Cato Daily Dispatch for December 10, 2003
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High Court Upholds Campaign Finance LawTwo Dead in Bootleg Cigarette Shooting
Boston, N.H. Look to Canada for Drugs
High Court Upholds Campaign Finance Law
"A sharply divided Supreme Court upheld key features of the nation's new law intended to lessen the influence of money in politics, ruling today that the government may ban unlimited donations to political parties," The Associated Press reports.
"Those donations, called 'soft money,' had become a mainstay of modern political campaigns, used to rally voters to the polls and to pay for sharply worded television ads."
Cato filed an amicus brief in the Supreme Court case, available here.
John Samples, director of Cato's Center for Representative Government, made the following comments on today's decision: "Today is a sad day for freedom of speech and political activity. In the past, the Supreme Court has enforced real, though imperfect, limits on the power of Congress to regulate political speech.
"Far from protecting political freedom, a slim majority of the Court has now expanded the power of Congress to regulate and to harass individuals and groups who criticize incumbents. The question remains whether the Court in the future will enforce any constitutional protections for the funding of political activity challenging the Congressional status quo."
Two Dead in Bootleg Cigarette Shooting
"Two people have been murdered and two others shot in separate acts of violence tied to a surge in cigarette bootlegging that has rocked the Big Apple in the aftermath of the whopping cigarette tax hike," the New York Post reports.
"The allure of easy profit - as much as $50 per carton - has drawn to the lucrative illegal cigarette trade a variety of criminals, from Russian thugs in Brighton Beach to gangs in Chinatown to suspects with ties to the terror group Hezbollah, police and federal officials say."
"Proponents of high cigarette taxes portray them as innocuous levies that improve public health," writes Patrick Fleenor, author of "Cigarette Taxes, Black Markets, and Crime: Lessons from New York's 50-Year Losing Battle." "Yet those taxes have long been known to have a dark side. Since the first state cigarette taxes were imposed in the 1920s, black markets and related criminal activity have plagued high-tax jurisdictions. Such activity has proven to be resistant to law enforcement curtailment efforts."
Fleenor concludes: "The negative side effects of high cigarette taxes in New York provide a cautionary tale that high tax rates have serious consequences--even for such a politically unpopular product as cigarettes."
Boston, N.H. Look to Canada for Drugs
"The Republican governor of New Hampshire and the Democratic mayor of Boston launched programs Tuesday to allow residents to buy lower-cost drugs from Canada, adding momentum to a growing movement that would defy the Food and Drug Administration," USA Today reports.
"The efforts by New Hampshire and Boston -- which said they can't afford to wait for federal approval -- will be watched by states and cities that want to lower their budgets by buying drugs from Canada, where price controls keep costs lower than in the USA."
In "Conservative Drug Split," Cato President Edward H. Crane and Vice President for Legal Affairs Roger Pilon write: "Because our drug market, burdened as it is with regulations and cost controls, is still free relative to such systems [abroad], America's drug companies, which do most of the world's drug research and development, recoup most of their costs, including R&D costs, in the domestic market, then sell abroad at prices far below true costs. Foreigners are thus classic free riders. As with defense, Americans are underwriting a good part of the health-care costs of the rest of the world."
They go on to say: "[D]ropping trade barriers and freeing U.S. consumers to purchase drugs at far lower prices overseas would significantly threaten the profit margins of the pharmaceutical companies. These companies would be forced to present the price-setting countries with an ultimatum: Either liberalize your market or we will leave. It's hard to imagine that countries in this situation will deny their citizens access to life-saving drugs. Instead, they will most likely ease their controls and increase the price they are willing to pay for their drugs. ... It is neither right nor good that Americans bear so great a portion of the health-care costs of the world."
Jonathan Block, editor, jblock@cato.org
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