Topic: Government and Politics

“Lockdown High”: Brought to You by the NRA

By
Gene Healy

Yesterday, the “National School Shield Task Force,” a 12-member study group commissioned by the National Rifle Association, released its recommendations [.pdf] for heightened school security in the aftermath of the Sandy Hook Elementary School shootings. The Washington Post’s coverage quotes the head of Children’s Defense Fund, who accuses the NRA of “prey[ing] on America’s fears” and trying to turn the nation’s schools “into armed fortresses.” 

Not long ago, I’d have been shocked to find myself agreeing with Marian Wright Edelman over Wayne LaPierre, but in this case, the lady has a point. Since  last December, the NRA leader has outdone left-leaning “children’s advocates” in fomenting legislative hysteria “for the children.” As I noted in Tuesday’s Washington Examiner:  

The NRA head opposes new gun laws, but he’s otherwise been [President Obama’s] partner in panic, breathlessly demanding an “armed good guy” in every school—a federally funded expansion of “America’s police force.” 

The Post notes that the National School Shield Task Force is “ostensibly independent” of NRA direction, and for what it’s worth, the report’s tone is less hysterical, the recommendations somewhat less sweeping, than LaPierre’s. But, like LaPierre’s public statements, it lacks any intelligent assessment of relative risks, instead making the very possibility of harm to children a rallying cry for opening the checkbook and summoning the security consultants. The entire project seems designed to enhance the paramilitarization of public institutions, allowing the Homeland Security mentality of institutionalized overreaction free rein in American schools.

Five of the twelve task-force members work for “Phoenix RBT Solutions,” a security consulting firm that “offer[s] schools vulnerability assessments, innovative security solutions, and reality-based training for security personnel”–and so just might have some skin in the game.  

Among the remaining members are a former Secret Service director, a former top military security official, a Department of Homeland Security veteran, and, for good measure, a “Former Assistant Administrator of U.S. Transportation Security Administration (TSA).”  Woe betide the poor parent who just wants to drop off her kid’s lunch. 

“Prior to the Sandy Hook incident,” the National School Shield Report chides, “most schools took the view that ‘it probably won’t happen here.’”  “Most schools” is too broad a generalization, given that, as documented in Annette Fuentes’ excellent Lockdown High, the trend toward the TSA-ification of American schools long predated the Newtown massacre.  

Still, for any particular school, “it probably won’t happen here” is an accurate assessment of the risk. One estimate, published in the journal Educational Researcher (“What Can Be Done About School Shootings?” January 2010), is that any given school in the United States can expect a school shooting every 6,000 years.  

To put “armed police officers in every school,” as LaPierre has frantically demanded that Congress do, would require hiring over 100,000 new cops. But if your goal is to prevent kids from getting murdered, the schools are about the last place you’d put new police, since 98 percent of youth homicides occur off school grounds.

 

[Source: “Indicators of School Crime and Safety: 2011,” National Center for Education Statistics.]

Rough estimates of what LaPierre’s proposal would cost range from $5.5 billion to $34 billion a year. How can we justify that sort of expense in what’s supposed to be an era of belt-tightening? “You justify it because it’s necessary,” says Asa Hutchinson, the former DEA chief and Homeland Security official who’s heading up the NRA’s school safety initiative. But it’s not necessary, and it’s not wise.

The National School Shield Task Force is less bullish on federal funding than is NRA’s leadership (in December LaPierre called on Congress “to act immediately, to appropriate whatever is necessary … and to do it now, to make sure that blanket of safety is in place.” Though the NSS Report calls for making federal Homeland Security grants available for school security programs, it states that “federal funding has proved unreliable as a long-term solution to the school safety and security needs of our nation” and concedes that “Local school authorities are in the best position” to determine “whether an armed security guard is necessary.”

That’s an improvement over what NRA’s leadership has recommended. Unfortunately, as I’ll discuss in a separate post, I can’t say the same for what the rest of the report has to say about school safety.  

Topics: 
Education and Child Policy, Government and Politics, Law and Civil Liberties

Identifying the Right “Depreciation” Tax Policy

By
Daniel J. Mitchell

I’m normally reluctant to write about “depreciation” because I imagine eyes glazing around the world. After all, not many people care about the tax treatment of business investment expenses.

But I was surprised by the positive response I received after writing a post about Obama’s demagoguery against “tax loopholes” for corporate jets. So with considerable trepidation let’s take another look at the issue.

First, a bit of background. Every economic theory agrees that investment is a key for long-run growth and higher living standards. Even Marxist and socialist theory agrees with this insight (though they foolishly think government somehow is competent to be in charge of investments).

Let’s look at two remarkable charts, starting with one that shows the very powerful link between total investment and wages for workers.

 

As you can see, if we want people to earn more money, it definitely helps for there to be more investment. More “capital” means that workers have higher productivity, and that’s the primary determinant of wages and salary.

Our second chart shows how the internal revenue code treats income that is consumed compared to how it penalizes income that is saved and invested. Simply stated, the current system is very biased against capital formation because of the combined impact of capital gains taxes, corporate income taxes, double taxes on dividends, and death taxes.

Indeed, one of the reasons why the right kind of tax reform will generate more prosperity is that double taxation of saving and investment is eliminated. With either a flat tax or national sales tax, economic activity is taxed only one time. No death tax, no capital gains tax, no double tax on dividends in either plan.

All of this background information helps underscore why it is especially foolish for the tax code to specifically penalize business investment. And this happens because companies have to “depreciate” rather than “expense” their investments.

Read the rest of this post »

Topics: 
Government and Politics, Tax and Budget Policy

The Making of a Japanese Ambassador

By
David Boaz

The Washington Post keeps telling us that the Japanese will love Caroline Kennedy as an ambassador, because they appreciate the honor of our sending an ambassador of vast experience and respect. As Jason Horowitz put it:

Diplomatic sources said that the Japanese tend to be flattered when the American ambassador is a person of great renown, because it confirms their importance to the United States. Past ambassadors to Japan have included former Senate majority leaders Mike Mansfield and Howard Baker, former vice president Walter F. Mondale, and former House speaker Tom Foley.

Well, let’s see. Each one of those ambassadors had previously served more than 20 years in high public office. Caroline Kennedy is the daughter of a president and a major supporter of the incumbent president’s first campaign. I suspect the Japanese are thinking this week, “One of these things is not like the others.”

Topics: 
Foreign Policy and National Security, Government and Politics

Art, Religion, and Taxpayer Funding

By
David Boaz

In Germany enrolled members of a church must pay a tax for the support of the church. I’m sure a lot of American churches would like to have such a revenue source. How’s it working out in Germany? Well, Marketplace radio reports:

Christians – Protestants and Catholics combined – are leaving their churches at a rate of about 300,000 people a year.

No doubt tax avoidance isn’t the only reason for that. But really, if you simply become less interested in religion, why bother to formally renounce your membership? The tax saving is an obvious reason. Marketplace’s John Laurenson talks to one ex-church member:

Stefan, though, no longer pays the church tax that used to gobble up four percent of his salary.

Was it really the money, I ask. Or was it loss of faith? No, he says, it was the money.

Back in April 2000 I attended a lecture at the Smithsonian Institution by Richard Dawkins. Afterward I wrote this to him:

I was struck by your answer to one question. A member of the audience asked why the United States has a stronger movement for religious fundamentalism than other countries even though it has separation of church and state. You replied that you didn’t know; it might be just a coincidence. I was surprised that you didn’t offer what I think is the clear “Darwinian” answer: competition makes individuals and enterprises stronger, while subsidies and protection make them weaker. As I wrote in Libertarianism: A Primer, “businesses coddled behind subsidies and tariffs will be weak and uncompetitive, and so will churches, synagogues, mosques, and temples. Religions that are protected from political interference but are otherwise on their own are likely to be stronger and more vigorous than a church that draws its support from government.”

And indeed scholars of religion often comment that American churches tend to be more vibrant and more robust than European churches, with far more Americans actually in church on Sunday morning than Europeans. Perhaps a guaranteed source of income isn’t all that helpful in the long run.

I was particularly amused by this comment in the Marketplace report, from a businessman who

travels quite a bit in the U.S. and doesn’t much like what he’s seen of the way they fund churches there.

In the States you see churches that sometimes “look a little like they have too much of a consumer orientation,” says Wendland. “Where they play rock music and do all sorts of crazy stuff. I have nothing against rock music but I would (prefer) a church that is doing the right thing for the community and for God but not do stuff to attract a sort of clientele.”

It strikes me that that’s just the argument made on behalf of tax funding for the arts. We have more arts in America than in any country in history. But much of it is labeled “entertainment” and disdained by those who “have nothing against rock music but would prefer arts organizations that are doing the right for the community” rather than having “too much of a consumer orientation.”

Which is why my argument that “Because art is just as spiritual, just as meaningful, just as powerful as religion, it is time to grant art the same independence and respect that religion has. It is time to establish the separation of art and state” seems entirely on point here. 

Topics: 
Government and Politics

Hogberg: How ObamaCare Is Disrupting the Coverage & Care of One D.C. Woman

By
Michael F. Cannon

David Hogberg reports on “Natalie,” a Washington, D.C., resident who may lose her current coverage when ObamaCare forces her into one of its health insurance “exchanges”:

Natalie increasingly thinks that she’ll have the surgery. However, she notes that if she could keep her insurance and her medical team indefinitely, she’d have the luxury of waiting a year or two to see if she could get the pain under control (or at least live with the pain she has) and avoid an operation. Now, she may have to decide on an operation within a few months so that her current physicians can treat her…

At times, Natalie feels her trust in progressive leadership was betrayed.

“I voted for Obama in 2008 because I couldn’t stand McCain,” she said.

During the debate over Obamacare, President Obama assured the American people, “No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”

Natalie may lose both.

“I can’t say how disappointed I am because I believed him,” laments Natalie.

Topics: 
General, Government and Politics, Health Care

Question of the Week: What’s the Right Point on the Laffer Curve?

By
Daniel J. Mitchell

Back in 2010, I wrote a post entitled “What’s the Ideal Point on the Laffer Curve?”

Except I didn’t answer my own question. I simply pointed out that revenue maximization was not the ideal outcome.

I explained that policy makers instead should seek to maximize prosperity, and that this implied a much lower tax rate.

But what is that tax rate, several people have inquired?

The simple answer is that the tax rate should be set to finance the legitimate functions of government.

But that leads to an obvious follow-up question. What are those legitimate functions?

According to my anarcho-capitalist friends, there’s no need for any public sector. Even national defense and courts can be shifted to the private sector.

In that case, the “right” tax rate obviously is zero.

But what if you’re a squishy, middle-of-the-road moderate like me, and you’re willing to go along with the limited central government envisioned by America’s Founding Fathers?

That system operated very well for about 150 years and the federal government consumed, on average, only about 3 percent of economic output. And even if you include state and local governments, overall government spending was still less than 10 percent of GDP.

Moreover, for much of that time, America prospered with no income tax.

But this doesn’t mean there was no tax burden. There were federal excise taxes and import taxes, so if the horizontal axis of the Laffer Curve measured “Taxes as a Share of GDP,” then you would be above zero.

Or you could envision a world where those taxes were eliminated and replaced by a flat tax or national sales tax with a very low rate. Perhaps about 5 percent.

So I’m going to pick that number as my “ideal” tax rate, even though I know that 5 percent is just a rough guess.

For more information about the growth-maximizing size of government, watch this video on the Rahn Curve.

The Rahn Curve and the Growth-Maximizing Level of Government

There are two key things to understand about my discussion of the Rahn Curve.

First, I assume in the video that the private sector can’t provide core public goods, so the discussion beginning about 0:33 will irk the anarcho-capitalists. I realize I’m making a blunt assumption, but I try to keep my videos from getting too long and I didn’t want to distract people by getting into issues such as whether things like national defense can be privatized.

Second, you’ll notice around 3:20 of the video that I explain why I think the academic research overstates the growth-maximizing size of government. Practically speaking, this seems irrelevant since the burden of government spending in almost all nations is well above 20 percent-25 percent of GDP.

But I hold out hope that we’ll be able to reform entitlements and take other steps to reduce the size and scope of government. And if that means total government spending drops to 20 percent-25 percent of GDP, I don’t want that to be the stopping point.

At the very least, we should shrink the size of the state back to 10 percent of economic output.

And if we ever get that low, then we can have a fun discussion with the anarcho-capitalists on what else we can privatize.

P.S. If a nation obeys Mitchell’s Golden Rule for a long enough period of time, government spending as a share of GDP asymptotically will approach zero. So perhaps there comes a time where my rule can be relaxed and replaced with something akin to the Swiss debt brake, which allows for the possibility of government growing at the same rate as GDP.

Topics: 
General, Government and Politics, Political Philosophy, Tax and Budget Policy

Pages