Wire Report

William F. Shughart II – Senior Fellow, The Independent Institute

William F. Shughart II is a Senior Fellow at The Independent Institute and the Frederick A. P. Barnard Distinguished Professor of Economics at the University of Mississippi. A former economist at the Federal Trade Commission, Professor Shughart received his Ph.D. in economics from Texas A & M University, and he has taught at George Mason University, Clemson University, and the University of Arizona. Professor Shughart is Editor in Chief of Public Choice, past President of the Public Choice Society, President-elect of the Southern Economic Association, Associate Editor of the Southern Economic Journal, and Book Review Editor for Managerial and Decision Economics. His books include Taxing Choice: The Predatory Politics of Fiscal Discrimination; The Elgar Companion to Public Choice: The Organization of Industry; Antitrust Policy and Interest-Group Politics, Modern Managerial Economics (with W. Chappell and R. Cottle); Policy Challenges and Political Responses: Public Choice Perspectives on the Post-9/11 World (with R. Tollison); The Political Economy of the New Deal (with J. Couch); The Causes and Consequences of Antitrust (ed. with F. McChesney); and The Economics of Budget Deficits (with C. Rowley and R. Tollison). A contributor to numerous other books, Professor Shughart is the author of more than 100 articles for scholarly journals and his popular articles have also appeared in the Wall Street Journal, Los Angeles Times, Oklahoman, San Francisco Chronicle, Investor’s Business Daily, San Jose Mercury News, Philadelphia Inquirer, San Francisco Examiner, Kansas City Star, Pittsburgh Post-Gazette, Washington Times, Detroit Free Press, Clarion-Ledger, Vision Hispana, National Post, Providence Journal, and many other publications.

Put a New Tax in Your Pipe and Smoke It.

(Wire/Ind.Inst.) – I am a college professor. My job description therefore requires that, among other things, I wear a tweed sport coat with leather elbow patches, grow a beard, spend two days a week in the classroom, and smoke a pipe.

H.R. 4439 Tobacco Tax Parity Act of 2010 (PDF 156KB)

That last essential trait is now under attack. A bill before Congress proposes to increase the federal excise tax on pipe tobacco, making it equal to the recently enacted tax on loose cigarette tobacco purchased by smokers who “roll their own.” If passed, the bill would tax pipe tobacco at nearly $25 per pound, an increase of 775 percent over the current level.

Tobacco smoking is bad for one’s health. To my knowledge, however, no scientific studies have been conducted showing that pipe smokers (or cigar smokers, for that matter) have shorter lives than nonsmokers. There certainly is no evidence that nonsmokers who are exposed to environmental pipe or cigar smoke are harmed by it. Indeed, every person who smells the ambient odor of my pipe says that they are reminded of their fathers or grandfathers.

So, why are pipe smokers selectively being targeted by Washington? The answer is political opportunism. The federal government has been on a spending binge since George W. Bush occupied the White House. Over the past nine years, America’s taxpayers have been burdened with unprecedented expansions in the federal budget to finance new educational mandates (“No Child Left Behind”), new healthcare initiatives (Medicare Part D, to pay for granny’s meds), two wars on terrorism (Iraq and Afghanistan), failed economic “stimulus” plans and the bailouts of irresponsible financial institutions.

With annual budget deficits now running at $1.4 trillion, Washington is desperate for revenue enhancements (i.e., new sources of tax revenue). Rather than increasing taxes on a broad basis, which predictably would elicit broad-based opposition from already overburdened taxpayers, it is politically expedient to single out minorities who cannot bring effective power to bear in the legislative marketplace. And so we have seen proposals to tax those who have sacrificed wages in return for generous, “Cadillac” health-insurance plans, to tax the consumers of junk food and carbonated soft drinks, and to tax transactions in common stocks.

It is naïve to think that our elected representatives are attentive to the public’s interests. What presidents and the members of Congress do in practice is to transfer wealth to the special interests that are critical to their re-election prospects. It is therefore not surprising that they finance those wealth transfers by taxing groups that are not important to them electorally.

And so the tax burden falls most heavily on anyone, anywhere who is politically impotent, especially if they can be portrayed as the consumers of products that, on the flimsiest of scientific evidence, harm themselves or impose costs on others.

That mindset unleashes the nanny state to run amok. Pipe and cigar smokers are no threat to the public’s health. Even if smoking a pipe or a cigar harms the consumers of those products, that harm is borne privately and thus is not an issue of public policy concern.

But it unfortunately is if tax policy is predatory, with the aim at raising revenue from any group that cannot marshal effective political opposition to it. Perhaps it is time to add pipe tobacco, junk food and soft drinks to the agendas of the tea parties now being organized to oppose a government that is everywhere more intrusive.

Copyright 2010 The Independent Institute

Wire Report

Jim Harper, Director of Information Policy Studies

As director of information policy studies, Jim Harper focuses on the difficult problems of adapting law and policy to the unique problems of the information age. Harper is a member of the Department of Homeland Security’s Data Privacy and Integrity Advisory Committee. His work has been cited by USA Today, the Associated Press, and Reuters. He has appeared on Fox News Channel, CBS, and MSNBC, and other media. His scholarly articles have appeared in the Administrative Law Review, the Minnesota Law Review, and the Hastings Constitutional Law Quarterly. Recently, Harper wrote the book Identity Crisis: How Identification Is Overused and Misunderstood. Harper is the editor of Privacilla.org, a Web-based think tank devoted exclusively to privacy, and he maintains online federal spending resource WashingtonWatch.com. He holds a J.D. from UC Hastings College of Law.

CATO- Thanks to the push for a more transparent Congress, we’re getting a better look at what new health care regulations might shape up to be. Alas, not a very good look: with weak justifications, the Senate Finance Committee is working on a strange “plain language” description of the bill, and apparently not planning to read or release the final language¹.

I’ve found something worth noting, though, in each of the bill versions I’ve seen. The Senate Finance Committee’s Rube Goldberg plan for health care in America has a provision establishing paragraph talking about “Eligibility Verification.”

If you want to access the “state exchanges” or collect the federal tax credits created by the bill, your eligibility will have to be verified. Here’s what it says:

Eligibility Verification. In order to prevent illegal immigrants from accessing the state exchanges or obtaining federal health care tax credits, the Chairman‘s Mark requires verification of the following personal data. Name, social security number, and date of birth will be verified with Social Security Administration (SSA) data. For individuals claiming to be U.S. citizens, if the claim of citizenship is consistent with SSA data then the claim will be considered substantiated. For individuals who do not claim to be U.S. citizens but claim to be lawfully present in the United States, if the claim of lawful presence is consistent with Department of Homeland Security (DHS) data then the claim will be considered substantiated. Individuals whose status is expected to expire in less than a year are not allowed to obtain the tax credit. Individuals whose claims of citizenship or lawful status cannot be verified with federal data must be allowed substantial opportunity to provide documentation or correct federal data related to their case that supports their contention.

CHAIRMAN’S MARK
AMERICA’S HEALTHY FUTURE ACT of 2009
Page 27

Translation: Every American who wants to access a “state exchange” or get the tax credits in the bill would have to submit data about themselves to the Social Security Administration or Department of Homeland Security for verification. If you don’t do it, no exchanges or tax credits. If your data doesn’t match, no exchanges or tax credits, unless you can convince SSA or DHS bureaucrats that you are who you say you are.

If you’re one of the millions of people about whom the Social Security Administration has bad data, plan to spend long hours waiting in line to plead with indifferent federal bureaucrats for health care access. When attacks and complications on the verification system break down, they’ll move to “strengthen” the system. Get ready to dig up your birth certificate—they’ll want to scan it into their computers—plan to be photographed and fingerprinted, and get ready to stand in line for your national ID card.

Related Materials
	Chairman’s Mark – America’s Healthy Future Act of 2009 (PDF 1.53 Mb)

Source(s): ¹Washington Examiner “Congressional leaders fight against posting bills online” by: Susan Ferrechio, Published Oct. 6, 2009

Joseph Marohl

Step One. No employee or executive of a given company can earn more than fifty times what any other employee or executive in the same company earns. No exceptions.

Step Two. Productivity and usefulness will always receive greater rewards than consumption and ineffectuality. Need will always receive greater compensation than cunning.

Step Three. No wealth is inheritable. Personal wealth dissolves upon decease. Survivors may purchase properties thus left in limbo—and in life, individuals are free to give gifts to whomever they please.

Step Four. Every college and university student will have to minor in some area to ensure that she or he can make and repair something of use to society or can provide another service that has demonstrable benefits to others.

Step Five. Nothing in the universe will cost more than a million dollars. Anyone who buys anything that costs a million dollars will know up front that he or she will never see a profit from reselling it. The cost of things will be adjusted to fit the new economy—no form of housing will cost more than $70,000, no bicycle will cost more than $100, no loaf of bread more than 25 cents, etc.

Step Six. Workers and investors will share equally in the profits of any venture—with exceptions for work and investments of exceptional value (provided such value can be supported in evidence). Workers and investors will share equally in the risks of any venture—with exceptions for workers or investors for whom the costs of the risk are demonstrably more severe than for other workers or investors.

Step Seven. Advertising will be restricted to the description of verifiable facts about the product (size, color, ingredients, etc.) or the service (time frame, processes, equipment, etc.). No promises will be made or implied that products contribute meaningfully to one’s sex life, sense of belonging, closeness to nature, patriotism, rebel image, desire for eternal youth, or admiration for small animals and children. Appeals to magical thinking or impulse will be strictly forbidden.

Step Eight. The porn industry will be recognized as a religious organization—in the service of the god Eros. Like other religious groups, it will operate tax free, yet remain free to encroach on legislation and judicial interpretation of laws uninhibitedly. If politicians and judges caught with their panties down are no more subject to censure or impeachment than a new President who commissions three Protestant prayers for his inauguration, the nation may spare itself the cost of investigating, censuring, and impeaching politicians over what they do with their willies and pussies with consenting partners.

(Of course, it would seem to make better sense to tax porn … and churches …, just to relieve the public debt, if nothing else, though arguably porn, anyway, provides a service to society.)