The Great American Tax Ripoff: New at Reason

Tax Day gets a lot of attention, but John Stossel says that attention is misleading, because the April 17 deadline is only for income tax. That’s just a fraction of the taxes that Americans pay.

You probably know about property, payroll, and sales taxes, but there are also lots of hidden taxes. Kristin Tate reports on them in her new book, How Do I Tax Thee? A Field Guide to The Great American Ripoff.

Tate found a hundred hidden taxes—a rifle tax, airplane and hotel taxes, dog license fees, a blueberry tax in Maine, a sliced bagel tax in New York City (whole bagels aren’t taxed), and so on.

Click here for full text and downloadable versions.

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The views expressed in this video are solely those of John Stossel, his independent production company, Stossel Productions, and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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Student Thinks University of Michigan’s Race Requirement Exists ‘To Get White People To Be a Little Less Racist’

UMSome students would like the University of Michigan to revise its race and ethnicity requirement (R&E), which obligates students in the College of Literature, Science, and the Arts (LSA) to complete a course that includes these themes.

That’s because the requirement has strayed from its true purpose, according to Allie Brown, a junior in the School of Public Policy.

“The purpose of the Race and Ethnicity requirement is to get white people to be a little less racist, for people to be a little bit more knowledgeable about the world they live in,” Brown told The Michigan Daily. “That’s really what it came about after the activism. Not just, ‘Oh, learn about race and ethnicity in general.’ That’s not really the purpose behind it. A lot of the courses that are counted as R&E today don’t require cultural competency, that’s the problem. It’s just like, ‘Oh, we mention race and ethnicity, thus we should be counted as Race and Ethnicity.'”

Brown isn’t just a random student; The Daily notes that she recently helped Angela Dillart, an associate dean of LSA, complete a study of the requirement, and is therefore positioned to advise its possible revision or expansion. And the main point of R&E, in Brown’s view, is to educate one specific identity group.

I graduated from Michigan’s LSA. The college only has a few requirements: a first-year writing course, an upper level writing course, a quantitative reasoning course (the bane of my existence), foreign language competency, and race and ethnicity. The best argument for the race and ethnicity requirement is this: Students should at some point study the history, traditions, or sociology of some identity group with which they aren’t particularly familiar, as part of a broad-based liberal arts education. But it sounds like Brown wants race and ethnicity to be less like an educational requirement and more like an activism recruitment experience.

This reminds me of American University’s effort to reimagine dorm life as an opportunity to teach “oppression studies” to a captive audience—with recruitment into an ideological movement being the true goal of the students advising such changes.

And yet we wonder why political conservatives have suddenly soured on higher education.

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The Feds Are Going After Trump’s Lawyer. It Looks Pretty Bad: Reason Roundup

The feds raided the office and hotel of Trump’s personal lawyer, Michael Cohen. Federal agents raided Cohen’s office, home, and hotel rooms and seized “records related to several topics including payments to a pornographic-film actress,” according to The New York Times. “The search does not appear to be directly related to Mr. Mueller’s investigation, but likely resulted from information he had uncovered.”

That information was at least in part related to Cohen’s $130,000 payment to porn actress and director Stormy Daniels. According to The Washington Post, Cohen is under investigation for bank fraud, wire fraud and campaign finance violations. None of the documents on Cohen are public yet, but the Post cites four people “familiar with the investigation” and reports that:

Investigators took Cohen’s computer, phone and personal financial records, including tax returns, as part of the search of his office at Rockefeller Center … In a dramatic and broad seizure, federal prosecutors collected communications between Cohen and his clients — including those between the lawyer and Trump, according to [two sources].

“Stormy Daniels and Donald Trump appear to be vying for the world record for the longest one-night stand in history,” quipped Harry Litman, a former U.S. attorney and deputy assistant attorney general, in The New York Times. I’ll let him recap the Stormy settlement situation so far:

Mr. Cohen and Mr. Trump’s troubles in the hush agreement case are of their own making. First, Mr. Cohen insisted, through his lawyer, that the president was never aware of the agreement and that Mr. Cohen acted wholly on his own. Then, speaking briefly to reporters on Air Force One last Thursday, Mr. Trump, echoing Mr. Cohen, said that he knew nothing about the arrangement. In saying so, he walked directly into the buzz saw of the legal position of Ms. Daniels and her attorney, Michael Avenatti.

The hush agreement identified Mr. Trump as a party and required him to do a number of things. But since he insists he didn’t know about the agreement, there’s no way he could have entered into it. Moreover, Mr. Trump’s avowed cluelessness implies that Mr. Cohen induced Ms. Daniels to sign the agreement through fraud — a lie about Mr. Trump’s performance of reciprocal obligations. Both of these circumstances invalidate the hush agreement’s very formation under basic contract law principles.

Daniels’ lawyer Avenatti went on MSNBC to say he predicted Cohen would “fold like a cheap deck of cards.” But Avenatti added: “With that said, I don’t, I’m not applauding or high-fiving anybody’s offices being raided by the FBI. It’s a very, very serious matter. And I think that this is the first significant domino to fall.”

Writing here at Reason, attorney Ken White agrees that the raid is a very big deal. (“Be skeptical of the surge of misinformation and inaccurate legal takes that are certain to drop,” he advise. “But watch. This is historic.”)

Meanwhile, Trump told reporters Monday night that the situation was “disgraceful” and “a total witch hunt.” He called the raids of Cohen’s properties “an attack on our country, in a true sense,” and “an attack on what we all stand for.” Evidently, Trump thinks that’s the right to have an affair with an adult actress while your spouse stays at home with your newborn and then later pay your lover to keep quiet about it as you run for president without anyone taking notice or minding.

There’s good reason for Trump to be huffing and puffing. As Politico points out, “Cohen is among the loyal cohort that worked for Trump long before his campaign and remains close to the president. He told Vanity Fair last year that he’s ‘the guy who protects the president and the family. I’m the guy who would take a bullet for the president.'”

On Sunday, Daniels’ lawyer filed a motion in California requesting a formal deposition of Trump and Cohen. “If Mr. Trump was completely unaware of Mr. Cohen’s actions, the question naturally arises as to how it would be possible for a ‘meeting of the minds’ to have occurred between parties where one of the parties does not even know about the existence of the agreement,” it says.

“Normally a request to depose the president would seem like a nuisance move, quickly rebuffed,” writes Litman. “Here, though, it is hard to see how the court resolves the factual issue without hearing Mr. Trump’s version of events.” And “inconveniently for the president, Ms. Daniels’s position turns on questions of fact.”

FREE MINDS

Facebook founder and head Mark Zuckerberg is scheduled to testify before Congress this afternoon about the social media giant’s data-collection practices and relationship with the firm Cambridge Analytica.

In prepared remarks released Monday, the chairman and chief executive officer of Facebook tried to put a good spin on his company. It’s “an idealistic and optimistic” place, Zuckerberg said. He portrayed public concerns about privacy and misuse of user data as an unfortunate consequence of bad actors who had taken advantage of their idealism. Despite all the good that Facebook has allegedly done, “we didn’t do enough to prevent these tools from being used for harm,” said Zuckerberg.

That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy. We didn’t take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I’m sorry.

These opening comments show the impossible position Facebook has been put in as more users start to lose faith in Facebook’s lip service to having their best interests in mind. People are not wrong to be wary of the power and influence that Facebook wields, and the opportunities it provides for abuse of personal data. But in this fear, goverments around the world, including ours, are seeing an opportunity to enact the kind of regulations and control over the web that authorities have long desired.

For the most part, Zuckerberg’s prepared speech rings hollow, with a lot of platitudes about reform and vague statements about steps going forward. “Over the past few weeks, we’ve been working to understand exactly what happened with Cambridge Analytica and taking steps to make sure this doesn’t happen again,” said Zuckerberg, referring to the analytics firm that received data on Facebook users from a British researcher who wasn’t supposed to share it. Zuckerberg also told Congress that his company was “too slow to spot and respond to Russian interference” but was “working hard to get better,” assuring them he doesn’t “want anyone to use our tools to undermine democracy.”

FREE MARKETS

Court unseals indictment against Backpage. On Monday evening, a federal court unsealed the Justice Department’s 93-count indictment against Michael Lacey and James Larkin, founders of the now-defunct classified ads marketplace Backpage.com. You can check out the charges here.

Notably, the indictment doesn’t include any charges related to sex trafficking—the ostensible reason why Backpage has been the subject of such intense law-enforcement scrutiny for years from state prosecutors, a select Senate subcommittee, and now the Department of Justice (DOJ).

If any of these extensive investigations had turned up evidence that Backpage staff knowingly facilitated sex trafficking—defined under federal law as forced prostitution of adults or any prostitution by someone under age 18—than DOJ could have indicted them under the 2015 “SAVE Act,” part of that year’s massive new “anti-sex trafficking” law. They didn’t. Instead the indictment contains charges similar to those we’ve seen lobbed against other sites, such as Rentboy and MyRedbook, by meddling federal authorities: money laundering, conspiracy, and violating the Travel Act, which prohibits using interstate commerce to facilitate activities, including prostitution.

I went on Laura Ingraham’s show on Fox News last night to discuss Backpage and the indictment; check it out below starting around minute 28:

Asked by Buzzfeed on Monday whether prostitution should be criminalized, White House press secretary Lindsay Walters said “I refer you to the President’s outside counsel.”

QUICK HITS

  • Former Trump campaign manager Paul Manafort is currently trying to challenge the FBI’s search of his Alexandria, Virginia, condo last July. “Once inside, the agents seized or imaged every electronic device and storage device in the home,” says a motion filed by Manafort’s lawyers Monday night. “The Fourth Amendment does not permit the warrant that was issued in this case, which was essentially a general warrant for ‘any and all’ financial documents and electronic device.”
  • On Fox News’ Happening Now last night, Syrian American Council adviser Bassam Rifai told the camera: “President Trump, I am speaking to you directly. Do not take the same mistakes that President Obama had made… What we need to do right now is to take out… Assad’s air force.”
  • Following the chemical attack in Syria over the weekend, Trump declared yesterday, “We cannot allow atrocities like that. Cannot allow it.” He promised to announce a response in the next 48 hours.
  • Excessive occupational licensing in US states is harming displaced Puerto Ricans.
  • “Women who have their first child before 25 or after 35 eventually close the salary divide with their husbands,” but women whose first child is born when they’re 25- to 35-years-old do not, according to a large new study on gender, family, and pay gaps.
  • Yes, Westworld creator “Jonathan Nolan has Rickrolled everyone on the Westworld subreddit.” (More on the upcoming season and “Shōgun World” here.)

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This Illinois Town Might Not Have Intended to Ban My Family’s ‘Peashooter,’ But They Still Did

22 rifleIn a Friday article “My Family’s Peashooter Is Now an Illegal ‘Assault Weapon’ in This Illinois Town,” I wrote that a new “assault weapon” ban in Deerfield, Illinois, was written so broadly that it outlawed an old .22 semi-automatic rifle kept by my decidedly non-firearm-obsessed family.

Since publishing that article, I have received a number of emails and comments from readers claiming that my family’s rifle would not actually be prohibited because of a specific exemption contained in the Deerfield ordinance.

I understand why people would come to this conclusion. But that’s not what the law says.

The Deerfield ordinance makes it unlawful to store or keep assault weapons, promising fines for people who do not comply. The ordinance also gives several definitions for what counts as an unlawful assault weapon. The first is “a semiautomatic rifle that has the capacity to accept a large capacity magazine detachable or otherwise”—with “large capacity magazine” defined as a magazine that can hold more than 10 rounds—and which comes with one of several features, including a pistol grip or adjustable stock. The second definition reads “a semiautomatic rifle that has a fixed magazine that has the capacity to accept more than ten rounds of ammunition.”

As many commenters have pointed out, the definition of “large capacity magazine” includes a specific exemption for “a 22 caliber tube ammunition feeding device”—the same device on my family’s rifle. That would certainly exempt my family’s rifle from the first definition. But it would not exempt it from the second definition. The .22 caliber tube ammunition feeding device is still a “fixed magazine,” even if it is exempted from being a “large capacity magazine.” Thus from a plain interpretation of the text, is still prohibited.

Why would the bill include both a carveout for tube magazines and a catch-all prohibition on semi-automatic rifles with magazines that can hold more than 10 rounds? I can only assume sloppy drafting by the bill’s authors.

Interestingly, the federal assault weapons ban being floated by Sen. Diane Feinstein (D – Calif.) makes sure to specifically exempt .22 tube feeding magazines from its definition of semi-automatic assault weapons. Feinstein’s definition reads “a semiautomatic rifle that has a fixed magazine with the capacity to accept more than 10 rounds, except for an attached tubular device designed to accept, and capable of operating only with, .22 caliber rimfire ammunition.”

The writing in of an exemption for the .22 caliber tube magazines suggests that the people who wrote the Deerfield ordinance might not have intended to ban rifles like the one my family owns. Given the broadness of that second definition for assault weapon however, it seems inescapable—at least according to the plain text—that they banned them anyway.

If you were a resident of Deerfield, would you continue to hold onto a semi-automatic .22 rifle that can hold more than 10 rounds, hoping that all the town’s cops and prosecutors will look beyond the actual text to the at-best-ambiguous intent of the authors? I certainly wouldn’t bet my freedom on that.

Accidental prohibitions are not unheard of in the world of firearms regulation, as Reason has previously reported. Hence the need that laws involving minute technical detail be written with precision.

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Americans Can’t Stand Each Other, So Let’s Stop Forcing Our Preferences on One Another: New at Reason

As a display of Americans’ seemingly growing intolerance for one another, last week presented something of a perfect storm, writes J.D. Tuccille. The flash career of a prominent conservative writer at The Atlantic, the seeming endorsement by several tech executives of one-party rule, and President Trump attacking Amazon to punish The Washington Post for criticizing him provide the latest evidence that some Americans just don’t play well together and should probably withdraw to separate corners.

But why, asks Tuccille, must so many people treat every political preference as a collective endeavor to be imposed on the unwilling? This country started as a federal system, on the premise that each state should be entitled to indulge in stupid political experiments without dragging in the neighbors.

We could devolve decisions down even further, Tuccille ads. More local governance would minimize the number of unwilling conscripts into potentially contentious policies. And who knows? If power is devolved far enough—to individuals, by preference—we might even come to see our divergent views as harmless eccentricities rather than existential threats.

View this article.

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Brickbat: Too Close for Comfort

glovesThe driver was stopped for tailgating. He ended up getting his genitals and buttocks groped by a New Jersey state trooper. Video shows Trooper Joseph Drew telling the man he smells marijuana. The man, whose name was not released by the media because he is the victim of a sexual assault, protests he has no drugs. But Drew puts on gloves and reaches inside the man’s underwear as they stand on the side of the road. Drew found no drugs on the man or in his car.

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Backpage Founder’s 93 Charges Lack Actual Sex-Trafficking Claims

BackpageThe Department of Justice this afternoon finally released the indictment against Michael Lacey, founder of Backpage.com, the website the feds seized control over on Friday and shut down.

The site has long been a center of accusations that Lacey was fostering sex trafficking, including child sex trafficking and sex slavery, and the indictment’s text focuses on whether Lacey knew what was being posted on his site (prosecutors argue he did). Lacey stands accused of profiting off prostitution on Backpage.com, turning a blind eye to it (including underage prostitution), and attempting to hide the money from the feds.

But Lacey isn’t actually charged with actual sex trafficking. He faces 93 total charges, 79 of which are felonies. For the felonies, he’s charged with one count of conspiracy, 28 counts of various kinds of money laundering, and 50 counts of violating the Travel Act. The Travel Act is how they’re hitting him for prostitution. Soliciting prostitution is not currently a federal crime (as yet). But the Travel Act allows the Department of Justice to intervene and apply federal charges in certain state-level criminal violations that cross state lines or foreign borders. Prostitution is one of the crimes the Travel Act covers, and the Department of Justice has used the Travel Act to shut down other sites (like gay escort site Rentboy.com in 2015). While it’s not technically wrong to say that Lacey is being charged with facilitating prostitution (how many media sites are reporting it), the feds are doing so by using a round-about fashion.

The indictment claims that Lacey knew about prostitution ads in Backpage and even bragged about it. When sex trafficking ads appeared on the site that included those who were listed as being underage, prosecutors say Backpage edited the ads to remove any suggestion that a child was involved and reposted. The indictment says that the National Center for Missing and Exploited Children (NCMEC) gave Lacey and Backpage several recommendations to help prevent underage prostitution from appearing on Backpage, and he declined to adopt them.

The indictment makes it clear that the Department of Justice believe Backpage was doing more than just hosting prostitution ads, but deliberately pursuing them and encouraging them. Therefore, federal law shielding web sites for third-party postings of illegal behavior don’t apply here. Elizabeth Nolan Brown previously took note of a civil suit against Backpage for similar allegations.

The indictment (readable here) posts example after example of Backpage helping facilitate the posting of online prostitution ads by editing the language to conceal the financial exchange, and this included ads for children being pimped for sex. The indictment includes lurid stories of women who were murdered by Johns after being pimped out for sex with Backpage.com ads. There’s even a reference to a woman being taken to Phoenix to be sold for sex because the Super Bowl was there, which will no doubt feed into that well-worn sex-trafficking mythology.

As Backpage drew in more and more money—eventually surpassing $100 million per year—Lacey is accused of all sorts of different tactics to shift the money around to shield its origins. And a good chunk of it went back to Lacey. The feds say he pocketed more than $30 million in 2016 filtered through a property company.

The Department of Justice is asking that Lacey be detained for prosecution as both a flight risk and a danger to the community. But if the government does decide to release Lacey prior to trial, they’re asking for him to give up his passport, subject himself to electronic monitoring, post a bond, not engage in any financial transactions, and of course, stay away from Backpage.com operations. The indictment also includes forfeiture requests to seize all that money Lacey made from Backpage.

Seven other Backpage employees have also been charged with crimes. Read more about those charges here.

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Feds Seize Stormy Daniels Records From Trump’s Lawyer: New at Reason

The very big news of the day: FBI agents raided the law office of Michael Cohen, President Trump’s lawyer who was involved in payment of $130,000 to adult performer “Stormy Daniels” for a nondisclosure agreement. Some reports suggest they also raided his home. It’s early times. Watch for the search warrant itself—that will show us what crimes they are investigating and what documents they think are probative of that crime. Watch also for what Michael Cohen’s lawyers do in the struggle to compel arbitration with Stormy Daniels in a federal court in Los Angeles—the search warrant dramatically complicates whether Cohen can, or should, submit to any questions in that case. Be skeptical of the surge of misinformation and inaccurate legal takes that are certain to drop. But watch. This is historic, explains Popehat’s Ken White.

View this article.

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Partisan Hype Is Driving the Cambridge Analytica Scandal: New at Reason.

Senators and members of Congress wondering what to ask the CEO of Facebook, Mark Zuckerberg, when he turns up Tuesday and Wednesday of this week to testify on Capitol Hill might try this one: “How is what Cambridge Analytica and the Trump campaign did with Facebook data in 2016 any different from what the Obama campaign did in earlier years?”

Zuckerberg’s answer would be useful in sorting out how much of the election-related Facebook furor is partisan hype, and how much is a genuine scandal, writes Ira Stoll.

Read the whole thing.

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London Knife Murders Reteach Old Lessons: Drug Wars are Bad and Weapon Laws Can’t Stop Crime

London saw more murders in February and March than New York City (37 vs. 32), for apparently the first time. This has led to calls for both heavier policing and social media censorship. London’s murder number total for 2018 so far is now over 53 (vs. 130 total in 2017), with at least 35 from stabbing, and its murder rate over the past three years has gone up nearly 40 percent.

The comparison between London and New York might be less about London becoming more of a hellhole and more about New York City becoming amazingly less of one. In 1990 that American city had 2,245 murders, and as the Financial Times reports, In the 20 years to 2009, the number of murders, robberies and burglaries in New York was down 80 per cent, twice the US national average, and lower than it had been in 1961.” While London has more and more relied on racially unbalanced stop-and-frisk searches to futilely cope with crime, New York has found that curtailing those practices, has not, despite law-and-order fears, led to increasing crime.

London Mayor Sadiq Khan has sent 300 more police on the streets this month and threatened all knife-wielders, whether they’ve assaulted anyone or not, with “the full force of the law.” (For all the good it has done them, London has banned carrying a knife in public without “good reason” for years already.) For many Londoners, carrying a knife in a dangerous city is an understandable matter of self-defense. But too often, the government doesn’t consider your own self-defense a good reason to allow you to innocently carry a tool, both in London and in American debates over the right to carry a gun.

Some in London believe that a stronger public health/social services approach to curbing violent crime (which some claim helped cut Glasgow’s murder rate in half from 2005 to 2015) might work where more policing might not, and some blame a national-level lowering in police funding and staffing for the rising murder numbers. But the relation between policing efforts and British crime is by no means clear-cut. According to The Guardian, a leaked report on policing and crime from the U.K.’s Home Office

says that it was unlikely that “lack of deterrence” was the catalyst for the rise in serious violence. “Forces with the biggest falls in police numbers are not seeing the biggest rises in serious violence.”

Writing before the launch of her strategy to counter violence, [Home Secretary Amber] Rudd said in a Sunday Telegraph article: “While I understand that police are facing emerging threats and new pressures—leading us to increase total investment in policing—the evidence does not bear out claims that resources are to blame for rising violence.

“In the early [90s], when serious violent crimes were at their highest, police numbers were rising. In 2008, when knife crime was far greater than the lows we saw in 2013-14, police numbers were close to the highest we’d seen in decades.”

While simplistic blame for London’s murder problem is also aimed at social media in general and the rise of “UK drill” hip-hop in particular, one important lesson here is old and applies across the globe: Whatever weapons are or are not available, or legal, or used to harm others (acid attacks are also on the rise in London), keeping a desired commodity like drugs illegal and crammed into a black market with no legal recourse for conflict resolution is a terrible idea for domestic tranquility; and no amount of legal anathemas on mere tools, whether knives or guns or acid, is sufficient (or necessary) to reduce crime.

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