...and apparently thinks connecting gun users with marksmanship trainers isn't quite commercial enough. And now the Goldwater Institute in Arizona is suing. The details, from a Goldwater Institute press release:
Today, the Goldwater Institute filed a legal challenge to the removal of a business advertisement from 50 Phoenix bus shelters in October 2010, claiming the city’s rules are so vague that they allow city officials to violate business owners’ right to free speech.
The Phoenix Public Transit Department says posters for a website operated by TrainMeAz did not comply with city standards for advertising at bus shelters. But city officials cannot explain how the TrainMeAZ ads are substantially different than posters that appear on bus stops throughout the city for other businesses including jewelry stores, fast-food restaurants, and weekend gun shows, said Clint Bolick, the Goldwater Institute’s litigation director.....
The Arizona Constitution protects free expression to a greater degree than the federal Constitution – it gives every person in the state the right to “freely speak, write and publish.” But the City’s ordinance permits only commercial speech at bus stops, prohibiting all other types of advertisements. This doesn’t comply with the state’s broad speech protections. In Arizona, the government may not favor one type of speech over other types.
The TrainMeAz website was created in 2010 to connect self-defense and marksmanship trainers with potential customers. To grow the new business, the website launched a promotion campaign that included roadside billboards. It also contracted for poster locations with CBS Outdoors, a private company hired by the Phoenix transit department to manage advertising at city bus stops. A week after the bus stop ads were in place, Phoenix transit officials ordered their removal. Negotiations to restore the ads failed, as the city claimed the posters did not propose “a commercial transaction.”
Jacob Sullum on the city of Boston's attempts to bar drug policy reform ads on its public transportation system back in 2002.
Today Delaware officially became the 16th state to allow medical use of cannabis. The bill signed by Gov. Jack Markell allows patients with doctor's recommendations to possess up to six ounces of marijuana at a time, which they can obtain at one of three state-licensed "compassion centers." Although the nonprofit centers are explicitly authorized by state law to grow and dispense marijuana, that does not mean they won't be raided by the DEA. According to the Justice Department's latest position, complying with state law offers no protection against federal prosecution, although that threat should not be construed as "using Justice Department resources to try to circumvent state laws on this issue," since the president promised he would not do that.
Texas A&M's Thomas Saving, a senior fellow at the National Center for Policy Analysis and a former Public Trustee of the Medicare trust fund, has put together a useful set of slides comparing the headline numbers from year's Medicare and Social Security Trustees Report with last year's: According to the official estimates (which almost certainly undersell the bad news) total unfunded liabilities for America's two big entitlements are a hair above $59 trillion. In the 75 year window, the total liability is just a shade over $33 trillion, up 10 percent from last year. And these projections assume that big cuts to provider payments to occur. How likely is it those cuts actually occur? Given that the Trustees say those cuts would almost certainly cause "Congress to intervene" on account of "severe problems with beneficiary access," I'd say the answer is "not very."
Last night the Texas House of
Representatives approved
a bill that would make TSA groping of passengers at airports in the
state a misdemeanor punishable by a $4,000 fine and up to a year in
jail. The bill, which A.P.
says was approved "with little opposition," applies to a
government employee who, "while acting under color of the person's
office or employment without probable cause to believe the other
person committed an offense... performs a search for the purpose of
granting access to a publicly accessible building or form of
transportation" and in the process "touches the anus,
sexual organ, buttocks, or breast of another person including
through the clothing, or touches the other person in a manner that
would be offensive to a reasonable person."
The Tenth Amendment Center is celebrating the vote as an example of "what James Madison implored states to do when the federal government overreaches its constitutional authority—interpose on behalf of its citizens." It notes "several incidents [that have] brought the intrusiveness of TSA screening to the nation's attention in recent weeks":
In early April, a father videotaped a TSA agent in New Orleans running her hands all over his visibly upset 6-year-old. A few weeks later, former Miss USA Susie Castillo made a tearful video after agents touched her genitalia during a pat-down. She said she came away feeling violated. And just this week, a bystander snapped a photo of screeners in Kansas City patting down an infant.
The American Conservative's Daniel McCarthy is less excited about the bill, arguing that "the Texas legislature has just done [Homeland Security Secretary Janet] Napolitano and TSA a tremendous favor":
If the bill becomes law, Texas will be on its way to becoming the first state to deprive air travelers of the option not to go through TSA's pornoscanners. It's not as if the agency recognizes any fundamental right not to be subject to the scanners...The pat-downs began as a PR move, easing resistance to the introduction of the scanners by giving travelers a (conditional) choice. The ensuing outrage over "groping" is probably not what TSA was going for, but that too serves a purpose: it sensationalizes the problem and makes the scanners seem less objectionable by contrast....
Won't it be a wonderful victory for civil liberties when the problem of intimate searches is solved and we can all go back to being X-rayed whenever we fly?
McCarthy mentions an American Conservative piece by our own Brian Doherty, who "noted how quickly we forget the freedoms we once enjoyed when traveling." I made a similar point in a December column about the TSA's new screening procedures.
More on the incidents mentioned by the Tenth Amendment Center here and here. More on TSA pat-downs here.
As this Politico piece notes,
Mitt Romney didn't convince many critics of his Massachusetts
health care overhaul in his speech yesterday. Those who didn't like
RomneyCare before the speech still didn't like it afterwards—and
quite a few folks seemed to like Romney even less for refusing to
back away from his plan.
As a political play, then, it's hard to see the speech as anything but a disaster for Romney, who clearly would like to be the GOP's next presidential nominee: Few Republican primary voters will ever see the whole mid-afternoon speech, which wasn't even broadcast on the cable news networks. But they will hear quite a bit of loud criticism of it from those who remain unconvinced by Romney's continued defense of the Bay State's mandate-and-subsidy driven health care plan. At best, Romney's approach might play well with independents, who tend to like compromise. But that won't matter if he doesn't win the nomination, which now seems all but impossible. If opposing ObamaCare in any form is a priority for the conservative base that votes in GOP primaries, then I suspect voting against Romney will be too.
Still, Romney did manage to win plaudits from at least one influential political institution: The White House. Speaking to reporters earlier today, Obama administration press secretary Jay Carney had nice things to say about Romney and the Massachusetts health care overhaul he passed: "We have said before that health care reform that then Governor Romney signed into law in Massachusetts is in many ways similar to the legislation that resulted in the Affordable Care Act...we obviously feel that Massachusetts took a smart approach towards health care reform.”
Read my not-so-enthusiastic take on Romney's speech here.
This, from Agence France Presse, is just brutal:
US officials revealed Friday they had canceled an annual visa lottery for citizens of poor nations, after a computer program failed to make a random selection among some 20 million applicants.
"Regrettably, the results that were previously posted on this website are not valid, they were posted in error," a State Department official said, referring to the http://dvlottery.state.gov/website.
"They did not represent a fair, random selection of entrants as required by US law," he added.
Some 22,000 people, who had already been told that they could go ahead and apply for a coveted visa, have now been told that the results have been voided.
"We sincerely regret any inconvenience or disappointment," the official, who asked to remain anonymous, said.
Set up in 1994, the annual Diversity Immigrant Visa program gives workers from poor countries the chance to travel to the United States on a work visa even if they do not have any relatives or an employer in the country.
The lottery is carried out by an electronic random selection among the millions of applications received every year.
For 2012, at least 100,000 hopefuls were due to be chosen out of the 14.7 million applications, comprising a total of 19.6 million people when family members are included.
The 100,000 then have the right to apply for one of the 50,000 visas which are ultimately granted, with authorities leaving room for those who drop out of the process, or are rejected by immigration officials.
"We sincerely regret any inconvenience or disappointment."
UPDATE: House Republicans are considering ending the diversity program altogether.
ABC News
reports that the Navy SEALs who raided Osama bin Laden's house
in Abbottabad, Pakistan, found a "huge" stash of pornography,
including "electronically recorded videos," in a wooden box in his
bedroom. Presumably this information is part of what former
counterterrorism adviser Richard Clarke
calls "the U.S. government's effort to discredit him after his
death so... he doesn't become a martyr in the eyes of the Arab
youth." That effort also has included the release of
outtakes from Bin Laden videos that show the terrorist
mastermind flubbing his lines and huddling under a blanket while
watching himself on TV. Another revelation from the outtakes: Bin
Laden's beard was not really black.
Do our government's propaganda specialists know what they're doing? Maybe, but what can you say about a target audience that considers watching dirty movies or dyeing your beard a bigger offense than murdering thousands of people?
What are the best ways to get America moving in terms of transportation?
At Reason Weekend 2011, Reason Foundation's annual donor event, Adrian Moore and Robert Poole spoke about the right ways to create a 21st-century transportation policy. Moore takes heavily documented aim at high-speel rail projects as tax-funded boondoggles that will certainly fail to hit ridership goals. Poole argues that pie-in-the-sky projects such as high-speed rail divert limited federal funds from much-needed infrastructure improvement and fail to tap into private capital funds that could help expand the nation's transportation network.
About 45 minutes. Filmed by Alex Manning and Paul Detrick; edited by Joshua Swain.
Go to Reason.tv for downloadable versions and subscribe to Reason.tv's YouTube channel to receive automatic notifications when new material goes live.
In the wake of a Government Accountability Office report that 247 people on the FBI's terror watch list were permitted to purchase guns last year, Rep. Mike Quigley (D-Chicago) proposed an amendment to the PATRIOT Act that would prevent anyone on a terror list from buying a firearm. Republicans on the House Judiciary Committe voted down Quigley's amendment yesterday, arguing "that restricting sales to people on the watch list would violate the Second Amendment rights of those placed on the list by mistake." After you get your jaw off the floor, read Quigley's justification for his amendment:
“Surely, we cannot look our constituents in the eye and tell them in good faith that we have decided to enact public policy that restrains some of their civil liberties for the greater good but that we refused to ask the same of suspected terrorists. I know we are smarter than that.”
And then the testimony from Paul Helmke of the Brady Campaign:
"Osama bin Laden is dead, but the war on terror is far from over," Paul Helmke, president of the Brady Campaign to Prevent Gun Violence, said in a statement. "How can the Congress pretend to be serious about protecting the nation from terrorism, while voting to allow known terrorists to buy guns?"
Here’s the problem with calling everyone on the FBI's watch list a "terrorist": Many of them aren't.
In May 2009, a report from the Inspector General for the Department of Justice found many records "for individuals who had originally been appropriately watchlisted but should have been removed from the watchlist after the case had been closed." On average, nearly two months passed between the time a person was cleared and when his or her name was removed from the watch list. "In one instance," the report reads, "we identified a former subject who remained watchlisted for nearly 5 years after the case had been closed." The report also found that some people were added to the watch list for specious reasons.
Six months after the IG's report came out, the Washington Post reported that the FBI added roughly 1,600 entries to its watch list and ordered the removal of 600 names every single day. At one point, the ACLU hypothesized that there were more than a million names on the FBI's list.
In an odd turn of events, the GOP seems more aware of these types of problems than they ever have, which explains why House leadership is having trouble whipping up the votes necessary for extending the PATRIOT Act fully entact. Democrats, meanwhile, want to use the bill to pass Trojan gun control laws.
Ron Paul made his 2012 GOP presidential bid officially officially official today. Some reactions:
But unlike [Paul's] efforts in 1988 or 2008, the explosion of US debt along with the weakening of the US dollar have turned his fringe talking points into mainstream issues. Paul was a one-man tea party before the tea party movement emerged in 2009, and his consistency as a fiscal conservative certainly gives him major street cred.
* Michael Crowley at Time lamely defends leaving Paul out of official GOP oddsmaking, while pointing out that in fact he's got more objective juice behind him than most of the other wanna-bes:
Why, then, would an oddsmaker like [Mark] Halperin ignore Paul? Because for all the money and hype the man generated last time around, he barely made a dent at the ballot box. After peaking with a 10 percent showing in the 2008 Iowa caucuses, he finished in the mid-to-low single digits in New Hampshire, South Carolina, Florida and other key primaries. In all, Paul wound up with 35 delegates at the convention–more than big boys like Rudy Giuliani and Fred Thompson, to be sure (both wound up with goose eggs), but a negligible fraction of the party’s nearly 2400 total delegates.
And how many delegates have most of the other candidates ever won?
* The Republican Jewish Coalition doesn't like his anti-foreign aid stance.
* Huffington Post sums up some of his best aspects:
He is known for holding unconventional views while keeping a smile on his face, espousing a sort of modern Republican populism without the fangs. The obstetrician has delivered more than 4,000 babies and is personally against abortion, but he doesn't think the federal government should regulate it. That's a function of state government, he says.
He has also said he wants to abolish the Internal Revenue Service, favors returning the United States to the gold standard in monetary policy and wants the U.S out of Iraq and Afghanistan.
* The OC Weekly from Southern California lists 10 Reasons to Love Ron Paul:
1) He opposes capital punishment.
2) He supports expanding ballot access to third-party candidates.
3) He opposes the War on Drugs.
4) He opposes "Don't Ask, Don't Tell."
5) He opposes the Patriot Act and torture.
6) He opposes government I.D. cards.
7) In 2009, he was one of two Members of Congress who pledged to reject U.S. government pensions.
8) He was one of four Republicans who last month voted against the GOP's so-called "Path to Prosperity" budget proposal.
9) He called Ronald Reagan a failure.
10) Nolan Ryan is a pal.
* CBS News with some good straight reporting on the announcement:
"The revolution is spreading, and the momentum is building," he said. "Our time has come."
Pointing to the role of technology in spreading his beliefs, Paul suggested that an "intellectual revolution" is underway and has helped people understand that "government isn't the solution, government really has created the problem."
Paul said that the federal government should not be an "intervener," either in personal liberty or foreign policy. He said a president should show strength not by policing the world but by "standing up for liberty" and keeping the federal government from unnecessary interference.
"I take a strict constitutional position, that the government has very little authority to get involved in our economic or personal lives," he said.
Paul pointed to the question of drug use to make his point. He said Americans "have a freedom of choice with [their] bodies," calling the idea a "basic principle of liberty." He complained that while Americans take freedom of speech and freedom of religion as a given, they "have conceded way too much to the government to decide what we put into our bodies."
Paul said that pundits "wanted to paint me as this monster" because he has said that he believes heroin should not be illegal on a federal level. Saying that he "happen[s] to have a personal real disgust with the abuse of drugs" - both illegal and prescription - Paul said that didn't mean people shouldn't have the freedom to make their own choices.
"You also have to have responsibility for what you do, and if you do harm to yourself you can't go calling to the government to penalize your neighbor to take care of you," he said.
Watch some video of his announcement, where he sounds very federalist (and makes a nod to the "Codex Alimantarius" crowd by saying the U.N. should have no authority over nutritional supplements) and calls for an end to federal intervention in education, and any foreign intervention or inflation:
UPDATE: Video of the entire announcement speech, nearly 40 minutes:
I hope that others were as
irritated as I that the New York Times chose Francis
Fukuyama, a disciple of G.W.F.
Hegel (via Alexandre Kojeve),
to
review the new edition of Friedrich Hayek's magisterial
The Constitution of Liberty. Hayek spent a huge portion of
his career explaining why such irrational rationalists as Hegel and
subsequent philosophical mind-children as Karl Marx and Martin
Heidegger are wrong and why because of their intellecutal errors,
they end up worshiping the State. In his 1992 book, The End
of History and the Last Man, Fukuyama declared that
Hegelian analysis shows:
The Universal History of mankind was nothing other than man's progressive rise to full rationality, and to a self-conscious awareness of how that rationality expresses itself in liberal self-government....Hegel was the philosopher of freedom, who saw the entire historical process culminating in the realization of freedom in concrete political and social institutions.
It is impossible for someone, even a philosopher as perspicacious as Fukuyama believes Hegel to have been, to discern the laws of history or where the "movement of the World-Spirit" is tending. As Hayek explained thinkers like Hegel and the founder of sociology Auguste Comte believed that
...they had reached a position where they were able to predict the course of the growth of Reason [and] it was only one step more to the still more presumptuous idea that Reason should now be able to pull itself up by it own bootstraps to its definitive or absolute state. It is in the last analysis this intellectual hubris, the seeds of which were sown by Descartes, and perhaps already by Plato, which is the common trait in Hegel and Comte. The concern with the movement of Reason as a whole not only prevented them understanding the process through which the interaction of individuals produced structures of relationships which performed actions no individual reason could fully comprehend, but it also made them blind to the fact that the attempt of conscious reason to control its own development could only have the effect of limiting its very growth to what the individual directing mind could foresee. ...
Hegel and Comte both singularly fail to make intelligible how the interaction of the efforts of individuals can create something greater than they know. While Adam Smith and the other great Scottish individualists of the eighteenth century -- even though they spoke of the "invisible hand' -- provided such an explanation, all that Hegel and Comte give us is a mysterious teleological force. And while eighteenth century individualism, essentially humble in its aspirations, aimed at understanding as well as possible the principles by which the individual efforts combined to produce a civilization in order to learn what were the conditions favorable to further its growth, Hegel and Comte became the main source of that hubris of collectivism which aims at "conscious direction" of all forces of society.
In his review, Fukuyama cites criticisms of Hayek
from the left and the right. From the left the claim is that
Hayek's conception of limited government permits freedom to
...be threatened by a variety of social actors, from wealthy elites to corrupt local governments to large corporations that hold a whip hand over their workers.
Apparently, Fukuyama (and the left he is characterizing) misses the fact that States (from Sumer to Rome and China to any number of European monarchies) until the rise of liberal political philosophy had always been the handmaidens of wealthy elites, corrupt, and hostile to workers. Have they never heard of "crony capitalism?" The rise of philosophical individualism and the concept that governments should be limited in their powers and enforce only general rules applicable to all equally enlarged the scope of freedom. This already-too-long blogpost is not the place to explain how this process got started and unfolded, but suffice it to say, the Hayek is better at it than someone whose explanation relies the "movement of the World-Spirit."
Next Fukuyama asserts:
A second critique of Hayek has tended to come from the right. He is necessarily a moral relativist, since he does not believe that there is a higher perspective from which one person can dictate another’s ends. Morality for him is more like a useful coordinating device than a categorical imperative. But surely the Western tradition that Hayek celebrates is as concerned with virtue as with freedom, whether from the standpoint of Christianity or that of classical republicanism. One searches in vain through this or any of his other books for a serious treatment of religion or the moral concerns that animate religious believers.
Actually, Hayek did recognize the importance of religion and morals in human life. He also argued that if social peace is to be maintained the State should be neutral with regard to those aspects of human life broadly speaking. Again enforce only general rules of tolerance rather than try to engage in some version of "statecraft as soulcraft."
A bit of Hayek on religion:
It may indeed prove to be far the most difficult and not the least important task for human reason rationally to comprehend its own limitations. It is essential for the growth of reason that as individuals we should bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depend. Historically, this has been achieved by the influence of the various religious creeds and superstitions which made man submit to those forces by an appeal to his emotions rather than to his reason.
The most dangerous stage in the growth of civilization may well be that in which man has come to regard all these beliefs as superstitions and refuses to accept or to submit to anything which he does not rationally understand. The rationalist whose reason is not sufficient to teach him those limitations of the powers of conscious reason, and who despises all the institutions and customs which have not been consciously designed, would become the destroyer of the civilization built upon them. This may well prove a hurdle which man will repeatedly reach, only to be thrown back into barbarism.
Fukuyama ends by arguing that there is a contradiction deep in the heart of the Hayekian thinking, that is, Hayek does not allow governments the same scope for innovation, planning, and experimentation that he does for individuals. Oddly, Fukuyama claims that Hayek makes this distinction based on abstract principle rather than empirical analysis. This is a serious misreading -- one of Hayek's chief points is that the consequences of a State's failed innovation or experiment are much greater than those made by individuals.
Bonus: Enjoy this Hip Hop rematch video of the Fight of the Century between Hayek and Keynes below.
Go here for my editor Matt Welch's take on the Fukuyama review.
Note: Hayek quotations taken from The Collected Works of F.A. Hayek, Vol. 13. Studies on the Abuse and Decline of Reason.
Reihan Salam at The Daily is of course glad hedge fund villain Raj Rajaratnam was convicted for insider trading, blah blah, but spells out one of the perverse results of keeping those who know the most about companies (theoretically) from helping spread that knowledge and help bake it into the price of stock through the buying and selling of stocks in those companies:
The basic idea behind these [insider trading] rules is that officers, directors and stockholders that own at least 10 percent of a company should not be allowed to use inside information to influence their investment decisions. Say a senior executive knows that his company is about to post huge losses in the next quarter. He might use this information to dump the company’s stock before outside investors catch wind of the bad news and the stock price plummets. Similarly, investors who own a big stake in a company can bend the ear of directors or executives to gain the material nonpublic information, i.e., information that only insiders have that could affect the movement of the stock price. The SEC demands that insiders file statements that reveal all of the equity securities they own, to guard against just this kind of behavior.
The result of these regulations is that American investors, large and small, keep the executives running the big public companies they invest in at arm’s length. They don’t forge long-term relationships based in mutual trust. Instead, thousands of anonymous investors pump money in and out of these companies, knowing nothing more than what appears in annual and quarterly reports....
As a result, the executives and directors of big public companies can get away with almost anything, as their investors are widely dispersed and legally barred from profiting from any effort to get under the hood of the company. The corporate scandals that marked the Enron era — the headlong rush into toxic assets, the corruption of corporate boards — all can be traced to the resulting lack of accountability. Ironically enough, insider trading rules work all too well. They’ve not only restored confidence in the stock market. They’ve created the illusion that it is safe to invest in a company without doing any due diligence of your own.
Privately held companies understand the benefits of linking ownership with oversight and with the ability to act to profit on that oversight:
Contrast this with venture capitalists, who devote considerable energy to getting to know the entrepreneurs they back. It’s not unusual for VCs to offer advice to the startups they invest in, and to devour all of the information they can to keep their partners on track. The best VCs understand that this nitty-gritty engagement in their investments can make all the difference between success and failure.
Insider trading laws have been looked at askance here at Reason by Michael McMenamin and me.
In another case that should be of great importance in shaping the post-Heller and McDonald landscape of permissible regulation of Second Amendment rights, the Second Amendment Foundation (SAF) (which fought and won McDonald v. Chicago, the 2010 Supreme Court case that established that the Second Amendment applied to state and local governments as well as the federal one) is suing to challenge Illinois' statewide ban on carrying weapons in public.
From the SAF press release:
The lawsuit alleges that Illinois statutes that completely ban the carrying of handguns for self-defense are “inconsistent with the Second Amendment.” Joining SAF are two private citizens, Michael Moore of Champaign and Charles Hooks of Percy. Named as defendants are Illinois Attorney General Lisa Madigan and State Police Superintendent Patrick Keen. SAF is represented by attorneys David Jensen and David Sigale. The lawsuit was filed in U.S. District Court for the Central District of Illinois.
“Illinois is currently the only state in the country that imposes a complete prohibition on the carrying of firearms for personal protection by its citizens,” said SAF Executive Vice President Alan Gottlieb. “The state legislature recently stopped, by a thin margin, a concealed carry measure. After the 2008 Heller ruling and last year’s McDonald ruling against the City of Chicago that incorporated the Second Amendment to the states, one would think that Illinois lawmakers would act quickly to comply with court decisions and the constitution.”....
The lawsuit insists this case is not an attempt to force Illinois into some regulatory scheme, but only to clarify that the state’s current regulatory ban on firearms carry is impermissible under the Second Amendment.
“Every other state has some kind of regulatory scenario,” Gottlieb noted. “Even in Wisconsin, where there is no concealed carry statute, the state attorney general has recognized that open carry is legal. Only Illinois makes it statutorily impossible for average private citizens to carry firearms for self-defense.
The case is called Moore v. Madigan. SAF's complaint as filed with the District Court here. The legal root of the complaint:
This action for deprivation of civil rights under color of law challenges Illinois’ statutory prohibitions on “Unlawful Use of Weapons” (720 ILCS 5/24-1) and “Aggravated Unlawful Use of Weapons” (720 ILCS 5/24-1.6) to the extent that they prohibit otherwise qualified private citizens from carrying handguns for the purpose of self-defense. Plaintiffs seek a declaratory judgment, injunctive relief, and attorney’s fees and costs.
I've been chronicling the shifts in Second Amendment law here at Reason for a while. My December 2008 feature article on Heller; my October 2010 feature article on McDonald.
As Mike Riggs noted the other day, the IRS is investigating at least five donors to 501(c)(4) organizations, asking whether their contributions were subject to the gift tax. The New York Times made this development its lead story today, emphasizing the possible impact on political spending during the 2012 election season (and including the obligatory reference to Citizens United):
Big donors like David H. Koch and George Soros could owe taxes on their millions of dollars in contributions to nonprofit advocacy groups that are playing an increasing role in American politics....
The timing of the agency's moves, as the 2012 election cycle gets under way, is prompting some tax law and campaign finance experts to question whether the I.R.S. could be sending a signal in an effort to curtail big donations.
But the Times never addresses a question that must have been on the minds of at least some readers: What the hell is a gift tax? Does the IRS, having taxed someone's income once, really expect him to hand over another chunk of it simply because he chooses to give it to someone instead of spending it on a new car, a home theater system, or a European vacation? Yes, officially it does. In practice, only wealthy people end up owing gift taxes, which are aimed at preventing them from avoiding estate taxes (another form of double taxation) by giving away their property before they die. But many people of more modest means are theoretically required to report gifts so the IRS can keep track of them.
What counts as a "gift"? Per the IRS, "any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return." That includes not only cash but "any property" that is given away or sold for less than its "fair market value" as well as interest-free or reduced-interest loans. When is a gift taxable? "The general rule is that any gift is a taxable gift," the IRS says. "However, there are many exceptions to this rule." It notes that "the laws on Estate and Gift Taxes are considered to be some of the most complicated in the Internal Revenue Code."
If you give to a qualified charity, the donation is not subject to the gift tax. (In fact, it is tax-deductible, reducing your taxable income.) Gifts to spouses, payments for another person's tuition or medical expenses, and "gifts to a political organization for its use" are "generally" not subject to the gift tax. In most other cases, gifts, including gifts to your children or grandchildren, are subject to an annual limit per recipient, currently $13,000. Above that threshold, they are taxable. But there is also a "lifetime exclusion" of $5 million, meaning you can rack up that amount in taxable gifts before you actually have to pay taxes on them. That's why only the rich need to worry about paying the tax, although everyone is supposed to be reporting gifts that count toward the lifetime limit.
The exclusion for "political organizations" includes 527 groups, which Congress specifically exempted in 2000, but not 501(c)(4) "social welfare organizations," which are tax-exempt but permitted to engage in lobbying and political campaigning, as long as the latter is not their primary focus. Unlike donations to 501(c)(3) organizations, whose political activity is subject to stricter limits, donations to 501(c)(4) groups are not tax deductible. In fact, assuming the IRS is serious about enforcing the gift tax, contributions to these organizations could be taxed twice. That's assuming the contribution exceeds $13,000 and the donor has hit his $5 million lifetime limit, which will probably be the case for anyone with a decent-sized fortune who is trying to minimize the taxes on his estate.
Addendum: In the comments, Alan Vanneman says the gift tax is not double taxation, because "if someone gives you money, dude, that's income," "so you pay tax on it." The gift tax is incurred by the donor, not the recipient. If George Soros gives $100,000 to Priorities USA, say, he's the one who owes any applicable gift tax.
Medicare’s finances are in even worse shape than previously thought, according to an annual report released by its Trustees today. The hospital fund is now slated to run out of coin in 2024, rather than 2029. Politico reports that Treasury Secretary Timothy Geithner explained that the new numbers are a result of “technical changes in the economic assumptions underlying the projections.” Translation: The economy still looks as ugly as the home of one of the Garbage Pail Kids, and that, in turn, means the Medicare's finances, which rely on the economy for their health, are more broken—and more broke—than Washington’s fiscal minders previously thought.
If anything, though, the
Trustees are still overstating the studiness of program’s finances,
which were “extended” with ObamaCare voodoo money. More from
Politico:
In last year’s report, the trustees predicted the cost savings and tax increases in the Affordable Care Act would extend the life of the Medicare trust fund for 12 years. At that time, it was expected to run out of money in 2029, rather than 2017. That was a controversial conclusion, since most Republicans think the savings in the law can be used either to extend the life of the trust fund or to pay for the new health care reform programs, but not both.
That conclusion was “controversial,” but that's not the word I would use. Instead, I would say it was wrong. As I’ve noted on multiple occasions, it’s not just Republicans who’ve argued that the administration is double counting: The Congressional Budget Office has said so too:
To describe the full amount of HI [hospital insurance] trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings.
And so has Medicare’s chief actuary:
In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.
And you know who else agrees with them? Why none other than the Obama administration's Health and Human Services Secretary, Kathleen Sebelius. True, she's tended to stick to the line that ObamaCare made Medicare's finances healthier. But in a congressional hearing this year, she was pressed on the double-counting question. Asked whether ObamaCare’s Medicare cuts were “preserving Medicare or funding the health care law,” she replied with one word: “Both.”
Should you ever trust the headline estimates from an entitlement’s trustees? Perhaps not: Last year, Medicare’s Board of Trustees essentially warned that maybe you shouldn’t believe their own report.
The Wall Street Journal’s Jess Bravin reports that retired Supreme Court Justice John Paul Stevens, the author of two major opinions upholding the rights of detainees held by the U.S. at Guantanamo Bay, believes the targeted killing of Osama bin Laden was perfectly legal:
In 2004 and 2006, Justice Stevens wrote Supreme Court opinions holding that Guantanamo prisoners could challenge their detention before neutral judges, and that while in custody were entitled to the minimal protections of the Geneva Conventions. His rulings stressed that the laws of war—of which the Geneva Conventions, ratified by the U.S., form a principal part—cannot be ignored simply because the government found it “convenient” to do so.
But on Thursday, Justice Stevens indicated that those same laws of war permit the armed forces to kill an enemy commander who remains engaged in active hostilities against the U.S., as Navy Seals did on their May 2 operation inside Pakistan. “I have not the slightest doubt that it was entirely appropriate for U.S. forces to do,” Justice Stevens said, according to Ms. Amann’s account [of Stevens’ speech at Northwestern University].
Read the rest of Bravin’s report here. I discussed the legality of the bin Laden killing last week.
N.J. Gov. Chris Christie gets high
marks for taking
on teachers, filling in unfinanced tunnel plans with cement,
and generally being open about state-level
budget woes.
But his track record on throwing good money after bad is hardly perfect. Christie is tossing $200 million of Garden State tax dough at a long-stinking shopper-tainment project once called "Xanadu" and now renamed the "American Dream" (because it's every developer's dream to get the state to pay most of the freight for private building). From an account by the Manhattan Institute's Nicole Gelinas:
Christie stood with the mall’s new developers and promised that “it’s finally going to move forward.” The governor offered $200 million in new support to the project, which has a new name — American Dream — and a not-so-dreamy new price tag: $3.7 billion.
Christie’s support is inconsistent with his values. The Republican governor should understand that there’s no place for public money in a mall, even one with indoor ski slopes.
If Xanadu’s new owners and lenders thought that American Dream’s prospects were stellar, they’d fund the thing themselves.
Of course, if they knew anything about literature or movies, they would never have named the damn thing Xanadu, as that guarantees its failure (forget Olivia Newton John's bomb flick for a moment; even in Coleridge's "vision"-poem "Kubla Khan," the place is a symbol of an unattainable goal that drives the dreamer to distraction). The project and most of the public subsidies started under Christie's predecessor, Jim McGreevy, whose administration unraveled when he made his own misstep in poetry by hiring and then allegedly harassing Israeli poet Golan Cipel as New Jersey's security czar.
But Christie is not blameless, as Gelina underscores:
It’s likely that Christie’s financial folks will design the subsidy as debt backed by future tax revenues. Many states, including New Jersey, have argued that this type of subsidy is better than cash because the future taxes wouldn’t exist without state support.
But giving away future tax revenues is no better than giving away today’s. Voters wouldn’t like it if Christie took $200 million out of this year’s budget to give to real-estate developers. Structured tax-supported financing is the same thing, in disguise, and pushes bigger deficits onto future governors’ watches.
Picking and choosing particular projects doesn’t “create” future tax revenues anyway.
Read Gelinas' whole piece here. It underscores the sad reality that even those who seem to know that We Are So Out of Money at every level of government can always find a few more nickels to rub together for well-connected pals.
And now, without further ado, Xanadu, which killed a thousand careers (rightly):
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Given the red-team/blue-team dynamic of American
politics, it was probably inevitable that discussion of energy
policy would degenerate into a debate between drillers and
renewers—between those who want more domestic oil exploration to
the exclusion of other power sources, and those who want the U.S.
to kick its petroleum habit entirely. But as A. Barton Hinkle
argues, both sides are being unrealistic.
Your Friday fun video, via Ted Gioia:
And if I link to that, I suppose I ought to link to this, too. And this. And here's Ben Harper borrowing liberally.
Doesn't matter whether it's a media scold using
the analogy to declaim
unpaid contributions to the Huffington Post, or the Senate
Majority Leader criticizing
opponents of ObamaCare, or
the most interesting man in the Senate trying to make a point
about the dangers of establishing a "right" to health
care–comparing slavery to anything short of, well, slavery, strikes
me in the best case as wildly, off-puttingly inaccurate.
Here's Rand Paul:
"With regard to the idea of whether you have a right to healthcare, you have to realize what that implies. It's not an abstraction. I'm a physician. That means you have a right to come to my house and conscript me," Paul said recently in a Senate subcommittee hearing.
"It means you believe in slavery. It means that you're going to enslave not only me, but the janitor at my hospital, the person who cleans my office, the assistants who work in my office, the nurses," Paul said, adding that there is "an implied use of force."
"If I'm a physician in your community and you say you have a right to healthcare, you have a right to beat down my door with the police, escort me away and force me to take care of you? That's ultimately what the right to free healthcare would be," Paul said.
Watch him here:
Could slaves free themselves by changing professions? Do doctors in Switzerland get taken away at gunpoint? To treat the analogy with technical seriousness, even setting aside (as if you could) the colossal weight of America's most lasting shame, is to render it ridiculous, in my opinion.
Some relevant Reason reading:
* Rand Paul, the "Great Non-Compromiser"?, Brian Doherty, Feb. 4, 2011
* Stop Smearing Federalism, Damon W. Root, Nov. 10, 2010
* Paul and the Private Parts, Jacob Sullum, May 26, 2010
* Up From Slavery, David Boaz, April 6, 2010
* Who Wins Today's Godwin Award?, Matt Welch, Dec. 7, 2009
* Crying Wolf, Michael C. Moynihan, August 2008
* The Uses of Hyperbole, Matt Welch, August 2008
* The 'White Slavery' Panic, Joanne McNeil, April 2008
Nick Gillespie and I interviewed Paul in March:
South Park creators Trey Parker and Matt
Stone have conspired with Avenue Q lyricist Robert Lopez
to create The Book of Mormon, an outrageously rude,
irreverent, yet big-hearted Broadway musical. The show relentlessly
satirizes Mormon doctrines about gays, blacks, coffee, golden
plates buried in ancient upstate New York, and God’s home on the
planet Kolob. But it also advances the notion that religious belief
can enable people to behave better toward others. Stone has called
the play “an atheist love letter to religion.” As Ronald Bailey
explains in his review, that’s a pretty accurate summation.
President Obama and his legal advisers are deliberating about how the United States military may lawfully continue participating in NATO’s bombing campaign in Libya after next week, when the air war will reach a legal deadline for terminating combat operations that have not been authorized by Congress.
Under the War Powers Resolution of 1973, a president must terminate such operations 60 days after he has formally notified lawmakers about the introduction of armed forces into actual or imminent hostilities. The Libya campaign will reach that mark on May 20.
Though Congressional leaders have shown little interest in enforcing the resolution, James Steinberg, the deputy secretary of state, was asked Thursday about the deadline at a Senate Foreign Relations Committee hearing.
He said the administration was examining the military’s “role and activities as we move through the next period of time” and would consult Congress about evaluating “what we think we can and can’t do.”
“Mindful of the passage of time including the end of the two-month period, we are in the process of reviewing our role, and the president will be making decisions going forward in terms of what he sees as appropriate for us to do,” Mr. Steinberg said.
The administration apparently has no intention of pulling out of the Libya campaign, and Mr. Steinberg said that Mr. Obama was committed “to act consistently with the War Powers Resolution.” So the Obama legal team is now trying to come up with a plausible theory for why continued participation by the United States does not violate the law.
[Via]
The Obama administration threatened two weeks ago to cut off aid to the Palestinian Authority if it proceeds with its plans to forge a unity deal with Hamas, a terrorist outfit in America’s book. The Palestinian Authority should get that promise in writing, counsels Reason Foundation Senior Analyst Shikha Dalmia in her latest column at The Daily.
Foreign aid is a curse that has ruined the Palestinians. Indeed, if the administration is seriously interested in Mid-East peace, it should also stop the massive amounts of military assistance it gives Israel. As Dalmia writes:
Contrary to half a century of conventional wisdom, foreign aid has fanned the forces of extremism on both sides, making the prospects for peace less, not more, likely. If money could buy peace, Israelis and Palestinians would now be holding hands and singing “Kumbaya,” instead of directing weapons at each other.
Read the whole thing here.
Well, not the complete opposite -- the NYPD comes off looking pretty bad. Still, this is the feel-good crime story of the week.
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