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Cato Daily Dispatch for October 19, 2001

Cato Scholar Testifies Before Presidential Social Security Commission
Congress Won't Renew Internet Tax Moratorium
Nationalizing Cipro?

Cato Scholar Testifies Before Presidential Social Security Commission

Under the shadow cast by last month's terrorist attacks and their impact on the economy, a presidential commission charged with recommending changes in the Social Security system met for a fifth time yesterday and heard conflicting advice on using a portion of the Social Security payroll tax revenue to create personal retirement accounts, according to The Washington Post.

Testifying before the commission, Michael D. Tanner of the Cato Institute, argued for the maximum use of private accounts. He said that individuals, not the government, should be allowed to invest the funds, that people should have a wide array of investment choices and that the amount of Social Security funds to be diverted to private accounts should not be limited to 2 percent or 3 percent of payroll taxes, the most common percentages mentioned.

"Once the commission has conceded that private capital investment can provide better and more secure retirement benefits, it should press [to] allow workers to control the maximum feasible amount of their retirement income," he said.

In a new Cato Briefing Paper, Peter Ferrara writes that most of these criticisms are based on misconceptions of the current system, and of the benefits of private accounts. You can also use Cato's new Social Security calculator to see how much you would save under a privatized system.

Congress Won't Renew Internet Tax Moratorium

In a move that will allow a ban on Internet taxes to expire this weekend, Congress declined today to extend it, remaining mired in a dispute over how state sales taxes should apply to billions of dollars in electronic commerce, according to The New York Times.

Analysts and lawmakers say it is unlikely that state and local governments will rush to impose new taxes after the moratorium expires on Sunday. But given enough time and an increasing need to raise revenue, that could change.

"Starting Monday, there's an opportunity for considerable economic mischief," said Sen. Ron Wyden (D-Ore.)

In a three-part series of Cato's TechKnowledge newsletter, Aaron Lukas and Adam Thierer tackle the net tax issue. Their articles and all of Cato's research on Internet taxation are available online.

Nationalizing Cipro?

According to MSNBC, Sen. Charles Schumer (D-N.Y.) is questioning Bayer's ability to produce enough of the anthrax-fighting antibiotic Cipro to meet ballooning demand, and he proposed that the government abrogate Bayer's patent on the drug and ask generic manufacturers to help build up a stockpile. Health and Human Services Secretary Tommy Thompson said officials were looking into the proposal but doubted its legality.

The New York Times reports in its front page that Canada, taking an unusual step that the United States has resisted, said yesterday that it had overridden Bayer's patent for Cipro and ordered a million tablets of a generic version from a Canadian company.

In "When Rights Collide: Principles to Guide the Intellectual Property Debate," Adam Thierer and Wayne Crews try to hammer out a consensus between both sides of the intellectual property debate. They suggest agreement can be found on three points: seeking better understanding of the constitutional clause establishing copyright, not banning new technologies or business models to solve patent or copyright problems, and removing government barriers to the marketplace's ability to protect intellectual property.

The topic of Cato's fifth annual Technology and Society Conference on Nov. 14 will be "The Future of Intellectual Property in the Information Age." More information about the conference is available online.