Cato Daily Dispatch for November 12, 2002
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FEC Preserves Two Party SystemStates to Vote on Creating Tax Cartel
Supreme Court Takes on Porn in Public Libraries
FEC Preserves Two Party System
According to USA Today, a new law designed to wring the worst excesses out of America's political money system took effect last week. But already the law is being undermined by the agency charged with enforcing it: the Federal Election Commission.
A close look by USA Today at the FEC's 27-year history reveals an agency that puts protecting the interests of the Democratic and Republican parties ahead of policing election laws or guarding public confidence in the integrity of campaigns and elections.
Instead of banning the influence of big-bucks contributors in federal elections, the FEC has paved the way for preserving it, the new law's sponsors say. So instead of celebrating victory in their decade-long quest, they are trudging off to court to force the agency to rewrite its rules in keeping with what they intended. One of them, Sen. John McCain (R-Ariz.) calls the commission's majority "corrupt" for failing in its public-interest mission. McCain vows to remake the FEC into a more effective enforcement agency.
In a Cato Daily Commentary, "Next Stop for McCainiacs: The FEC", John Samples, director of Cato's Center for Representative Government, writes, "Far from being a weak enforcer of the law, the FEC has chilled political speech by constantly reaching for more power over our elections. The last thing we need is a stronger bureaucracy dedicated to controlling and intimidating Americans trying to exercise their constitutional rights."
"Since its creation nearly a quarter of a century ago, the FEC has been a virtual captive of 'good government' groups. At their urging it has waged war on our free speech rights, restrained only by the determination of judges to uphold the Constitution," writes Cato Vice President for Legal Affairs Roger Pilon in another Cato Daily Commentary, "A 'Radical' for the FEC".
States to Vote on Creating Tax Cartel
As the holiday shopping season shifts into high gear, revenue-hungry states will vote today on a plan to tax all Internet sales, reports The Washington Post.
Tax officials and legislators from 31 states are meeting in Chicago today to vote on a proposal to simplify their tax laws and enter into a voluntary pact to collect online sales taxes.
"It is important to understand that the 'tax simplification' process the states are advocating, in reality, is an attempt to create a collusive multi-state tax cartel and a de facto national sales tax for America," says Adam Thierer, Cato's director of telecommunications studies. "Such a result would betray the Founding Fathers' intended model of competitive federalism and would greatly discourage tax competition between the states. In that sense, this proposal can be seen as little more than an attempt to create an Articles of Confederation-style tax system for e-commerce, with the states dictating sales tax policy for the national marketplace.
"Moreover, the proponents of this sales tax cartel have wrongly blamed the Internet for perceived holes in their sales tax bases. To the extent there is any sales tax problem in the states, it is one of their own doing since politicians have spent years rigging the tax code to favor special interests or completely exempt service sector industries. The Internet only constitutes about 1 percent of total retail spending in the U.S., hardly enough consumer activity to cause a drain on state budgets."
Aaron Lukas, a former Cato policy analyst, wrote a three-part series on Internet sales tax in Cato's hi-tech newsletter "techknowledge"," "Closing the Net Tax Debate" part 1, part 2, and part 3. Lukas and Thierer collaborated on another "techknowledge" article, "Avoiding a Net Tax Cartel Catastrophe".
Supreme Court Takes on Porn in Public Libraries
The Supreme Court said today it will decide if public libraries can be forced to install software blocking sexually explicit Web sites, according to The Associated Press.
Congress has struggled to find ways to protect children from Internet pornography without infringing on free speech rights for Web site operators. Lawmakers have passed three laws since 1996, but the Supreme Court struck down the first and blocked the second from taking effect. The latest measure, signed by President Clinton in 2000, requires public libraries receiving federal technology funds to install filters on their computers or risk losing aid.
"Some argue that content that adults should be free to see would be blocked by such broad-based filtering, in violation of the First Amendment. But despite the way this issue is being portrayed, it's not primarily a free speech issue. The real problem here is government funding, not speech," says Clyde Wayne Crews Jr., Cato's director of technology policy. "Properly, a library would be funded by private donations and its management thus would make its own decisions regarding whether or not to use filtering software to block porn or violent content. No entity paying its own way or receiving voluntary donations has to worry about pleasing either anti-porn advocates or their free-speech opponents. But once government funding enters the picture, the fight leaves the realm of decisions over one's own property. Now rather than library management setting the terms, it becomes the 'right' of taxpayers who prefer to view anything they want vs. the 'right' of the taxpayers who favor filtering to protect kids. This is a battle that will always leave one side unsatisfied because one side or the other is being forced to pay taxes to support views that are to it objectionable. When would library filtering be a free speech issue? When a library totally independent of government funding was being told what materials it could make available."
Crews wrote a Cato Daily Commentary entitled "Government Can't Protect Kids from Porn--But Parents Can" that further examines the role of the government in protecting children from pornography.
Wyatt Dubois, editor, wdubois@cato.org