Thoughtless Taxation | Richard W. Rahn | Cato Institute: Commentary

Thoughtless Taxation | Richard W. Rahn | Cato Institute: Commentary: "Many Democrats, including many lame ducks, are still demanding that tax rates for entrepreneurs be increased under the absurd claim that not to do so will 'cost' the government 'almost $2 trillion over the 2011-20 period' in lost tax revenues. To believe these bogus numbers that the Joint Tax Committee staff and the administration put out about the revenue loss, one needs to believe that upper-income people will not alter their behavior when faced with higher tax rates, that high marginal tax rates on capital (the seed corn of the economy) and double taxation of it do not damage economic growth and job creation, and that the government is smaller than its optimum size to maximize the general welfare. The empirical evidence as well as good economic theory demonstrate that none of the above is true — but to those politicians, mainstream media sorts and left-wing economists who cannot understand the difference between variables and constants, facts don't matter.

The Wall Street Journal reported this past week, 'Some of the nation's largest banks are exiting or scaling back their dealings with foreign embassies and missions because of the burden of complying with money-laundering regulations.' The head of the Angolan mission to the United States said, 'Bank account closures strain relations with the U.S. ... Without bank accounts, we find it very difficult to function.' Surprise, surprise. Most people (other than members of Congress and government bureaucrats) can figure out not to take an action if the costs outweigh the benefits. U.S. government financial regulations on banks have reached the point where it is no longer profitable for banks to engage in many normal and necessary banking operations, particularly with foreigners. Not a good way to make friends.

In March, Congress passed the 'HIRE Act' which has had the unintended — but not unforeseen by many of us — consequence of causing foreign banks to withdraw from investing in the United States because of the costs and uncertain liabilities of dealing with U.S. government regulations. Thus, the United States may lose a trillion or more dollars in foreign investment under the guise of picking up a few billion dollars in tax-avoidance revenue."

"Both plans recognize that tax increases have adverse economic consequences and are far more damaging than spending cuts, but both plans endorse major tax increases. Neither plan seems to have asked the fundamental question, which is: Why do we need to have a government bigger than the revenue the tax code now produces? The simple answer is that we don't.

Government is growing faster than the private sector, and thus it is an arithmetic fact that no amount of tax increases can solve this spending problem. When a politician promises a spending 'entitlement' to one person, that politician is also making the normally unstated promise to make someone else a tax slave to pay for the entitlement."

Conservatives Share Blame for TSA's 'Freedom Fondle' | Gene Healy | Cato Institute: Commentary

Conservatives Share Blame for TSA's 'Freedom Fondle' | Gene Healy | Cato Institute: Commentary: "But when every bungled attack — no matter how inept — gets the screeching siren treatment on Drudge, what do you expect that political dynamic to produce? Sober, sensible policy?"

"when prominent conservatives brush off constitutional concerns with the bromide 'the Constitution is not a suicide pact,' (or, as Mitt Romney put it in 2007, 'Our most basic civil liberty is the right to be kept alive') is it so surprising that liberty and dignity get sent to the back of the line?

Like it or not, we live in the world the alarmists have made.

Yet, in reality, we're remarkably safe. In 2009, terrorists caused just 25 U.S. noncombatant fatalities worldwide. That's 25 too many, but 'existential,' it's not.

My colleague Jim Harper points out that, since 9/11, 'in 99 million domestic flights, transporting 7 billion people, precisely zero domestic travelers have snuck an underpants bomb onto a plane. (The one that we have seen — which did not work — came from overseas.)'

Surely the existence of the TSA — hapless and bureaucratic as they are — deters some potential bombers. Even so, the agency won't — likely can't — identify a single genuine terrorist they've caught, and it's not at all clear, according to the Government Accountability Office, that even the nude machine would have exposed the Christmas bomber.

We're safe — but not perfectly safe. Hyping and politicizing the terrorist threat won't deliver us perfect safety. Nothing can. But, as we're learning, it can put us on the path toward a society that no longer looks like America — one where you're endlessly prodded and poked — and ordered not to joke about the poking."

A Public Display of BMA Ignorance | Patrick Basham and John Luik | Cato Institute: Commentary

A Public Display of BMA Ignorance | Patrick Basham and John Luik | Cato Institute: Commentary: "proponents usually argue that the sole aim of tobacco display bans is to reduce youth smoking. So why does the BMA's statement suggest that other goals are being promoted, too? Why is Ireland now held up as a tobacco control nirvana? Most importantly, why does the BMA ignore a plethora of contrary economic evidence on the effects of such bans?

Until very recently, tobacco-control advocates campaigned for a display ban because it would lead to reduced youth smoking, full stop. But the evidence from various jurisdictions that have implemented a display ban suggests that smoking prevalence, especially among adolescents, is at best unaffected by such a ban. Indeed, there is evidence in some places that display bans have coincided with an increase in smoking.

Consequently, ban advocates are quietly and subtly moving the empirical goalposts. They are replacing youth smoking levels as the test of success with a measurement of how many young people perceive that their peers are smoking and then propagating a lower score as 'evidence' of the display ban's effectiveness. It is an intellectually dubious tactic, but left unchallenged it may do the trick, politically."