In the Democratic party’s weekly radio response to President Bush, Democratic National Chair Howard Dean said, “It’s time for the President to show respect to the American people, who voted overwhelmingly to leave Iraq.”
One can support withdrawal from the floundering war with Iraq without getting carried away. The Democrats indeed took control of Congress in the last election, but the results were hardly overwhelming, nor is it clear that the vote was primarily about Iraq. In the House elections, Democrats carried the total popular vote by almost 5 million, or 52.0 to 45.6 percent. In the previous election, the Republicans had a margin of almost 3 million, but then about 37 million more people voted that year, so to some extent the shift in 2006 was a result of more Republicans than Democrats staying home.
As for Iraq, Democrats did best in 2006 among voters who said Iraq was “extremely important” or “not at all important” to them. A Democratic polling firm found that Iraq was the most important issue in the election, especially among people who voted for Democrats, though it was still only cited as most important by 37 percent. And in the exit polls corruption, terrorism, and the economy were all named as “extremely important” by slightly larger numbers of voters than Iraq.
Republican over‐spending, corruption, the religious right, health care, perceptions of a weak economy, immigration, Iraq — lots of issues pushed voters toward the Democrats in 2006. We should be careful not to over‐interpret the results of any election, as elections inevitably involve many factors. In any case, a swing of 3 or 4 percent toward the Democrats in a low‐turnout election is hardly evidence of any “overwhelming” vote, much less an overwhelming referendum on any issue.
At last — a big story about people deciding to work together to solve a widespread individual problem without asking for taxes, regulations, subsidies, or general pestering from the government.
Spearheaded by Ian Smith, a doctor and fitness guru, the 50 Million Pound Challenge is a national campaign underwritten by State Farm Insurance Co. to improve the health of African Americans.
Heart disease and diabetes are among the leading causes of death for African Americans. If that is to change, public health experts say, people must exercise more and eat better, which is easier said than done, given the dearth of high‐quality supermarkets and restaurants in poorer black communities.
With the 50 Million Pound Challenge, organizers hope to rally African Americans to trim waistlines by keeping tabs on their blood pressure, cholesterol levels and body mass index and by trimming some of the fat out of their diets.
Leave aside the reporter’s irresistible temptation to suggest that the lack of high‐quality restaurants in poor neighborhoods is why many poor African Americans are overweight. I was in a high‐quality restaurant last night, and it wasn’t easy to watch my diet there. (Besides, poor people presumably can’t afford expensive restaurants, even if they are in the neighborhood.)
The point is, most stories about obesity these days throw around misnomers like “public health” and call for government programs and restrictions on our freedom. In this case a doctor, an insurance company, and some popular entertainers got together to encourage individual people to improve their own health. Let’s hear it for the 50 Million Pound Challenge!
A story in Tax-news.com reports on sloppy security at the IRS. The Treasury Inspector General for Tax Administration found numerous instances of confidential taxpayer information being improperly safeguarded. The article highlights the risks for taxpayers, mostly because of identity theft, but the untold story is that much of the risk is a function of the current tax system. Taxpayers today are forced to divulge information about their financial assets. Why? Because the internal revenue code contains pervasive double‐taxation of income that is saved and invested. So if a thief steals an IRS laptop, he may be able to determine all of a taxpayer’s assets. Under a flat tax system, by contrast, there is no double‐taxation. Income is taxed only one time, when first earned, and there is no additional tax if people save and invest their after‐tax income. The only personal information the IRS would need to enforce a flat tax is the size of the taxpayer’s household and the level of wage and pension income. Under a national sales tax (assuming politicians could be trusted to completely eliminate the income tax), the IRS would have no personal taxpayer information:
…a new government report…has revealed just how vulnerable taxpayer data contained on employee laptops is to theft, fraud and other criminal abuses. The report by the Treasury Inspector General for Tax Administration (TIGTA) found that hundreds of IRS laptop computers and other computer devices had been lost or stolen, employees were not properly encrypting data on the computer devices, and password controls over laptop computers were not adequate. TIGTA concluded that as a result, “it is likely that sensitive data for a significant number of taxpayers have been unnecessarily exposed to potential identity theft and/or other fraudulent schemes.” The report prompted harsh criticism from Grassley, the senior Republican on the Finance Committee, who commented that: “Thieves are very good at mining sensitive data for their own end. One stolen IRS laptop could put thousands of taxpayers in jeopardy. It’s hard to see why this is still a problem when the IRS knew about it more than three years ago.” …The TIGTA report shows that theft of IRS computer equipment potentially containing sensitive information on thousands of taxpayers is running at alarmingly high levels. Between January 2, 2003, and June 13, 2006, IRS employees reported the loss or theft of at least 490 computers. A large number of IRS laptops were stolen from employees’ vehicles and residences, but 111 incidents occurred within IRS facilities, where employees were likely not storing their laptop computers in lockable cabinets while they were away from the office. …TIGTA also evaluated the security of backup data stored at four offsite facilities and found that data was not encrypted and adequately protected at the four sites. For example, at one site, non‐IRS employees had full access to the storage area and the IRS backup media. Envelopes and boxes with backup media were open and not resealed. At another site, one employee who retired in March 2006 had full access rights to the non‐IRS offsite facility when TIGTA inspectors visited in July 2006.
If the U.S. does decide to homogenize its education system with uniform national standards and tests, our misery may be lessened by some companionship from the land down under.
Australia is currently toying with the same idea, and columnist Kevin Donnelly is trying to keep his country from biting that particular bullet (or rather, the muzzle of the gun housing it).
Donnelly tempts fate, however, by suggesting a federal government role in evaluating national curricula proposed by independent sources. It’s a small political step from evaluation to prescription, and there’s no compelling reason to think that government involvement would help.
Spurred by tax competition, the flat tax revolution continues to generate positive results. Albania will have a 10 percent flat tax beginning in January 2008. The corporate rate also will be 10 percent, as will the payroll tax. The latter reform is particularly interesting since many of the flat tax nations in Eastern Europe retain punnitive payroll tax rates — a policy that undermines the pro‐growth and pro‐employment effects of the flat tax. The Southest European Times reports:
In a bid to promote growth and improve the business climate, the administration of Albanian Prime Minister Sali Berisha plans a major overhaul of the tax system. The biggest change is a switch to a flat tax. “As of January 1st, 2008, Albania will have implemented the 10% flat tax system, one of the lowest in Europe,” Berisha told a business community meeting in late March. Corporate taxes, currently at 20%, are to be slashed in half. Social security contributions from businesses will likewise be capped at 10%. The government and other supporters of the reform say it will widen the taxable base and simplify tax administration, while also making Albania an easier place to invest. According to Finance Minister Ridvan Bode, the changes will lead to a more streamlined fiscal system. “The flat tax helps eliminate the potential arbitrage between corporate tax, dividend taxes and the income tax,” he says. VAT and other taxes will also be gradually reduced in order to woo investors, the minister added. …In the past, the IMF has been wary of plans to reduce taxes in Albania. This time, however, it seems more receptive — provided the overhaul is combined with more effective revenue collection. “We will negotiate with the Albanian government about the tax reduction, depending on the tax collection,” IMF representative Ann Margaret Westin told the press.
Alexander Russo blogs today about the disconnect in education between research and practice.
Mike Lieberman has done a good job explaining this disconnect in books like Public Education: An Autopsy. He points to the fact that, in other fields, there is a powerful market incentive for applied research. It’s R and D, not just R, and the only justification for the former is the latter. When you don’t have a market, you don’t have that systemic incentive for applied R&D. Instead, pedagogical methods are chosen for their ideological appeal (e.g. whole language), by accident (the infamous California case where Nobel laureate in physics Richard Feynman revealed that several members of his textbook adoption committee had actually rated a blank math textbook), or by conflict of interest (because there ARE incentives in our current school systems, they just aren’t market incentives that make it desirable to find and implement the best, most efficient methods).
An onerous tax burden, combined with the inevitable inefficiencies that occur when politicians try to pick winners and losers, are causing Michigan’s economy to lag compared to other states. A column in the Wall Street Journal notes that the governor wants higher taxes — policies that will accelerate Michigan’s decline:
Michigan’s private sector is contracting compared to the expanding tax bases of every other state. The economic fog will lift when policies are enacted that make Michigan a good place to do business for newcomers as well as for existing firms. This won’t happen if the legislators in Lansing, the state capital — who advocate heavier tax burdens on the remaining taxpayers to subsidize or attract firms handpicked by government officials — get their way. These targeted subsidies simply redistribute scarce income. Nor is the governor, Jennifer Granholm, moving in the right direction. Her recent call to impose a 2% tax on most services is a nonstarter. But she’s also calling for a new tax on the estates of wealthy residents, giving those with the means an even more urgent reason to leave. Michigan’s slide will continue.
If Michigan policy makers want the state to prosper, they should return to the policies that originally helped create wealth. First on the list would be repeal of the personal income tax:
Michigan was a formidable competitor prior to 1967, when the state had no personal income tax. Why not return to these days by abolishing the state’s 3.9% personal income tax and replace it with nothing? Even a slow phase‐out of the tax will allow the state to vie for business, new jobs and private‐sector investment with fast‐growing Florida, Texas and the nearly half‐dozen other states that do not levy an income tax. If Florida and Texas — two of the fastest growing states in the union — can survive without income taxes, Michigan can too.