Grading the Rubio-Lee Tax Reform Plan

In my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current system:

  1. High tax rates that penalize productive behavior.
  2. Pervasive double taxation that discourages saving and investment.
  3. Corrupt loopholes and cronyism that bribe people to make less productive choices.

These problems all need to be addressed, but I also acknowledged additional concerns with the internal revenue code, such as worldwide taxation and erosion of constitutional freedoms an civil liberties.

In a perfect world, we would shrink government to such a small size that there was no need for any sort of broad-based tax (remember, the United States prospered greatly for most of our history when there was no income tax).

In a good world, we could at least replace the corrupt internal revenue code with a simple and fair flat tax.

In today’s Washington, the best we can hope for is incremental reform.

But some incremental reforms can be very positive, and that’s the best way of describing the “Economic Growth and Family Fairness Tax Reform Plan” unveiled today by Senator Marco Rubio of Florida and Senator Mike Lee of Utah.

Obamacare’s Fate Turns on Whether Roberts and Kennedy Think State and Federal Exchanges Are the Same

It all depends on what the meaning of “by” is.

The four liberal justices clearly believe that an exchange established “for” or “in” a state by the federal government is the same as an exchange “established by the state,” to quote the relevant statute. Justices Scalia and Alito (and presumably the silent Thomas) equally firmly believe that words mean what they say.

So this case, as expected, turns on the views of Chief Justice Roberts and Justice Kennedy, who gave very little away at oral argument. If the government wins here, then not only will Obamacare continue to be rewritten by the IRS, but any executive agency – and any future president – will be able to rewrite any law. Accordingly, for the sake of the rule of law, I fervently hope that Roberts and Kennedy decide to enforce the Affordable Care Act as written and let Congress clean up its own mess.

New Hampshire Ends Brief Flirtation with National ID Compliance

When the REAL ID Act passed in 2005, Senator Joe Lieberman (D-CT), no civil libertarian, called the national ID law “unworkable” for good reason. It seeks to herd all Americans into a national ID system by coercing states into issuing drivers licenses (and sharing information about their drivers) according to complex federal standards.

The hook REAL ID uses in seeking to dragoon states into compliance is the threat that TSA agents will refuse IDs from non-complying states at our nation’s airports. The threat is an empty one. Consistently over years, every time a DHS-created compliance deadline has come around, state leaders with spines have backed the Department of Homeland Security down. I detailed the years-long saga of pushed-back deadlines last year in the Cato Policy Analysis, “REAL ID: A State-by-State Update.”

DHS has stopped publishing deadline changes in the Federal Register–perhaps the endless retreats were getting embarrassing–and now it has simply said on its website that TSA enforcement will begin sometime in 2016. But it’s evidently back-channeling threats to state officials. Those folks–unaware that REAL ID doesn’t work, and disinterested in the allocation of state and federal power–are lobbying their state legislatures to get on board with the national ID program.

Bibi vs. Frost

There is a lot to say about Israeli Prime Minster’s Benjamin Netanyahu’ speech to Congress today. I could object to his use of worst case scenarios and overstatements of Iranian power. Instead I’m taking issue with his treatment of Robert Frost’s The Road Not Taken. My point, besides being pedantic, is that Frost’s realist sensibility makes him a poor reference for Bibi.

Netanyahu tells us that we face a crossroads. One path is the deal being negotiated, which may contain the Iranian nuclear program temporarily but will “lead to a nuclear-armed Iran whose unbridled aggression will inevitably lead to war.” Or we can do the difficult thing and hold out for a better deal, which “would prevent a nuclear-armed Iran, a nuclearized Middle East and the horrific consequences of both to all of humanity.”

Obama Police Task Force Report Includes Worrying Recommendation

Yesterday, President Obama met with the Task Force on 21st Century Policing, which on the same day released an interim report outlining dozens of recommendations related to how policing can be improved. The report was released the day after police in Los Angeles shot and killed a man during an altercation in which, according to the LAPD, he and officers “struggled over one of the officer’s handguns.”

What makes the shooting notable is that at least one of the officers involved in the shooting was wearing a body camera. According to LAPD commander Andrew Smith, the officers who were at the scene were assigned to the LAPD’s Central Division and Safer Cities Initiative, which is outfitting officers with body cameras as part of the LAPD’s body camera pilot program. Smith has said that footage from the body camera will be used in the investigation along with footage of the shooting captured by a member of the public. 

President Obama’s Task Force interim report directly addresses police body cameras without explicitly recommending that they be required. Among the recommendations in the report is that the Department of Justice (DOJ) “develop best practices that can be adopted by state legislative bodies to govern the acquisition, use, retention, and dissemination of auditory, visual, and biometric data by law enforcement.”

The report also makes a worrying recommendation; that the DOJ’s Office of Community Oriented Policing Services (COPS Office) consider offering law enforcement agencies a financial incentive to adopt the national benchmarks and best practices they may propose. It is unclear that the COPS Office — the same office whose grants were sometimes used to fund the increased militarization of police — needs to take a lead in developing national benchmarks for police reform. As in most other policy areas, when it comes to police reform a decentralized approach is better than a centralized one.  

California Outliers

Today’s Washington Post story by Darryl Fears on California drought frequency in a warming world compelled me to take a look at the Golden State’s temperature history. In my 2011 book Climate Coup,  I showed that the alarm over California warming was rather odd, as most of the changes had taken place thirty years previously. 

That was then, and this is now. But what about history?

Long Range Bomber’s Big Bill

Over the next several months the Pentagon will award the contract for the Long Range Strike Bomber. If the Department of Defense’s history repeats itself, cost overruns on the project seem likely.

According to 2010 estimates each new plane is officially expected to cost $550 million. More recent estimates are higher. A 2014 report from the Congressional Research Service included estimates of up to $810 million per bomber. The Air Force is expected to buy 100 planes, which would cost a total of $55 billion even if the low official estimate per plane panned out.

One reason for the projected overruns is that there are only a few suppliers of military aircrafts to the Department of Defense (DoD), and so companies take advantage. The Washington Post describes the situation:

‘Given the steep barriers to entry, it is not surprising that no one has disrupted the combat aircraft market,’ [Todd] Harrison [Director of Defense Budget Studies at the Center for Strategic and Budgetary Assessments] said. Unlike the space launch industry, which also flies commercial satellites, the market for combat aircraft is dominated by a single customer: the U.S. government.

The technical challenges are great, the costs high, the industry highly regulated. And barriers to exit are low: Lose one major contract and you could be out of an industry forever. All of which is why many companies have left the business but “nobody has entered the business of building aircraft since 1969 to any meaningful degree,” said Richard Aboulafia, an aerospace analyst with the Teal Group.

And so while Silicon Valley innovation and verve upends industry after industry, the companies vying for the bomber contract are the same stalwarts that have dominated military aviation for decades.

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