Topic: Government and Politics

The Real Reason Politicians Want a Bigger Bite of Apple

Earlier this month, I explained four reasons why the Apple “tax avoidance” issue is empty political demagoguery.

And Rand Paul gave some great remarks at a Senate hearing, excoriating some of his colleagues for trying to pillage the company.

But this Robert Ariail cartoon may be the best summary of the issue.

Arial Apple Cartoon

What makes this cartoon so effective is that it properly and cleverly identifies what’s really driving the political class on this issue. They want more revenue to finance a bigger burden of government spending.

When I did my contest for best political cartoonist, I picked a cartoon about Greece and euro for Robert Ariail’s entry. While I still think that was a very good cartoon, this Apple cartoon would probably take its place if I did a new contest.

First They Came for My Coke, Then They Came for My Jack

Not satisfied with hounding smokers and purveyors of Big Gulp sodas – or even gun manufacturers – nanny-staters have reached way back into their historical toolkits to go after alcohol. That’s right, in this the 80th year since the repeal of Prohibition, a new coalition has arisen to take on the scourge of demon rum.

But these aren’t your great-granddaddy’s Baptists and bootleggers; instead we have a transnational alliance of “public health professionals” out to make the world a more sober place.  Not satisfied with the persuasiveness of their entreaties, however, they further want to muzzle alcohol producers and anyone else with a “stake” in the debate.  (Apparently limiting the freedom to drink isn’t enough for these people; the freedom of speech and to petition the government for redress of grievances are also suspect.)

Here’s Exhibit A, a “statement of concern” put out in February by a group of public health advocates calling themselves the Global Alcohol Policy Alliance.  In a nutshell, GAPA doesn’t like the fact that the beverage alcohol industry is involved in the debate on how to reduce alcohol abuse, not even the commitments that 13 of the largest alcohol producers made in support of the World Health Organization’s “Global Strategy to Reduce the Harmful Use of Alcohol.  The most revealing “reservation” the GAPA-niks have is item 3 on page 3:

Prior initiatives advanced by the alcohol industry as contributions to the WHO Global Strategy have major limitations from a public health perspective …

That sounds rather innocuous – an academic disagreement about alcohol policy – but let me put this in context.  The public health community consistently advocates “population-based” controls that simply seek to reduce total alcohol consumption, regardless of whether alcohol abuse declines.  There could be cirrhotic ne’er-do-wells dying in the streets, but as long as yuppies buy less Jack Daniel’s, all is fine.  The alcohol industry, or anyone that cares about actually fixing social problems rather than taking steps that at best just make politicians feel good – call it the inverse Baptists/bootleggers – prefers a targeted approach: keep booze away from kids, get alcoholics treatment, don’t drink bad moonshine that’ll make you go blind, etc.

Campaign Restrictions Lead to Due Process Violations, Even in Local Politics

Most times when I write about campaign finance laws, the context is a presidential race or Supreme Court case.  But these restrictions on political speech – the protection of which is the main purpose of the First Amendment – abound in local politics and state courts even without FEC intervention or presidential finger-wagging.

Here’s a case from California that literally just came across my transom:

Last year, John Mlnarik ran for Santa Clara City Council.  Mlnarik is the sole shareholder of a small business, a law firm with seven employees – a fact revealed in several mandatory campaign disclosures.  Because his money is partly tied up in his business, along with two personal loans to his campaign he also made a third loan (for about $6000) via his business.  He fully disclosed the loan and its source.

More than three months later, after the election, the City of Santa Clara issued a citation against Mlnarik for receiving an excessive loan “from a third-party source.”  Yet the City Code also states:  “For purposes of the contribution limits … [a]n individual and any corporation in which the individual owns a controlling interest, shall be treated as one person … . Nothing … shall prohibit a candidate from making unlimited contributions to his/her own cam­paign.”  And under state law incorporated into the City Code, an individual’s income includes his business’s income; an individual’s real property includes his business’s real property; and an individual’s investments include his business’s investments.

Given this logical overlay, and the fact that his sole ownership and the loan’s source were both fully disclosed, Mlnarik thought he was following the law.  After all, as the Supreme Court reiterated in 2008, “the use of personal funds … reduces the candidate’s dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which … contribution limitations are directed.”  (Davis v. FEC, quoting Buckley v. Valeo).

The City, however, cited the following from its Code:  “[U]nless a term is specifically defined in this chapter, or the contrary is stated (or clearly appears from the context), the definitions set forth in [a portion of the State Government Code] shall govern the interpretation of the provisions of this chapter.”   The State Code, in turn, includes a 192-word definition of “candidate,” which – along with many other possible definitions – states that “ ‘Candidate’ means an individual who is listed on the ballot.”  Thus, while Mlnarik was free to make unlimited loans to his campaign, he supposedly violated the law by making a campaign loan via his wholly owned business, which itself wasn’t a “candidate.”

Mlnarik argued that the City law was unconstitutionally vague – after all, how is one to know whether a term’s contrary meaning “clearly appears from the context”?  (If it does, then the State law’s definition of “candidate” must not be used – and there would be no case against Mlnarik.)  As noted above, the “context” was a law that repeatedly makes an equivalence between a person and his or her business; moreover, the law has eight statutory purposes, three of which (Mlnarik argued) were actually advanced by allowing sole business-owners to contribute to their own campaigns via their business, while none of the eight purposes was thwarted.  If that’s not the contrary “clearly appearing,” what is?

Nevertheless, the City refused to drop the case, and the trial judge denied that the phrase “the term[’s] … contrary … clearly appears from the context” was unconstitutionally vague (in a quasi-criminal case!).  Mlnarik is now attempting to appeal further, but he has been warned that state law may not permit an additional appeal – even though his constitutional argument couldn’t be heard by the administrative hearing officer, and thus has been heard only once, and then only by one judge.

So not only is there an underlying First Amendment violation, but there are due process infringements squared or cubed.  And all this because a candidate for office “loaned himself” $6,000 and fully disclosed all aspects of the transaction.

You can’t make this stuff up!

Washington’s Range of Policy Options

Ezra Klein writes in the Washington Post that congressional Republicans have moved to the right on such issues as health care, stimulus spending, and a carbon tax, forcing Democrats to move to the center to find common ground. And thus:

If you imagine a policy spectrum that that goes from 1-10 in which 1 is the most liberal policy, 10 is the most conservative policy, and 5 is that middle zone that used to hold both moderate Democrats and Republicans, the basic shape of American politics today is that the Obama administration can and will get Democrats to agree to anything ranging from 1 to 7.5 and Republicans will reject anything that’s not an 8, 9, or 10. The result, as I’ve written before, is that President Obama’s record makes him look like a moderate Republicans from the late-90s.

His argument is that Mitt Romney and Newt Gingrich used to support “the basic architecture of the Affordable Care Act,” John McCain (R-AZ) supported a cap-and-trade bill, George W. Bush pushed a stimulus bill in 2008—but now Republicans don’t want to support any of those policies. So, he says, Democrats have moved to the right, away from what they really want, like single-payer health care, command-and-control environmental regulation, and no cuts to entitlements plus massive new spending. He says that leads to center-right policy.

But another way to look at it is this: on his scale of 1 to 10, where 1 represents bigger government and 10 represents smaller government, what’s happening? Is government getting bigger or smaller? Take health care: if 1 represents national health care and 10 represents a free market in health care, then surely with income tax preferences for health insurance, Medicare, the prescription drug benefit, and government paying for more than half of all health care, we were at least at 5 by 2009. Everybody from Michael Cannon to Joe Biden thinks Obamacare is a BFD on the road to total government control of medicine. So let’s say it put us at 3 or 4.

You can see the same pattern in the other issues Klein discusses. Carbon tax, cap and trade, stimulus spending—they all make government bigger than it is now. So when Republicans endorse any of those policies, they are playing on bigger-government territory. Now, Republicans say they’re not going to do that any more. So Klein’s complaint is not really that Republicans are insisting on “8, 9, or 10” policies; they’re just no longer proposing policies in the 3 and 4 range, hoping that Democrats will agree to make government only a little bigger, rather than way bigger. Sounds like maybe the debate is moving back toward the 50-yard line, instead of taking place entirely in Democratic territory.

Note: Klein talked only about economic issues, so I’ve done the same. There’s a clear trend in a liberal/libertarian direction on social issues such as marriage and marijuana. And Republicans who propose further restricting immigration or getting involved in yet another Mideast war are hardly advocates of small government. This analysis deals only with fiscal, regulatory, and entitlements issues.

The IRS Has Already Abused Its Powers under ObamaCare

Over at Bloomberg, National Review’s Ramesh Ponnuru writes about the Obama administration’s disregard for the rule of law, including the IRS’s $800 billion power grab:

The Patient Protection and Affordable Care Act, the sweeping health-care law that Obama signed in 2010, asks state governments to set up health exchanges, and authorizes the federal government to provide tax credits to people who use those exchanges to get insurance. But most states have refused to establish the online marketplaces, and both the tax credits and many of the law’s penalties can’t go into effect until the states act.

Obama’s IRS has decided it’s going to apply the tax credits and penalties in states that refuse, even without statutory authorization. During the recent scandal over the IRS’s harassment of conservative groups, many Republicans have warned that the IRS can’t be trusted with the new powers that the health law will give the agency. They are wrong about the verb tense: It has already abused those powers.

For more, read my article (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”

 

Does Freedom of Speech Conflict with Freedom of Religion?

This is a provocative question, of course, or at least it is seemingly everywhere in the world but the United States. In just the last three years, the Supreme Court has protected highly offensive funeral protests, violent video games, animal “crush” videos, and a host of other types of expression. No law punishing blasphemy or “defamation of religion”—as approved by various UN resolutions and making inroads into the legal codes of even Western countries—could possibly survive First Amendment scrutiny. But that’s not the case elsewhere in the world, as an excellent new video by Danish human rights lawyer Jacob Mchangama shows (courtesy of Free to Choose TV; see press release):

America isn’t immune from increasing demands that free speech be limited to respect religious feelings. Recall the condemnations of the anti-Islamic video that may have caused rioting in Cairo on September 11 of last year (but not in Beghazi, as details of that scandal develop). The outcome of this battle will have profound consequences for the ability of people everywhere to freely express themselves and follow their beliefs. Democratic governments play a dangerous game when appeasing religious sensitivities rather than defending free speech.

Mchangama, not coincidentally, is affiliated with the invaluable Human Rights Foundation—an organization that deals with actual human rights violations rather than simply being a vehicle for pushing a transnational leftist agenda—whose president, Thor Halvorssen (with whom I’ve been acquainted since college), calls himself a “classical liberal” rather than a man of the Right or Left.

Washington Booms during Slowest Recovery

Continuing our ongoing series on the wealth of Washington, we bring you the lead story in Friday’s “Mansion” section of the Wall Street Journal:

WSJ DC Boomtown

The Journal reports:

As other American cities have been buffeted by an uneven economy, Washington’s property market has been buoyed two forces specific to the capital city: a surge of federal contractors and a rising tide of government spending. The result: what real-estate agents and developers are calling an unprecedented real-estate surge.

Yes, a rising tide of government spending may be bad for the American economy, but it’s great for the Washington area.

Washington is wealthy and getting wealthier, despite history’s slowest recovery in most of the country. As we’ve said here before, this of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. 

Money spent in Washington is taken from the people who produced it all over America. Washington produces little real value on its own. National defense and courts are essential to our freedom and prosperity, but that’s a small part of what the federal government does these days. Most federal activity involves taking money from some people, giving it to others and keeping a big chunk as a transaction fee.

Every business and interest group in society has an office in Washington devoted to getting some of the $3.6 trillion federal budget for itself: senior citizens, farmers, veterans, teachers, social workers, oil companies, labor unions - you name it. The massive spending increases of the Bush-Obama years have created a lot of well-off people in Washington. New regulatory burdens, notably from Obamacare, are also generating jobs in the lobbying and regulatory compliance business.

Walk down K Street, the heart of Washington’s lobbying industry, and look at the directory in any office building. They’re full of lobbyists and associations that are in Washington, for one reason: because, as Willie Sutton said about why he robbed banks, “That’s where the money is.”

The wonder is why the taxpayers put up with it.