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Virginia takes lead in patent reform

April 07, 2014, 8:30 AM

As awareness builds about the cost in dollars and innovation that patent trolling extracts from the economy, Virginia has been among the states that have responded with legislation designed to counter frivolous patent suits while protecting legitimate patent holders.

Both chambers of the Virginia General Assembly unanimously passed bills designed to protect state businesses from patent infringement allegations that are frivolous or made in bad faith.

Patent trolls, or patent assertion entities, are companies or consortiums that acquire patents solely to coerce license fees or royalties from innovators who develop something similar. Relying often on vague, nonspecific claims of infringement, the entities threaten litigation, which can be prohibitively expensive for a start-up, to induce an out-of-court settlement. The most visible difference between a patent troll and a legitimate inventor is that trolls don’t make or market a product related to the patent in question.

Nationally, 7,000 businesses were sued by patent trolls in 2011 and 2012, four times as many as were sued in 2006, according to Michael Beckerman, president and CEO of the Internet Association, a trade group representing U.S. Internet companies. Counting direct payments to trolls, legal fees and other associated costs, troll litigation costs U.S. businesses $80 billion a year.

Many trolls are deep-pocketed, aggressive organizations with international reach. Some are state-sponsored, using patent assertion as a latter-day protectionist strategy either to extract payments from promising U.S. start-ups or impede their entry into their home markets. Taiwan’s Industrial Technology Research Institute holds more than 18,500 patents and has been asserting them in U.S. courts.

Italy’s Sisvel, with offices spread across seven countries, controls patents in 12 different technology standards pools. In the past, Sisvel’s attempts at theatric intimidation have involved bringing in armed guards to shut down 51 exhibitors at a major German trade show, alleging they were infringers.

Virginia’s legislation follows similar action in other states over the past several weeks in Kentucky, Oregon and Maine.

As patent assertion entities tend to target high-tech start-ups, many legislators are worried that trolling will adversely affect the technology business climate in their respective states. Virginia also reflects the general bipartisan concern. Attorney General Mark Herring, a Democrat, had significant input in the bills, which were shepherded through the Legislature by Sen. Richard Stuart and Del. Israel O’Quinn, both Republicans.

The bills authorize the attorney general to investigate cases of patent trolling and sue to recover civil penalties.

Recognizing that patent cases can often be complicated, the Virginia bills establish a set of standards that will aid in separating legitimate patent claims from trolling.

These standards target questionable elements commonly found in complaints from trolls, such as no identification of the actual patent holder, failure to specify how the defendant is infringing and a demand for unreasonably high license or royalty fees.

In Congress, the House of Representatives has already passed the Innovation Act, sponsored by Virginia Rep. Bob Goodlatte. Like the state bill, Goodlatte’s bill would require patent assertion entities to be specific about infringement claims.

The bill, which has been garnering bipartisan support on Capitol Hill, also would force plaintiffs to pay the defendant’s legal fees if the court finds claims to be frivolous. Multiple reform bills await action in the U.S. Senate, and President Barack Obama has come out in favor of patent reform.

There are encouraging signs that legislation and programs are working.

During the first two months of 2014, a total of 778 patent cases were filed, a 25 percent drop from the 1,038 cases filed during the first two months of last year, according to data from Lex Machina, a legal firm that specializes in helping companies fight trolls.

January’s monthly total of just 322 new cases was the lowest since October 2011, the firm reported.

By exploiting patent law, trolls sap U.S. businesses of energy and capital.

Virginia deserves praise for its leadership in stopping abuse and maintaining a fair and favorable business climate in the commonwealth.

How to get Americans back to work

April 07, 2014, 8:00 AM

Friday’s Labor Department data shows an uptick in jobs, but an unemployment rate that remained steady from February to March. While the size of the labor force is increasing, the economy is not strong enough to get all would-be workers off the sidelines and into jobs.

Part of the story is that the fates of the short-term unemployed and the long-term unemployed have sharply diverged. The short-term unemployment rate, as Annie Lowrey of the New York Times has observed, is lower than its pre-recession level, while the long-term unemployment rate remains very high.

We need to find better ways to help the 3.7 million American workers who’ve been out of a job for six months, and the twice-as-large number of workers who are working part-time although they’d prefer full-time employment. But we would also do a great deal of good by ensuring that the short-term unemployed don’t remain on the sidelines for long.

That is why America needs wage insurance – a form of insurance that would subsidize a worker’s income if she were forced to take a job with a lower salary. The goal of wage insurance is to encourage workers to broaden their job search and to subsidize on-the-job training as they move from one kind of employment to another. A woman who worked in construction for most of her adult life might have a hard time transitioning to the hospitality industry, for example, and starting from scratch in an entry-level job would mean accepting a low wage. Wage insurance would cushion her and her family against this drop in income, and it would give her an opportunity to raise her skill level so that she could eventually command a higher wage from her employer.

Wage insurance was first introduced in 2005, by policy scholars Lael Brainard, Robert Litan and Nicholas Warren. The goal of the program was not to shield workers from all risk, but rather to provide them with a strong incentive for rapid re-employment. Workers who lose their jobs and then find jobs that pay less would receive an insurance payout that would cover up to 50 percent of the earnings gap, up to $10,000 a year for no more than two years.

The authors estimated that the program would cost roughly $3.5 billion a year (in 2005 dollars), and saw it as a way to protect the interests of workers permanently displaced by off-shoring and technological change.

Yet because the authors had no way of imagining the Great Recession and its impact, they ultimately understated the case for their proposal. Had we implemented a well-designed wage insurance program in the mid-2000s, we may have avoided much of the pain associated with the recent downturn.

To be sure, a wage insurance program would have cost more in recent years than Brainard, Litan and Warren had anticipated in 2005, particularly when the labor market was at its worst. But if the program had prevented millions of workers from entering the ranks of the long-term unemployed, it would have more than justified its expense.

One of the most attractive aspects of the proposal from Brainard, Litan and Warren is that it starts the clock on its two-year eligibility window after just a few weeks of unemployment. The sooner a person takes another job, the bigger the insurance payout she would ultimately receive. This provision would reduce the cost of traditional unemployment insurance while also limiting some of the damaging effects of being out of work.

Critics of the program worry more about “undermatching,” in which workers rush to take jobs for which they are overqualified, thus reducing their long-term earning potential. But the threat of undermatching must be balanced against the heavy economic and social costs of long-term unemployment. Wage insurance would reduce the costs associated with undermatching, and it wouldn’t prevent workers from returning to their old industries if or when they recover.

Granted, a new wage insurance program can’t do much to help the millions of workers who have already entered the ranks of the long-term unemployed. But it can spare future workers from the same fate.

Patent reform efforts shouldn’t overlook patent quality

April 07, 2014, 7:30 AM

With the Senate Judiciary Committee set to take up legislation in the next several days that looks to combat so-called “patent trolls,” it’s imperative that lawmakers address the real underlying problem of low-quality patents, which give the trolls a platform to sue anyone and everyone.

There’s much to like about the Patent Transparency and Improvements Act, the primary bill under consideration in the Senate. Introduced by committee Chairman Patrick Leahy, D-Vt., and cosponsored by Sen. Mike Lee, R-Utah, the bill follows the path of the Innovation Act, which passed the U.S. House in December by an overwhelming 325-91 margin. Like the House bill, which has the support of the White House, it tackles a set of important litigation reforms, as well as addressing demand letters and transparency requirements for patent litigation and ownership.

But neither effort is comprehensive, especially when it comes to confronting bad patents. Notably, the worst offenders are software and business method patents. One study from George Mason University estimates 39 to 56 percent of software and business method patents would be found invalid if challenged. And when these kinds of infringement claims do go all the way to court, they almost always get shot down.  According to another study from the non-partisan Government Accountability Office, software-related patents are responsible for most of the increase in patent litigation in recent years (notably, the patentability of software currently is being considered by the Supreme Court).

Patent trolls have become a major economic drain, causing billions each year in economic damage. The targets are not just technology companies, but also many businesses you wouldn’t expect. For instance, one troll went after coffee shops, restaurants and hotels just for offering wireless Internet service. Another troll went after businesses for using scanners connected to an office network.

The list of dubious patents goes on and on. Complicating matters, non-disclosure requirements and lack of transparency for patent settlements make it difficult to assess the true scope of the problem.

Since litigation can cost millions per case, there’s often no practical way to challenge bogus infringement claims. This gives trolls a profitable racket extorting nuisance settlements from small businesses that can’t afford to fight back against bad patents. While litigation reforms like fee-shifting, customer-stay, and increased transparency will help mediate the trolls’ advantages in court, these changes won’t address the fundamental problem: that we need a better way to invalidate stupid patents.

During the markup process, we expect the Judiciary Committee to incorporate language from other proposals in the Senate, particularly a very strong bill put forward by Sen. John Cornyn, R-Texas. Of the half-dozen bills in the Senate, we recommend a close look at one sponsored by Sen. Chuck Schumer, D-N.Y., which is the only one that deals seriously with the underlying issue of patent quality.

Schumer’s idea goes back to the debate Congress had three years ago when it passed the America Invents Act, an earlier effort to reform the patent system. Coming only a decade after the federal circuit made “business methods” patentable, the law reflected the concern shared by many senators that we needed to curtail or eliminate these patents, as they allowed trolls set their sights on America’s financial institutions.

The final legislation included a provision from Schumer creating the covered business method (CBM) review program. This program offered a much cheaper alternative to litigation, making it practical to fight back against bad patents. But while the original debate was grander in scope, the final provision only covered a specific class of financial services patents, and had an expiration date in 2020.

Schumer’s current bill would expand the CBM program to other industries, and eliminate the sunset provision. While the original version of the House’s patent reform bill also had a provision expanding the CBM review program, large incumbent firms lobbied aggressively to remove it. Its opponents argued that it would unfairly subject them to an onslaught of challenges and delay their ability to shut down infringing competitors.

While they have real concerns, the systemic benefits of improving patent quality vastly outweigh them. Unfortunately, this may go down as a classic public choice failure, where those with concentrated benefits triumph over a multitude bearing dispersed costs.

In the end, our intellectual property system was created for the sole purpose of promoting innovation; for what the founders called “the Progress of Science and useful Arts.” The limited monopoly granted through the patent system is the means, not the end. And we should be very careful not to get those wires crossed if we want America to continue being the world’s technological leader.

Abusive patent litigation is a tax on innovation, not an incentive for it. In the final push for reform in Washington, lawmakers should address the root of the problem — not just treat the symptoms.

R Street’s Salam with FBI vet Michael German

April 07, 2014, 7:00 AM

Over at the Vice Podcast, R Street’s Reihan Salam discusses how the FBI has changed since the Sept. 11, 2001 terrorist attacks, with Michael German, a 16-year FBI veteran. Check out the video below:

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To make Congress more accountable, make it more open

April 04, 2014, 4:10 PM

This piece was co-authored by Daniel Schuman is policy director at Citizens for Responsibility and Ethics in Washington.

Nearly two decades ago, Congress began publishing some of its activities online, revolutionizing access to essential public information. The system was called THOMAS, after our third president. Managed by the Library of Congress, it aimed to serve as a central hub to find bills and resolutions, the Congressional Record, committee reports, treaties and so on. There’s no doubt that, for 1995, this was a huge leap forward.

While technology has changed a lot since the mid 1990s, the quality of data coming from Congress has not kept up. Complicating matters, the THOMAS website is set to be retired and replaced with Congress.gov by the end of 2014. Once this happens, applications that have been developed with this data, and that are used extensively by congressional members and their staff, interest groups and citizens, will stop working.

Congress.gov could support truly transformative applications, but for that to happen, Congress must provide its underlying data to the public in machine-readable formats. In its absence, many outside developers are put off by the inaccessibility of the information, while others scramble to find makeshift solutions.

Creating a more open and comprehensive system of public data — not only from Congress.gov, but throughout government — would make a variety of powerful new applications possible. They could show instantly how an amendment would change a bill, alert users to relevant hearings, or even tie constituent communications to particular legislation. Not only would these changes drastically reduce the overwhelming workload put on legislative staff in Congress, they also would help make the federal government leaner and more effective.

What’s more, the utility of open data isn’t limited to those inside the Beltway. According to a recent Pew poll, 87 percent of American adults now go online. That number jumps to 97 percent among adults under 30. The Internet has become the central clearinghouse for how we access news and information, including information about our government and its laws.

As legal scholar John McGinnis observed, “[a]s a successor to the printing press, the Internet advances liberty by continuing to reduce the cost of acquiring information.” Bringing the lawmaking process out into the light of day serves to level the playing field with entrenched special interests, who otherwise benefit from privileged access and a more opaque process.

recent poll by The Economist and YouGov showed only 9 percent of Americans approve of the job done by Congress. But if the people don’t know what their representatives are up to, they have no easy way to engage with them. Lowering barriers to access legislative information promotes a healthier democracy by encouraging a more informed citizenry to more closely scrutinize federal policy. One example of this transformation can be seen in the Washington Examiner’s “Appropriate Appropriations?” page, which brings attention to spending bills deemed wasteful and abusive using information from the Cato Institute’s Deepbills Project.

Despite flaws in the current system, civic hackers and public interest groups like the Sunlight Foundation and GovTrack have created a myriad of applications using legislative data. Many of these projects receive millions of views, with hundreds of thousands of app downloads, and tens of thousands of active users, including hundreds of members of Congress and thousands of staff.

Growing recognition of our data problem, particularly by leaders from both parties in the U.S. House, has led to significant improvements. For example, the Clerk of the House’s new docs.house.gov website transformed public access to floor actions and committee activities. But there still remains a trove of crucial information not yet published in formats that computers can easily use, such as updates on what stage of the legislative process a given bill has reached.

We believe people have a fundamental right to know what their government is doing. There’s still a long way to go, but we’ve assembled a nonpartisan coalition of public interest groups, individuals and companies who want to raise awareness and promote better access for all. Our group, the Congressional Data Coalition, will host its first event April 4. If government transparency matters to you, we hope you’ll join us.

Coalition urges Congress to pass meaningful NSA reform

April 04, 2014, 10:05 AM

From United Liberty:

A coalition compromised of nearly 40 groups expressed support for ending the federal government’s bulk data collection program in a letter to President Barack Obama, Attorney General Eric Holder, and congressional leaders from both parties…

…Signers to the letter come from across the ideological spectrum, including Americans Civil Liberties Union, Competitive Enterprise Institute, Electronic Frontier Foundation, FreedomWorks, Generation Opportunity, R Street Institute, Reddit, and TechFreedom. The full list of signers is available here.

CDC report highlights poisoning risk from liquid nicotine in e-cigs

April 04, 2014, 10:03 AM

From the Winston-Salem Journal:

Brad Rodu, a professor of medicine at the University of Louisville and a smokeless-tobacco advocate, said he views the CDC report as “another example of a relentless, orchestrated campaign to demonize e-cigarettes.”

He said the CDC report does not put the poison risk into proper context.

In 2012, U.S. poison control centers reported there were 172 calls about exposure to ecigs among children under 6 years old, compared with 7,480 calls about all tobacco products, 106,582 calls about household cleaners and 156,623 calls about cosmetics and personal care products.

“Many consumer products pose potential danger, especially to young children; if put into the perspective of exposure to other common household items,” Rodu said. “Selective reporting of poison control information about e-cigarettes is trivial.”

Can a vampire serve in Congress?

April 03, 2014, 4:40 PM

While this might be the sort of question one usually only expects to hear on an episode of True Blood, it became a genuine concern this week. It was revealed that Jake Rush, a primary challenger to U.S. Rep. Ted Yoho, R-Fla., makes a habit of role-playing as fictional vampires with names like Archbishop Kettering, The Kriesler and most infamously, Chazz Darling, the last of whom has been linked to a controversial blog post expressing the (in-character) desire to sexually assault a fellow character.

At first blush, this might sound terribly odd and potentially sinister. Actually, it is only Americans’ pervasive ignorance of the otherwise harmless role-playing lifestyle that makes it see it that way.

To give some context, Rush, alias Darling, is a member of a group called the Mind’s Eye Society. The conceit is that they are a sub-sect of the fictional vampire clan known as the “Camarilla,” featured in White Wolf’s “Vampire: The Masquerade” role-playing system.

Like all role-playing systems, “Vampire” relies on its players to create characters and act as those characters, unless specified otherwise. This can be done around a table with randomized dice rolls being used to determine sequences of events (such as combat).  Or it can be done by actually dressing up and going out to act together as those characters, using improvised fake weapons and/or rock/paper/scissors to substitute for the dice.

Role-playing is, in short, nothing but improvisational theater without an audience. Players should not be taken to be acting in a way that is consistent with their actual personality, any more than Ronald Reagan should be attacked for the actions of his mob boss character Jack Browning in 1964′s “The Killers.” These are role-playing games because the players are literally playing roles, i.e. characters who are not them.

Adding to the confusion is Rush’s specific role within his group’s game. According to SaintPetersBlog, Rush is a storyteller – a “regional storyteller” – a job which, in game terms, makes him the theatrical equivalent of a director, scriptwriter and stage manager all rolled into one. Rush would have been responsible for creating not just his own characters, but also potential antagonists for any sessions he oversaw (role-playing sessions tend to behave like episodic television shows in that they have plots), and probably performed several of those roles himself.  This puts him at an even greater remove from the actions of his characters.

So why is there such a rush to judge Rush for the storylines in which he participated or helped create? Probably because, unlike acting for an audience, role-playing is still perceived as a niche interest of odd and/or undesirable people.

Unfortunately, this is especially true in some Republican circles, where the memory of social conservative moral panics surrounding games like Dungeons & Dragons has not entirely faded. The 2012 election cycle, for instance, saw distasteful mailers sent out accusing Democratic Maine state senate candidate Colleen Lachowicz of being unfit for the office, merely for the crime of playing World of Warcraft, and openly enjoying the experience.

Never mind that conservative luminaries like Hillsdale College’s John J. Miller, or British politician Michael Gove or even bestselling author Michelle Malkin, are all open and avowed role players, to say nothing of the countless other famous writers and actors who have come from the role-playing scene. For some conservatives, the idea of people engaging in what is essentially harmless improvsional theater appears to be too much to stomach. Lachowicz won, but Rush appears to be feeling the same sting.

Of course, opportunism is natural in American politics, but there are points where making certain attacks do more harm than good for a political party. For instance, cases where they create an image that makes the party appear ignorant, bullying, or reflexively judgmental for no good reason. The reaction against Jake Rush by some on the right seems to parallel the complaints of Fox News panelist Greg Gutfeld, who made the following point in an interview with the New York Post:

 OK, so why aren’t conservatives cool? Gutfeld makes a valid point: “From my experience being around conservatives, it’s extremely frustrating how dismissive they are of ‘weird’ things, and that hurts them.”

Gutfeld chooses the music that backs his segments on “The Five” and “my choices are never met with ‘That’s good’ or ‘That sucks.’ It’s always rewarded with anguished looks on the other panelists’ faces and the two-word review, ‘That’s weird.’ “

Automatically dismissing tradition and latching onto whatever’s new isn’t cool. But neither is being closed-minded.

When even a Fox News host is complaining about a lack of openness on the right, there’s a problem. Republicans have already nominated a candidate who professed a love for reading about vampires. Is it really such a stretch to consider one who writes and acts as one in his spare time?

After all, unlike many members of the political class, at least in Rush’s case we can be sure that feeding off the lifeblood of others is only an act.

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Multiplication nation

April 03, 2014, 11:06 AM

From Reuters:

Reihan Salam and Matthew Klein don’t want to legislate for demographics, but they do want to tax incentivize for them. Here’s Salam’s solution

Tax the childless to help parents?

April 03, 2014, 10:24 AM

From the New York Times:

“The willingness of parents to bear and nurture children saves us from becoming an economically moribund nation of hateful curmudgeons,” Reihan Salam wrote recently in Slate. “The least we can do is offer them a bigger tax break.” Childless taxpayers like himself should pay more, he said. He suggested lowering the threshold at which higher tax rates kick in, and then giving parents a new $2,500 per child credit that’s included in a Republican bill in the House.


Breaking wind

April 03, 2014, 10:15 AM

It’s budget season, and with budget season comes a renewed debate over one of the most depressing elements of American politics – namely, its tendency to pick winners and losers based solely on the arbitrary political whims of individual legislators. As such, it’s no surprise that the Senate is considering pushing the Wind Production Tax Credit into its tax extenders package this week.

Unfortunately, like many of the worst pieces of legislation passed in recent years, this particular bit of bad economic medicine has a spoonful of sugar that many lawmakers find particularly easy to swallow. Namely, the fact that it has bipartisan support. Specifically, both Democrats like Mark Udall of Colorado, and Republicans like Chuck Grassley of Iowa, have signed letters that support extending the credit. At the state level, 23 governors have signed a similar letter.

On the one hand, it’s easy to see why bipartisanship of this kind carries so much currency in Washington, especially at a time when the two parties are otherwise historically polarized. In this context, bipartisanship can recommend a piece of legislation based on a cunningly disguised logical fallacy which posits that if both parties can agree on something, when they agree on so little, it really must be a noncontroversial public benefit. This is a naïve, if understandable, view insofar as it ignores the fact that many exercises in bipartisanship happen simply because the politicians in question are united more by common desire for economic favoritism and corporate welfare than they are divided by party affiliation. The Stop Online Piracy Act was one good example of such a bill.

Similarly, in this case, one doesn’t have to be an investigative journalist to see how the desire for campaign cash is the uniting factor. Grassley, for instance, has been on the receiving end of $5,000 from the wind industry, while one of Udall’s top five contributors throughout his career has been the alternative energy company NextEra Energy, who have given him a total of $42,000 over five years. In the words of Frank Underwood, “when the t—’s that big, everybody gets in line.”

Campaign donations alone don’t prove a lack of due diligence, but in this case, they certainly raise the question. The wind production tax credit is built on nothing but empty air. To begin with, the wind power industry reaps an unprecedented level of subsidies from the federal government relative to other forms of energy, taking in $24/megawatt hour, in comparison with $1.65 for all other forms of industry except solar. For this reason, the last extension of this credit cost taxpayers $12 billion.

This might be acceptable, or at least defensible, if the wind plants in question were producing energy Americans were actually using. But in fact, the subsidy is structured such that no one ever checks whether that’s actually the case. Rather, the credit simply assumes that if wind power is producing electricity, someone must want it, and forks over the money to wind companies regardless of whether the power they produce is wanted or needed. This runs entirely contrary to free-market practices, and to common sense.

What’s more, wind power has failed at an international level. As the German newspaper Der Spiegel noted about their own country’s experiment with a similar subsidy:

Indications are mounting, however, that green capitalism will not be able to meet all expectations. In courts around the country, complaints are mounting from wind park investors who haven’t received a dividend disbursement in years or whose parks went belly up. Consumer protection activists are complaining that many projects are poorly structured and lack transparency. In the renewables sector, fear is spreading that the Prokon bankruptcy – combined with plans for a reduction in the guaranteed feed-in tariff recently released by new German Economy Minister Sigmar Gabriel – could scare away investors.

Defenders of wind power claim the industry is still a fledgling one and needs time to be allowed to grow. But the fact is that the industry has been subsidized since 2009, and shows no signs of slowing down in terms of the amount of money it demands from the government. The entire point of a free market is to see which fledgling industries deserve to survive on their own, rather than pretending that some deserve special treatment simply because they aim to achieve objectives that are consonant with the wishes of political leaders. The wind industry is dependent on never having to leave the nest. If it can’t survive after five years of being propped up in a way that other industries are not, it may be time to throw in the towel and wait for something more economically viable.

In other words, the wind production tax credit is not so much a case of bipartisan common sense as it is of bipartisan cronyist irrationality. It’s time the federal government finally let the wind out of the sails of this unprofitable experiment.

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Sanders talks robopocalypse on FBC’s ‘The Independents’

April 02, 2014, 4:27 PM

R Street Outreach Director Lori Sanders joined hosts Kennedy, Kmele Foster and Matt Welch (editor of Reason magazine) on Fox Business Channel’s “The Independents” to discuss whether the growth in robots and artificial intelligence spells a long-term threat to the availability of jobs. Check it out below.

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Give larger tax breaks for raising kids, childless columnist argues

April 02, 2014, 12:57 PM

From Deseret News:

Although he is in his 30s without any kids, Slate columnist Reihan Salam argues that parents deserve better tax treatment, even if that means hiking taxes on the childless.

Should childless people be taxed to help families?

April 02, 2014, 12:13 PM

From news.com.au:

It is a controversial proposal, floated today in the US by one childless columnist who was raised by two extremely hardworking middle class parents who battled—as many Australian families do—to cover family costs.

To foster a fairer society and give those who are producing kids a little less excruciating financial pressure, he suggests that child-free people earning more than the median household income (in Australia $57,400 in 2011) should be taxed more heavily, and families should pay around $5000 a year less.

“As a childless professional in my mid-30s, I often reflect on the sacrifices working parents make to better the lives of their children. And I have come to the reluctant conclusion that I ought to pay much higher taxes so that working parents can pay much lower taxes,” writes conservative columnist and political commentator Reihan Salam in the journal Slate.

Childless should pay more tax

April 02, 2014, 12:04 PM

From the Times Union:

Parents help the economy grow by producing tomorrow’s workers, Reihan Salam says in Slate. To better compensate them for the cost and labor of raising children, we need to shift “the tax burden from parents to nonparents,” he says.

Florida pivotal in Internet tax battle

April 02, 2014, 9:58 AM

This piece was co-authored by R Street Florida Director Christian Camara.

A misleading piece of federal legislation, called the “Marketplace Fairness Act,” passed the U.S. Senate last year. Contrary to its title, this bill would allow states to impose an unfair burden on Web and catalog retailers by requiring them to collect sales taxes even for states where they have no physical presence. This could force Florida’s online retailers to comply with as many as 9,600 separate taxing jurisdictions across the country, even if their only physical location is here in the Sunshine State.

Despite more than a decade of efforts to simplify sales tax codes nationwide, they remain enormously complex. Supporters of the Marketplace Fairness Act dismiss this by pointing to the existence of software to help businesses untangle the dense web of rules and regulations in each jurisdiction. But software can no more solve sales tax complexity than TurboTax has solved income tax complexity. If the bill were to pass, the result would be heavy burdens on Florida retailers availing themselves of the Internet to expand their businesses.

House Judiciary Committee Chairman Bob Goodlatte, R-Va., held a hearing recently to explore alternative approaches. He’s laid out a set of seven principles, arguing that taxes should be low, neutral and simple, and that any reform should protect vibrant tax competition, states’ rights and customer privacy. The Marketplace Fairness Act arguably violates each of these common-sense standards.

South Florida was well-represented in the hearing, with Democratic Reps. Ted Deutch and Joe Garcia sitting on the committee. If they consult with their constituents, they’ll likely find strong opposition. In a Mercury poll conducted last year, respondents opposed tax policies like those in the Marketplace Fairness Act by a 22-point margin overall. Republicans opposed it by a 39-point margin, independents by nearly 20 points and even Democrats by five points.

In short, the Marketplace Fairness Act is bad policy and it’s bad politics. We’re hopeful that Reps. Deutch and Garcia take that into account as Congress continues its work on this issue.

Should childless Americans pay more taxes?

April 02, 2014, 9:05 AM

From Hot Air:

I’m surprised by some of the upset in Headlines to Reihan Salam’s proposal. Granted, the phrase “more taxes” rarely induces happy thoughts among conservatives, but I thought there’d be more support for beefing up the incentives for having children within a movement that (a) laments the breakdown of the nuclear family, (b) frets about declining birth rates and what they mean for the entitlement state (see, e.g., Mark Steyn and Jonathan Last), and (c) would probably benefit electorally if more Americans had children. I can’t find any data about voters with kids from the 2012 exit poll but Romney won 56 percent of married voters while Obama won 62 percent of singles. If Salam tweaked his idea to limit the tax breaks to parents who are married and reside in the same household, with lesser supplements for single parents, would that change people’s minds? What I’m asking, in other words, is whether the problem here is that we’re using the tax code to do too much social engineering or not quite enough.

And before you say “the answer is to cut spending, not to increase anyone’s tax burden,” Salam agrees with you on that. He just insists on living in reality. We tried to starve the beast and failed; turns out the beast doesn’t starve, it simply borrows and keeps feeding. If we’re doomed to run deficits until a debt crisis brings about a reckoning, who should bear the burden of extra taxes in the meantime in the name of reducing that deficit as much as possible?

Congressional Data Coalition launches with panel discussion

April 02, 2014, 8:00 AM

WHAT: Official launch of the Congressional Data Coalition and discussion on public access to congressional information


  • Daniel Schuman, policy director, Citizens for Responsibility and Ethics in Washington (CREW); Director, Congressional Data Coalition (opening remarks)
  • Jim Harper, senior fellow, Cato Institute; Global Policy Counsel, Bitcoin Foundation (moderator)
  • Steve Dwyer, senior policy advisor and digital director, Democratic Whip Steny Hoyer
  • Kirsten Gullickson, senior systems analyst, Clerk of the U.S. House of Representatives
  • Nick Schaper, senior vice president, Engage; former director of digital media, Speaker John Boehner, R-Ohio
  • Josh Tauberer, founder, Govtrack.Us

WHEN: Friday, April 4, 2014, from 10:30 a.m.-noon

WHERE: 1310 Longworth House Office Building, Washington, D.C., 20515

WHY: What does a digital Congress look like? Congress has an opportunity to make truly transformative changes in its approach to data that could drastically reduce legislative staff workloads while making the federal government leaner and more effective. Without modernization, however, civic hackers and constituents could be effectively cut off from data used to track legislation and hold elected officials accountable.

Hill credentials are not required for attendance. The event is organized by the Congressional Data Coalition, sponsored by CREW and R Street Institute, and made possible with the assistance of other organizations including the Electronic Frontier Foundation, Sunlight Foundation, Engine Advocacy, Competitive Enterprise Institute, TechFreedom, GovTrack, WashingtonWatch, Data Transparency Coalition, and others.

Upside-down on mortgage interest deduction policies

April 01, 2014, 3:42 PM

From the Denver Post:

In metro Denver, for example, the average tax saving from the mortgage deduction for households earning more than $100,o00 (in adjusted gross income) is $5,183, according to a study by three economists published in the current issue of National Affairs. For those below that threshold, the average subsidy in Denver is just $2,199, with of course most of the benefit congregated toward the upper part of the spectrum.

“Most Americans receive no benefit from the preferential tax treatment of home ownership,” write Andrew Hanson, Ike Brannon and Zackary Hawley, “and those who do see such benefits tend to be high-income earners who own large, expensive homes, and who are therefore unlikely to be on the fence about whether to buy or rent.”

No stroke risk with snus

April 01, 2014, 1:33 PM

Swedish researchers who two years ago reported no association of heart attacks with snus use (abstract here, my blog entry here) now conclude there is no association with stroke.  The new study, appearing in the Journal of Internal Medicine, is once again the product of a collaboration of scientists from the Karolinska Institute; Sweden’s Umeå, Uppsala and Lund Universities; and the University of Milano-Bicocca in Italy.

Compared with never-users of tobacco, the hazard ratio (HR, similar to relative risk, adjusted for age and body mass index, BMI) for stroke among current snus users was 1.04 (95 percent confidence interval = 0.92 – 1.17).  HRs were not elevated with higher levels of snus consumption (one can per day) or longer duration (more than 20 years).

Claims that snus causes heart attacks and strokes were first raised in 1994 by the Karolinska Institute’s Gunilla Bolinder. I challenged the institute’s specious claims in the medical literature in 1995 and later with Carl Phillips and Karyn Heavner, as well as on my blog.

It is well known that nicotine does not cause cancer, but its role in cardiovascular diseases has been difficult to determine. Studying users of Swedish snus, who consume large quantities of smoke-free nicotine over decades, the Swedish researchers concluded that nicotine was unlikely to be a contributor to heart attacks or strokes.

Smokeless tobacco and nicotine have been demonized for no valid scientific reasons.  The Swedish findings are vitally important to all consumers of nicotine and tobacco products, including e-cigarettes.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.