Month: June 2021

Supreme Court Won’t Hear Case Challenging Massachusetts’ Income Tax on Telecommuters Who Don’t Live or Work in Massachusetts


westendrf648864

The Supreme Court won’t take up New Hampshire’s lawsuit against Massachusetts over teleworker taxes. Massachusetts has a policy of taxing out-of-state teleworkers working for Bay State companies.

The Court justifiably deemed the lawsuit out of its jurisdiction. But the decision to pass on the case frustrates many who were hoping to get nationwide clarity on how states can tax the income of out-of-state workers, particularly teleworkers. 

Income tax for those living in one state and working in another has always been a tangled mess, with rules and differing from state to state. The confusion has been compounded during the pandemic, with the rise of teleworkers who live and work out of state.

States have the ability to tax income that was earned by working in the state and income that was earned by residents of the state. This means that if someone works in New York and lives in Vermont, then New York can tax it because it was earned by working in New York, and Vermont can tax it because it was earned by a resident of Vermont. Fortunately, like most states, Vermont offers a refund of the amount one pays in New York income tax, so the income would not be taxed twice. 

But these refund schemes vary from state to state, creating a complicated web that can make filing as an out-of-state worker a headache. 

For remote workers, the confusion only grows. Take the case of a person who lives in New Hampshire but, under typical circumstances, commutes to work in Massachusetts. As of 2017, more than 103,000 people—that’s more than 15 percent of all New Hampshire workers—were in this position.

During the pandemic, many of these people were forced to work from home. This would seem to mean that because they earned the income while working at home in New Hampshire and are residents of New Hampshire, that income could only be taxed in New Hampshire. And since New Hampshire has no income tax, that means they would owe nothing on that money. 

This is where the controversial Massachusetts rule comes in. Effective March 10, 2020, Massachusetts instituted a temporary rule that gave the state the power to tax the income of remote workers who typically work in Massachusetts. For those in income tax-free states like New Hampshire, that means being subject to income taxes that people who work non-remote jobs in the state don’t have to pay.

The rule states: “All compensation received for services performed by a non-resident who, immediately prior to the Massachusetts COVID-19 state of emergency was an employee engaged in performing such services in Massachusetts, and who is performing services from a location outside Massachusetts due to a Pandemic-Related Circumstance will continue to be treated as Massachusetts source income subject to personal income tax.” 

New Hampshire officials sued Massachusetts over this policy, considering it an affront to their sovereignty to decide how workers in their state are taxed. 

“In the middle of a global pandemic, Massachusetts has taken deliberate aim at the New Hampshire Advantage by purporting to impose Massachusetts income tax on New Hampshire residents for income earned while working within New Hampshire,” reads New Hampshire’s complaint. “Upending decades of consistent practice, Massachusetts now taxes income earned entirely outside its borders. Through its unprecedented action, Massachusetts has unilaterally imposed an income tax within New Hampshire that New Hampshire, in its sovereign discretion, has deliberately chosen not to impose.” 

In its brief, the Supreme Court said that it passed on the case because—as established by the precedent set by Mississippi v. Louisiana and other similar cases in order to protect the rights of states—the court will not take state-on-state suits “unless the threatened invasion of rights is of serious magnitude and established by clear and convincing evidence.” 

Legal scholars note that, in general terms, this means the court will not take on state-on-state suits unless there is a clear reason why this suit is being brought by a state and not by a private citizen affected by the issue. 

“New Hampshire does not invoke the types of interests that would warrant such an exercise,” reads the Supreme Court brief, “and the issues New Hampshire seeks to present can adequately be raised and litigated by New Hampshire residents who are subject to the Massachusetts income tax.”

While this may be the right decision, the Court passing on the case leaves open the question of whether states have the ability to tax out-of-state remote workers. The Massachusetts rule, although temporary, could set a precedent that remote workers in another state have strong enough economic ties and impact to the state where their company is located to merit being taxed out of state. 

This could cause further problems, especially for those who live and work remotely in states that do have an income tax, unlike New Hampshire. As of now, state rules regarding refunds for those who work out of state do not usually include remote workers. This means that if teleworkers were taxed in the state where their company is, they could be taxed twice on the same income. 

In our increasingly remote-work world, people now have the opportunity to choose where they want to live, and, independently from that, where they want to work. This gives them the opportunity to live in lower-tax states like New Hampshire and work for companies based in urban centers in states like Massachusetts, New York, and California.

Remote employees of Massachusetts companies living in New Hampshire aren’t using the roads in Massachusetts or creating trash that Massachusetts must dispose of. Their employers are already paying corporate taxes in Massachusetts. Out-of-state employees are not consuming in-state public goods, and should not be required to pay for them.

from Latest – Reason.com https://ift.tt/3y7dYEM
via IFTTT

House Votes To Repeal 1957 and 1991 Authorizations for the Use of Military Force


zumaamericastwentynine277403

On Tuesday, the House voted to repeal two war authorizations, the 1957 Authorization for the Use of Military Force (AUMF) and the 1991 AUMF, which grant the president broad discretion in military operations in the Middle East absent congressional approval. The measure passed 366–46 as part of a larger bill package.

AUMFs allow the president to use military force against certain hostile parties without an official declaration of war, for which the Constitution grants Congress sole authority. Though Congress has not formally declared war since World War II, the U.S. has engaged in conflicts far and wide thanks to ever-broadening interpretations of AUMFs and other war legislation.

The 1957 AUMF was signed into law by President Dwight D. Eisenhower and authorized him to counter possible communist hostility in the Middle East. The measure had a provision allowing the president to “use armed forces to assist any such nation…requesting assistance against armed aggression from any country controlled by international communism.” Critics have pointed out that the language of the 1957 AUMF did not simply authorize force, but “declared a policy to use it.”

The 1957 AUMF has never been invoked by a presidential administration to justify military activity. Rep. Peter Meijer (R–Mich.), who sponsored the 1957 AUMF repeal bill, noted that rolling back the measure would have no impact on ongoing military conduct.

The other measure subject to yesterday’s House vote, the 1991 AUMF, was the primary authorization through which the U.S. entered the Gulf War. It hasn’t been invoked since that conflict, but as sponsor Rep. Abigail Spanberger (D–Va.) explained, “The fact that it hasn’t been misused or hasn’t been abused doesn’t mean that that possibility doesn’t exist at some point in the future.”

On June 17, the House voted to repeal the 2002 AUMF, which granted the president the authority to combat Saddam Hussein’s regime in Iraq without congressional approval. The vote margin for that bill was tighter than Tuesday’s at 268–161, even though its repeal would not affect current U.S. military conduct either. It hasn’t been used as the sole authorization behind operations since the Iraq War ended in 2011.

Meanwhile, the 2001 AUMF that authorized the president to invade Afghanistan—and which has been the basis of 41 operations in 19 countries—has not seen a formidable legislative challenge. 

The measures Congress has repealed won’t lead to a meaningful reduction in presidential overreach in military conduct. Indeed, these bills passed the House in part because their repeal wouldn’t affect contemporary military campaigns. The White House backs repealing the 2002 AUMF  because it would “likely have minimal impact on current military operations.” Repealing benign laws, even those with concerning underpinnings, would do little to change how Congress and the president collaborate—or don’t—on military operations. 

What’s especially telling is that President Joe Biden hasn’t invoked a single AUMF—not the one from 1957, 1991, 2001, or 2002—to justify the airstrikes he’s carried out in his 161 days in office. To authorize his February airstrikes in Syria and his Sunday attacks there and in Iraq, he cited Article II of the Constitution, which allows the president to protect U.S. service members in self-defense. (Whether the strikes were truly defensive is still open to debate.)

That dynamic highlights an important aspect of presidential war making—an executive determined to wage war has tools at his disposal, even without the broad discretion granted to him by AUMFs. As symbolically important as it is to repeal the legislation that took away much of Congress’ combat oversight, more will need to be done to tie the president’s hands. 

from Latest – Reason.com https://ift.tt/3jzfiw3
via IFTTT

Donald Rumsfeld Dead At 88

Donald Rumsfeld Dead At 88

Former defense secretary Donald Rumsfeld, the main planner for the Iraq war until former President George W. Bush replaced him, has died at the age of 88, according to Reuters, citing a statement from the family. 

“It is with deep sadness that we share the news of the passing of Donald Rumsfeld, an American statesman and devoted husband, father, grandfather and great grandfather. At 88, he was surrounded by family in his beloved Taos, New Mexico,” the statement read.

“History may remember him for his extraordinary accomplishments over six decades of public service, but for those who knew him best and whose lives were forever changed as a result, we will remember his unwavering love for his wife Joyce, his family and friends, and the integrity he brought to a life dedicated to the country,” the statement continued. 

*This story is developing… 

Tyler Durden
Wed, 06/30/2021 – 15:31

via ZeroHedge News https://ift.tt/2UUaUxv Tyler Durden

House Votes To Repeal 1957 and 1991 Authorizations for the Use of Military Force


zumaamericastwentynine277403

On Tuesday, the House voted to repeal two war authorizations, the 1957 Authorization for the Use of Military Force (AUMF) and the 1991 AUMF, which grant the president broad discretion in military operations in the Middle East absent congressional approval. The measure passed 366–46 as part of a larger bill package.

AUMFs allow the president to use military force against certain hostile parties without an official declaration of war, for which the Constitution grants Congress sole authority. Though Congress has not formally declared war since World War II, the U.S. has engaged in conflicts far and wide thanks to ever-broadening interpretations of AUMFs and other war legislation.

The 1957 AUMF was signed into law by President Dwight D. Eisenhower and authorized him to counter possible communist hostility in the Middle East. The measure had a provision allowing the president to “use armed forces to assist any such nation…requesting assistance against armed aggression from any country controlled by international communism.” Critics have pointed out that the language of the 1957 AUMF did not simply authorize force, but “declared a policy to use it.”

The 1957 AUMF has never been invoked by a presidential administration to justify military activity. Rep. Peter Meijer (R–Mich.), who sponsored the 1957 AUMF repeal bill, noted that rolling back the measure would have no impact on ongoing military conduct.

The other measure subject to yesterday’s House vote, the 1991 AUMF, was the primary authorization through which the U.S. entered the Gulf War. It hasn’t been invoked since that conflict, but as sponsor Rep. Abigail Spanberger (D–Va.) explained, “The fact that it hasn’t been misused or hasn’t been abused doesn’t mean that that possibility doesn’t exist at some point in the future.”

On June 17, the House voted to repeal the 2002 AUMF, which granted the president the authority to combat Saddam Hussein’s regime in Iraq without congressional approval. The vote margin for that bill was tighter than Tuesday’s at 268–161, even though its repeal would not affect current U.S. military conduct either. It hasn’t been used as the sole authorization behind operations since the Iraq War ended in 2011.

Meanwhile, the 2001 AUMF that authorized the president to invade Afghanistan—and which has been the basis of 41 operations in 19 countries—has not seen a formidable legislative challenge. 

The measures Congress has repealed won’t lead to a meaningful reduction in presidential overreach in military conduct. Indeed, these bills passed the House in part because their repeal wouldn’t affect contemporary military campaigns. The White House backs repealing the 2002 AUMF  because it would “likely have minimal impact on current military operations.” Repealing benign laws, even those with concerning underpinnings, would do little to change how Congress and the president collaborate—or don’t—on military operations. 

What’s especially telling is that President Joe Biden hasn’t invoked a single AUMF—not the one from 1957, 1991, 2001, or 2002—to justify the airstrikes he’s carried out in his 161 days in office. To authorize his February airstrikes in Syria and his Sunday attacks there and in Iraq, he cited Article II of the Constitution, which allows the president to protect U.S. service members in self-defense. (Whether the strikes were truly defensive is still open to debate.)

That dynamic highlights an important aspect of presidential war making—an executive determined to wage war has tools at his disposal, even without the broad discretion granted to him by AUMFs. As symbolically important as it is to repeal the legislation that took away much of Congress’ combat oversight, more will need to be done to tie the president’s hands. 

from Latest – Reason.com https://ift.tt/3jzfiw3
via IFTTT

JPM’s Kolanovic: The Delta Variant Does Not Pose A Risk For Markets

JPM’s Kolanovic: The Delta Variant Does Not Pose A Risk For Markets

Amid the growing mainstream media panic over the covid Delta variant, which one can only assume is meant to set the stage for another lockdown and even more stimulus payments, earlier today we tried to explain why much of this fearmongering is nothing more than just “panic porn dressed up as science.” However, with the market also starting to freak out about the Delta strain with rates hammered and travel and auto shares sliding on concerns about future lockdowns as the reflation trade fizzles yet again, we note that none other than the market’s biggest cheerleading permabull, JPM’s Marko Kolanovic who has emerged as this generation’s Abby Joseph Cohen, this morning published a report in which he says that “the Delta variant does not pose a risk for markets” and that “yields and value should move higher”, which was to be expected since JPM’s core thesis is to be be balls to the wall long value.

Reminding readers that contrary to the rest of the market which freaked out over the emerging B.1.1.7 variant back in February, Kolanovic was quite optimistic back then (and as always), the Croatian quant then extrapolates the same argument to today, writing that “there is a similar setup now with the so-called Delta COVID-19 variant fears, which resulted in a decline in yields and value stocks.”

So what makes JPM’s resident nuclear physicist-cum-immunologist – who also opines on markets, so certain that the delta strain is a nothingburger, a view that could promptly get him canceled by the “narrative” brigade which is so positive that the D in Delta stands for Doom?

Well, as he writes, “we analyzed the progression of new cases and fatalities in the top 15 countries most affected by the Delta variant over the past month” and looking at the progression of cases (as driven by the Delta variant) and fatalities, “we find that in 10 out of 15 countries cases declined, and in 13 out of 15 countries fatalities declined as the Delta variant increased share of new infections.”

In summary, Kolanovic writes, “spread of the Delta variant has on average coincided with an improvement of the overall COVID-19 situation in affected countries.” He goes on:

Let us analyze the situation in the countries where pandemic conditions deteriorated over the past month. These 3 countries are Portugal, the UK, and Russia. In Portugal, the deterioration resulted in an increase of ~900 cases per day, which is about 7% of cases during the peak pandemic. However, the increase in fatalities is ~1 per day, which is consistent with noise. In the UK, cases increased by ~14,000 per day, which is a significant increase; however, fatalities increased by ~9 per day, which is 0.9% of the peak fatality rate. This is consistent with findings that vaccines effectively prevent worse outcomes in Delta variant infections. One should also note that the current increase of delta cases results in 5-10 times smaller fatality rates compared with the outbreak of B.1.1.7 this winter, likely a result of high vaccination rates and natural immunity. This is further corroborated with that fact that most fatalities occurred in unvaccinated people.”

Kolanovic then looks closer at Russia, where the Delta variant is driving a significant number of cases and fatalities (e.g., 39% increase in cases, and 36% increase in fatality rate in June) and asks “How is the situation in Russia different from other countries?” His answer:

  • First, it is important to notice that the % of the population vaccinated in Russia is 4 times smaller than, for example, in the UK and USA (12% vs 48% for fully vaccinated population, 14% vs 57% for full and partially vaccinated).
  • Secondly, note that the estimated natural immunity in Russia is at least 2 times smaller based on COVID-19 fatalities per capita than in the UK and USA since March last year. In other words, given that Russia had a much smaller number of COVID-19 cases and vaccines administered, overall immunity of the population in Russia is much smaller.

For this reason, the JPM quant argues that any COVID-19 variant (alpha, beta, gamma, etc.) would result in faster spread and bigger impact in Russia (i.e., similar to the winter wave in the US and UK). Pointing to the chart below, Kolanovic argues that “Russia is an outlier, and not driven by Delta but rather by the level of immunity.”

And while many will be alarmed that a JPM quant is once again practicing virology, that does not stop Kolanovic to conclude that “the Delta variant should not have significant repercussions for the pandemic situation in developed markets (e.g., Europe and North America, which have strong progress in vaccination) due to the level of population immunity, and hence positioning in markets should not be driven by this
or any other subsequent variant of COVID-19 for which current vaccines are effective.”

While Kolanovic is probably right, what is remarkable is that his “Delta” analysis – goalseeked as it may be – only seeks to further JPM’s bullish market thesis.

We reiterate our view to go long reflation, cyclical and value trades, and sell growth and defensive positions.

What if he is wrong? Well, people may die, but more importantly, the value names JPM is long will drop.

Finally, we find it a big paradoxical that in talking down the risk of the Delta variant, Kolanovic reduces the odds of another fiscal intervention which is surprising because if JPM really wants value, oil and yields higher, he should be begging for another cool trillion or two in stimmy checks. But if the Delta variant proves to be a dud, not only will another stimulus bonanza not come, but it is much more likely that any value outperformance is now over not because of any Delta-related fears but because the market still has some forward looking capabilities, and they are all looking to September when Biden’s emergency claims expire, and when wages and income will tumble dragging the broader economy – and yes, value stocks too – with them while the tailwind of government generosity turns into a headwind.

With that in mind, we wonder how long until JPM changes its mind and concludes that the Delta strain is actually far more dangerous than consensus believes and deserves a few more trillion in value-boosting fiscal stimuli.

Tyler Durden
Wed, 06/30/2021 – 15:23

via ZeroHedge News https://ift.tt/364oX5O Tyler Durden

Erik Voorhees: Bitcoin’s Point Is ‘Financial System of the Planet.’


Erik.Voorhees.Miami Bitcoin_

Few figures in the bitcoin community are as controversial and visionary as Erik Voorhees, founder and CEO of the cryptocurrency exchange ShapeShift.

Back when cryptocurrency was in its infancy and its conferences included lectures delivered to empty rooms, Voorhees was helping to popularize bitcoin’s unique attributes with an unregulated online casino called SatoshiDice.

After he sold SatoshiDice, Voorhees was investigated by the Securities and Exchange Commission (SEC) and was fined $50,000, observing that the investigators didn’t seem to understand bitcoin. “As much as I hated government before,” he recalled, “then I was like, ‘man, this is what these people do, go around ruining innocent people’s lives.'”

The son of libertarian businessman and writer Jacques Voorhees, he discovered bitcoin in 2011 while living in New Hampshire as a member of the Free State Project. Voorhees was employee number three at BitInstant, an early exchange backed by Cameron and Tyler Winklevoss and whose founder, Charlie Shrem, ultimately went to prison on charges of operating an unlicensed money-transmitting business.

Unlike bitcoin maximalists, who insist that bitcoin is the only cryptocurrency with any viable future, Voorhees maintains that other coins do serve a purpose.

In 2017, as fees on the network were climbing, he controversially backed an unsuccessful attempt to scale up bitcoin’s ability to process transactions, which critics said would have weakened the network’s security and decentralized structure.

At the Bitcoin 2021 conference in Miami, Voorhees talked to Reason‘s Nick Gillespie about the immense growth not just in the market caps of cryptocurrencies but in their economic and cultural legitimacy, the ways they challenge central banks and political power, and why he believes in multiple coins and continuing innovation in digital currency.

from Latest – Reason.com https://ift.tt/2Tludzj
via IFTTT

Steve Cohen Is Hiring Head Of Crypto

Steve Cohen Is Hiring Head Of Crypto

One month after we reported that Steve Cohen’s SAC Capital Point72 was set to make a “sizable entrance” into the crypto market and is poised to “get big in crypto,” today we learned that Steve Cohen isn’t joking around and as TheStreet and BBG reported, Point72 is seeking to hire “a head of crypto.” It wasn’t immediately clear what the position would entail.

“We are exploring opportunities around blockchain technology and its transformative and disruptive capabilities,” Point72 said in a May letter to investors seen by Bloomberg. “We would be remiss to ignore a now $2 trillion crypto currency market.”

Cohen’s interest in crypto was also confirmed in a recent interview in which he said that he has done a deep dive in crypto and is “fully converted.”

I’m fully converted to crypto. You have to pay to learn; there’s no way around it. You can talk all you want, but you’ve got to get in the game.

Furthermore, despite the total crypto market hitting $2.5 trillion back in May and then losing about half of that value since then, the New York Mets owner believes that he’s still early:

I’m not going to miss this. I’ve missed the first part, but I still feel like I’m early. I may look foolish initially, but it accordingly to earn the game. And then, when you’re confident, take it to the next level.    

As Bloomberg notes, Cohen’s pursuit of a dedicated crypto trader comes at a time when dedicated cryptocurrency firms are struggling to find the right candidates to fill hundreds of positions. A frenzy of interest in digital currencies and other assets have pitted those shops against some of the world’s biggest financial institutions, with Goldman Sachs, Bank of New York Mellon and DBS starting to offer services and trading.

What is perhaps most notable is that for once Cohen appears late to a trade: one of his big rivals, Israel Englander’s Millennium has been active in crypto-related futures and exchange-traded funds, and plans to continue in the space, while Brevan Howard Asset Management has begun investingin crypto, as has Paul Tudor Jones. In March, hedge fund manager Dan Loeb said he was doing a “deep dive” into crypto, while One River Asset Management opened a dedicated bitcoin and ethereum fund in late 2020.

Tyler Durden
Wed, 06/30/2021 – 15:06

via ZeroHedge News https://ift.tt/2UVecAD Tyler Durden

Erik Voorhees: Bitcoin’s Point Is ‘Financial System of the Planet.’


Erik.Voorhees.Miami Bitcoin_

Few figures in the bitcoin community are as controversial and visionary as Erik Voorhees, founder and CEO of the cryptocurrency exchange ShapeShift.

Back when cryptocurrency was in its infancy and its conferences included lectures delivered to empty rooms, Voorhees was helping to popularize bitcoin’s unique attributes with an unregulated online casino called SatoshiDice.

After he sold SatoshiDice, Voorhees was investigated by the Securities and Exchange Commission (SEC) and was fined $50,000, observing that the investigators didn’t seem to understand bitcoin. “As much as I hated government before,” he recalled, “then I was like, ‘man, this is what these people do, go around ruining innocent people’s lives.'”

The son of libertarian businessman and writer Jacques Voorhees, he discovered bitcoin in 2011 while living in New Hampshire as a member of the Free State Project. Voorhees was employee number three at BitInstant, an early exchange backed by Cameron and Tyler Winklevoss and whose founder, Charlie Shrem, ultimately went to prison on charges of operating an unlicensed money-transmitting business.

Unlike bitcoin maximalists, who insist that bitcoin is the only cryptocurrency with any viable future, Voorhees maintains that other coins do serve a purpose.

In 2017, as fees on the network were climbing, he controversially backed an unsuccessful attempt to scale up bitcoin’s ability to process transactions, which critics said would have weakened the network’s security and decentralized structure.

At the Bitcoin 2021 conference in Miami, Voorhees talked to Reason‘s Nick Gillespie about the immense growth not just in the market caps of cryptocurrencies but in their economic and cultural legitimacy, the ways they challenge central banks and political power, and why he believes in multiple coins and continuing innovation in digital currency.

from Latest – Reason.com https://ift.tt/2Tludzj
via IFTTT

BLM Rioter Who Smashed Car Window In A Toddler’s Face Avoids Jail After Lawyer Says It Was An “Emotional Time”

BLM Rioter Who Smashed Car Window In A Toddler’s Face Avoids Jail After Lawyer Says It Was An “Emotional Time”

Authored by Paul Joseph Watson via Summit News,

A Black Lives Matter rioter who smashed a car window in a 1-year-old child’s face has avoided prison after his lawyer argued that it was a “very emotional time” for the culprit.

Yes, really.

A video from the incident, which occurred in Fredericksburg VA during last year’s George Floyd riots, shows a BLM mob surrounding the vehicle before Victor Miles II smashes the glass which shatters all over the child in the back seat.

The clip appears to show Miles deliberately targeting the toddler.

For this despicable act, Miles received a suspended sentence of just 90 days for assault and destruction of property charges and the assault charge will be completely removed from his record if he stays out of trouble for a year.

Defense attorney Eugene Frost justified the pathetic sentence by arguing that Miles was angry because, “It was a very emotional time all the way around.”

Miles was originally facing a 5 year prison sentence on felony charges of unlawful wounding, but now he is free to walk the streets and attack anyone else who doesn’t bow to the BLM mob.

A Guardian analysis of legal records following last year’s devastating nationwide riots found that,

“The vast majority of citations and charges against George Floyd protesters were ultimately dropped, dismissed or otherwise not filed.”

In addition, NYPD data shows that out of the 118 arrests that were made in the Bronx in June 2020, 73 were dismissed while 18 cases remain open and there were 19 convictions for lesser crimes like trespassing which carry no jail time.

America is increasingly becoming a two tier society where left-wing extremists can commit wanton acts of destruction and violence for months on end with zero consequences while Trump supporters are treated like terrorists.

“Though Capitol protesters are being tortured in jail and held in indefinite detention for “trespassing” into the people’s house, last year’s Black Lives Matter rioters are being treated with kid gloves after citing their lived experiences and emotional trauma,” writes Chris Menahan.

*  *  *

Brand new merch now available! Get it at https://www.pjwshop.com/

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, I urgently need your financial support here.

Tyler Durden
Wed, 06/30/2021 – 14:45

via ZeroHedge News https://ift.tt/3AcN9AN Tyler Durden

FOSTA’s Failure: The 2018 Sex Trafficking Law Has Been Worse Than Useless So Far


sfphotosthree371804

Is FOSTA a failure?

The federal law concerning commercial sex ads was pitched and passed by Congress with extreme urgency, as activists and politicians insisted it was absolutely necessary for stopping sexual violence and exploitation. But FOSTA—short for the Allow States and Victims to Fight Online Sex Trafficking Act—has only factored into one criminal prosecution since its passage in 2018. Meanwhile, it’s made finding and fighting sex criminals more difficult.

The law’s lack of usage and its unintended consequences are the subject of a new report from the Government Accountability Office (GAO), which looked at cases brought by the U.S. Department of Justice (DOJ) against commercial sex ad platforms from 2014 through March 2021.

The Feds Didn’t Need FOSTA

Before and after the passage of FOSTA, the U.S. Department of Justice has preferred to use money laundering and racketeering charges to target adult-advertising platforms for criminal prosecutions.

Since 2014, DOJ has filed at least 11 cases against websites that allowed ads for sex work, leading to the prosecution of 23 people and seven organizations. Only one of these cases—filed in June 2020 against Cityxguide.com—has utilized FOSTA.

The first DOJ case was filed in June 2014 against myredbook.com. The second came in 2015, against rentboy.com. Next up: Backpage.com. (This tally does not count state prosecutions DOJ assisted with but did not prosecute on its own, such as the 2016 takedown of Seattle’s The Review Board.)

In spring 2018, the DOJ filed three cases involving Backpage. According to FOSTA advocates, prosecuting Backpage was the main reason FOSTA was needed. But this was never true—as evidenced by the fact that the site was seized and those affiliated with it charged before FOSTA became law.

Nor has the DOJ needed FOSTA to target Backpage descendants. Since FOSTA’s passage, the DOJ has initiated six more criminal prosecutions of commercial sex platforms. Five out of these six did not involve FOSTA charges.

DOJ officials told GAO that this may be partly because of the law’s newness but also because they’ve seen so much success using the old statutes. Racketeering, money laundering, and conspiracy statutes have long been used by the federal government to target prostitution and those who enable it.

But FOSTA was also aimed at prostitution broadly—not just sex trafficking, though this more salacious element was the near-exclusive focus of advocates, media, and legislators pushing for the new law.

Prostitution—which is not a federal crime—is often a consensual matter between two adults. By contrast, sex trafficking by definition involves either an adult being forced, coerced, or defrauded into prostitution or someone under age 18 engaging in prostitution (on their own accord or via force, fraud, or coercion). “While prostitution and sex trafficking both involve commercial sex activity, sex trafficking is defined under federal law as inherently exploitative,” explains the GAO report.

FOSTA dealt with both prostitution and sex trafficking, creating the new federal crime of owning, managing, or operating “an interactive computer service […] with the intent to promote or facilitate the prostitution of another person.” It also carved out an exception to Section 230, the federal communications law that shields websites from some liability for user-generated content. Under FOSTA, Section 230 does not apply in civil lawsuits involving claims of sex trafficking or in state criminal prosecutions involving allegations of sex trafficking or managing a website that promotes prostitution.

States Didn’t Need FOSTA 

FOSTA’s change to Section 230 was one long pushed for by state attorneys general.

Before FOSTA, it was already a federal crime to knowingly advertise a sex trafficking victim. And, as we’ve seen, the DOJ could also go after websites for prostitution ads by using money laundering, conspiracy, and racketeering charges. But until FOSTA, Section 230 precluded state attorneys general and private actors from successfully taking websites to court for merely running ads that later led to sex crimes. State prosecutors that tried it—including now-Vice President Kamala Harris—kept losing in court.

Attorneys general tend to flock toward law enforcement issues that can get them lots of press and allow them to seize ample assets or negotiate big settlements. Yet here was a hot-button issue—sex trafficking and ads that facilitated it—perfect for getting attention and making money, with just one thing—Section 230, “the Internet’s First Amendment“—perceived as standing in their way.

So, for years, state attorneys general begged Congress to change federal law so they could ignore Section 230 when it came to cases involving sex ads. FOSTA granted them this power.

Yet since FOSTA was passed more than three years ago, states have declined to file civil suits or criminal charges against adult-ad platforms. Instead, they’ve moved on to targeting deep-pocketed and mainstream tech companies such as Facebook and Google with antitrust lawsuits (and pushing further erosion of Section 230).

Two of the main premises for passing FOSTA were that the law was needed to target Backpage and that state attorneys general were missing a crucial tool. Neither justification holds up.

Still, FOSTA wouldn’t be a complete failure if it accomplished another goal: fighting sex trafficking. And yet…

FOSTA Didn’t Fight Trafficking (But Backpage Did) 

FOSTA and the takedown of Backpage have made finding and fighting sex criminals more difficult, according to the GAO report.

Since FOSTA’s passage, the commercial sex ad market has become more highly fragmented and more likely to be based overseas. This “heightens already-existing challenges law enforcement face in gathering tips and evidence,” the report says. Those running the newer platforms often “host servers abroad, reside abroad, use offshore bank accounts and financial institutions, or introduce third parties to attempt to obscure or distance themselves from the day-to-day operation of their platforms, according to DOJ officials.”

Whereas sites like Backpage and Craigslist were willing to work with legal authorities—reporting suspicious ads, turning over information relevant to prosecutions, etc.—the new crop of commercial sex ad platforms are much less responsive and helpful. As a result, prosecuting their users has become more difficult, as has finding the victims of sex trafficking.

“According to a 2019 FBI document, the FBI’s ability to identify and locate sex trafficking victims and perpetrators was significantly decreased following the takedown of Backpage.com,” states the GAO report. “According to FBI officials, this is largely because law enforcement was familiar with backpage.com, and backpage.com was generally responsive to legal requests for information.”

In contrast, “obtaining evidence from entities overseas may be more cumbersome and time-intensive, as those who control such platforms may not voluntarily respond to the legal process, and mutual legal assistance requests may take months, if not years, according to DOJ officials.”

The FBI also told GAO that it’s seen more sex ads migrate to “social media, dating, hookup, and messaging/communication platforms.” A combination of factors—including greater anonymity on these sites, auto-deleting options, encrypted messaging, and the large number of such platforms—also makes finding victims and building cases off of them more difficult than it was when a few platforms dominated the sex-ad marketplace.

Civil Suits and Chilled Speech

There are some areas where FOSTA seems to be making a major impact—albeit not necessarily a positive one. In the wake of FOSTA’s passage, a number of platforms have begun to crack down on sex worker posts and/or on sex-related content more generally.

Some platforms—such as Craigslist, which shut down its entire personals section in the wake of FOSTA—admitted to changing their policies in direct response to the law. Many more have quietly cracked down on sexual content.

Such crackdowns can be seen in changes to terms of service, and in countless tales of sex workers having their social media posts deleted or accounts canceled.

Evidence suggests these changes haven’t prevented predators—who can still easily use private chat and message functions—from using these services to recruit and communicate with victims. But it has made it harder for independent sex workers to use online platforms (which, incidentally, could put them in danger by cutting into their incomes and necessitating riskier methods of finding and communicating with customers), and led to a general chilling of sexuality-related speech and imagery on the public parts of these websites.

This sort of sanitization of the internet has long been a goal of many of the groups that pushed for FOSTA, including the National Center on Sexual Exploitation (NCOSE), a conservative morals group formerly known as Morality in Media. And making it harder for anyone (including consenting adults) to engage in sex work is also on the agenda of many FOSTA proponents.

On these fronts, FOSTA has been a success. It’s just not the success story that supporters promised, which is that FOSTA would help sex workers and sex trafficking victims.

So far, no victims have obtained restitution as a result of FOSTA. “As of March 2021, one individual had sought civil recovery in federal court under section 3 of FOSTA, but no damages were awarded and the case was dismissed,” according to the GAO report.

Recently, however, NCOSE has been helping orchestrate new federal lawsuits—so far, against Twitter, Pornhub parent company MindGeek, and XVideos—accusing platforms of facilitating sex trafficking. These, too, seem to have serious flaws, and it’s unclear whether they’ll accomplish anything but helping NCOSE get good press.

The Success of FOSTA 

So, is FOSTA a failure? If you accepted political grandstanding around the issue, then yes. FOSTA has failed at the goals publicly stated by most activists, attorneys general, and lawmakers who pushed for its passage.

But there was always a reason to suspect those publicly stated goals. For one, the DOJ was already having success prosecuting prostitution content, had already seized Backpage without it, and had actually urged against FOSTA’s passage. For another, Congress had just passed a sex-ad law a few years earlier (the 2015 SAVE Act) that had gone completely unused.

In addition, politicians pushing for the law had refused to listen to sex workers and non-religious victims groups—who opposed the law en masse—about the negative consequences it would have on their work and safety and who challenged the claim that this law was for their protection. Meanwhile, the groups they did listen to were largely radical feminists and Christian conservatives, openly dedicated to eradicating all sex work and pornography and prohibiting free speech online around even non-criminal displays of sexuality.

For these activist groups, the fight for FOSTA was a great opportunity to get invited to testify before Congress, get their names in the press, and raise money, all while tacitly pressuring internet companies to start cracking down on all sorts of sexual content. And for politicians—in Congress and state prosecutors’ offices—it was a great way to grandstand about fighting crime and helping women without having to make any politically difficult decisions.

FOSTA may not have been legally necessary or socially useful. But in certain prohibitionist and public relations terms, it’s been a resounding success.

from Latest – Reason.com https://ift.tt/3x7YTm5
via IFTTT