jones Industrial Average sank to 36,645 on April 8. The Dow then staged a remarkable 3,000 point rally on April 9 following President Trump’s 90-day pause on implementing his tariffs. The Dow is at 40,000 points as of writing this column, which is about halfway between its early February high and its April 8 low. Why is the stock market reacting so strongly to tariffs?

As of this writing, President Trump has implemented record high tariffs across numerous countries. The stock market responded by dropping by 10% within two days. This has pushed the market 15% below its peak in February 2025, resulting in the loss of trillions in shareholder value.

The Trump Administration’s “Department of Government Efficiency” (DOGE) is making headlines for the substantial federal government layoffs that have resulted from its cuts. The idea behind DOGE is not new. President Obama had the “National Commission on Fiscal Responsibility and Reform,” collegially known as the “Bowles-Simpson” commission after its committee chairs, former White House Chief of Staff Erskine Bowles and former Wyoming Senator Alan Simpson. In December 2010, Bowles-Simpson proposed a series of budget cuts, reforms to Social Security and Medicare, and tax reforms to reduce the federal budget deficit. None of the commission’s recommendations were enacted.

President Trump has floated the idea of replacing the income tax with tariffs. As he correctly notes, tariffs were the primary funding source for the federal government until the 16th Amendment was ratified in 1913, which allows Congress to levy an income tax. However, attempting to return to tariffs to raise government revenue over a century later will encounter a practical difficulty, namely the federal government is much, much larger now than it was then.

Last month, I discussed the Median Voter Theorem and how voter concerns with the economy pointed to a Trump win. This presented a puzzle, as economic indicators leading up to the election were strong. Economic growth was a healthy 3%, the unemployment rate was below 4% and inflation was 2.4%, which was above the Federal Reserve’s 2% target but falling. Why did the economy dominate voters’ concerns, which spelled trouble for the incumbent Democratic Party?

Donald Trump’s victory in the November presidential election was a surprise to some, but not to me. I was certain that Trump would win, and that we would know the outcome by Wednesday morning. The reason for this confidence was the Median Voter Theorem, one of the more famous (and underappreciated) theories in political science and public choice economics.

A family member recently sent me a post from the Reddit Subreddit, r/wallstreetbets. The post was written by a McDonald’s worker who received a shipment of special coins at his restaurant. These coins allow the bearer to exchange a coin for one Big Mac. The post asks, “Since the U.S. dollar is no longer backed by gold, does this mean that the Big Mac coin is more stable than the dollar, since that coin is backed by Big Macs?”

When the price of something rises, allegations of price gouging inevitably surface. Vice President Harris claims that she will “make groceries more affordable by cracking down on price gouging on food.” What exactly is price gouging and what should be done about it? Simply put, price gouging is a meaningless concept and fighting it makes the situation worse.

A few weeks ago, the Harris campaign proposed using price controls to address the high cost of groceries. The cost of groceries is indeed 25% higher than at the start of the pandemic. Addressing this through price controls would be counterproductive and damaging.

In the world of baseball cards, the most valuable is Honus Wagner’s rookie card that sold at auction for $6.6 million in August 2021. Known as the “Flying Dutchman,” Wagner played for the Louisville Cardinals and Pittsburgh Pirates from 1897-1917. His 3,420 career hits put him 1,000 hits behind Pete Rose.

The 40-year high inflation the United States has experienced post-COVID has resulted in substantial hardship for Americans. Rising prices have reduced Americans’ purchasing power and standard of living.