NR Condemns Fair Tax Proposal

In a move that is sure to generate feedback, National Review is urging Republican candidates not to support the Fair Tax. The editorial is somewhat disconcerting since NR should be happy that at least some Republicans are talking about free-market ideas. The same logic could be used, after all, to argue that Republicans should not support Social Security reform or advocate the elimination of the Department of Education.

I’ve always thought the flat tax is a politically better way of getting to a system that taxes economic activity only one time and at one low rate (see here for more information), so I don’t have a dog in the Fair Tax fight. But I am nonetheless disappointed that the flagship publication of the conservative movement is discouraging GOPers from bold proposals:

The tax code needs major reform to become fairer, simpler, and more efficient. The Fair Tax is one instantiation of those goals, but its political impracticality makes it fatally flawed. If conservatives force a choice between a Fair Tax and no tax reform at all, the latter is what they are likely to get.

…The great, undeniably attractive selling point of the Fair Tax is that it would allow the country to dispense with the IRS. But the sad truth is that if the federal government is going to collect as much money as it currently does — which the Fair Taxers say their system would — its methods of tax collection will inevitably be intrusive. …[E]very country that has ever tried to impose retail sales taxes this high has quickly moved to a Value Added Tax levied at every stage of production. Consumers rarely see or keep track of these taxes, and they seem to be fairly easy for governments to raise.

…A candidate who ran on the national sales tax would be able to run on nothing else. He would have to spend all of his time defending the idea. Off the top of our heads, we can think of three devastating lines of attack an opponent could use in television ads. One ad could argue that getting rid of the mortgage deduction would send home prices into free fall (something that voters are going to find especially worrisome now). Another could ask why senior citizens, having paid taxes all their lives as they made income, should have to spend their retirements paying taxes on everything they use that money to buy. A third could simply ask voters if they look forward to paying a brand new tax.
There are answers to each attack. But no Republican candidate, especially in the daunting environment of 2008, is going to want to have to make them. Republicans cannot win a national election without the tax issue. If they ran on the national sales tax, Republicans would be taking one of their natural strengths and making it into a liability.

Solution Already in Place for Chinese Product Safety Problems

The recent spate of recalls involving products manufactured in China has elicited cries from the public for better regulatory oversight and glee from protectionists who seek to demonize all trade with China. But increased government screening or an outright import ban would be unnecessarily intrusive and prohibitively expensive. The solution that makes the most sense is already working.

There is nothing more immediately deleterious to the bottom line than the kind of bad publicity that connotes wanton disregard for the vulnerable and innocent. Think Exxon Valdez and oil-drenched, arctic sea mammals; think Kathy Lee Gifford and allegations of sweatshop labor; and now, think Mattel and sick children. Companies pay dearly even for the perception that they have transgressed.

Large quantities of poisonous products ending up in consumers’ toy chests, medicine chests, and refrigerators constitute serious transgressions, which should be punished and relegated to the very rare occurrence. For its recent woes, Mattel is being punished. The company’s stock value took a hit, its revenues are projected to decline as we head into the holiday buying season, it will incur huge costs refunding and replacing purchases of tainted toys, and it will be spending hundreds of million of dollars to improve its safety audits. Meanwhile, Chinese factories that compete for Mattel’s business have every financial incentive to clean up their own acts.

If Mattel fails to win back the confidence of American parents, it could be facing extinction. But allowing Americans to decide whether they will purchase Mattel products, or other products made in China, is preferable to Congress or the administration making that decision for them.

Giuliani Is Half-Right on School Choice

Presidential contender Rudy Giuliani has just told an audience in New Hampshire that he supports competition and parental choice in education, including government-funded school vouchers. “I’d give parents control over their children’s education,” he told the crowd.

Real consumer choice and competition among schools aren’t just good ideas — they’re essential if we are ever going to see the kind of progress and innovation in education that we’ve seen in every other field over the past few centuries. But if Rudy is saying he’d back a federal school choice program, he’s got the right idea at the wrong level of government.

As someone who touts the merits of limited government, Giuliani should heed the Tenth Amendment, which reserves to the states and the people powers that they have not delegated to Washington in the Constitution. Last time I checked, neither the word “education” nor the word “school” appears anywhere in that document. 

I’ve made the broader case against federal school choice programs already, and the same arguments still apply.

An ardently pro–school choice president could do wonders to encourage states to adopt meaningful market reforms in education without usurping a power that does not belong in Washington’s hands. America could really use such an “education president.” It doesn’t need an “education king.”

A Fine Day

Today, U.S. News and World Report released its annual college guide, and I for one think it’s great. Sure, the rankings offer far from the definitive, final word about what college any given student should choose, and there could be thousands of credible methods used for evaluating schools other than what U.S. News does, but the magazine’s guide is still a valuable, market-driven tool to help parents and students choose from among thousands of U.S. colleges.

And, despite the complaints of opportunistic politicians about a supposed vacuum of data to help parents and students navigate higher education, if one is unhappy with U.S. News there are sundry other resources available, including the Princeton Review, the Kaplan College Guide, the College Prowler, the Gourman Report, and many, many more.

And so I say, “Hooray, the U.S. News rankings are out! Viva la U.S. News rankings!”

Not the Way America Is Supposed to Work

A Miami jury has convicted Jose Padilla of charges unrelated to those that were alleged when he was first incarcerated more than five years ago. Some will argue that the guilty verdict justifies Padilla’s characterization as an enemy combatant and his extended detention, incommunicado, without charges filed. Nothing could be further from the truth. Jose Padilla is a U.S. citizen, protected by the U.S. Constitution against unreasonable seizure and deprivation of liberty without due process. He was denied his rights.

In the case of suspected terrorists, the stakes are immense. So a powerful argument can be made for changing the rules to provide for preventive detention in narrowly defined circumstances. But if we do change the rules, the process cannot be unilateral − implemented by executive edict without either congressional or judicial input. And it cannot be law on-the-fly, with no knowledge of the rules by anyone other than the executive officials who are responsible for their enforcement. In the end, Padilla may have deserved the treatment he received, perhaps worse; but for those of us concerned about the rule of law, the Padilla episode is not the way America is supposed to work.

Padilla Verdict

Jose Padilla is the American citizen who was arrested five years ago at Chicago’s O’Hare airport because he was suspected of working with al-Qaeda.  At that time, Attorney General John Ashcroft said Padilla had come to the U.S. from Pakistan to set off a “dirty bomb.”  President Bush declared Padilla an “enemy combatant” and locked him up in a military brig with no access to family, lawyers, or the civilian court system.  That move turned into the most important constitutional issue that has arisen since 9/11.  President Bush says he can arrest any person in the world and lock that person up in a military prison.  No arrest warrant.  No trial.  No judicial check via the great legal writ of habeas corpus.

We filed a brief (pdf) in the Padilla case when it reached the Supreme Court in 2004.  The Supreme Court did not reach the merits of the controversy at that time.  A majority of the Court found a jurisdictional problem and basically said that the lawsuit should have been filed elsewhere.  Justice John Paul Stevens dissented and this is how he described the matter:

At stake in this case is nothing less than the essence of a free society.  Even more important than the method of selecting the people’s rulers and their successors is the character of the constraints imposed on the Executive by the rule of law.  Unconstrained Executive detention for the purpose of investigating and preventing subversive activity is the hallmark of the Star Chamber.  Access to counsel for the purpose of protecting the citizen from official mistakes and mistreatment is the hallmark of due process. … [I]f this Nation is to remain true to the ideals symbolized by its flag, it must not wield the tools of tyranny even to resist an assault by the forces of tyranny.

That was the dissent.  The majority dismissed the lawsuit on jurisdictional grounds.

Another lawsuit was promptly filed – and just when looked as if the Supreme Court was about to rehear the case and declare President Bush’s enemy combatant policy to be illegal, Bush administration lawyers moved Padilla back into ordinary civilian custody to be tried on criminal charges.  That move was presumably to keep the controversial claim of executive power away from the Supreme Court, i.e. no need to hear the case because the circumstances have changed. 

The criminal trial finally concluded today with a guilty verdict.

What’s it all mean?  Well, we should all want the intelligence and police agencies to be on the lookout for persons connected with al-Qaeda or other terrorist groups.  No argument there.  The real issue, as Justice Stevens noted, is the means by which the government goes about that mission.  I did not follow the criminal trial closely because the key issues surrounding Padilla’s imprisonment (military custody and the legality of the interrogation tactics that were used against him) were not in play–though they may now come up on appeal. 

Although the federal government was able to persuade a jury that Padilla broke the law and was involved in a murderous conspiracy with al-Qaeda, we should all be troubled that this prisoner was locked up for five years before an independent tribunal could affirm the allegations.  If the wheels of justice turned slowly in this case–and they unquestionably did–it means the same thing might happen tomorrow to another American citizen right here in the U.S.  On paper, the Constitution guarantees everyone “speedy trials” so as to minimize the hardship on innocent people who get charged with crimes they did not commit.  Reasonable people can disagree about what “speedy” means, but I’m sure that five years imprisonment ain’t speedy.  We need to be vigilant about the weakening of that guarantee, as well as all the others.

For some additional Cato work about the Padilla case, go here, here, and here.

For more about the constitutional record of the Bush administration, go here.

RomneyCare Falls A Bit Short

When Mitt Romney signed the Massachusetts health care plan into law, he bragged that it would provide universal health care coverage. In fact, he still says that on the campaign trail. After all, the plan does mandate that everyone in the state buy health insurance. The state has done pretty well at the welfare aspects of the bill, signing up some 150,000 people for subsidized insurance (families of four earning as much as $62,000 are eligible for subsidies). But the latest reports from Massachusetts indicate that of 170,000 people who are uninsured but have incomes too high for subsidies, only 17,500 have complied with the mandate so far. Someone should have pointed out that the Massachusetts mandate is probably unenforceable and almost certainly not going to achieve universal coverage. Oh, that’s right, we did.