European Commission Continues Attack on Swiss Tax System

A Swiss newspaper reports on the latest skirmish in the Brussels-led effort to hinder
Switzerland’s ability to maintain pro-growth tax policy. The European Commission argues that low tax rates are somehow akin to a subsidy, while also arguing that a free-trade agreement between Switzerland and the European Union somehow obliges
Switzerland to modify its tax laws. But the most revealing part of the story is that both the socialists and the so-called conservatives in the European Parliament are in favor of this attack on tax competition:

The European Union has once again taken Switzerland to task for its policy on corporate taxes, which it claims violates a free trade accord with Bern. …Earlier this week senior EU diplomats approved a mandate for talks between the Commission and Switzerland. Brussels argues that the practice of some cantons of partially exempting profits generated abroad from local company taxes is in breach of the 1972 agreement between Bern and Brussels. However, Switzerland which is not a member of the EU, has consistently said that corporate tax and the tax policies of the cantons were never parts of the free trade agreement. …The two main political groups in Strasbourg: the Conservatives and Social Democrats, supported the European Commission in its position against Bern.

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This Is a Republic

Queen Elizabeth II is coming to Washington and Jamestown, and the Washington Post offers advice in case you should happen to meet her.

You don’t have to curtsy or bow. That requirement went out a generation ago.

Um, actually, the United States is a republic. (“And to the republic for which it stands.”) That requirement went out in 1776.

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The Case Against E-Voting

Ars Technica has an article about problems created by e-voting machines in the French elections on Sunday. Apparently, technical problems caused long lines, causing some voters to be turned away from the polls.

France’s problems are not an isolated incident. In November’s U.S. election, one county in Florida (ironically, the one Katherine Harris was vacating) seems to have lost about 10,000 votes, which happens to be smaller than the margin of victory between the candidates. And there were numerous smaller examples of e-voting problems all over the United States in the 2006 elections.

Those incidents by themselves would be a good argument for scrapping computerized voting. But the most important argument is more fundamental: e-voting is not, and never can be, transparent. The most important goal of any election system is that the voting process be reliable and resistant to manipulation. Transparency is a critical part of that. Transparency makes it more likely that any tampering with the election process will be detected before it can do any damage.

With e-voting, the process of recording, tabulating, and counting votes is opaque, if not completely secret. Indeed, in most cases, the source code to the e-voting machines is a trade secret, not available for public inspection. Even if the source code were available, there would still be no way to ensure that the software on a voting machine wasn’t tampered with after it was installed. This means that if someone did install malicious software onto a voting machine, there would likely be no way for us to find out until it was too late.

This isn’t just a theoretical concern. Last fall, Princeton computer science professor Ed Felten obtained an e-voting machine (a Diebold Accuvote-TS, one of the most widely used models in the United States) and created a virus that could be used to steal an election. The virus would spread from machine to machine through the memory cards that are inserted into the machines to install software upgrades. (Of course, Felten didn’t use his virus on any real voting machines or release the software to the public)

Although it may be possible to close the specific security vulnerabilities that Felten discovered, there’s no way to be sure that others wouldn’t be found in the future. Indeed, after being infected with Felten’s virus, a voting machine would behave exactly the same as a normal voting machine, except that it would innaccurately record some of the votes. Moreover, the virus could easily be designed to evade pre-election testing procedures. For example, it could be programmed to only steal votes at a particular date and time, or to only start stealing votes after a hundred votes have been cast. It would be very difficult — probably impossible — to design a testing regime that would ensure that a voting machine has not been compromised.

Therefore, the safest course of action is to stop using e-voting machines entirely, and to return to a tried-and-true technology: paper ballots. There are a variety of technologies available to count paper ballots, but probably the best choice is optical-scan machines. These have a proven track record and many state election officials have decades of experience working with them.

E-voting supporters point out that paper ballots have their own flaws. And it’s true: paper is far from perfect. But there’s an important difference between paper ballots and e-voting: stealing a paper-ballot election is extremely labor-intensive. To steal even a relatively minor race would involve stationing people at multiple precincts. Except in extremely close races, stealing a major race like Congress, governor, or president would require dozens, if not hundreds, of people. It’s very difficult to keep such a large conspiracy secret. As a result, voter fraud with paper ballots will almost always be small-scale. Occasionally, someone might get away with stealing an election for city council or a state representative, but races higher up the ticket won’t be affected.

In contrast, just one person can steal a computerized election if he’s in the right place. For example, a technician who serviced Diebold Accuvote-TS in the months before the 2006 elections could easily have developed a version of Felten’s virus and discreetly installed it on all voting machines in his service territory, which could have encompassed a county or perhaps even an entire state. In fact, he wouldn’t even have needed access to all the machines; simply by putting the software on one memory card in 2005 or early 2006, he could have started the process of spreading the virus from machine to machine as other technicians transferred memory cards among them.

The idea of a single person being able to steal a major election is much more frightening than the prospect of a larger group of people being able to steal a minor election. Of course, we should do whatever we can to prevent either scenario, but the risks posed by e-voting are clearly much more worrisome.

Fortunately, Congress is on the case, and may pass legislation restricting the use of e-voting machines during this session. In my next post, I’ll take a look at that legislation and consider some arguments for and against it.

Give Us Back Our Monopoly!

The governor of Ohio is threatening to kill most school choice in his state, and several leaders of urban school districts are doing all they can to help him. If you ever wanted to know what really motivates people like this, your answer is clear as day in this Cleveland Plain Dealer article:

Columbus — Leaders of Ohio’s eight big-city school districts are lobbying lawmakers this week to support Gov. Ted Strickland’s proposal to ban for-profit charter schools and ax a statewide school-voucher program.

“We strongly support his position that for-profit entities not operate in our state,” said Cleveland schools CEO Eugene Sanders, co-chairman of the Ohio 8, a coalition of superintendents and teachers union presidents from the state’s largest districts. “We think those funds can more appropriately be used in a public school context.…”

The school leaders want legislators to know they are weary of watching students, as well as tens of millions of tax dollars, fly out of their coffers and into the hands of charter schools — independent public schools that are privately run but publicly funded.

Simply put: Lousy competition is kicking our butts. We want our monopoly back!

Corruption in Atlanta Police Dep’t. ‘Widespread’

A few months ago, Atlanta police officers broke into the home of Kathryn Johnston with a “no-knock” search warrant to look for drugs. Ms. Johnston, who was 88 years old, thought she was being burglarized.  When she heard men breaking down her front door, she retrieved her handgun and shot through the door. The police shot back and killed her.

Her tragic death brought scrutiny to the police department, and what a mess it is. Yesterday, several officers pleaded guilty to criminal charges. They lied to obtain the warrant and then they tried to cover up their lies by planting marijuana and cocaine in Ms. Johnston’s home as she lay dead on the floor. 

The Atlanta chief of police apparently couldn’t clean house himself — he called 911 and asked for the FBI and federal prosecutors for assistance. Yesterday, federal officials said they are investigating a “culture of corruption.” An attorney for one of the cops involved claims that the officer was “trained” to put false information into search warrant applications! The investigation is still underway.

Last year, the Supreme Court heard a no-knock case and the majority opinion was authored by Justice Scalia. Scalia and the conservatives said that concerns about civil liberties violations were overblown in light of “the increasing professionalism of police forces.” Wrong.

The spotlight is on Atlanta because of Ms. Johnston’s death. But it would be a serious mistake for anyone to conclude that the “culture of misconduct” is unique to that city’s police department. It’s hard to say how bad it is because there’s so little interest in tackling the festering problem.  If more journalists  would take an interest, we’d see more corrective action, as happened with the Walter Reed scandal. Why not begin with the Maye case in Mississippi?

Media Bias 2?

The Politico has a story about Congress and gun control. The online headline is “Congress slow to respond to shootings with legislation.” The print headline is even stronger: “All Talk, No Progress on Gun Control in Wake of V-Tech.”

This is a standard trope of perhaps unconscious bias. “Progress” is a good thing; if Congress has made “No Progress on Gun Control,” then that’s a bad thing. It’s like the frequent media lead “Congress failed today to pass national health insurance (or an increase in the minimum wage, or global warming restrictions, or campaign finance restrictions).”

Does one ever hear “Congress failed today to reduce taxes”? “No Progress on Deregulation”? I don’t think so. Journalists unconsciously assume that Congress should Do the Right Thing. When it doesn’t, that’s “failure” or “no progress.” Journalists and headline writers should try to find neutral language to describe Congress’s actions.

I’d Be OK with Hinky, Given Post Hoc Articulation

Bruce Schneier has a typically interesting post about right and wrong ways to generate suspicion. In “Recognizing ‘Hinky’ vs. Citizen Informants,” he makes the case that asking amateurs for tips about suspicious behavior will have lots of wasteful and harmful results, like racial and ethnic discrimination, angry neighbors turning each other in, and so on. But people with expertise — even in very limited domains — can discover suspicious circumstances almost automatically, when they find things “hinky.”

As an example, a Rochester Institute of Technology student was recently discovered possessing assault weapons illegally (though that’s not necessarily good policy):

The discovery of the weapons was made only by chance. A conference center worker who served in the military was walking past Hackenburg’s dorm room. The door was shut, but the worker heard the all-too-familiar racking sound of a weapon … .

Schneier explains this in terms of “hinky”:

Each of us has some expertise in some topic, and will occasionally recognize that something is wrong even though we can’t fully explain what or why. An architect might feel that way about a particular structure; an artist might feel that way about a particular painting. I might look at a cryptographic system and intuitively know something is wrong with it, well before I figure out exactly what. Those are all examples of a subliminal recognition that something is hinky — in our particular domain of expertise.

This straddles an important line. Is it something we “can’t fully explain,” or something that feels wrong “before [one can] figure out exactly what”? My preference is that the thing should be explainable — not necessarily at the moment suspicion arises, but at some point.

I’m reminded of the Supreme Court formulation “reasonable suspicion based on articulable fact” — it was hammered into my brain in law school. It never satisfied me because the inquiry shouldn’t end at “articulable” but at whether, subsequently, the facts were actually articulated. “The hunch of an experienced officer” is an abdication that courts have indulged far too long.

I hear fairly often of “machine learning” that might be able to generate suspicion about terrorists. The cincher is that it’s so complicated we allegedly “can’t know” exactly what caused the machine to find a particular person, place, or thing worthy of suspicion. Given their superior memories, I think machines especially should be held to the standard of articulating the actual facts considered and the inferences drawn, reasonably, to justify whatever investigation follows.