Massachusetts to Impose Tax on Ride-Hailing Companies to Subsidize Their Traditional Taxi Competitors

Republican Governor Charlie Baker recently signed statewide regulations for ride-hailing platforms like Lyft and Uber and this package has the ignominy of including “a subsidy that appears to be the first of its kind in the United States,” as Reuters calls it. This comes in the form of a new 5-cent per trip tax on ride-haling companies that will be funneled to the traditional taxi company. This is part of the total 20-cent per trip fee with the rest of the revenues being split between local governments and the state transportation fund.

There are approximately 2.5 million rides per month in Massachusetts just through Uber and Lyft, with more coming through other, smaller ride-hailing companies.  This means that the 5-cent tax and subsidy will transfer at least $1.5 million to traditional taxi companies each year, and likely much more as the total number of ride-hailing trips continues to rise in the coming years.

As it is written now the “taxi tax,” as Brittany Hunter has dubbed it, is scheduled to be collected through 2021 and the entire 20 cent surcharge will be in effect through 2026. Now that traditional taxi competitors have gotten a taste of being subsidized by their more successful competitors, it seems unlikely they would let a fruitful source of new ‘revenue’ expire without a fight.

While the regulation promises “riders and drivers will not see the fee because the law bars companies from charging them” there is no way the ride-hailing companies will passively absorb all of these additional costs. Instead, the most likely scenario is that they will indeed find a way pass on these costs and the most likely channels are higher prices for consumers or lower compensation for drivers.

Is the U.S. Trade Deficit a Problem to Solve?

Since 1975 – for 41 straight years – the United States has registered annual trade deficits with the rest of the world.  That means that year after year, Americans spend more on foreign-produced goods and services than foreigners spend on U.S.-produced goods and services or, put simply, the dollar value of U.S. imports exceeds the dollar value of U.S. exports.

For almost as long, some economists have been arguing that trade deficits are unsustainable – they sap economic growth, bleed jobs, and saddle our descendants with debt.  Perhaps if one looks at the trade deficit (or the slightly broader current account deficit) in isolation, these concerns might seem to have merit.  But looking at the U.S. trade or current account deficits without considering the capital account surplus is a meaningless, misleading exercise.

Yesterday, I published this piece at Forbes online, explaining why the trade deficit is not only not a problem, but that the associated capital surplus (the excess of inward investment over outward investment), which includes high-quality foreign direct investment, bestows huge advantages on the U.S. economy.  In that piece, I ask trade deficit hawks (or scolds, as I call them) to furnish their best, fact-based, comprehensive arguments – to finally step up to the plate and explain why it is that the trade deficit is a problem to solve.  

It would be of immense public policy value if we were to be able to catalogue and compare the arguments of both sides (and those who may be in the middle).  After all, one of the reasons that trade is so maligned is that the public has been lead to believe that the trade account is a scoreboard, with the deficit indicating that Team America is losing – and it’s losing on account of poorly negotiated trade deals and foreign cheating.  Helping the public reach that conclusion (rather than find the truth) may be the goal of some noisy contributors, but I suspect there are plenty of trade deficit hawks with purer motives, if not convincing arguments.

Topics:

Make America (Realize It’s) Safe Again

Donald Trump keeps insisting we live in dangerous times. “I don’t think America is a safe place for Americans” he said earlier this year. And most Americans agree with him. In June 71% of Americans said they expected further terrorist attacks in the United States over the next several weeks. And 53% recently said they worry a great deal about crime while 70% believe that there is more crime in the United States than there was a year ago.

It may have been smart politics for Trump to use Make America Safe Again as the theme for the opening day of the Republican National Convention. The facts, however, suggest Americans are already quite safe.

Take crime, for example. The statistics suggest that the public has it entirely backwards. In 2013 and 2014 Americans experienced their safest years on record. The murder rate per hundred thousand was 4.5, well below half of what it was at its worst point in the 1980s and early 1990s, lower even than the murder rate in 1963, the previous safest year on record. The numbers are nearly identical for other types of violent crime. According to the FBI’s crime statistics, the past five years have been the safest of the last half century.

Terrorism is another case where the numbers don’t support the heightened level of fear. The attacks in San Bernardino and Orlando certainly set people on edge, but Americans have a better chance of being killed by lightning or drowning in their own bathtubs than being killed by a terrorist.

Over the past two decades, the tragic attacks of 9/11 included, Muslim extremists were responsible for less than one percent of murders in the United States. And in the past 10 years that number has dropped substantially, with radical Islamists responsible for less than one-tenth of one percent of the killings in America.

New Heterodox Academy Initiative

Over at Heterodox Academy, we have been hearing from students who are concerned that their universities exhibit a rigid ideological orthodoxy, with dissenting faculty members almost nonexistent and dissenting students afraid to speak their minds. We agree that this sort of academic climate is profoundly unhealthy: It tends to stifle the sort of uncensored intellectual inquiry that produces groundbreaking scholarship and robust education. Indeed, the Supreme Court itself has cautioned against a “pall of orthodoxy” in education: “The classroom is peculiarly the marketplace of ideas. The Nation’s future depends upon leaders trained through wide exposure to that robust exchange of ideas which discovers truth out of a multitude of tongues, [rather] than through any kind of authoritative selection.”  Keyishian v. Board of Regents, 385 U. S. 589, 603 (1967) (internal quotations omitted).

Yale University understood this very wellfor a time.  And the University of Chicago understands it now.  But, alas, this basic principle has been forgotten on countless campuses across the country.  Heterodox Academy has, therefore, launched a new initiative to empower students to call for a more heterodox education. In collaboration with several students, we have generated three short resolutions that students may use to reaffirm the central importance of free speech and intellectual diversity on campus.  Students who want an uncensored and heterodox education may propose these resolutions to their student governments, publicize them in student newspapers and use them to press for official policy changes:

[B]e it resolved that [our school] is a Heterodox University

We make the following specific requests to the faculty and administration:

1) Adopt the Chicago Principles on Freedom of Expression

A clear way for the university to show commitment to viewpoint diversity is by adopting the University of Chicago’s Principles on Freedom of Expression, which state in part:

The University’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the University community to be offensive, unwise, immoral, or wrong-headed. It is for the individual members of the University community, not for the University as an institution, to make those judgments for themselves, and to act on those judgments not by seeking to suppress speech, but by openly and vigorously contesting the ideas that they oppose. Indeed, fostering the ability of members of the University community to engage in such debate and deliberation in an effective and responsible manner is an essential part of the University’s educational mission.

We request that the Faculty Senate endorse the “Chicago Principles” as official university policy.

2) Implement a non-obstruction policy for protests

We support the right of all students to protest against speakers and writers with whom they disagree, but we ask that protests be done in a way that does not deprive other students of their rights to speak and hear. When members of our community shout down a speaker, or take other actions intended to make it more difficult for a speaker to speak or for an audience to hear, they are practicing obstruction, censorship, and sometimes intimidation, not free speech. Such practices have no place in any academic community. We request that the university formulate and enforce a non-obstruction policy. As stated in the Chicago Principles: “The University has a solemn responsibility not only to promote a lively and fearless freedom of debate and deliberation, but also to protect that freedom when others attempt to restrict it.”

3) Improve viewpoint diversity

We request that the university include viewpoint diversity, and particularly political diversity, in its diversity policies and in its efforts to diversify the faculty and the curriculum. We want to encounter a range of viewpoints in the classroom, just as we will after we graduate.

Adoption of these resolutions will mark a school as a “Heterodox University” – a safe space for intellectual diversity and uncensored speech. Heterodox Academy stands ready to help tailor these resolutions to specific universities and to help support students who wish to promote these principles.  For more information, click here.

[Cross-posted from The Volokh Conspiracy]

Prof. Laurence Tribe on IRS Targeting

Last week Harvard law professor Larry Tribe sent out a tweet brusquely dismissing the IRS targeting episode as a debunked non-scandal. I and others promptly took issue with him, and pointed him toward the August 5 D.C. Circuit opinion laying out the scandal’s genuineness. (I also referenced my Ricochet article summarizing the decision and citing the Inspector General report from Treasury.)

Within an hour or two Prof. Tribe sent this tweet very graciously conceding error, along with several similar.

I have on occasion had my differences with Prof. Tribe’s views, but what an honorable example he sets here. May all of us prove equally ready to re-examine our own views when challenged [cross-posted and slightly adapted from Overlawyered].

P.S. If word of the D.C. Circuit panel decision has not gotten around as widely as it should, one reason is that some major news organizations have still, nearly three weeks later, not seen fit to cover it. 

Trump Never Convinced Republicans on Deportation

Donald Trump is currently in the midst of trying to, as he said last night, “soften” his image on immigration, stating that he will renege on his promises to deport each and every person in the country illegally. To the extent that he is moderating—and it’s unclear how much of a change this really is—it will be because no group of voters outside of his core supporters agreed with him. More importantly, despite over a year of campaigning on the issue, he simply has not convinced anyone—even among Republicansto flip to his side.

Pew Research Center has polled Republicans and Republican-leaning voters on their position on immigration four times in the last two years—twice before Trump announced his candidacy in June 2015 and twice after. As you can see, Trump’s no legalization view has remained flat, losing considerable ground between March and September before rebounding slightly again this year. But at no point was it the majority view in the party.

Figure 1: Pew Polls of Republicans: “Immigrants living in the country who meet certain requirements should be–or not be–allowed to stay in the U.S. legally.”

 

Sources: Pew Research Center - December 2014, March 2015, September 2015, March 2016

Muslim Assimilation: Demographics, Education, Income, and Opinions of Violence

Many Americans, including Donald Trump, are concerned over whether Muslim immigrants and their descendants are assimilating into American society.  This topic is tricky for a few reasons.  First, almost all Muslims who are immigrants or descended from them entered the United States after 1968 so there haven’t been many generations yet.  As a result, the evidence and research on Muslim assimilation are not as complete as they should be.  A second problem is that many studies or surveys do not compare the opinions of Muslims with society at large or other minorities.  Where possible, such comparisons will be made below.  A third problem is that, until recently, sociologists weren’t interested in Muslim assimilation in the United States.  Whereas there is a vast literature on Hispanic assimilation going back generations, Muslims were overlooked entirely prior to the 1990s. 

To mix my personal experience with this post, my brother and I are two of a handful of third-generation descendants of Muslim immigrants.  Our paternal grandparents came from Iran in the late-1940s while our maternal grandparents were the descendants of Europeans.  Nobody on that side of the family identifies as a Muslim anymore let alone practices, as far as I know, and none of those who were born Muslim raised their children as such.

My wife and her family have a similar experience although her father was born a Muslim and immigrated here in the 1970s.  The extended portions of my family and my wife’s family mostly immigrated after the Islamic Revolution in 1979.  Thus, I am deeply interested in this topic for personal as well as professional reasons.

Muslim Demographics

The United States government does not ask Americans or immigrants about their religious beliefs, with the exception of refugees.  Thus, we have to rely on private surveys and other methods of estimating the Muslim population in the United States.  Many of these surveys do not distinguish between different sects of Islam but merely on self-identification.  This, a Sunni Muslim immigrant from Saudi Arabia is just as Muslim as an African-American convert to the Nation of Islam.

A 2015 Pew Research Center report estimated that there are roughly 3.3 million Muslims in the United States equal to just over 1 percent of the population – up from Pew’s estimates of about 2.4 million in 2007 and 2.6 million in 2010.  The U.S. Religion Census (not be confused with the U.S. Census Bureau) in 2010 found that there were 2.6 million Muslims, equal to about 0.84 percent of the U.S. population. 

Seven of the most methodologically sound estimates of the size of the Muslim population around the turn of the Millennium found there to be between 1.5 million and 3.4 million Muslims in the United States.  Five of those seven estimates found that there were between 2.3 and 2.9 million Muslims.  Compared to the more recent estimates by Pew and the U.S. Religion Census above, the Muslim population has grown slowly.     

Births and immigration are the main sources of growth for the Muslim population.  Pew in 2011 estimated the total fertility rate (TFR) of Muslim women in the United States to be 2.5 children per woman and just 2.2 for Muslim women born here – both above the U.S. TFR of 1.9 in 2011.  Roughly 5 percent of the stock of immigrants in the United States is Muslim.  One Pew paper estimates that 80,000 to 90,000 immigrants a year are Muslim while another found 115,000 a year in 2009.  Pew estimates that there will be 6.2 million American Muslims by 2030 that comprise 1.7 percent of the population. 

Pages