Out of the Storm News
From the Aurora Advocate:
The R Street Institute and the National Taxpayers Union say the results should prompt Ohio’s congressional delegation to think twice before backing federal legislation on the issue.
“From our perspective, this is a really dangerous expansion of state tax authority,” said Andrew Moylan, executive director if the R Street Institute. “We have a system where states are rightly sovereign within their own borders, but their power ends at borders’ edge, because we can’t have states trying to exert control over commerce in other states.”…
…R Street and the National Taxpayers Union decided to poll Ohioans on the issue; about 400 likely voters in the state responded a telephone survey early last month.
Among the results, 56 percent of respondents said they opposed allowing states to require online retailers to collect sales taxes on out-of-state purchases. More than 60 percent said they seldom or never buy things online.
The results have a margin of error of about 5 percentage points.
Moylan acknowledged arguments from supporters of the Marketplace Fairness Act, but he said the result would not be fair to all of the businesses involved.
The proposed federal legislation “would create a totally unlevel playing field, where if you’re a brick-and-mortar retailer, you get to use this simple, easy standard of collecting based on where you’re located, whereas you would be forcing online businesses to have to jump through all of these hoops to figure out tax obligations across the country.
He added, “There are 46 states with sales taxes, there are 9,998 separate taxing jurisdictions across the country. Asking online businesses to be accountable for all of those … is the exact opposite of a level playing field.”
From 1370 WSPD:
“Ohioans of all political stripes, majorities, count themselves in opposition to this,” said Andrew Moylan, executive director of the R Street Institute, a Washington D.C. think tank.
Under current law, states are only able to collect sales taxes from businesses that actually have a physical presence in the state. Business groups, like the Ohio Council of Retail Merchants, argue that gives online retailers an unfair advantage in the marketplace.
However, Moylan argues that forcing a business based in one state to collect sales tax for 46 states and more than 9,000 taxing authorities is unfair.
“Asking online businesses to be accountable for all of those when you are only asking brick-and-mortar businesses to be accountable for the one where they are physically located is the exact opposite of a level playing field,” he said.
A bill, labeled the Marketplace Fairness Act, would change current law and allow states to require online retailers, known as e-tailers, to collect and remit sales tax from customers. The U.S. Senate passed the bill, but the House hasn’t taken it up. A new version has since been introduced in the Senate.
Ohio has a use tax, which requires residents to voluntarily report items purchased out of state and pay a tax on it.
Moylan also worries that an internet sales tax could open up retailers to other cross-state taxes.
“From our perspective this is a really dangerous expansion of state tax authority,” he said.
From the Iowa Republican:
National Taxpayers Union visited Iowa Wednesday to reveal the results of a poll that shows Iowans overwhelmingly oppose a sales tax on internet purchases. Representatives from the taxpayer watchdog group, along with D.C.-based think tank R Street Institute, revealed the findings during an early afternoon briefing at the State Capitol.
R Street Executive Director Andrew Moylan and Pete Sepp from the National Taxpayers Union joined host host Kay Henderson of the Learfield Radio Network’s Radio Iowa to discuss R Street/NTU polling showing voter opposition to the proposed Internet sales tax. Listen to the whole show below.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.http://www.rstreet.org/wp-content/uploads/2014/07/mickelson-2014-07-16.mp3
The National Taxpayers Union and a D.C.-based think-tank are touting a new survey which finds a majority of Iowans are opposed to paying sales taxes on internet purchases.
A Gallup poll last year found 57 percent of Americans were opposed to internet sales taxes and the groups’ survey, which was conducted in Iowa this past May, found 67 percent of Iowans were opposed to the concept.
Andrew Moylan of the R Street Institute was at the Iowa capitol today to discuss the survey with legislative staff and representatives from Iowa business groups. Moylan suggested candidates for all offices should be wary of allowing states to collect internet sales taxes, including prospective presidential candidates like Ted Cruz, Mike Lee and Marco Rubio who’ve been campaigning in Iowa. There may soon be a vote in the U.S. Senate on a bill that would give states greater authority to collect sales taxes on internet sales.
“This is definitely coming to a head now and I think that folks who are supporters of this would like to get this done as soon as possible because even supporters don’t want to be on record supporting an internet sales tax bill so close to an election,” Moylan said during an interview with Radio Iowa.
Moylan praised Chuck Grassley, Iowa’s Republican senator, for opposing what’s called The Marketplace Fairness Act that would give states broader authority to collect sales taxes on internet purchases. Others who support the legislation say Main Street businesses see more and more people who come in, look over the merchandise, then go online to make the purchase — escaping the sales taxes they’d pay if they bought the product in the store. Moylan rejected that argument.
“There are 46 different states with sales taxes and 9,998 different taxing jurisdictions across the country,” Moylan said, “and so if you’re asking online retailers to have to jump through all those hoops when brick-and-mortar retailers are just jumping through one where they’re physically located, I think that’s the opposite of a level playing field.”
According to a University of Tennesse estimate, $88 million in sales taxes that were legally due to the State of Iowa were NOT collected on internet purchases made in 2012. Moylan argued that “pales in comparison” to the sales taxes the State of Iowa fails to collect because the state sales tax is not charged on all services. For example, boat repair services are not subject to the Iowa sales tax and, ironically, the state sales tax is not charged to any “on-line computer service” operating in Iowa. Here’s the comprehensive list of state sales tax exemptions for both goods and services.
Gov. Jerry Brown’s spokesman has raised questions about the feasibility of the Six States proposal, arguing that “the proposal has serious practical challenges.” But does this position harmonize with Brown’s own articulated preferences?
Venture capitalist Tim Draper believes his initiative to carve California into six separate states has now received the requisite number of signatures necessary to qualify for a November 2016 ballot. If it does, since the vote itself is not imminent, voters in California will have a substantial amount of time to consider separation and subsidiarity.
Public reaction to the initiative has been mostly critical. A poll in February placed opposition to the Six States plan at 59 percent. Among pundits and the Internet crowd, there is even less enthusiasm. In rare spasms of political conservatism, Ezra Klein of Vox believes that it is “an incredibly dumb idea”; the San Francisco Chronicle maintains that such a move will create a “state of confusion”; and Reddit’s response has been the comically apoplectic: “F*** everything about this.” Perhaps the difficulty Vladimir Putin faces in reassembling the former Soviet Union is informing their opinions.
Nonetheless, the obstacles to the Six States effort truly are daunting. First, the initiative would necessitate a majority vote of California’s electorate. Second, approval of the split by the California Legislature, as it is currently composed, would likely be required. Third, the plan would need a green light from Congress. Each step appears a degree of magnitude more difficult to achieve than the last.
Still, the Six States plan deserves serious consideration if for no other reason than the existing precedent for such a conversation.
While California is today the most populous state in the nation, with 38 million people currently living within its borders, extreme geographical and cultural variations have always been a hallmark of the state. In 1859, California’s legislature recognized the problem associated with such dissimilarities and passed legislation that would have broken California into two states, Northern and Southern. When the question was put to voters, they agreed. Three out of four voters cast a ballot in favor of devolution (Congress never acted on the question, preoccupied as it was by the events leading to the Civil War).
Today, there are any number of angles from which to evaluate the Six States proposal, including representational, economic and cultural.
The subsidiarity angle, though, is well-known as a favorite of California’s current governor, Jerry Brown. Gov. Brown is a former Jesuit novice fond of Catholic social philosophy. During both the 2013 and 2014 State of the State addresses he referenced the notion of “subsidiarity.” The idea behind subsidiarity is that matters should be handled by the least centralized and smallest competent authority possible.
Through the lens of subsidiarity, California’s government is something of a failure. Can it really be said that 38 million Californians are represented in Sacramento by the smallest competent authority possible? Consider that a California state senator represents 931,000 people, compared to a California member of Congress who represents 704,000 people. This ratio of population-to-legislator is by far the highest in the United States.
Perhaps the issue could be addressed by something short of dividing the state since adding legislators is not unheard of, but other problems defy straightforward resolution.
Not unexpectedly, even though the U.S. Constitution grants the states plenary power over matters not explicitly reserved to the federal government, the State of California maintains state functions that are unable to respond flexibly to regional concerns. This is particularly true with regard to the state’s regulatory environment on business, natural resources and transportation issues.
For example, those areas of California that are dependent upon cultivation of agricultural development, and those that are dependent upon the use of natural resources, chafe under the political weight of parts of the state capable of supporting themselves through other means. By use of the governor’s subsidiarity concept and dividing California, new states would be able to establish regulatory environments reflective of not only their own political will, but also the economic assets of their region. Doing so, residents of the new states would have their will better reflected by a state government in closer proximity to their concerns – a total win for subsidiarity.
Clearly, the practical uncertainty associated with splitting up California demands at least as much attention as the theoretical justifications for a split. No doubt, much time and effort will be expended in that very endeavor. Still, an advocate of free markets and the plain benefits of federalism would be hard-pressed to ignore the virtues of reassessing California’s present situation.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
WASHINGTON (July 17, 2014) – The R Street Institute today urged members of Congress to commit to sensible reforms to the federal Terrorism Risk Insurance Program, as called for under U.S. House legislation that would extend the program for five years.
The U.S. Senate today voted to approve S. 2244, the Terrorism Risk Insurance Program Reauthorization Act, by a 93 to 4 margin. Unlike H.R. 4871, the TRIA Reform Act – which was approved by the House Financial Services Committee in June – the Senate’s proposed seven-year extension fails to make appropriate changes to the program to shift more risk to the private sector, according to R Street Senior Fellow R.J. Lehmann.
“The insurance and reinsurance markets have grown significantly in the dozen years since the Terrorism Risk Insurance Act first was passed, as seen most recently by some reinsurers dropping exclusions for terrorism from standard policies,” Lehmann said. “As private markets for terrorism insurance continue to advance, it is appropriate that the government’s role should retreat to ensure that private capital is not displaced by taxpayer bailouts.”
The Terrorism Risk Insurance Program is a $100 billion federal backstop established in the wake of the Sept. 11, 2001 terrorist attacks. It provides reinsurance coverage for terrorism risks to private insurers, who are required to offer coverage to their commercial property, liability and workers’ compensation policyholders. Insurers do not pay the government any premium for the coverage, but under some circumstances may be asked to repay a portion of any outlays after an event.
While the Senate bill does make modest adjustments to the federal share of terrorism losses, which gradually would be scaled back to 80 percent from the current 85 percent, the House bill goes further by raising the trigger level for coverage for conventional terrorist attacks to $500 million. Events involving nuclear, biological, chemical and radiological risks would retain the current $100 million trigger.
“Reinsurance broker Guy Carpenter recently issued a report finding that multiline terrorism reinsurance capacity is about $2.5 billion per program for conventional terrorism and about $1 billion per program for coverages that include NBCR,” Lehmann said. “The changes proposed in the House bill are well within the bounds of the private market’s existing capacity, and failing to make those changes would put taxpayers on the line for risks that should be borne by big corporations, property owners and insurance companies.”
Polling released Friday by free-market think tank R Street Institute and conservative lobbying group National Taxpayers Union indicates that a majority of residents in six states including Pennsylvania, Minnesota and Wisconsin oppose efforts floating in Congress to impose new sales tax collection laws on Internet retailers.
R Street and NTU are conducting a national polling campaign that the groups says is aimed at measuring the public’s support of the Marketplace Fairness Act. So far, a majority of respondents in Pennsylvania, Minnesota, Wisconsin, North Carolina, Virginia and…
With the impending shortage in the U.S. Highway Trust Fund, claws have come out across the political spectrum. Grassroots activists decry what they see as wasteful spending on many highway projects, while governors on both sides of the aisle, as well as union and business interests, fear what they believe would happen if the federal dollars begin to dry up.
Harsh rhetoric abounds, with Jay Timmons, president of the National Association of Manufacturers, calling the grassroots threatening Republican lawmakers:
…fringe elements who are using intolerant social propaganda and distorting the records of honorable men and women, driving them into the wilderness of defeat.
Meanwhile Dan Holler at Heritage Action responds that:
America is not facing ‘a transportation government shutdown’ and lawmakers should stop trying to create an artificial crisis which they can use as an excuse to raise taxes or increase spending.
The fight hinges mainly on the gas tax, which many lawmakers are keen to raise to address the shortfall. The House passed legislation to plug the hole yesterday, and the Senate will take up the issue later this week. Alternate plans are continually bandied about, including Rep. Kerry Bentivolio’s Repairing Our Aging Roads Act (the ROAR Act, unfortunately introduced without any references to bringing our roads “roaring” back). The opposing sides have dug in, with many interest groups favoring an increase, while conservative activists press lawmakers to refuse until all wasteful spending is rooted out.
Like many political fights in D.C., it’s quite plausible that both sides are correct – while we should be fighting unnecessary spending and artificially inflated costs, it could also be very possible that a gas tax increase is necessary to modernize our nation’s infrastructure. The American Society of Civil Engineers rated America’s roads a “D” and our bridges a “C+.” The Federal Highway Administration estimates that $170 billion is needed annually to improve road performance, but the gas tax falls short. While these studies should be taken with a grain of salt, even Richard Geddes of the conservative American Enterprise Institute questions the ability of the gas tax to bring in the amount necessary to fix the problems.
On July 8, Americans for Prosperity released a coalition letter signed by 17 conservative and libertarian organizations laying out a set of principles to address the issue. These principles include limiting fuel tax revenue to fund federal roads and bridges only; giving control over state interests back to the states; and reforming regulations like the Davis-Bacon Act’s “prevailing wage” requirements and redundant environmental impact studies that increase costs. Each of these principles have merit, and should be considered seriously by any fiscally responsible lawmaker also interested in improving America’s infrastructure.
However, it could be true that even if all those principles were adhered to, an increase in the gas tax may still be necessary to deal with our nation’s aging infrastructure. Unfortunately, the heated nature of these debates obscures any real discussion over our country’s needs and how to best address them. For unions, the money is a sacred pot in an age of declining membership and opportunity. For business, the specter of aging roads and failing transportation networks incites deep fears. And for politicians, the money represents real dollars for their districts.
But for government watchdogs, the spending is rightfully another example of waste and abuse. In today’s age of bitter partisanship, thoughtful conversation seems unlikely, which is unfortunate, as it will likely result in more dollars wasted and less actual infrastructure improvement. We should be considering a wide variety of alternatives, as fuel efficiency increases and Americans drive less. In this vein, Geddes and Brookings’ Clifford Winston have put forward several innovative solutions. But with elections pending, Congress’ ability to consider real alternatives seems to be out of gas.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
Would you think that an unexpected ban of a disruptive technology, particularly a ban imposed 20 years ago by a private race car administrative organization, could retard timely availability to consumers of sophisticated, high-performance automotive technology? Please hold that question while I digress for a few moments.
Car culture lives at the intersection of innovation, industry and regulation. From this spot, enthusiasts develop preferences and prejudices alike.
A kernel of axiomatic truth among many who drive their cars exuberantly is that, when possible, a manual transmission is essential. There are three elements undergirding this preference. The first is a belief that manual transmissions provide a driver with greater control over the drivetrain. The second is that, until very recently, manual transmissions tended to be more efficient, allowing for lighter engines that accelerate faster and get slightly better mileage.
The third element is not mechanical at all, it is cultural. In an era in which manual transmissions represent only a small fraction of all vehicles sold in the United States, a buyer’s preference for manual transmissions oft arises from a condition we will call “throwback authenticity.” This makes a very satisfying and low-budget snobbery available to anybody who chooses to drive a manual.
As a self-styled car enthusiast, one with a snobby history of seeking out manual transmissions whenever possible, I was dead-set on continuing to select my own gears. Then, last week, a sudden need for a new vehicle emerged. After ticking through my mental shortlist of desirable vehicles, I took a ride to my local Subaru dealership. Upon arrival, I was delighted to see, sitting front and center, the blue 2015 WRX for which I had made the trip.
I experienced utter disappointment upon finding that it was not a manual. Worse…it was not just any automatic, it was a nearly universally despised form of automatic known as CVT (continuously variable transmission).
My snob sense went off the chart and I became peevish. CVTs are known for being slow, unresponsive, dull and generally antithetical to all things performance. Still, I was coaxed into test driving the vehicle by the person who had given me a ride to the lot.
The test was brief but transformational. Impossibly, I was forced to reconcile myself to a new reality when, as I accelerated out of a corner, the transmission responded to inputs from the steering wheel-mounted paddle shifters as fast as my fingers could muster a tug. When I hopped out of the car I was left wondering how in the world such a powerful anti-CVT narrative could ever have taken hold in my head.
Back to the intersection point of “innovation, industry and regulation”:
The innovation: CVTs do not have gears. Instead, inside of a CVT, there is a drive-belt positioned between a pair of pulleys. The significance of this is that there are an infinite combination of power-delivery settings between the two pulleys, hence the name “continuously variable.” By not having to change gears, there is less parasitic loss between the engine and the tires. The associated savings can manifest themselves in the form of increased miles per gallon. Further, a CVT is capable of keeping an engine operating in a specific manner (be it for economy or performance) all of the time, because there are no set gear ratios, allowing the engine to operate at peak efficiency for whatever purpose it is being used at that time.
Like many novel technologies, CVTs were temperamental in their initial applications. Early adapters were beset by frequent drive-belt failures, because the belt was made from rubber. Subsequent adapters found the CVT both reliable and economical, but unrewarding to drive, because of their prevalence in low-powered vehicles. By pairing the CVT to the Prius, the transmission became a lodestar of enthusiast disdain.
Industry’s role: CVTs found their first automotive application in a small Dutch make named DAF, an abbreviation of Van Doorne’s Trailer Factory (in Dutch: Van Doorne’s Aanhangwagen Fabriek). DAF was gobbled up by Volvo, which allowed the technology to gain widespread exposure.
In the early 1990s, CVTs came to the attention of teams competing at the highest level of racing in the world, Formula 1. Teams recognized that, since an engine is constantly accelerating and decelerating, it is rarely operating at its full potential. For an engine to operate at its full potential, it is necessary for it to hold its speed at the peak of its power – a feat that a CVT is uniquely suited to accomplish. To this end, a number of well-financed Formula 1 teams began to develop CVT transmissions with a belt strong enough to withstand the phenomenal power loads of a Formula 1 engine.
Racing regulation: By 1993, a number of teams were testing CVTs in their cars under race conditions. Unsurprisingly, because the engines were not wasting time or power revving up and down the unprofitable parts of their power-curves, the cars were fast…several seconds a lap faster than traditional transmissions.
The CVT cars were arguably too fast. Not because the cars or the drivers could not sustain the pace, but because they were able to seriously upset the competition’s ability to compete without them. For this reason, to preserve competitive balance, Formula 1′s governing body decided to ban the use of CVTs.
Banning the use of CVTs at the highest level of racing competition retarded the development of the technology. Formula 1 teams enjoy an unparalleled level of factory funding and support because the cars are excellent platforms from which speculative technologies may be proven and refined. Arguably, without a fair trial in the crucible of motorsports, CVTs were unable to realize their potential until decades later. The intervening decades of mediocrity spawned a legion of detractors, hence the existence of an anti-CVT narrative among the automotive press corps and the enthusiast crowd for whom they write.
The generally applicable lesson that can be induced from the CVT story is that the shadow cast by regulation, even by non-governmental bodies, can be long and profound. By prohibiting the use of a particular technology, as opposed to introducing regulations designed to shape outcomes more globally, Formula 1 sought parity in an overbroad and ineffective way (fittingly, Team Williams, the first team to develop a racing CVT, enjoyed an uninterrupted period of dominance even without the transmission).
An enthusiast, I remain. But, now I proudly drive a technology that was able to overcome the heavy hand of regulatory shortsightedness. I drive a CVT.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
From WVTF Public Radio:
Both sides of the issue want to sway Virginia Congressman Bob Goodlatte, who chairs the House Judiciary Committee, to their side. The R Street Institute’s Andrew Moylan says a new poll reveals that most Virginians don’t want their goods purchased through sites such as eBay to be taxed. He also says the process is burdensome because on-line businesses would be required to pay varying taxes based on each state and purchase point. He says there’s another option.
“The sort of technical term for it is origin sourcing, but in practice what that means is allowing online retailers to utilize the same collection scheme that brick and mortar retailers use, which is based on where they are physically present – where they are physically located. Then they only have to know one sales tax code – they only have to be accountable to one revenue agency.”
Even as it faces new regulatory headaches in New York, transportation network company Lyft is making news this week with a major announcement today that should quiet at least some of its vocal critics: the company has begun offering primary commercial auto insurance coverage for its drivers.
Lyft already provided a $1 million excess liability policy, generally designed to kick in once a driver’s private passenger auto policy limits were exhausted, typically at $50,000 of coverage. However, given that some standard private passenger policies may exclude coverage for a driver while acting in a commercial capacity (or, at least, given general legal uncertainty about whether such coverage would be upheld in a dispute) Lyft’s policy had a unique structure that would allow it to “drop down” to cover the first dollar of loss in case the primary policy did not respond.
But given concerns from regulators in places like Virginia, New York, California and Seattle (largely egged on by local taxi associations) that even this “drop-down” coverage wasn’t sufficient, Lyft is just going all the way to offering primary coverage:
In response to that feedback from leaders in markets such as New York, California and Seattle, Lyft has voluntarily converted its policy from excess to be primary to a driver’s personal policy during the period from the time a driver accepts a ride request until the time the ride has ended in the app. This major change is part of our continued effort to set the highest standard for trust and safety in transportation.
The coverage is provided via James River Insurance Co., a Richmond, Va.-based surplus lines writer that is ultimately owned by Bermuda-based Franklin Holdings Ltd. According to statutory filings, the company had $165.0 million of policyholder surplus as of the end of the first quarter, and it hold an A- financial strength rating from A.M. Best Co.
It makes sense that this new kind of risk would require looking to the surplus lines market for a solution. But over the longer term, if car-sharing does indeed take hold as a major transportation option across a broad swath of American cities, we would expect admitted market insurers will be able to craft their own products to meet this emerging consumer need.
Though “hybrid” products could either from personal lines or commercial lines insurers, full-scale commercial auto insurance policies would likely be a bit of overkill for the limited amounts of commercial activity in which most car-sharing drivers engage. A far simpler solution would be for personal lines insurers to come forward with riders or endorsements that offer coverage for a nominal amount of commercial activity, provided they could appropriately price the coverage.
That’s where it is crucial that insurance regulators remain flexible to permit insurers to innovate and bring new products to market in a reasonable time frame.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
WASHINGTON (July 14, 2014) – Tomorrow, U.S. Reps. Tony Cárdenas (D-San Fernando Valley, Calif.) and Mick Mulvaney (R-South Carolina) will host a bipartisan discussion regarding continuing long-term unemployment in the United States and one potential solution, the American Worker Mobility Act.
A recent report by the World Bank indicates that decreased labor mobility is slowing our economic recovery and stalling employment. As a partial solution, the American Worker Mobility Act, introduced by Mulvaney and Cárdenas, would create relocation vouchers for American workers to move from areas of high unemployment to parts of the nation where job openings are more prevalent.
The bipartisan proposal has been supported by economists on all sides of the political spectrum, some of whom will be represented at the discussion. Panelists will include:
- Lori Sanders, Outreach Director and Senior Fellow at the R Street Institute and author of “Moving to Work” in National Affairs’ Winter 2014 issue
- Michael Shank, Senior Fellow at the JustJobs Network and the Associate Director for Legislative Affairs at the Friends Committee on National Legislation
- Michael Strain, Resident Scholar for the American Enterprise Institute
- Marshall Steinbaum, Research Economist at the Washington Center for Equitable Growth
The panel discussion will take place at 4 p.m. TUESDAY, July 15, in 210 Cannon House Office Building. Mulvaney, Cárdenas and the panelists will be available for interviews before the discussion, as well as following the event.
WHO: U.S. Rep Tony Cárdenas
U.S. Rep Mick Mulvaney
WHAT: Bipartisan Discussion of Long-Term Unemployment
WHEN: Tuesday, July 15 at 4 p.m.
WHERE: 210 Cannon House Office Building
WASHINGTON (July 11, 2014) - The second week of the National Taxpayers Union (NTU) and R Street Institute’s 20-state tour to announce poll results relating to the Marketplace Fairness Act’s (MFA’s) brand of Internet sales tax scheme wrapped up today at the State House in Virginia – having previously visited South Carolina, North Carolina, Wisconsin, Minnesota and Pennsylvania.
In these six states, polling results have shown that the MFA, which “would allow tax enforcement agents from one state to collect taxes from online retailers based in a different state,” is a toxic issue for voters, with respondents rejecting such legislation by margins as high as 26 points.
Even in blue states like Pennsylvania, Minnesota and Wisconsin, voters have overwhelmingly indicated their belief that the Internet should remain as free from regulation and taxation as possible. Additionally, Independent voters have polled as strongly against a federal Internet sales tax law, including by a 25-point margin in the Keystone State.
“Taxes of any kind will rarely be popular in opinion polls, but our survey shows citizens want an Internet that prospers without excessive government interference,” said Pete Sepp, NTU executive vice president. “If a candidate had polling numbers like this Internet tax collection scheme, I suspect the political consultants would take notice and seek a different path.”
“We’ve seen a universal response from residents of these states that they believe the Internet should exist to enrich their lives, not the treasuries of other states,” said Andrew Moylan, executive director and Senior Fellow of the R Street Institute. “Voters have strong misgivings about proposals pending before Congress, and are equally strong in their support for an Internet free from oppressive taxation and regulation. Lawmakers should pay attention to what their constituencies are saying loud and clear.”
Since I wrote about the Lyft/New York City fight for The Weekly Standard this morning, it has come out that state Attorney General Eric Schneiderman is suing the company for daring to offer free rides to the residents of taxi-starved outer boroughs.
On its face, this resembles something out of an Ayn Rand novel, minus the purple prose, 100-page lectures and violent sex. As best as I can tell, the practical argument against letting Lyft operate and provide rides for free seems to come down to because…reasons.
I can’t really find any of those reasons and a few things that sound scary—the attorney general claims that Lyft started operating in other cities across New York State without official permission—should actually be comforting to those worried about the company’s safety record. Since it’s operated incident-free in these places, that’s a good sign that nothing serious is going to go wrong in New York City either.
For now, however, there’s an easy enough compromise that everyone should be able to live with: let anyone else who wants to, offer rides for free. If there are real regulatory questions to be answered, the two weeks that Lyft has already committed to providing free service should be way more than enough to get them answered and fulfill whatever bureaucratic requirements the city wishes to impose.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
UPDATE: New York state Attorney General Eric Schneiderman is indeed now suing Lyft for daring to offer free rides. See the update here.
As anyone who has visited New York City knows, getting a taxicab in the city can prove very, very difficult. And finding a driver that speaks English, has working air conditioning, will let a visitor pay by credit card and knows directions to major landmarks can be even harder. That’s why it’s utterly bizarre that the city is trying to stop drivers from offering taxi-like rides in the city for free.
The underlying cause of the cab shortage, of course, is the city’s antiquated system of taxi medallions that limits a city of 8.4 million people and few parking spaces to about 13,000 cabs—about 4,000 fewer than existed in in 1937 when the city had a million fewer residents.
To their credit, the city’s elected leaders have moved to remedy that situation by slightly increasing the supply of medallions, creating new, green-colored taxis to serve outlying areas, and letting Uber, a trendy company best known for its high-end “black car service,” operate. (Albeit with constant bureaucratic meddling.)
But the city’s bureaucratic mandarins don’t seem to want to allow their subjects too many new options. Exhibit A is their treatment of a newcomer to the market, the San Francisco-based company called Lyft, which puts giant pink mustaches on the front of its cars and encourages drivers and fares to fist-bump. The company, scheduled to debut in taxi starved Brooklyn and Queens on July 12, was planning to offer its services for free to build market share during its first two weeks in operation.
The city’s response: If drivers so much as dare to give people free rides, they’ll face $2,000 fines and might have their cars impounded if they, say, fail a spot engine emissions check. Given that Lyft and its competitors (Uber’s UberX service and Sidecar) largely rely on people driving their personal cars, this is a draconian penalty, to say the least. Indeed, there really doesn’t seem to be a limiting principle that would stop the city from applying the same logic to people who give rides to friends. After all, they’re competing with taxis too.
The city does, of course, have some legitimate interest in overseeing the safety of companies that offer rides for money. But given that Lyft, Uber, Sidecar and some smaller players have all already compiled better-than-taxis safety records in dozens of markets where they already operate, i’’s difficult to figure out why the process should be complicated or involved. In the end, if a private company wants to offer the city’s resident something for free, the bureaucrats really need to think about getting out of the way.
Eli Lehrer, president of the R Street Institute, a conservative think tank that specializes in insurance issues, applauded Cartwright for finding common ground between Democrats and Republicans on the issue of disasters. Lehrer said the bill could reduce damage without additional spending.A conservative climate agenda
Last week, Lehrer challenged conservatives to embrace policies around climate change in a column published by the National Review. He argued that it could be done “without giving up a single conservative principle” by ending all energy subsidies, overhauling the National Flood Insurance Program and strengthening federal facilities against disasters.
Yesterday, he said Cartwright’s bill would improve federal catastrophe policy even if climate change was not happening.
“This bill makes a lot of sense on its own,” Lehrer said. “What we do know is that disasters are going to happen.”
…Proponents of the Marketplace Fairness Act argue that its implementation would help brick-and-mortar businesses remain competitive with online companies. The R Street Institute Executive Director Andrew Moylan disagrees with that premise.
“It’s the exact opposite of leveling the playing field,” he said. “It’s about the relationship of the government and the Internet.”
R Street Executive Director Andrew Moylan was a guest on the Bill LuMaye Show on Raleigh, N.C.’s WPTF (NewsRadio 680/TalkRadio 850) to discuss federal proposals to allow states to collect Internet sales taxes from out-of-state businesses. Andrew and guest host Mitch Kokai of the John Locke Foundation in particular focused on recent R Street/National Taxpayers Union survey data, showing that North Carolinians oppose the proposal by a 57 percent to 31 percent margin
You can listen to the full episode below and visit rstreet.org/donttax for updates on R Street and NTU’s state-by-state Internet sales tax polling.This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
WASHINGTON (July 11, 2014) –The R Street Institute today welcomed the introduction by Rep. Cory Gardner, R-Colo., of the Earnings Advancement and Recovery Now Act, or EARN Act.
By its own estimate, the federal government made $14.5 billion in improper EITC payments last year alone, which accounts for 24 percent of the program. The legislation aims to reduce misdirected spending and dedicate the savings to expanding credit for working families.
“The Earned Income Tax Credit has proven to be one of the most effective ways to lift hard-working families out of poverty,” said Lori Sanders, R Street outreach director and senior fellow. “The EARN Act takes important steps toward curbing the recognized problem of improper payments, which is an essential part of making the credit work for more Americans. We applaud Rep. Gardner’s willingness to address this issue and encourage his colleagues to both support these reforms and to think creatively with regard to protecting and expanding this crucial anti-poverty tool for those who need it most.”
Sanders cautioned that the bill is only a first step and that more should be done to simplify the EITC and increase oversight to ensure accuracy in payments.
“We need to make it simpler to ensure that everyone who deserves the tax credit is able to understand and access it, but curtailing willful abuse is crucial to ensuring that its impact isn’t undermined by fraudulent claims. By reducing improper payments, we will be able to expand the credit to reach a larger population, particularly working noncustodial parents in need of additional help,” she said.