Tag: New York

The Terrorism Risk of Asylum-Seekers and Refugees: The Minnesota, New York, and New Jersey Terrorist Attacks

News stories are now suggesting that the Minnesota stabber Dahir Adan entered the United States as a Somali refugee when he was 2 years old.  Ahmad Khan Rahami, the suspected bomber in New York and New Jersey, entered as an Afghan asylum-seeker with his parents when he was 7 years old.  The asylum and refugee systems are the bedrocks of the humanitarian immigration system and they are under intense scrutiny already because of fears over Syrian refugees.    

The vetting procedure for refugees, especially Syrians, is necessarily intense because they are overseas while they are being processed.  The security protocols have been updated and expanded for them.  This security screening should be intense.  The process for vetting asylum-seekers, who show up at American ports of entry and ask for asylum based on numerous criteria, is different.  Regardless, no vetting system will prevent or detect child asylum-seekers or child refugees from growing up and becoming terrorists any more than a child screening program for U.S.-born children will be able to prevent or detect those among us will grow up to be a terrorist. 

Adan and Rahami didn’t manage to murder anyone due to their incompetence, poor planning, potential mental health issues, luck, armed Americans, and the quick responses by law enforcement.  Regardless, some may want to stop all refugees and asylum seekers unless they are 100 percent guaranteed not to be terrorists or to ever become terrorists.  Others are more explicit in their calls for a moratorium on all immigration due to terrorism.  These folks should know that the precautionary principle is an inappropriate standard for virtually every area of public policy, even refugee screening.   

Should Low-Skill Workers Eat Cake?

Yesterday, the governors of California and New York signed legislation to raise their states’ minimum wage over the next few years to $15 an hour throughout California and much of New York. Similar proposals are percolating in other state and local governments, and Democratic presidential candidate Bernie Sanders has called for a national minimum wage of $15/hour.

Predictably, critics of raising the minimum wage are arguing that the higher wage floor will hurt employment for low-skill workers, the very people the wage floor is intended to help. A worker will be employed only if the value of his output is greater than the cost of employing him—a cost that includes wages, employer payroll taxes (e.g., Social Security, Medicare, unemployment insurance), training and outfitting costs, the new health care mandate and other benefits, etc. According to these opponents, the higher wage floor will reduce employment for low-skill workers and encourage employers to find non-labor ways to accomplish low-skill tasks (e.g., ATM machines, self-serve gas pumps, vending machines, automated phone answering systems).

Wage-increase supporters dismiss this concern, claiming there’s no proof that a higher wage floor hurts employment. A very large body of empirical research indicates otherwise, however, with the negative effects falling mainly on workers below age 25 (which isn’t surprising, as 77% of workers earning the federal minimum wage are below age 25, and they have few demonstrated work skills). Wage-increase supporters can argue the research isn’t unanimous, but given the one-sidedness of the extensive empirical evidence, that argument sounds a bit like climate change denial—if not creation science.

More thoughtful wage-increase supporters have begun offering a different argument: Yes, they concede, raising the minimum wage can hurt low-skill employment. But that harm is a worthwhile tradeoff for better wages for the remaining low-skill work: some workers may lose their jobs or some work hours, but others will get a raise.

This argument is important and interesting—in a Marie Antoinette* sort of way.

Traveling Into the Future, Despite Regulatory Traffic

Several science-fiction-like advances in transportation are currently underway. They may revolutionize the way people get around. Among the most exciting are hoverboards, driverless cars, and even fully re-usable rockets that could radically reduce the cost of space launches.   

Hoverboards are now a reality. You might even receive one as a present during the holidays. While they may not look exactly like the ones in Back to the Future, actual self-balancing, hands-free scooters are now on the market. Unfortunately, government regulations prohibit you from riding one outside if you live in the United Kingdom , or in New York City.   

Driverless cars are another promising technology. Just last week, Google patented a way for driverless cars to communicate with pedestrians, as well as a way for the company’s driverless cars to automatically unlock as their passenger approaches by recognizing the passenger’s Bluetooth device. As if the potential convenience of a computerized personal chauffeur weren’t enough, you may never need to fumble looking for your car keys again.  

The Year of Educational Choice: Update II

Educational choice is on the march.

As I noted back in February, the stars appeared to be aligned for a “Year of Educational Choice.” By late April, state legislatures were halfway toward beating the record of 13 states adopting new or expanded school choice laws in 2011, which the Wall Street Journal dubbed the “Year of School Choice.” The major difference in the types of legislative proposals under consideration this year is that more than a dozen states considered education savings account (ESA) laws that allow parents to purchase a wide variety of educational products and services and save for future education expenses, including college.

On Monday, Tennessee Gov. Bill Haslam signed the Individualized Education Act, an ESA program for students with special needs. Earlier this year, Mississippi enacted the nation’s third ESA law, behind Arizona and Florida. Lawmakers in Montana also passed an ESA, but Gov. Steve Bullock vetoed it earlier this month.

Nevertheless, Gov. Bullock allowed a universal tax-credit scholarship bill to become law without his signature. The law is an important step toward educational freedom, albeit a very modest one. Taxpayers can only receive tax credits for donations to scholarship organizations up to $150, meaning that a single $4,500 scholarship will require 30 donors. No other state has such a restrictive per-donor credit cap. Unless the legislature raises or eliminates the cap, Montana’s tax-credit scholarship program is likely to help very few students.

Scholarship Tax Credits Do Not Financially Benefit Donors

In a desperate attempt to halt New York legislators from enacting a new school choice law, teachers and their allies have resorted to misrepresenting what the proposed law would do.

Scholarship tax credit laws make donations to nonprofit scholarship organizations eligible for tax credits, rather than merely tax deductions. The scholarship organizations help low- and middle-income families afford tuition at the schools of their choice. The New York proposal, known as the Education Investment Tax Credit, would create a 75 percent tax credit, meaning that a $1,000 donation to a scholarship organization would reduce a donor’s tax liability by $750. Between the donation and the remaining $250 in tax liability, the donor would have given a total of $1,250.

New York teachers unions and the think tank they fund are trying to portray this arrangement as somehow financially benefiting the donors. Sadly, some media outlets have reported their spin verbatim, including WXXI News:

“It’s nothing more than a giveaway to the wealthy and corporations,” said Ron Deutsch, with the think tank Fiscal Policy Institute, which is in part funded by unions.

He says it’s also bad tax policy that could harm other charitable organizations. Under current laws, a million dollar charitable donation nets the donor just $22,000 in tax credits. He says education tax credit donors would get $750,000 back from a million dollar donation. Under a Senate version of the plan, donors would get $900,000 dollars back.

It takes real chutzpah to describe an arrangement that decreases the amount of money in the donor’s pocket as a “giveaway.” Deutsch falsely claims that the donors receive a “net” benefit, but the net is actual in the negative. The hypothetical donor that Deutsch describes could have paid only $1,000,000 in taxes, but instead chose to pay $250,000 in taxes and donate an additional $1,000,000. In other words, the donor would have saved $250,000 had she decided not to donate anything.

Some giveaway!

Scholarship tax credits expand educational opportunities for low-income families–the type that have been rallying in support of the proposal in recent weeks. Donors do not financially benefit from their donations whatsoever. Media outlets should not let themselves be used to spread misinformation to the contrary.

For those interested in learning how scholarship tax credit laws affect the lives of real families, watch the Cato Institute’s recent film, “Live Free and Learn”:

Several States Expand Educational Choice

On Friday, Gov. Rick Scott signed legislation that expands eligibility for the Florida’s longstanding scholarship tax credit (STC) program and creates a new education savings account for students with special needs. Earlier this year, Oklahoma expanded its STC program and Arizona expanded both its STC and education savings account programs. Kansas Gov. Sam Brownback signed legislation creating a new STC program, though unfortunately it is limited only to low-income students assigned to government schools that are designated as “failing” by the state’s board of education. Students in “non-failing” schools that are nevertheless failing to meet their needs are not eligible to receive scholarships.

The changes to Florida’s scholarship program were mostly positive. Florida eliminated the requirement that students first spend a year at a government school before being eligible to receive a scholarship. Also, starting in 2016-17, the income eligibility cap for first-time recipients will increase to include middle-income families (from 185 percent of the federal poverty line to 260 percent), with priority given to lower-income students. Students from middle-income families will receive smaller scholarships. Students in foster homes will be eligible regardless of their foster family’s income.

Unfortunately, the law adds new rules regulating the operation of scholarship organizations. Florida already has the most regulated scholarship program in the nation, which explains why the state has only one scholarship organization while other states have dozens or even (in the case of Pennsylvania) hundreds.

Back in March, the bill’s prospects seemed dim. The Florida Speaker of the House and Senate President battled over whether to mandate that private schools administer the state test (i.e. – Common Core) as a condition of receiving scholarship students. As a result, the bill’s sponsor withdrew the legislation. That poison pill would have severely restricted school autonomy and parental choice. Fortunately, the resurrected bill that the governor signed into law did not mandate state tests. Participating schools must still administer nationally norm-referenced tests.

Florida’s new education savings account for students with special needs is based on Arizona’s highly popular program, but with a twist: nonprofit scholarship organizations will administer the program rather than the state, though the accounts will still use public funds.

Parents will be able to use the funds to pay for a variety of educational services, including private school tuition, tutoring, online education, curriculum, therapy, post-secondary educational institutions in Florida, and other defined educational services. … The maximum amount for the Personal Learning Scholarship Account shall be equivalent to 90 percent of the state and local funds reflected in the state funding formula that would have gone to the student had he or she attended public school.  

Students qualify if they reside in Florida and are eligible to enroll in kindergarten through 12th grade who have an Individualized Education Plan or have been diagnosed with one of the following: autism, Down syndrome, Intellectual disability, Prader-Willi syndrome, Spina-bifida, Williams syndrome, and kindergartners who are considered high-risk. 

Unfortunately, New York legislators ended the session without passing an educational choice bill, despite majority support in both chambers of the legislature and a promise by Gov. Andrew Cuomo to Timothy Cardinal Dolan that he would support STC legislation. Given the legislative support, the New York Post faulted Gov. Cuomo for the failure to pass the legislation:

The human tragedy, of course, is who will pay the price for Cuomo’s alliance with the Working Families Party & Co.: i.e., the children of actual working families, who have no avenues of escape from rotten public schools where they aren’t learning.

Turning New York City into Detroit?

I recently speculated whether Detroit’s fiscal problems should be a warning sign for the crowd in Washington.

The answer, of course, is yes, though it’s not a perfect analogy. The federal government is in deep trouble because of unsustainable entitlement programs while Detroit got in trouble because of a combination of too much compensation for bureaucrats and too many taxpayers escaping the city.

A better analogy might be to compare Detroit to other local governments. Some large cities in California already have declared bankruptcy, for instance, and you can find the same pattern of overcompensated bureaucrats and escaping taxpayers.

And the same thing may happen to New York City if the next mayor is successful in pushing for more class-warfare tax policy. Here are some excerpts from an excellent New York Post column by Nicole Gelinas:

Mayoral candidate Bill de Blasio…thinks New York can hike taxes on the rich and not suffer… De Blasio’s scheme is this: Hike income taxes by 13.8 percent on New Yorkers making above half a million dollars annually….After five years, de Blasio would let this tax surcharge lapse, and — he says — find another way to pay.

But there’s a big problem with de Blasio’s plan. Rich people are not fatted calves meekly awaiting slaughter.

In 2009, the top 1 percent of taxpayers (the 34,598 households making above $493,439 annually) paid 43.2 percent of city income taxes (they made 33.9 percent of income), according to the city’s Independent Budget Office. Each of these families paid an average $75,477. No, most people won’t up and leave (though if 20 percent did, they’d leave New York with less money than before the tax hike). But they can rearrange their incomes. Unlike most of us, folks making, say, $10 million have considerable control over how and when they get paid. That’s because much of their money comes from cashing out a partnership, or selling stock or a house or a painting. To avoid a tax hike, it’s easy enough for them to pay themselves earlier by selling their stuff earlier — before the tax hike. The city made $800 million in extra taxes last year because rich people sold their stuff before President Obama increased investment taxes in December. Or, people can pay themselves later — after the five years’ worth of higher taxes are up.

Gelinas makes some very important points. She warns that the city would have less money if just 20 percent of rich people escaped. She doesn’t think that will happen, but she does explain that rich people can stay but take some simple steps to reduce their taxable income.

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