Cato Daily Dispatch for October 31, 2002
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Treasury Dept. Researches Consumption TaxBush Plan Would Accelerate Judicial Confirmation Process
Government Shares Information with Private Companies
Treasury Dept. Researches Consumption Tax
The Washington Post reports that in the heart of the Treasury Department, their work deeply under wraps, tax-policy experts are hatching policy options for what could be the Bush economic team's first big idea: shifting the U.S. tax system away from taxing income, toward taxing consumption.
But taking what has long been an academic ideal and translating it into real-world tax policy would take a dramatic commitment of presidential leadership, a long education and political campaign, and a bipartisan convergence of political interests, tax-policy experts say. Few of them are holding their breath.
Cato Institute Director of Fiscal Policy Chris Edwards says, "The Bush administration's plan to move toward a consumption-based tax is a winner on all fronts. A consumption-based tax would be simpler, more efficient, pro-growth, and fairer to taxpayers.
"On the business side, a consumption-based tax would scrap the complex depreciation system for immediate capital expensing. That reform would make U.S. businesses much more competitive in the world economy and create an investment boom that would drive Americans' wages higher. On the individual side, a consumption-based tax could be arrived at by greatly expanding the Roth IRA and turning it into a Universal Savings Account. That would boost the savings rate and increase financial security for all Americans."
Edwards details the benefits of a consumption-based tax in a Cato Policy Analysis, "Simplifying Federal Taxes: The Advantages of Consumption-Based Taxation".
Bush Plan Would Accelerate Judicial Confirmation Process
President Bush proposed a plan on Wednesday to speed Senate confirmation of his hotly contested judicial nominees, seizing on an issue that could galvanize Republican conservatives in next week's congressional election, according to Reuters.
Democrats who narrowly control the Senate dismissed the proposal as a campaign ploy with scant chance of being implemented.
Decrying what he called "a poisoned and polarized atmosphere" surrounding dozens of his federal court nominees, Bush said his plan would assure each of them a timely hearing and a fair vote regardless of which party controls the Senate or the White House.
In a statement issued yesterday, James Swanson, Cato senior fellow and editor in chief of Cato's Supreme Court Review, praised Bush's proposal: "For a year and a half, since May 2001, Democrats on the Senate Judiciary Committee have thwarted President Bush's efforts to fill vacancies on an understaffed federal bench. Democrats controlling that committee have politicized the confirmation process by refusing to hold hearings for many nominees -- or once hearings have been held, by refusing to allow the full Senate to vote on many of the nominations. That scheme subverts the Constitution, undermines the rule of law, and impedes the administration of justice."
"It was high time for the president to object to the Judiciary Committee's tactic of paralyzing nominations through delay," says Swanson. "Stalling harms the nominees, the courts and the American people."
Government Shares Information with Private Companies
The Associated Press advises that student aid applicants check the fine print. The information on the application to the U.S. Department of Education is being shared with the Pentagon, Justice Department and other agencies -- even private companies like debt collectors.
A report released yesterday by congressional investigators found government agencies frequently share information gleaned from various federal applications -- sometimes without the applicant's knowledge of where it might go. And it's legal.
The information sharing ranges from passport application data -- which can be shared with foreign governments -- to details on farm loan applications. The law requires that agencies that receive the applicant's form must disclose how they use the information.
"The ease with which government shares personal information, as uncovered by this investigation, should give pause. Much of the information now being collected and shared about citizens was not collected in exchange for a service, but mandated," says Clyde Wayne Crews Jr., Cato's director of technology policy. "Especially since 9/11, database creation and government surveillance through cameras and biometrics are on the rise. In a government culture that is already sharing and consolidating databases on us without our knowledge, the government's recent assurances about its benign intent, like promises of a 'voluntary' and limited national identification card, are more clearly revealed to be fantasy. As for government's sharing our data with the private sector, a fact uncovered in the report, no information collected by force should ever be merged with private, voluntary databases."
Crews goes on to say, "With private sector information collection, familiar in marketing, we have the twin market engines of consumer acceptance and consumer rejection at work. But there's no way to say 'no' to a government so invasive of our personal lives, that forces us to relinquish personal details. If compulsory government and private marketing databases are merged, we lose control over our privacy."
Wyatt Dubois, editor, wdubois@cato.org
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