This is an excerpt from an article in the forthcoming issue of Free Society, which will be published on November 13.

The debate over California’s Proposition 40, a proposal for a one-time tax of 5 percent on billionaires’ assets, highlights a revealing tension in the politics of taxing wealth. Governor Gavin Newsom opposed the measure, arguing that wealthy Californians could easily leave the state and take their taxable income with them. Instead, he proposed a national billionaire tax. To a wealth tax skeptic, Newsom’s logic may seem backward. If the concern is that a wealth tax imposes high economic costs, applying it to more taxpayers would simply amplify those costs, not eliminate them.

Newsom is implicitly acknowledging the problem that Mark Cuban put more colorfully when he warned that the new California tax would push entrepreneurs and investors to other states: “If this passes, only idiot startup founders stay in Cali.”

The Newsom two-step illustrates an important political economy insight. A California wealth tax would concentrate its consequences in California. As taxpayers and businesses leave the state, taking their economic activity and employment opportunities with them, the costs of policy failure would be unusually visible.

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A few months ago, Reddit received an administrative subpoena requesting identifying information for an account that had criticized Immigration and Customs Enforcement (ICE) and the Transportation Security Administration (TSA) as well as posted biographical details about Jonathan Ross, the ICE officer who fatally shot protester Renée Good. After the user moved to quash, the administrative subpoena was withdrawn. But days after, Reddit received a grand jury subpoena for similar information. The user’s motion to quash the grand jury subpoena was denied, and the user is appealing the denial to the DC Circuit.

Cato joined an amicus brief filed by the American Civil Liberties Union (ACLU), ACLU of DC, Electronic Frontier Foundation, and Center for Individual Rights urging the court to rigorously review the basis for the grand jury subpoena. The right to anonymity is deeply rooted in American history and serves critical functions online and off. While the grand jury traditionally has broad investigative authority, judicial scrutiny is warranted where a grand jury seeks to unmask an anonymous speaker. The government’s interest in unmasking will not be sufficiently compelling to justify piercing a speaker’s anonymity unless the government has made a prima facie showing that the speaker committed a crime. Nor is unmasking an anonymous speaker to chill protected speech a proper purpose for a grand jury subpoena.

“I’m here. With you.” With those words, María Corina Machado announced her return to Venezuela on Sunday. It was enough to produce a mass outpouring of Venezuelans into the streets, forming caravans along her hundreds-of-miles journey by land from Barquisimeto to Caracas, where even larger crowds awaited.

The opposition leader delivered no speech, and the spontaneous rallies of support—which also erupted in cities far from her route—were uniformly peaceful. Her presence underscores what has been missing in Venezuela since dictator Nicolás Maduro was removed in January: political legitimacy, of which Machado is the foremost embodiment.

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The Trump administration has fared poorly in court in its attempts to shape the midterms to its political advantage, and its latest lawsuits against California and Alaska seem likely to fail as well. But would it have better luck if it dressed up a bid to intervene as a matter of national security? Courts are markedly more deferential to claims of presidential power when that is a factor, although their deference is still by no means absolute. 

Last week, NPR reported that the top Democrats on the House and Senate intelligence committees, Rep. Jim Himes (D‑CT) and Sen. Mark Warner (D‑VA), are predicting that a president unwilling to accept adverse election results will claim foreign interference. (Himes also noted that despite the administration’s rumblings on the issue, it has failed to come up with what NPR calls “legally mandated pre-election reports to Congress assessing the state of play regarding foreign election meddling efforts.”) 

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Roughly speaking, there are only two ways of changing someone’s behavior. Either you persuade him, with words or money, or you put a gun to his head. There’s no third way.

Think about it the next time you want to pass another law coercing people, backed by the guns of the state.

The trouble is that putting guns to heads is easier. Louis XIV didn’t need to persuade his subjects, or anyone else. He cast into all his cannons Ultima ratio regum, “The last argument of kings.” It’s easier.

Yet the ease corrupts the holder of the gun. In 1887 Lord Acton (1834–1902), a British Catholic and notably liberal historian, wrote a letter to a US bishop arguing against papal infallibility. He wrote, “Power tends to corrupt, and absolute power corrupts absolutely.”

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Merchants pay fees to debit card networks (called “swipe” or “interchange” fees) each time a consumer uses a card. In 2010, the Durbin Amendment capped debit card interchange fees in the United States. On October 26, the 8th Circuit Court of Appeals ruled that the Federal Reserve exceeded its authority by including costs such as a share of expected fraud losses as part of interchange fees, thus setting the cap too high. In 2025, a district court in Kentucky had upheld the Fed’s rule: if the Sixth Circuit upholds the Kentucky court, the conflict between the circuits could reach the Supreme Court. 

The legal details—including the courts’ disquisitions on economic theory and comma placement—though interesting, are a distraction: the real problem is that the Durbin Amendment is a misadventure in price controls. Price controls on financial services harm consumers, for the same reasons that price controls on gasoline or fire insurance harm consumers. When regulators force prices down, firms react by raising other prices or by cutting services or service quality. 

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For nearly a decade, the conventional wisdom in Washington has been that protectionism is good for electoral politics. Most notably, Donald Trump won in 2016, when he promised to renege on existing trade agreements and impose tariffs on US trading partners for “ripping us off,” and once again in 2024, when he doubled down on his protectionist platform by promising “universal baseline” tariffs and higher duties on discrete US trading partners. From a theoretical perspective, this political instinct makes sense: appealing to constituencies that bear the highly concentrated costs of trade liberalization seems an intuitive strategy for electoral success. To the extent that protectionism truly carried the day in these previous elections—a debatable proposition—recent polling ahead of the forthcoming midterms suggests the opposite is happening: protectionism, specifically through high, sweeping tariffs, is not just failing to attract support among voters but has become a political liability for the president’s party. 

For starters, Americans today care—a lot—about tariffs, a major shift from just a few years ago. In 2018, Cato’s Scott Lincicome documented that, according to various polls, trade was not a priority for most Americans, despite the heavy emphasis on it during the 2016 election. Meanwhile, only 1 percent of Americans surveyed by the Cato Institute/​Morning Consult in 2024 listed trade and globalization as a top three issue. (Hence, why skepticism that protectionism propelled Trump to the White House is warranted.) 

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