Archive for September, 2011
UNR’s New Center for Public Policy Studies
Posted by Tom in Symposium Notes on September 22, 2011
We were pleased to provide a kick off forum on Tuesday for the University’s new Center for Public Policy Studies. Dr. Brad Schiller announced the $1 Million challenge grant from the Koch Foundation to start an independent center within the University to study the economic effects of public policy. It will focus on the application of theory to practice. “By bringing appropriately experienced faculty to the table and engaging and education the community in public policy, the Center will establish a forum, research environment, and incubator for understanding and evaluating the interactions fo the government decisions and private enterprise.” Brad said this would be the exclusive center in the West and had the potential to reach the level of that at George Mason University. Our advantage, of course, is our greater distance from Washington D.C.!
Kristen Kennedy, Director of Development, explained the challenge grant as a match of the Koch Foundation commitment over a five year period. So if we in Northern Nevada raise commitments for $200,000 a year for the next five years, we will have matched the Koch Foundation and shown the necessary support for the Center. The donation are, of course, tax deductible and can be made in various increments. (The pledge card had increments of Contributor at $500, Supporter at $1000, and Founder’s Club at $4000.) Kristen noted that the pledges would not be called until the challenge was assured.
Jerry O’Driscoll stressed the importance of the Center for our community, state and indeed the region. To the extent we can influence public policy with sound empirical research, we will have a more vibrant, growing economy. There were, as would be expected, several questions about the normative orientation of the Center and its independence from what some perceived to be a biased academic environment. The answers were that good research is good research and ultimately supports the correct theory. To have credibility over the long term the orientation cannot be biased one way or the other. Excellent public policy is the goal.
I urge a strong support of this effort. We at Hayek are fortunate to have five brilliant economists associated with our group; three of those five are from the University. The new Center for Public Policy will only enhance our access to quality research, discussion and debate.
September Dinner Update
Posted by Tom in Symposium Notes on September 21, 2011
If participation by our group is any indication, our dinner last evening was a great success. Ty Cobb did a masterful job in taking us through the economics of immigration, dispelling any notion that the economic impact of illegal immigration is positive. The negative impacts are broad in education, health care, and criminal justice and the offsetting direct taxes like payroll and sales taxes are minuscule. The bulk of illegals are from Mexico and there is little doubt that Mexico is exporting its poverty. There is also little doubt that our unchecked demand for narcotics has turned Mexico into a killing field. Foreign investment in Mexico has done little to staunch the flow of illegals. Likewise, our “free lunch” welfare acts as a magnet even when the market economics of employment are absent or reduced.
So far the “fence” we have in place has worked to some extent but to make it impregnable would be prohibitively expensive, the law of diminishing returns in force. So to, employer enforcement has had little effect. The E-Verify system is subject to criticism on a lot of sides and not all that effective as today’s WSJ article points out.
Even our legal immigration system has serious flaws: We favor family preference rather than skill, talent and investment. We allow children of illegals born here to become automatic citizens, exacerbating the low silled impoverished family chain.
The keys to a reformed immigration system are: 1. Secure the boarders as economically as possible. 2. End the system of family preference entry in favor of one based on skill and language capability. 3. Strictly enforce a guest worker program for the needed low skilled jobs. 4. End the automatic citizenship by birth even if it requires a constitutional amendment to correct judicial misinterpretation.
We thank Ty Cobb for an enlightening discussion and the lively participation it encouraged. We will continue this important topic at our next session with some key political outreach efforts currently underway.
Texas Style Gross Receipts-Corporate Income Tax For Nevada?
Posted by Tom in State Finances, Taxation on September 17, 2011
SEPTEMBER, 15 2011
BY TYRUS W. COBB
FOR THE NEVADA APPEAL
We have long heard the refrain that Nevada’s current tax structure is not only “unbalanced,” but that it’s based on an economy that no longer exists. Specifically, adherents of moving to a different tax arrangement argue that our over-dependence on gaming and sales taxes, which themselves heavily rely on tourism, makes the state very vulnerable to downturns in the economy.
The argument seems persuasive. With the national economy in a rut, tourism is down in Ne vada, at least in that those who are coming to the state spend much less than the confident, well-heeled (especially conventioneering) vacationers who dropped big sums on our gaming tables and at our shops in the past. Increasingly our gaming enterprises depend more on “locals” than they do on visitors from other states and countries.
I have often said that those who advocate such a shift in our tax system should in turn show us a state that has a “balanced” tax structure and is doing well.
So far, their silence is deafening.
Most states that have suffered less in the recession than Nevada have extensive natural resources at their disposal and experienced a less severe housing crisis.
Their economies have little to do with the tax system.
Still, adherents of new taxes are lining up their forces, and we are witnessing some rather strange coalitions in the making. Two major Democratic tax proposals were raised in the last Legislature session, but they failed because of their very late introduction in that body and because of the ambitious nature of the taxes.
A loose coalition is emerging that would like to institute some form of a corporate income tax, with considerable interest in the Texas-style “franchise tax,” a corporate income tax by any name. However, since that is prohibited in the Texas Constitution, Gov. Rick Perry and his backers call it a “franchise tax.” Questions have been raised in the Lone Star State regarding the legality of the tax and because the franchise tax has generated far less revenue than originally anticipated.
I would advise those who are considering placing such a tax on the 2012 ballot or before the 2013 Legislature to ascertain, first, its legality with respect to the Nevada Constitution, and secondly, that it would not create more harm than revenue. Specifically, on the last point, would a corporate income tax by any name drive out many of the firms that Nevada has en ticed here with its low-tax environment?
Adherents of a franchise or corporate income tax argue that Wal mart, Costco, Kohl’s, etc., are not going to move out of the state if such a tax is instituted. Agreed. However, what I don’t know is whether or not such a tax would drive out the high-tech and financial firms that are here largely be cause of the current tax structure. I have in mind such entities as Braeburn Capital (Apple), Micro soft Licensing, Intuit, Cisco, and others.
Finally, while voters might be inclined to support some form of new revenues (at least as long as they would not have to pay the tax!), adherents of any new tax on services, on corporations, on fuel, etc., should keep in mind that the propensity to lend support would come only if taxpayers felt that the additional revenues would go to tangible projects (such as bridges and other infrastructure) rather than simply allowing the current unsustainable compensation systems to exist for government employees, especially at the local level.
Let the debate begin!
• Tyrus W. Cobb is former special assistant to President Ronald Reagan.
Individual Responsibility and Death
Posted by Tom in Entitlements, Individual Freedom, Law, Morality & Religion in the Public Square, Nationalized Health Care, Subsidiarity, Welfare on September 17, 2011
Jonathan Cohn’s TNR post, Why We Don’t Let People Die, treats Wolf Blitzer’s question whether Ron Paul was prepared to let an uninsured 30-year old with cancer die just because he could not afford the treatments. Paul talked about individual responsibility and some of the audience shouted “yes.”
Cohn points out that “As a practical matter, few of us are prepared to allow a somebody die when life-saving treatment is available, just because that person isn’t prepared to pay the bills.” He goes on to point out that hospitals cannot legally refuse emergency medical treatment and that doctors are obliged to render aid under their professional oath.
He treats individual responsibility, “whether it’s the responsibility to stay healthy, the responsibility to seek timely medical care, or the responsibility to make the right choices about health insurance.” And he points out that luck, misfortune plays a significant role in medical problems and their outcomes.
Cohn concludes: “My definition of a decent society is one that protects people not only from bad luck, but also, in some circumstances, from their own bad judgment.”
It’s hard to fault his good will but not his argument. His problem is the fallacy of equating “society” to “government.” Society is composed of individuals, families, neighborhoods, communities, synagogues, churches, mosques, social service organizations, and charitable organizations. Society has moral obligations and norms. Society enforces social obligations with association and ostracization.
Government is the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, and societies. Government creates legal obligations and regulations. Its laws and regulations are frequently broad and of the “one size fits all” variety. Government enforces these obligations with civil and criminal penalties. What it extracts, it extracts at the point of a gun.
What is a social obligation is not necessarily a government obligation. Cohn misses the principle of subsidiarity, that matters ought to be handled by the smallest, lowest or least centralized competent social unit closest to the particular issue. Families, charities, social groups, hospitals can handle the case of the 30 year old with cancer who can’t afford treatment. Those groups close to the problem can make case-by-case judgments on the cancer patient’s misfortune or bad judgment. In short, they, better than the government can handle Cohn’s “in some circumstances” hedge. Likewise those groups can better handle the obese patient or alcoholic that refuses a life style change, which is the side of universal health care or health insurance that Cohn doesn’t mention.
The money that government doesn’t extract by legislating and enforcing universal health care or health insurance is money that subsidiary social groups will have to provide the necessary care in appropriate cases.
Solyndra on the Daily Show
Posted by Tom in Centrally Managed Economy, Corporate Welfare, Environment, Humor on September 16, 2011
Too funny-sad not to post:
Obama’s Attack Watch
Help Dear Leader: Spy on Your Friends and Family!
Three Levels of Immigration Solutions
Posted by Tom in Immigration on September 4, 2011
Mark Krikorian, executive director of the Center for Immigration Studies, penned an interesting article in the August 15th issue of National Review, To Reform Immigration, Legal and Illegal. The article sets out three position levels for presidential candidates, basic, upgraded, and premium. Note that he treats both legal and illegal immigration. I will attempt to thumb nail the suggestions as a prelude to our September dinner meeting:
The basic position for illegal immigrants has two elements: fencing and mandated employer E-Verification. Despite congressional mandate to double fence 700 miles of boarder the administration has not completed the job; in fact less than 1% has fencing that complies with the law. National mandated employer E-Verification will reduce demand for illegals by weakening the attraction of employment. Basic for legal immigration also has two objectives: ending the visa lottery and eliminating brother-sister chain migration. The lottery randomly provides green cards to 50,000 foreigners without any standards as to education or job skills or for that matter, wealth. The adult sibling visa brings 60,000 siblings each year to the country. This goes on ad infinitum when spouses and their siblings are considered. We are the only country to allow this without any real justification. With these two changes legal immigration could be reduced from 1.1 million to 1 million per year.
The upgraded position in each case includes the basic position plus the following: For illegals double deportations of both illegal criminals and non-criminals which will require expanded use of the “expedited removal” authority granted by Congress to avoid court processes. This in turn will require more detention beds and cooperation with local authorities. The Obama administration has refused this approach. Next, the US-VISIT program which checks entries and exits should be fully implemented. Obama has refused implementation which if used would prevent illegal immigration via overstaying short visit entries. With respect to legal immigration the upgraded program would end chain migration. We would continue to allow nuclear family immigration privileges, so foreign-born spouses and children would be covered. But there is no compelling reason to extend similar privileges to adult children or parents. This upgraded program would reduce future legal immigrations to 700,000 per year.
The premium program encompasses the first two program elements plus for illegal immigrants an end to birthright citizenship and for legal immigrants a reduction in skilled worker and refugee-asylum grounds. Each year we grant citizenship to 300,000 children of illegal immigrants or foreigners on temporary visas. Whether this requires a constitutional amendment or merely a statute is a matter of debate, but the change should be made. The skills and asylum admissions comprise about 150,000 entries per year. Both categories are often misused and should be reduced without losing their original purposes. If implemented the legal inflow would be about a half million per year.
Krikorian points out that this is by no means comprehensive of all the issues surrounding immigration but it hits the important points. I urge a full reading of the article.