Category: reason

Four blue states are actually invoking federalism in a lawsuit attempting to stop the Trump Administration’s new tax rules limiting how much state and local taxes people can deduct from their federal filings.

New York, New Jersey, Connecticut, and Maryland are all suing Treasury Secretary Steven Mnuchin and the Internal Revenue Service (IRS) to try to get the United States District Court for the Southern District of New York to invalidate the new $10,000 cap on state and local tax (SALT) deductions, arguing that this new cap is “interfering with the States’ sovereign authority to make their own choices about whether and how much to invest in their own residents, businesses, infrastructure, and more—authority that is guaranteed by the Tenth Amendment and foundational principles of federalism.”

It may be perplexing to try to figure out how on earth a state can argue its sovereignty is violated when the federal government changes its own deduction rules. After all, New York and the other states are not actually being required to change their tax rates or respond to the deduction change in any way.

But here’s what they’re essentially arguing: The reduced SALT deductions don’t affect all states equally and that this all has been done to punish “blue” states. As New York Gov. Andrew Cuomo said yesterday, “this is their political attempt to hurt Democratic states. It is totally repugnant and hypocritical of the fundamental conservative ideology which they preach.”

The changes don’t actually punish states for being heavily Democratic. They do significantly impact states that have high tax rates, which, well, tend to be under Democratic control. They’re no longer being shielded from some of the consequences of all these taxes.

So, in a subtle way, there is a kernel of truth here—the change in deduction laws may, as a consequence, force these states to change their tax laws and possibly their state spending. That’s part of the nature of the complaint—that this policy “violates” federalism because it results in the federal government trampling all over and distorting state-level tax policy decisions.

There’s a fundamental flaw in this argument. It only works if you acknowledge that the deductions themselves as they existed (as far back as the income tax) have always had a distorting effect on state tax decisions. These SALT deductions are not claimed equally across the population. They disproportionately benefit the wealthiest citizens who itemize their taxes. New York calculates that New Yorkers will see a $14.3 billion tax hike without the SALT deductions. But that doesn’t mean the hike will be spread across all the citizens of the state. It’s those who earn more than $100,000 a year who claim 81 percent of SALT deductions.

As a result, states that have higher concentrations of wealthy people (like New York and Maryland) could raise taxes on their high end and be sheltered from the consequences because of the federal deductions. The “tax the rich” mentality of the politicians of these states didn’t scare all the wealthy folks away because they knew they’d be able to take it out of their federal claims.

This, Veronique de Rugy explained last year, means that the existence of the deductions was itself essentially a subsidy to states like New York and New Jersey:

Indeed, the deduction provides an indirect federal subsidy to state and local governments in high-income areas by decreasing the net cost of nonfederal taxes to those who pay them. As the Tax Policy Center notes, in some instances these state and local governments effectively “export a portion of their tax burden to the rest of the nation.”

Estimates show that by sheltering state and local taxpayers from the spending decisions of their lawmakers, the deduction encourages anywhere between 2 and 20.5 percent more spending. Not surprisingly, the deduction distorts the financing decisions made by state and local lawmakers. In 2016, for instance, Alaska Gov. Bill Walker cited SALT as instrumental in proposing a hike in income taxes over a hike in the sales tax. He said, “We selected an income tax over a sales tax for a couple of reasons. … State income taxes are deductible from your federal taxes.”

Translation: “Thanks to SALT, we can increase your taxes without upsetting you as much as we should.” You don’t have to be a genius to understand that when taxpayers are less vigilant about policy changes and lawmakers’ spending behaviors, we don’t get the best policies implemented.

Just ask New Jersey, whose black hole of public employee pension debt keeps getting worse while thousands of retired public employees earn six-figure pensions at taxpayers’ expense. That’s what they’re trying to protect with this lawsuit.

Cuomo complains that it will make New York “less competitive” than other states. You know how to fix that? Lower your tax rates!

Read the lawsuit here.

A 34-year-old Texas man became the 13th prisoner to be executed in the United States in 2018, but not before the family of his victim fought for him to receive clemency for his 2004 crime. Fourteen years ago, 21-year-old Christopher Anthony Young of San Antonio sexually assaulted a woman at gunpoint in front of her three children and stole her vehicle. Young then made his way to a convenience store owned by 55-year-old Hasmukh “Hash” Patel. He pulled out his gun and demanded money. The attempted robbery turned fatal when Young shot Patel, who tried to run away. Police found Young the next morning, and he was convicted of the murder and sentenced to death by a Bexar County judge in 2006.

Since that time, a diverse group of people have worked to obtain clemency for Young so that he could instead serve life in prison. Among those trying to get Young off death row was his victim’s own son, 36-year-old Mitesh Patel. Patel, who once planned to watch Young’s execution, became a prominent voice in the fight for Young’s life after seeing his remorse.

In an interview with the Houston Chronicle, Young and Patel each explained their respective change of hearts. According to Young, he stopped placing the blame on others and took responsibility for the actions that led him to death row. “And that’s a hard realization,” he added. As Young’s thinking began to change, he was contacted by Los Angeles-based filmmaker Laurence Thrush for a project about David Dow, the capital defense lawyer representing Young. The project eventually fell through. Despite this, the men grew to have a relationship that inspired Thrush to make a video with the intent of saving Young’s life.

It was the videos captured by Thrush that led Patel to have his own realization.

“I assumed he was a typical death row inmate with no remorse,” he said. For the younger Patel, watching Young and learning about the influence he had in the lives of his daughters “struck a chord.” Patel did not wish to see Young’s children go through the same pain he did after losing his father, a sentiment that he repeated in an interview with NowThis.

“We’d rather see some good from all of this,” he told the Chronicle. “His execution doesn’t change what he did 14 years ago. It doesn’t bring my dad back.”

A week before Young’s execution, Patel joined faith leaders and other advocates in a rally at San Antonio’s main plaza. The rally was paired with a clemency petition that asked Texas Governor Greg Abbott to either halt Young’ execution or grant him life in prison. While speaking to the crowd, Patel said that he forgave Young. He also spoke of Young’s mentorship to younger people. “He actually has a desire to break the chain of other people possibly in his shoes from continuing down that path,” he said. “My family and I would rather see that come to fruition because that speaks better to what my dad stood for.”

Other calls for Young’s life were paired with concerns about religious and racial discrimination. A black juror was barred from sitting on the jury because of her service in her Baptist church’s ministry. Religious leaders said the action was discrimination on the grounds of religion and lawyers argued that the move violated the Constitution’s Free Exercise and Equal Protection Clauses. After Young was denied last-minute clemency, lawyers also argued that there was a racial component to his case. Drawing comparisons to another case of white Texas killer Thomas “Bart” Whitaker, whose father asked for clemency after surviving an attempted murder at the hands of his son, many, like Houston-based attorney Randy Schaffer, wondered if the commutation that spared Whitaker’s life “is a policy that only applies to the white and privileged who make a religious plea.”

Young was injected with a fatal dose of compounded pentobarbital on Tuesday at 6:13 p.m. He passed away 25 minutes later. Patel remained at home with his family.

Among his final words, Young said, “l want to make sure the Patel family knows I love them like they love me.”

In another skirmish in the steadily escalating trade war, the United States has filed complaints with the World Trade Organization (WTO) against countries that retaliated against American steel and aluminum tariffs with protectionist measures of their own.

On Monday, the U.S. filed separate cases against China, Canada, Mexico, the European Union, and Turkey, accusing them of responding to U.S. national security concerns with “retaliatory tariffs designed to punish American workers, farmers and companies,” said U.S. Trade Representative Robert Lighthizer.

While one can understand why those nations felt the need to respond to Trump’s tariffs, especially since the national security rationale offered by Lighthizer and the president is almost certainly bogus (a conclusion shared by the military itself), retaliatory tariffs aren’t the best strategy. They lead to higher prices for citizens on both sides of the dispute.

The economic case for tariffs might be weak, but the legal rationale is clear. Pursuant to Section 232 of the Trade Expansion Act of 1962, the president of the United States is authorized to tax imports so long as some national security justification can be produced, rendering these actions perfectly legal by domestic standards.

“Unfortunately, America’s claims are legitimate,” says Dan Ikenson, director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank.

The General Agreement on Trade and Tariffs (GATT), a precursor to the WTO conceived in 1947, included a national security exception for tariffs. That exception remained after the GATT evolved into the WTO.

“This exception allows nations broad discretion in their definition of a ‘national security concern,'” says Ikenson. That puts the defendants in this case on the backfoot.

Don’t expect a final decision from the WTO anytime soon. It could take up to a year and a half to convene the WTO panel and have them pass judgment, and then another year and a half from there if the respondents choose to appeal. That’s three years, a long time in which a lot can change in the unpredictable sphere of modern politics.

Independent of the outcome of these trade disputes, America’s trade policy risks setting a dangerous precedent for other countries. For instance, other member nations could just as easily begin to claim national security considerations and impose their own protective tariffs, effectively undoing a century of progress in trade policy.

Prior to President Donald Trump’s renouncement of international trade, tariffs were at historic lows. The relatively free trade embraced by recent administrations has played an undeniable role in recent U.S. economic growth and development. If the U.S. and other nations wish to ignore this lesson, they are rejecting progress in favor of short-term political gains and intellectually antiquated mercantilism.

The world’s largest hotel chain said today it will stop using plastic straws and drink stirrers by next July, though it’s still trying to come up with a viable alternative.

Marriott International, which owns and operates about 6,500 hotels and resorts around the world, says the move “could eliminate the use of more than 1 billion plastic straws per year and about a quarter billion stirrers,” according to a press release. Marriott President and CEO Arne Sorenson touted the plan as “a powerful step forward to reducing our reliance on plastics,” while the company’s release said the initiative represents part of Marriott’s “commitment to reducing its environmental impact.”

But it’s not clear what Marriott customers will use instead of plastic straws, as the company said individual hotels will figure that out over the next year.

Marriott is far from the first company to announce plans to stop using plastic straws. Starbucks, the nation’s largest food and drink retailer, said last week it would be going strawless by 2020. Other companies caught up in the strawless craze include American Airlines and the Hilton and Hyatt hotel chains. Meanwhile, Seattle became the first U.S. city to ban plastic straws in July, and there are active attempts to implement similar bans in New York City, Washington, D.C., San Francisco, and Portland, Oregon.

Various Marriott hotels in the United Kingdom, Costa Rica, Hawaii, and Australia have already gotten rid of plastic straws. And in March, the JW Marriott Marco Island Beach Resort in Florida opted to replace plastic straws with biodegradable paper ones. Amanda Cox, the Florida resort’s director of sales and marketing, told the Associated Press that prior to ditching them, the hotel used about 65,000 plastic straws every month.

Over the next year, it’s certainly possible that other Marriotts will decide to use eco-friendly straws as well. But that might not be such a great idea, as Reason‘s Christian Britschgi notes:

Why not use more eco-friendly disposable straws? Because they are terrible. Paper straws are known to collapse halfway through a drink. Compostable straws cost six to seven times more than their plastic alternatives, don’t keep for long, and fall apart when exposed to high heat.

And as Starbucks recently proved, some nifty alternatives to plastic straws, like strawless nitro lids, don’t actually use less plastic. According to Britschgi:

Right now, Starbucks patrons are topping most of their cold drinks with either 3.23 grams or 3.55 grams of plastic product, depending on whether they pair their lid with a small or large straw. The new nitro lids meanwhile weigh either 3.55 or 4.11 grams, depending again on lid size.

As a private company, Marriott is of course well within its rights to ditch plastic straws, but it is hardly helping the environment by doing so. Straws are a tiny fraction of the plastic waste that makes its way into the ocean. Most of the straws that do wind up in the water are the result of littering or poor waste management. If Marriott really wants to make an environmental splash, it should focus its efforts on ensuring that the straws its guests do use end up in the trash, as opposed to getting rid of the little suckers completely.

The mayor of Mount Dora, Florida, will have to publicly apologize Wednesday afternoon for his city’s overzealous code enforcement that targeted a home painted in the likeness of Vincent van Gogh’s masterpiece, “Starry Night.”

More importantly, the city will remove a lien against the property and drop more than $10,000 in fines it had issued to the husband and wife who own the home, according to a settlement approved unanimously by the city council Tuesday night. The Orlando Sentinel reports that the settlement also includes the payment of $15,000 to homeowners Lubomir Jastrzebski and his wife, Nancy Nemhauser.

The couple’s colorful home became the subject of national media attention and legal scrutiny last year when city officials deemed the elaborately painted mural covering a wall in front of the house to be “graffiti” and ordered the couple to remove it. At first, they were told the house and wall had to match—but after Jastrzebski and Nemhauser expanded the mural to include the entire house, city officials shifted their argument and claimed the display constituted an unapproved “sign” because it attracted people to look at the house. The couple were fined $100 per day.

It was something of a sign. Jastrzebski and Nemhauser intended the wall to serve as a sort of beacon for their 25 year-old son, who suffers from autism. If he were to ever get lost, they reasoned, he could simply tell anyone in town to take him to the van Gogh house.

Since then, the Starry Night House became national news. Jastrzebski and Nemhauser refused to pay the fines and filed a lawsuit against Mount Dora claiming that the city violated their First Amendment rights to free expression. The Pacific Legal Foundation, a nonprofit public interest law firm, represented them.

Attorneys from PLF seemed pleased with the outcome when it was announced Tuesday night.

It’s a good settlement. https://t.co/4sHf0KgEUM

— Jeremy Talcott (@jeremytalcott) July 18, 2018

A federal judge ordered the city to halt those $100 per day fines earlier this year. Losing that preliminary ruling seems to have caused officials in Mount Dora, somewhat famous as a colony for artists in central Florida, to reconsider their fight against the beautifully painted house.

As part of the settlement, Mount Dora will be required to rewrite its code enforcement rules. The city council will form a seven-member advisory committee, including Nemhauser, to advise the city on new ordinances and codes.

As the settlement was nearing a final vote from the city council this week, Jastrzebski told the Sentinel that he was happy with the outcome but still shocked by the whole process.

“I almost felt like being in communistic Poland where the rules were being made up by officials on the fly,” he said. “I couldn’t believe something like this could happen in the United States of America.”

“FOSTA has had an entirely predictable chilling effect.” The groups challenging the Allow States and Victims to Fight Online Sex Trafficking Act of 2017 (FOSTA) just filed a new motion in reply to the government’s efforts to get a quick ruling in its favor. Tomorrow, they will appear before a federal court and seek to temporarily block FOSTA from being enforced.

Their motion urges the court not to trust Department of Justice (DOJ) assertions that folks “need not fear application of FOSTA’s open-ended terms and draconian penalties.” This “utterly ignores a history of Internet regulation that includes overly broad and unconstitutional efforts to regulate speech,” argue lawyers for plaintiffs Woodhull Freedom Foundation, Human Rights Watch, massage therapist Eric Koszyk, sex worker rights activist Alex Andrews, and The Internet Archive (aka the WaybackMachine, a national treasure).

“FOSTA is even more extreme” than most attempts at online speech regulation, they say.

The new law—sold as a way to stop underage sex trafficking but in reality a federal ban on any online content that “facilitates” or “promotes” prostitution—took effect in April and “impos[es] more severe criminal penalties than ever, and pil[es] on redundant layers of potential civil liability while simultaneously stripping away immunities,” states the new motion. “Although the Government suggests (repeatedly) that FOSTA reaches only speech that advertises illegal activity, the Act by its plain terms extends far more broadly.”

Plaintiffs just filed an A+ reply in Woodhull v. Sessions: “This, in a nutshell, is #FOSTA‘s overbreadth problem: FOSTA’s sweep is indeed ‘vast,’ but the government’s constitutional latitude for imposing restrictions on speech is far more constrained.” https://t.co/Er3yb7Edpt

— Alex Frell Levy (@alexflevy) July 18, 2018

Already, “FOSTA has had an entirely predictable chilling effect,” says the new motion, “and as such it causes both injury-in-fact that gives Plaintiffs standing to challenge it, and First Amendment violations that constitute irreparable harm.”

Read the whole thing on the Electronic Frontier Foundation’s (EFF) site. EFF is one of several groups representing the plaintiffs in this case, Woodhull Freedom Foundation et al. v. United States, along with Daphne Keller, Walters Law Group, and the law firm of Davis Wright Tremaine.

The suit was first filed in June.

On Thursday, EFF will attempt to persuade a federal judge to temporarily block enforcement of FOSTA as the case plays out. “The hold is needed, in part, to allow plaintiff Woodhull Freedom Foundation, a sex worker advocacy group, to organize and publicize its annual conference, held August 2-5,” said EFF in a press release.

The Woodhull Freedom Foundation along with other plaintiffs filed court papers today in their legal quest to win a preliminary injunction against the enforcement of #FOSTA.https://t.co/ElIxFMoUKA

— Woodhull Foundation (@WoodhullSFA) July 18, 2018

FREE MINDS

New rules for nonprofit donor info. The IRS is easing up on reporting requirements for nonprofits “that spend money to influence elections but are not required to disclose donors to the public—called ‘dark money’ groups by critics,” note Michelle Ye Hee Lee and Jeff Stein at The Washington Post.

“The decision was immediately heralded by free-speech advocates who have long sought to protect donors’ private information,” write Lee and Stein. “But it was rebuked by those who want to reduce the role of money in politics, who claim it would make U.S. elections more susceptible to anonymous foreign donations.”

Under the new Treasury Department rule, these groups are no longer required to disclose donor names and addresses in their federal tax filings.

FREE MARKETS

“An almond doesn’t lactate, I will confess.” That’s U.S. Food and Drug Administration Commissioner Scott Gottlieb speaking at Politico‘s Pro Summit in D.C. yesterday. Gottlieb is lending support to a silly plan by dairy companies hoping to quash the popularity of almond milk and its ilk by banning these nut-based drinks from calling themselves milk. Gottlieb isn’t going that far, but he did announce that he will introduce a new FDA guidance document that could put new limitations on nut-milk labeling.

Gizmodo is attempting to portray it as some sort of uniquely Trumpian “gift [bestowed] upon Big Dairy,” but the crony politics behind dairy labeling knows no partisan bounds. Last year, Wisconsin Democratic Sen. Tammy Baldwin sponsored a similar proposal called the DAIRY PRIDE Act.

FOLLOW-UP

Trump goes all Jabberwacky on Russia response. President Trump has walked back his earlier statements on Russia, in which he said during a press conference that he couldn’t see why people thought Russia had interfered in the election. “I don’t see any reason why it would be Russia” were Trump’s words then. But on Tuesday evening, the president told NBC News: “I said the word ‘would’ instead of ‘wouldn’t.'”

“The sentence should have been: ‘I don’t see any reason why it wouldn’t be Russia,'” Trump continued. “Sort of a double negative. So you can put that in and I think that probably clarifies things.”

But in predictable Trump fashion, this circular concession didn’t sit well and Trump soon returned to being all in with the Russia positivity, tweeting early Wednesday morning that “the meeting with Russia may prove to be, in the long run, an even greater success” than his recent NATO meeting and “many positive things will come out of that meeting.”

So many people at the higher ends of intelligence loved my press conference performance in Helsinki. Putin and I discussed many important subjects at our earlier meeting. We got along well which truly bothered many haters who wanted to see a boxing match. Big results will come!

— Donald J. Trump (@realDonaldTrump) July 18, 2018

QUICK HITS

• Robert Mueller is asking for immunity for five potential witnesses in the government’s case against Paul Manafort. “Mueller’s office told a federal judge in Virginia on Tuesday that it was seeking to compel the witnesses to testify under condition of immunity,” the Los Angeles Times reported.
• The NAACP has been pushing a Puerto Rico statehood bill during its annual convention, the GOP-backed Puerto Rico Admission Act of 2018.
• The Washington Post invites you to “meet the man who might have brought on the age of ‘downloadable guns.'”

Ideally, feminists engage in fewer drone assassinations, but, you know. https://t.co/iVwIfwRolK

— Lucy Steigerwald (@LucyStag) July 18, 2018

• MGM Resorts International is counter-suing victims of the 2017 mass shooting in Las Vegas.
• “Federal prosecutors say this is the first time a bitcoin-for-cash exchanger will be going to jail for such an act in the central district of California,” Brian Doherty reports.
• Agree or disagree?

I don’t think the US media has ever been nuttier than they are right now. It would be comical if it wasn’t so dangerous. They are harming the national psyche in a profound way

— Michael Tracey (@mtracey) July 18, 2018

Adam Barsouk is a medical student and cancer researcher who has witnessed the unintended consequences of pharmaceutical regulation first hand. He writes about his experience for Reason:

I am a cancer researcher at the University of Pittsburgh Medical Center (UPMC). A few years ago, UPMC began restricting educational materials and office meals provided by pharmaceutical companies. Since then, numerous other hospitals across the country, including all of the major ones in my hometown of Pittsburgh, have followed suit. Although most bureaucrats paint this as a victory for the bottom-line (studies find that it increases the proportion of cheaper, generic drugs prescribed), I have witnessed (though never received) the many lost benefits of pharmaceutical-sponsored education.

View this article.

Can a gun be protected by our rights to free speech? According to a recent settlement by the Department of Justice, when the gun is a schematic written in computer code, it can.

Reason readers will be familiar with the saga of Cody Wilson and his gun rights collective, Defense Distributed. Disturbed by the rising tide of anti-gun sentiment in the cultural discourse, Wilson and his comrades set out to secure Americans’ rights to defend ourselves against government abuse. But they took a different tack than Second Amendment advocates before them. Rather than spending billions on lobbying and public persuasion campaigns, Defense Distributed bound their fate to the mast of technological determinism. They put guns on the internet.

It has been about five years since the first 3-D printed gun was fired. Engineers at Wilson’s Austin-based firearms defense syndicate had been hard at work building the first prototypes. While the design looked a bit like a toy gun that a young boy might play with, the plastic-cast first DIY handgun, dubbed “the Liberator,” was truly fearsome to regulators and gun control hardliners. On its launch day, Defense Distrbuted’s “Wiki Weapon” schematic file had been downloaded 50,000 times from their DEFCAD.org website. Andrea O’Sullivan discusses the battle over the right to publish code that soon followed.

View this article.

This week Rand Paul, the libertarian-leaning Republican senator from Kentucky, said he was “worried” and “disappointed” by Supreme Court nominee Brett Kavanaugh’s views on the Fourth Amendment. It is not hard to see why, Jacob Sullum says.

Kavanaugh, who has served on the U.S. Court of Appeals for the D.C. Circuit since 2006, is skeptical of politicians who want to restrict gun rights, regulators who limit freedom of speech or assert powers with a weak statutory basis, and prosecutors who try to convict defendants without proving all the elements of their alleged crimes. But as Sullum notes, Kavanaugh seems less inclined to scrutinize the claims of cops and spies who collect evidence without a warrant.

View this article

Want to sip a refreshing beverage this summer?

If environmental zealots and sycophants get their way, writes John Stossel, you won’t be allowed to sip it through a plastic straw.

View this article.