A federal tobacco tax hike took affect today, raising the price of cigarettes by 62 cents per pack.
Appearing on CNN today, Cato’s Chris Edwards says this tax will hit the poor more than anybody.
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A federal tobacco tax hike took affect today, raising the price of cigarettes by 62 cents per pack.
Appearing on CNN today, Cato’s Chris Edwards says this tax will hit the poor more than anybody.
Taxpayer financing of congressional campaigns has returned.
Yesterday Senators Richard Durbin (D‑IL) and Arlen Specter (R‑PA) introduced a modified version of their public financing bill first proposed in 2007, now as then called the Fair Elections Now Act (FENA). The older version included “free media vouchers” and discounted ad rates for television; the new model focuses more on small contributions and matching funds from the federal treasury.
These bills to finance campaigns with government revenue are often introduced in Congress and rarely make any headway, much less pass either chamber. Their perennial failure is not difficult to understand. Members are interested in campaign finance regulations that make it more difficult for challengers to raise money. They are not interested in giving candidates federal revenue to run against incumbents. Members are especially unwilling to fund campaigns because the public takes a dim view of using taxes in this way.
FENA tries to avoid public opposition by creating the appearance that taxpayers do not actually fund this scheme.
As Politico reports:
In the Senate version, the public money would come from assessing the country’s largest government contractors with a small surcharge… In the House, the money would come from the sale of broadcast spectrum.
But the question should be asked: if public financing of campaigns will actually achieve all the great things claimed by its proponents, shouldn’t the public be asked to pay the bill? After all, the public can expect to receive the promised benefits. Why should the bill be financed by government contractors and the sale of public assets?
We know the answer to these questions. Durbin and Specter have to obscure the role of taxes in these schemes because the public would oppose the bill if taxpayers were on the hook for the funding. Yet the senators obscure rather than eliminate the role of the taxpayer who will have to pay higher levies to fund more expensive government contracts or to replace the money that might have been obtained from the sale of the spectrum. Once the FENA lunch turns out not to be free, will voters feel like paying the tab?
The rationale for the new program also merits attention. In the past, advocates of taxpayer financing argued that private financing of campaigns corrupted representation, policymaking, and the general political culture. Replacing private contributions with public financing would, it was claimed, remove private interests and end corruption. That rationale appealed to most of the supporters of public financing; they tend toward the left politically and had little trouble believing the Republicans running Congress — all of them — were corrupt. But 2006 brought the Democrats back to power, and general claims of corruption no longer fit the background assumptions of both powerful legislators and supporters of public financing. So we now hear little about corruption and a lot about how FENA will free up legislators to “tend to the people’s business.”
Will “tending to the people’s business” be enough to convince Americans to spend tax dollars funding congressional campaigns at a time of record public sector deficits brought about by reckless spending on bailouts and much else?
The question answers itself.
It is unclear whether European Union agriculture policy is more absurd or less absurd than American agriculture policy. Both systems reward special interests. Both systems distort markets. Both systems deprive people in the developing world. Both systems are bad news for taxpayers. The real issue is whether it is possible to reverse these terrible policies. Maybe a bit of satire will do the trick. Our friends at the Taxpayers Alliance in England have put together a video which uses humor to explain the absurdity of Europe’s so-called common agricultural policy.
After watching this video, I’m feeling a bit envious. My mini-documentaries on economic issues (see examples here, here, and here) have received some good feedback, but perhaps we could change more minds in America by using mockery instead of wonkery.
Tuesday, March 31, 2009
POLICY FORUM — Can the Market Provide Choice and Secure Health Coverage Even for High-Cost Illnesses?
12:00 PM (Luncheon to Follow)
In a study recently published by the Cato Institute, economist John Cochrane argues that the market can solve a huge piece of the health care puzzle: providing secure, life-long health insurance and a choice of health plans to even the sickest patients. The key, Cochrane explains, is to eliminate government policies that force the healthy to subsidize the sick, such as the tax preference for employer-sponsored coverage and other attempts to impose price controls on health insurance premiums.
Featuring John H. Cochrane, Myron S. Scholes Professor of Finance, University of Chicago Booth School of Business Research Associate, National Bureau of Economic Research; Bradley Herring, Assistant Professor, Johns Hopkins Bloomberg School of Public Health; moderated by Michael F. Cannon, Director of Health Policy Studies, Cato Institute.
Please register to attend this event, or watch free online.
P
OLICY FORUM — Drug Decriminalization in Portugal
12:00 PM (Luncheon to Follow)
In 2001, Portugal began a remarkable policy experiment, decriminalizing all drugs, including cocaine and heroin.
In a new paper for the Cato Institute, attorney and author Glenn Greenwald closely examines the Portugal experiment and concludes that the doomsayers were wrong. There is now a widespread consensus in Portugal that decriminalization has been a success. The debate in Portugal has shifted rather dramatically to minor adjustments in the existing arrangement. There is no real debate about whether drugs should once again be criminalized. Join us for a discussion about Glenn Greenwald’s field research in Portugal and what lessons his findings may hold for drug policies in other countries.
Featuring Glenn Greenwald, Attorney and Best-selling Author; with comments by Peter Reuter, Department of Criminology, University of Maryland; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute.
Please register to attend this event, or watch free online.
A few bloggers who wrote about Cato this week:
Geithner to Propose Unprecedented Restrictions on Financial System
The Washington Post reports, “Treasury Secretary Timothy F. Geithner plans to propose today a sweeping expansion of federal authority over the financial system… The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities.”
Calling Geithner’s plan another “jihad against the market,” Cato senior fellow Jerry Taylor blasts the administration’s proposal:
What President Obama is selling is the idea that government must be the final arbiter regarding how much risk-taking is appropriate in this allegedly free market economy. It is unclear, however, whether anybody short of God is in the position to intelligently make that call for every single actor in the market.
Cato senior fellow Gerald P. O’Driscoll reveals the real reason behind the proposal:
Federal agencies have long had extensive regulatory powers over commercial banks, but allowed the banking crisis to develop despite those powers. It was a failure of will, not an absence of authority. If the authority is extended over more institutions, there is no reason to believe we will have a different outcome. This power grab is designed to divert attention away from the manifest failure of, first, the Bush Administration, and now the Obama Administration to devise a credible plan to deal with the crisis.
A new paper from Cato scholar Jagadeesh Gokhale explains the roots of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve’s actions to prop up the financial sector. Gokhale argues that recovery is likely to be slow with or without the government’s bailout actions.
In the new issue of the Cato Policy Report, Cato chairman emeritus William A. Niskanen explains how President Obama is taking classic steps toward turning this recession into a depression:
Four federal economic policies transformed the Hoover recession into the Great Depression: higher tariffs, stronger unions, higher marginal tax rates, and a lower money supply. President Obama, unfortunately, has endorsed some variant of the first three of these policies, and he will face a critical choice on monetary policy in a year or so.
Obama Defends His Massive Spending Plan
President Obama visited Capitol Hill on Wednesday to lobby Democratic lawmakers on his $3.6 trillion budget proposal. Both the House and Senate are expected to vote on the plan next week.
In a new bulletin, Cato scholar Chris Edwards argues, “Sadly, Obama’s first budget sets a course for more government bloat, more economic distortions, and ultimately lower standards of living for everyone who is not living off of federal hand-outs.”
On Cato’s blog, Edwards discusses Obama’s misguided theory on government spending:
Obama’s budget would drive government health care costs up, not down. But aside from that technicality, the economics of Obama’s theory don’t make any sense.
Obama’s budget calls for a massive influx of government jobs. Writing in National Review, Cato senior fellow Jim Powell explains why government jobs don’t cure depression:
If government jobs were the secret of success, then the Soviet Union wouldn’t have collapsed, because it had nothing but government jobs. Communist China, glutted with government jobs, would have generated more income per capita than Hong Kong where, at least before the Communist takeover, there were hardly any government jobs, but Hong Kong’s per capita income was about 20 times higher than that on the mainland.
Multiplying the number of government jobs did nothing then and does nothing now to revive the private sector that pays all the bills, in large part because of the depressing effect of taxes required to pay for government jobs.
Cato on YouTube
Cato Institute is reaching out to new audiences with our message of individual liberty, free markets and peace. Last year, we launched our first YouTube channel, which has garnered thousands of views and subscriptions. Here are a few highlights:
Here’s how YouTube describes the following clip:
Daniel Hannan, Conservative MEP for South East England, gives a speech during Gordon Brown’s visit to the European Parliament on 24th March, 2009. Read Daniel’s blog at www.hannan.co.uk.
Can I import him?