Taxation With Representation

All year in 2008, former National Journal Tech Daily editor and Beltway Blogroller Danny Glover will be cataloging all the taxes his family pays.

“How much do you really pay in taxes?” he says. “If you knew, you might get angry. You should – and I hope this blog will get you riled.”

Note the Weekly Tax Bite posts, where he tracks the tax-man’s weekly take in sales taxes, gas taxes, and so on.

Privatized Law Enforcement

The New York Times has a fascinating article explaining how bail bondsmen are a uniquely American, quasi-private element of the criminal justice system:

…posting bail for people accused of crimes in exchange for a fee…is all but unknown in the rest of the world. In England, Canada and other countries, agreeing to pay a defendant’s bond in exchange for money is a crime akin to witness tampering or bribing a juror — a form of obstruction of justice. …Other countries almost universally reject and condemn Mr. Spath’s trade, in which defendants who are presumed innocent but cannot make bail on their own pay an outsider a nonrefundable fee for their freedom. “It’s a very American invention,” John Goldkamp, a professor of criminal justice at Temple University, said of the commercial bail bond system. “It’s really the only place in the criminal justice system where a liberty decision is governed by a profit-making businessman who will or will not take your business.” …Bail is meant to make sure defendants show up for trial. It has ancient roots in English common law, which relied on sworn promises and on pledges of land or property from the defendants or their relatives to make sure they did not flee. America’s open frontier and entrepreneurial spirit injected an innovation into the process: by the early 1800s, private businesses were allowed to post bail in exchange for payments from the defendants and the promise that they would hunt down the defendants and return them if they failed to appear. …The system costs taxpayers nothing, Mr. Kreins said, and it is exceptionally effective at ensuring that defendants appear for court. …According to the Justice Department and academic studies, the clients of commercial bail bond agencies are more likely to appear for court in the first place and more likely to be captured if they flee than those released under other forms of supervision.

Libertarians sometimes get accused of being utopians because of occasional debates about the degree to which things such as roads, defense, and law enforcement can be handled by the private sector. But this article is a great introduction to a thought experiment: Imagine if America’s private bail system did not exist and one of Cato’s legal experts proposed privatization of whatever system the government had created instead. That proposal doubtlessly would be condemned as utopian, unrealistic, impractical, and unworkable. Fortunately, that impossible idea has been successfully in place for about two hundred years. Just something to keep in mind the next time a statist tells you that something only can be done by government.

DHS Was Bluffing

Last week, I published an Op-Ed in the Detroit News predicting chaos at the border in the face of ramped up document checks. I was wrong.

In fact, the DHS was bluffing. Border crossers who lacked government-issued photo ID and proof of citizenship like birth certificates or naturalization certificates weren’t prevented from crossing. They were given fliers.

As the AP reports:

Bobby and Genice Bogard of Greers Ferry, Ark., … who winter in Mission, Texas, knew the requirements were coming but thought they took effect in June. So even though they have U.S. passports, they had left them at home.”He allowed us to pass with a driver’s license,” Bobby Bogard said of a border agent.

“But next time he said he wouldn’t,” added Genice Bogard.

Yeah.

Something to keep in mind as the DHS threatens to make air travel inconvenient for people from states that don’t comply with the REAL ID Act’s national ID mandate.

The High Cost of Free Health Care

The U.K.-based Daily Telegraph reports on the growing sentiment to limit health care for both old people and those with unhealthy lifestyles. A survey of doctors is not the same as government policy, of course, but Prime Minister Gordon Brown wants to identify patient “responsibilities” — which is being interpreted as a step toward policies that will penalize those who drink, smoke, and eat too much:

Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives. Smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations, according to doctors, with most saying the health service cannot afford to provide free care to everyone. …About one in 10 hospitals already deny some surgery to obese patients and smokers, with restrictions most common in hospitals battling debt.

…Obesity costs the British taxpayer £7 billion a year. Overweight people are more likely to contract diabetes, cancer and heart disease, and to require replacement joints or stomach-stapling operations. Meanwhile, £1.7 billion is spent treating diseases caused by smoking, such as lung cancer, bronchitis and emphysema, with a similar sum spent by the NHS on alcohol problems. Cases of cirrhosis have tripled over the past decade. Among the survey of 870 family and hospital doctors, almost 60 per cent said the NHS could not provide full healthcare to everyone and that some individuals should pay for services. One in three said that elderly patients should not be given free treatment if it were unlikely to do them good for long. Half thought that smokers should be denied a heart bypass, while a quarter believed that the obese should be denied hip replacements.

Investor’s Business Daily comments on this controversy, noting that the denial of health care is a risk once government is in charge of the health care system. Moreover, the editorial explains that government-paid health care actually worsens problems such as obesity because people do not bear the cost when they behave recklessly. Of course, they will bear very steep costs if the government now cuts off health care, but this is an example of using one misguided government policy to try to fix the problems caused by another misguided government policy. Wouldn’t it be preferable to just fix the underlying problem by shifting to a free-market system?

The London Telegraph is reporting that the doctors believe “smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations.” Perhaps the doctors are following the lead of the National Institute for Health and Clinical Excellence, the British agency that provides guidance on public health. In 2005, NICE proposed that the National Health Service use age as a measurement of a patient’s worthiness for treatment.

…For Britons, health care rationing isn’t just a threat. It’s a reality. The Telegraph says roughly one in 10 hospitals — usually those with financial problems — now deny some surgery to smokers and the obese. On a moral level, the doctors have a point: Taxpayers shouldn’t have to subsidize care for those who make poor choices and then expect others to pay for their mistakes. But that’s exactly what universal health care does, and that’s one of its primary flaws. It promises people that they’ll be cared for no matter what they do to themselves. When the consequences of bad behavior are eliminated, there’s a strong incentive to behave badly.

…Proponents of forcing government health care on Americans want voters to believe that none of this can happen here under their plan. But they can’t guarantee it. All that can be known for sure is that the U.S. will follow the same path as Britain. Bureaucrats will ration care, and those who provide it will become civil servants whose performance will more closely resemble that of DMV employees than caring professionals.

Excessive Salaries for State and Local Bureaucrats

USA Today reports on the growing compensation gap between bureaucrats and workers in the productive sector of the economy. My colleague Chris Edwards already has documented how federal bureaucrats are overpaid, so the extravagant compensation for state and local bureaucrats is not very surprising

State and local government workers are enjoying major gains in compensation, pushing the value of their average wages and benefits far ahead of private workers, a USA Today analysis of federal data shows. The gap is widening every year, rising by an average $1.02 an hour last year and $2.45 an hour over the past three years.

…State and local government workers now earn an average of $39.50 per hour in total compensation, reports the Bureau of Labor Statistics (BLS). Private workers earn an average of $26.09 an hour. Benefits are a big reason for the gap.

…From 2000 to 2007, public employees enjoyed a 16% increase in compensation after adjusting for inflation compared with 11% for private workers. The nation has 20 million state and local government employees. About 116 million people work in the private sector.

The pay gap obviously is bad news for taxpayers, but the bigger issue may be the misallocation of labor. When compensation for bureaucrats is excessive, this encourages people to migrate into government jobs. This means that they are not in the private sector, producing value for their fellow citizens. This does not mean, to be sure, that every bureaucratic position is useless and every bureaucrat is lazy (I’ll resist the temptation to comment on DMV offices) and it does not mean that every private employee is a workaholic. But over the long run, the economy’s performance will suffer because labor is not being used productively.

The Democrats’ Mod Squad

The Democratic candidates remind me of the Nixon-era TV series “The Mod Squad”: One white, one black, one blonde.

And really, that’s all I know about the show and about all I know about the candidates. What are the differences among them? Obama is eloquent and elegant. Hillary is earnest. Edwards is TV-actor cute and shouts more than the others–not that that ended up counting for much.

And like the TV show, the Democrats’ Mod Squad is based on a lot of ideas that seemed cool in the early ’70s –  energy independence, groovy kinds of alternative energy, national health insurance, fine-tuning the economy, higher taxes, cheap money, interest rate freezes, corporation-bashing, and ending the war but not any time soon.

So instead of a bridge to the 21st century, the Democrats this year are offering us a bridge to the post-Woodstock era.

But the good news is that while the early ’70s were marked by plenty of policy disasters—Nixon’s wage and price controls, Ford’s “Whip Inflation Now” buttons, Carter’s “turn down your thermostats”—those things did make more people aware that the old regulatory policies had dramatically slowed down economic growth. As the ’70s went on and turned into the early ’80s, good things actually started to happen. Transportation, energy, finance, and telecommunications were deregulated. Capital gains and then income tax rates were reduced. Both large corporations and large unions were on the decline. CNN, Microsoft, and Apple were founded. Blacks, women, and gay people moved into the mainstream of society. After Watergate and Vietnam, Congress curbed some of the powers of the presidency.

Maybe the Mod Squad will once again be a precursor of better times to come.

Is FISA about Trial Lawyers?

One of the biggest canards of the FISA debate is the notion that congressional Democrats who oppose telecom immunity do so because, as Dick Cheney put it recently, they want to “leave open the possibility that the trial lawyers can go after a big company that may have helped” with the administration’s illegal wiretapping program.

Glen Greewald points to an interview with Cindy Cohn of the Electronic Frontier Foundation, the organization spearheading one of the biggest lawsuits against AT&T:

GG: John Boehner, the House Minority Leader, was on Fox News on Sunday arguing for telecom immunity, and this is one of the things he said in explaining why he believed in amnesty: “I believe that [telecoms] deserve immunity from lawsuits out there from typical trial lawyers trying to find a way to get into the pockets of the American companies.”

Is that an accurate description of your lawsuit and your organization?

CC: No, we are not plaintiff’s attorneys… . He’s welcome to come and visit our offices and if he still thinks that we’re rich plaintiffs’ attorneys after he’s visited our little tiny Mission Street offices, then I have a bridge to sell him. We’re a small, struggling nonprofit with a very tiny budget — and we’re doing this because we’re committed to protecting people’s privacy in the digital age.

GG: I don’t know the salaries of EFF lawyers and I’m not asking that, but I assume it’s true that there are all kinds of private sector opportunities and large corporate law firms in San Francisco where lawyers working in those places are making a lot more money, and if EFF lawyers were motivated by the desire for profit — as Mr. Bohener dishonestly suggested — there are a lot of other jobs that you could get that would pay a lot more money.

CC: Oh yeah, absolutely. And in fact, our lawyers are just the opposite. Most of the EFF lawyers worked in those big fancy firms for big fancy salaries, and took big paycuts to join us, because they wanted to do personally fulfilling work and feel like they were making the world a better place.

What I tell young lawyers who come to me and say: “I really want to work for EFF — you have such great lawyers,” I say: “Take your current paycheck, rip it in three pieces, take any third, and that’s about what you’ll get working for EFF.” The lawyers who work for EFF are making some of the biggest contributions to this organization, because they are making far less than they could on the open market in exchange for being able to work on things they believe in every day.

Having visited EFF’s offices myself, I can confirm Cohn’s description — they’re anything but a swanky law firm. And EFF’s work has been vital to defending and expanding online freedom. The idea that the FISA debate is about trial lawyers, rather than privacy and the Constitution, is an insult both to the hard-working lawyers at organizations like EFF and the ACLU, and to everyone else’s intelligence.