Archive for April, 2009
Vote for Me!
Final statements in my tax debate with economist Thomas Piketty were posted today at the Economist.
I think I’m softening Piketty up, as he reiterated that a 60% tax on high earners might be OK, rather than the 80% that he suggested.
The voting from readers has been locked at 50%/50% for days. So it is important that you register your vote by the end of tomorrow before the magazine’s “decision” on the winner Friday.
Why So Shy With The Hatchet?
ABC reports, “The Los Angeles Board of Education voted Tuesday to lay off as many as 5,400 teachers and support personnel for the upcoming school year” in order to help close “a roughly $718 million deficit.”
Ok, that’s a start. But the number of public school employees in the US has doubled since 1970, while the number of students has increased by just 9 percent.
The bloated, inefficient and ineffective LA District now spends nearly $13 billion a year –- over $20,000 per student –- so they might want to keep on cutting.
Considering the fact that the median private school tuition is around $4,800, maybe they could just let parents and taxpayers keep, say, a third of that money to spend on education themselves.
Presto, no budget problem! Although there would be a huge increase in unemployed school bureaucrats and ineffective teachers . . . I think it’s a good trade.
New at Cato, Tax Day Edition
Here are a couple of dishes Cato Institute scholars cooked up for Tax Day:
- Writing for National Review Online, Chris Edwards warns against the dangers of rapidly increasing government spending:
When filling out your tax forms, you might want to think for a second about where all that money is going. After federal spending roughly doubled in the Bush years, it is growing by leaps and bounds under President Obama. What’s more, the federal government is increasing the scope of its activities — it is intervening in many areas that used to be left to state and local governments, businesses, charities, and individuals.
There are now a staggering 1,804 subsidy programs in the federal budget. Hundreds of programs were added this decade, and the recent stimulus bill added even more. The result is that we are in the midst of the largest federal gold rush at taxpayer expense since the 1960s.
- At Townhall, Dan Mitchell rails against the current tax code:
Beginning as a simple two-page form in 1913, the internal revenue code has morphed into a complex nightmare that simultaneously hinders compliance by honest people and rewards cheating by Washington insiders and other dishonest people.
But that is just the tip of the iceberg. The tax code also penalizes economic growth, distorts taxpayer behavior, undermines American competitiveness, invites corruption and promotes inefficiency.
- At CNSNews.com, Edwards argues that policymakers should give Americans the low and simple tax code that they deserve.
- Also, don’t miss the new Cato video that reveals how troubling the American tax system really is.
Oprah Escapes the Long Arm of the Law
The Washington Post reports on the latest ruling by the Federal Election Commission:
William Lee Stotts of Cordova, Tenn., filed a complaint in October alleging that Obama’s appearance on Winfrey’s popular talk show during the Democratic primaries amounted to an unlawful campaign contribution that gave him an ‘an unfair advantage over the other candidates, both Republican and Democrat, who were deprived such an opportunity.’
The FEC decided that Winfrey was a media entity and thus qualified for the “media exemption” from the campaign finance laws. Without that exemption, Obama’s appearance would have become an electioneering communication and thereby a violation of McCain-Feingold.
The FEC provides a timely reminder that we no longer have a unified First Amendment. Congress shall indeed “make no law” regarding the freedom of the media, including the freedom to publicize a presidential candidacy. That’s a good thing, by the way. The bad thing is the rest of us are expected to make do with Congress making all kinds of laws limiting freedom of speech. Some animals, I suppose, are more equal than other animals.
Egypt Crosses Critical Line in the Arab Sands, Labels Hezbollah ‘Terrorist’
The designation of Hezbollah as a terrorist group by Egypt highlights a fault line developing in the Middle East over relations with Israel and the United States.
On the one hand, there are those who favor negotiations to resolve the dispute between Israel and the Palestinians. These countries include, most prominently, Egypt and Jordan, which both have signed treaties with Israel. Saudi Arabia also has promoted a negotiated solution.
Iran and Hezbollah, on the other hand, have emphasized what they call “resistance,” which means the use of arms to wrest territory from Israel ‘s control. The admission by Hezbollah’s leader, Hassan Nasrallah, that one of the people Egypt arrested was supplying arms to Hamas on Hezbollah’s behalf indicates that Hezbollah’s “resistance” is not limited to Lebanese sovereign territory.
Although Egypt’s action is directed against Hezbollah (and, by extension, Iran), it also carries a warning for the United States and Israel. The “resistance” argument is gaining ground in the Middle East. If it is to be successfully countered, negotiations need to deliver something tangible for the Palestinians—and soon. Otherwise, the regional governments who favor negotiation will find their arguments undercut, which could not only jeopardize hopes for Middle East peace, but might also threaten their own stability.
The Tax-Defying DC Detective
One of the most read articles on today’s Washington Post website tells the story of a DC detective who tried to get away with not paying federal income taxes. Here’s what caught my eye:
But federal prosecutors said the 18-year law enforcement officer — who earned $180,000 in 2005, most of it in overtime — should have known better.
$180,000? Wow — that’s a lot of taxpayer money for a single police officer. In addition, the odds are pretty good this fellow is going to receive extremely generous retirement benefits, which taxpayers will also be on the hook for. That he apparently earned the bulk of his salary in overtime also made me wince. I recall from my days in a state budget agency that the state police liked to play the same game. Thus, I find it irritating when state and local government officials discuss laying off police officers during an economic downturn and the media pay little or no attention to the salaries and benefits these folks are receiving.
A Poll for Tax Day
The latest poll to ask the question “would you prefer a more active government with more services and higher taxes or a smaller government with fewer services and lower taxes?” found that 66 percent prefer smaller government and lower taxes, to only 25 percent who prefer a “more active government” with more services.
Note that the poll doesn’t even say “larger government”; Rasmussen has actually made the wording more favorable toward big government.
As I’ve noted before, the usual “smaller government” question, as asked by CBS and other pollsters, is incomplete. It offers respondents a benefit of larger government — “more services” — but it doesn’t mention that the cost of “larger government with more services” is higher taxes. The question ought to give both the cost and the benefit for each option.
That’s what the Rasmussen poll does. And it shows that people prefer lower taxes to more government services.
Juan Williams Blasts Obama, Duncan on Vouchers
Yesterday on Fox News’ Special Report, Juan Williams had this to say about Obama’s silence and Duncan’s hostility to the DC voucher program, recently put on the chopping block by Democrats in Congress:
This is an outrage to me. … This is so important that you give young people a chance to have an education in America and especially in a failing public school system like you have in the District of Columbia. This voucher system is a direct threat to the unions. And so I think everybody on Capitol Hill, that’s getting money from the NEA or AFT, they should be called on the table. They should ask them, ‘where do you send your kids to school? And are you willing to say these kids getting the vouchers…and doing better than the rest of the kids, that these kids aren’t deserving of an opportunity to succeed in America?’ You just want to scream. Why Duncan and Obama aren’t in the forefront of education reform is an outrage and an insult to the very base that voted for them.
But we don’t have to ask President Obama where he sends his kids to school, do we? We already know he sends them to the prestigious private Sidwell Friends school also attended by several of the poor DC voucher students. But those voucher students will only remain classmates of Sasha and Malia for another year or so. After that, they’re out… because Barack Obama lacks the courage, the wisdom, or both to get his own party behind this program — a program that his own education department has shown is a success. Better results at a quarter the cost, and the reaction of our unified Democratic government ranges from outright opposition to malign neglect.
Future generations will look back on these politicians and bureaucrats as the Oral Faubuses of the 21st century. Like Faubus, they will ultimately fail.
Like Faubus, their names will live in infamy.
Duncan the Mercenary, Obama the Coward
The Obama administration’s stance on the voucher program is transparently political and insulting. President Obama claims he wants to help the poor and improve education, and yet he has aided and abetted Congress in the murder of the only federal education program with evidence of sustained and increasing achievement gains for participants (and at a quarter of the cost).
From Bloomberg today:
A spending law signed by Obama last month will end a program that gives low-income parents tuition vouchers of as much as $7,500 a year to send their children to private schools. Among 54 participating schools are Sidwell Friends, where Sasha and Malia Obama are students, and Ambassador Baptist Church Christian School, where Sherrise Greene sends her two daughters and had wanted to enroll Marquis.
“I had high hopes that he would be attending with a scholarship with his sisters,” Greene said in an interview. “I’m just really hurt that it’s being ended, because I think it’s a good program.”
Ms. Greene should feel hurt. And she should be angry as well. Many of the scholarship parents are meeting tonight to force Congress and the administration to recognize that they are real people who will be hurt by this payoff to the teachers unions. I look forward to their protests.
The most loathsome character in this sordid story, perhaps . . . it’s difficult to choose . . . is Secretary of Education Arne Duncan. This self-proclaimed “reformer” had this to say to the parents of this wildly popular and proven program:
Duncan said the Education Department findings don’t warrant a continuation of the voucher program, except for children already enrolled. While some students showed “modest gains” in reading, those who had switched to private schools from “low performing” public schools showed no improvement, he said in an e-mailed statement.
How stupid and insignificant do Duncan and Obama think these parents and children are? The whole affair is disgusting.
Tax Day
Fox News and MSNBC are having fun with the taxpayer tea party protests today. Fox News is playing up the protests, while MSNBC hosts are making jokes about “tea-bagging,” while pretending that the protests were all orchestrated by Sean Hannity. I’ll be attending the protests in D.C. today, and I’m hoping that the message isn’t just anti-Obama because the Republicans are every bit as guilty as the Democrats for the government’s fiscal mess.
MSNBC hosts who think that the colonists didn’t mind taxes, but were just upset about the “without representation” part, should read Alvin Rabushka’s massive tax history leading up to 1776, Taxation in Colonial America.
Doing my taxes last night, I asked my twins (age 5 1/2): “If Mommy and Daddy had $100, how much should we give to the government?” One twin said “5″ and the other said “10,” so they are off to good start on understanding limited government. Mommy reminded the kids that the government provides useful services such as fire and police, but the kids were comfortable with their answers.
I would footnote that state/local fire, police, and corrections spending amounts to just 4 percent of total government spending in the United States.
Pirates as Proto-Governments? You Bet!
I have to confess I don’t understand why Roger Pilon and Ilya Shapiro are criticizing our colleagues Ben Friedman and Peter Van Doren below. At the risk of being cast as yet another cog in the insidious piratofascist fifth column, I’d like to defend Ben and Peter.
Roger and Ilya reproach Ben and Peter for likening pirates to “pseudo-governments” and mount an impassioned defense of the nation-state as deserving a place in a different category from pirates.
On the distinction between the two, they write: “A tax, at least in principle, and most often in practice, is a charge for a service rendered –- not necessarily a wanted or an evenly distributed service, to be sure…” To be sure, indeed! There’s a term for charging people for an unevenly distributed and unwanted service. It’s called racketeering. Their description of taxation could apply quite well to a mafia.
Roger and Ilya would prefer to keep pirates and governments in two discrete categories but provide little reason why other than the above. But if they dislike the analogy, their problem is not with Ben or Peter or Noam Chomsky or St. Augustine, but rather with a body of well-developed academic literature. In particular, one of the preeminent scholars of the formation of national states, the late Charles Tilly, wrote a famous book titled Coercion, Capital, and European States that would help color in the gaps for them. The short version is that European elites came to form national states as a means for protecting their fiefdoms from other proto-states, which frequently had predatory aims, and that this process sometimes had the incidental effect of protecting the populaces that lived under state jurisdiction and could be used as means for making war against the neighbors.
Tilly also wrote a well-known essay titled “War Making and State Making As Organized Crime” that makes the following claim: “Banditry, piracy, gangland rivalry, policing, and war making all belong on the same continuum.” Tilly went on:
In retrospect, the pacification, cooptation, or elimination of fractious rivals to the sovereign seems an awesome, noble, prescient enterprise, destined to bring peace to a people; yet it followed almost ineluctably from the logic of expanding power. If a power holder was to gain from the provision of protection, his competitors had to yield. As economic historian Frederic Lane put it twenty-five years ago, governments are in the business of selling protection … whether people want it or not.
Governments and pirates both “put the victim to a choice between two of his entitlements — his freedom and his property.” In the literature on state formation, this isn’t a controversial point. I’m really surprised to see that it is for two libertarians.
New at Cato
Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe here.
- Andrew Coulson argues that Obama’s rhetoric on education doesn’t square with the reality of his budget.
- Christopher Preble and Malou Innocent declare that Obama deserves credit for choosing effective means for definite ends in Afghanistan.
- Watch Daniel J. Mitchell discusses high-speed rail on ABC’s “Good Morning America.”
- Join the Cato Institute Thursday, April 16 to hear Welile Nhlapo, South African ambassador to the United States, discuss the upcoming South African election.
- In a new video, Cato scholars reveal the heavy burden of today’s tax code.
- In today’s Cato Daily Podcast Chris Edwards discusses National Tax Day.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
