Archives: 03/2008

Where Are Our Gold Medals?

One of the most revolting things that a politician can do is accept a hero’s accolades for passing a law that generously spends other people’s money. So I ask Rep. Tom Davis (R-Va.), the other politicians honored for giving D.C. students taxpayer dollars, and the officials who run the D.C. Tuition Assistance Grant Program, where’s my gold medal, and the gold medals for all the other federal taxpayers who actually fund the generous tuition grants for which politicians are being given such great adulation?

Jury Nullification, David Simon, and the Texas Prosecutor

David Simon has done it again. First, he created the best show on television, The Wire.  Then, he and his co-writers wrote a passionate critique of the drug war in Time magazine, urging jurors to vote their conscience in certain cases. That article has, in turn, sparked a debate over at the Defending People blog. A Texas prosecutor started the debate with an anonymous post against jury nullification. The prosecutor went so far as to say that anyone advocating jury nullification could be prosecuted in Texas. David Simon just cheerfully joined the fracas. 

Previous coverage here. Cato co-published the most comprehensive book on this subject, Jury Nullification: The Evolution of a Doctrine by Clay Conrad. For shorter works, go here, here, and here.

Real Federalism in Switzerland

An article in the Financial Times notes that the income tax imposed by the national government in Switzerland takes no more than 11.5 percent of a taxpayer’s income, and that most taxation (and spending) takes place at the canton and municipal level. This is genuine federalism, unlike the United States, where the national government is the dominant force in fiscal policy.

A big advantage of real federalism is greater tax competition, which — as the article notes — leads to lower tax rates and less government waste:

The federal constitution gives significant powers both to Switzerland’s 26 regional cantons, and to the individual towns and villages in them. …A handful of cantons have used ultra-low taxation to attract wealthy individuals to stimulate economic growth. Among the best known are Zug and Schwyz, both not far from Zurich. Most recently, Obwalden, a small, mountainous canton near Lucerne, slashed tax rates to match its low-tax rivals.

The cantonal levy is complemented by a local tax, calculated as a percentage of the cantonal level. Again, rates vary dramatically, even between communities in the same canton. For example, in the canton of Zurich, Switzerland’s most populous, local tax ranges from roughly 70 per cent of the cantonal rate in the wealthy and relatively low-tax towns and villages along Lake Zurich’s so-called Gold Coast, to more than 120 per cent in poorer and much more financially stretched communities in the hinterland. The local and communal taxes are capped by a federal tax, payable separately and at a different time of the year, that rises gently to peak at 11.5 per cent for the highest incomes.

Although three levels of taxation might sound expensive, personal taxes in Switzerland are relatively modest compared with much of Europe. Rates in the ultra-low-tax cantons can be as low as 16 per cent. Even “average” cantons tend to charge less than elsewhere in Europe, thanks to the cantonal tax competition that the Swiss say encourages cantons and local administrations to maximise efficiency.

“New Hampshire Joins Montana in Real ID Victory”

So reports Wired’s “Threat Level” blog as the Department of Homeland Security capitulates in the face of New Hampshire’s rejection of REAL ID. The same thing happened with Montana.

The key? The renegade states send a nice letter that is not a request for an extension of a looming deadline but touts the security of their driver’s licenses, which the Department of Homeland Security accepts as an official extension request. That lets DHS save face, even as it backs down from repeated threats to punish the citizens of rogue states.

New Hampshire wins.

Passport Snooping Is Just the Beginning

Following up on the story earlier this week that the passport files of all three major presidential candidates had been snooped on, Brian Bennett writes in the April 7 issue of Time about plans to distribute passport information very widely indeed, such as to the Department of Homeland Security, IRS, employers, and foreign governments.

Meanwhile, the State Department has a video interview up on its website about passport privacy. Addressing the issue in a long format on a widely accessible medium is a good thing, so congratulations are due State for addressing the issue.

However, the lead question asked of Under Secretary for Management Patrick Kennedy is a big waste of time: “Does every State Department employee have access to personal data that’s given us for passports or other reasons?” That pitch is so slow it doesn’t even reach the plate. But there is some interesting information about the State Department’s data security practices later in the video.

Unaddressed is Brian Bennett’s reporting on the proposal for wholesale sharing of passport information.

Ironically Enough, McCain-Feingold Jeopardizes Public Campaign Financing

Six years ago today President Bush signed into law the Bipartisan Campaign Reform Act, otherwise known as McCain-Feingold. Sen. McCain, who has all but captured the Republican nomination for president in 2008, does not note the anniversary on his website. Perhaps, like many others, he has come to see the legislation as a mistake. According to his website, Sen. McCain is raising money today in Denver and Salt Lake City. Perhaps someone will ask him about the anniversary of his namesake legislation.

Over the past six years, there has been much debate about BCRA and its consequences. I will not repeat those arguments now; the discussion of a year ago remains relevant.

However, I do see one possible result of BCRA that will not please its sponsoring groups. I have been reading Joseph Cantor and Sam Garrett’s interesting history of efforts to pass taxpayer financing of congressional campaigns. They note that advocates have sought public financing as much to limit overall campaign spending as to prevent corruption. In the presidential system, for example, candidates agree to limit their spending in exchange for public money. If public funding were universal, so the argument goes, spending would be limited.

But candidates have never been the only sources of spending, and after BCRA, individuals and groups have learned how to raise and spend money independently. They have learned to design and manage vehicles for such independent spending. They have created arguments and legal theories to protect such vehicles and such spending from legal sanctions. Who knows? They may even have learned how independent spending can help a candidate without violating the law against coordinating such spending with a campaign.

Even if public financing for Congress passed, those who wish to spend money on campaigns have learned how to do so, voluntary spending limits on candidates notwithstanding. For that reason, it is hard to see how public financing would reduce overall spending.

So incentives established by BCRA have made public financing less likely to succeed on its own terms. I think that counts as an unintended consequence.

Bidding Adieu to No Child Left Behind?

Over the last few days there’s been a rash of stories about state legislators pushing to get out from under the No Child Left Behind Act.

In Arizona, the state’s House of Representatives yesterday approved by a voice vote a measure that would take the state out of NCLB’s standards-and-testing regime. A formal vote is expected as early as next week.

In Minnesota a day earlier, the state’s House K-12 Finance Committee passed an amendment to a supplemental budget bill that would pull the North Star State out of NCLB.

Finally, at the beginning of the month, the Virginia legislature passed a bill requiring the State Board of Education to recommend whether Virginia should withdraw from NCLB. It was a loud enough signal of revolt that yesterday U.S. Secretary of Education Margaret Spellings paid the Old Dominion State a visit and warned it not to drop out of her favorite law.

Unfortunately, though it might be uncomfortable to watch efforts to get states out of NCLB repeatedly percolating, the Secretary needn’t worry that too many states will actually break away. They just can’t seem to turn down the federal (read: taxpayer) money.

Few people in Virginia expect the State Board of Education to recommend turning down the roughly $364 million in federal education funds that the legislature itself didn’t have the courage to reject. In Minnesota, there’s good reason to believe the get-out-of-NCLB amendment won’t make it into law, lest roughly $200 million be sacrificed. Finally in Arizona, state Superintendent of Public Instruction Tom Horne warned that “the problem is, we would lose over a half-billion dollars a year. And it would go to the schools that need it the most: the low-income schools.” Considering that Arizona’s amendment would only pull the state out if it reimbursed local districts for lost federal dollars, Horne is probably right.

There’s little question that many, if not most, states want to get free of the No Child Left Behind Act. Regrettably, there’s also little question that they’re unwilling to sacrifice hundreds of millions of dollars to do so.