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Detroit: A city in transition

July 24, 2014, 5:26 PM

From Watchdog Wire:

Starting a business in Detroit is still difficult – Real estate costs may be low but apparently the red tape is still very thick. I attended a panel discussion on Friday morning where some policy analysts were discussing Detroit. Andrew Moylan of the R Street Institute remarked that due to all the regulations and bureaucracy, it’s easier to open a restaurant in New York City than it is in Detroit. That needs to change and it has to change for people to make investments in the city.

Anti-tax groups take online sales tax campaign to Idaho

July 24, 2014, 5:24 PM

From the Times-News:

The National Taxpayers Union and R Street say their poll of 400 Idahoans showed from 52 to 68 percent opposed to the “Marketplace Fairness Act,” depending on how the question was worded, with 20 percent to 32 percent in favor. Although conservatives and independents were the strongest opposed, a majority of self-described liberals opposed the legislation too. The poll had a 4.9 percent margin of error.

“When it comes to Internet tax schemes like the Marketplace Fairness Act, Idaho overwhelmingly support the common sense position that the Internet should exist to improve their lives and their communities, rather than plug the budgets of other states,” said Andrew Moylan, executive director and Senior Fellow at the R Street Institute.

Poll: Idahoans don’t want taxes collected from online shopping

July 24, 2014, 3:35 PM

From Idaho Business Review:

Most Idaho voters, whatever their political stripes, don’t want a sales tax on online purchases. That’s the finding of a new poll commissioned by free market public policy organization the R Street Institute and the National Taxpayers Union, a nonpartisan advocacy group that promotes lowering taxes. The groups polled Idaho voters on a federal effort to extend…

Taxpayers Union releases poll on online taxes, Idaho retailers, lawmaker dispute results

July 24, 2014, 3:32 PM

From the Spokesman-Review:

That’s the legislation the National Taxpayers Union opposes. In announcing its poll today, which the group said was conducted June 3-4, included 400 likely Idaho voters and has a margin of error of 4.9 percent, the group said, “When it comes to a federal law allowing out-of-state tax collectors to reach into the pockets of Idaho’s online merchants, by a 52-32 percent margin Gem State voters have a resounding and simple answer: Just, no!” The poll results were announced today by the NTU and the R Street Institute, a Washington, D.C.-based “free-market think tank” that’s in the midst of a 20-state tour to announce similar poll results.

Questioning lethal injection

July 24, 2014, 2:27 PM

What appears to be a rather horrifically botched execution in Arizona should give additional pause to those (me included) who continue to support the death penalty. This and other significant problems with lethal injection — including the growing evidence that it probably isn’t anywhere close to painless — means that it’s simply a barbaric practice that really ought to be ended posthaste. Given ongoing problems — and the existence of many surer, less error-prone methods of execution — there’s no reason to continue it. If shooting, hanging and other forms of execution make people queasy, well, that’s fine; the death penalty should be used very rarely and only for people who have committed truly horrific acts.

Insofar as some people who want to abolish the death penalty are trying to use the problems with lethal injection to advance their goal, I’d say, “all power to them.” Problems with the way we execute people are, indeed, a pretty good reason to rethink the death penalty overall. I’m more of the “mend it don’t end it” school, and on that front, NYU’s Robert Blecker has some very good ideas. They’re well worth reading.

Iipay Nation of Santa Ysabel launches online gambling in California

July 24, 2014, 10:39 AM

In the spirit of the adage that it’s better to ask for forgiveness than beg for permission, the Native American Iipay Nation of Santa Ysabel, Calif., has launched a real-money online poker site open to California residents.

The move comes as legislation remains stalled in the state Legislature, even though California is viewed as arguably the most profitable state for online wagering.

The actual legality of the site may come down to the murky laws of tribal sovereignty, which, when read broadly, grant federally recognized American Indian tribes substantial independence from state jurisdiction. This permits tribal nations to operate their own councils, police and courts and, of course, casinos. Tribes, however, are not completely exempt from all state laws, and, like all states, are subject to federal law. The Iipay Nation, part of the Kumeyaay tribe, argues that it is permitted to offer online gambling based on its sovereignty, as well as the provisions of the federal Indian Gaming Regulatory Act (IGRA).

Its poker site, privatetable.com, reportedly launched Monday, July 21. A visit to the site shows that there is a mechanism for depositing money. Online poker analyst Marco Valerio reported he was able to register. After doing so, he received a notice that deposits would only be accepted from California residents logging in within the state. This differs slightly from online sites legal in New Jersey, Nevada and Delaware, where your residency does not matter, only your location.

The Iipay Nation’s decision to move forward adds some excitement to the push for online poker and, ultimately, house-banked casino games. The poker situation has been contentious in California, because tribal interests have been in conflict with owners and operators of smaller poker rooms, which fear being put at a disadvantage if online licensing requirements are set too high. But if other tribes attempt to follow the Iipay’s example, online poker may fast become a fait accompli on the Golden State. I say let’s get those virtual cards in the air!

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Federal judge to FDA: Tobacco advisory panel tainted by conflicts of interest

July 23, 2014, 3:16 PM

“The presence of conflicted members on [the FDA Tobacco Products Scientific Advisory Committee, TPSAC] irrevocably tainted its very composition and its work product” and “the committee’s findings and recommendations…are, at a minimum, suspect, and at worst, untrustworthy.” So ruled federal judge Richard Leon this week.

A lawsuit by Lorillard et al. claimed the FDA appointment of TPSAC members Neal Benowitz, Jack Henningfield and Jonathan Samet was “arbitrary, capricious, an abuse of discretion and otherwise not in compliance with the law” because they had conflicts of interest. The evidence was abundant and uncontested. Here are excerpts from the judge’s opinion:

Since the 1980s, Dr. Benowitz has consulted for numerous pharmaceutical companies about the design of the NRT and other smoking-cessation drugs. He consulted for affiliates of Pfizer, Inc. and GlaxoSmithKline (GSK) as to such products, even while serving on the TPSAC…Dr. Benowitz has also served as a paid witness for lawyers suing tobacco-product manufacturers. He testified as a paid expert witness while serving on the TPSAC, and…he was designated to testify in 585 pending tobacco cases.


Before and while serving on the TPSAC, Dr. Henningfield consulted for GSK and other drug companies as to NRT and other smoking-cessation drugs. He also had ownership interest in a company that was developing a patented NRT drug. Dr. Henningfield has testified as an expert for GSK and for lawyers suing tobacco-product manufacturers… he was designated to testify in 350 pending tobacco cases.


Dr. Samet received grant support from GSK at least six times, including in 2010. He also led the Institute for Global Tobacco Control, funded by GSK and Pfizer. Dr. Samet also testified for lawyers suing tobacco-product manufacturers…he was designated to testify in two pending tobacco cases.

Judge Leon’s ruling notes that the composition of TPSAC is different from other FDA advisory committees, because the enabling legislation bans any expert “who received ‘any salary, grants, or other payment or support’ from any tobacco company in the 18-month period prior to serving on the TPSAC.”

TPSAC was structured to exclude qualified authorities who have had industry support. Experts with industry support are not precluded from serving on other FDA advisory committees, in which scientific issues are more important than industry demonization.

Judge Leon noted that the provision should apply evenly to any conflict of interest:

If Congress deemed that past remuneration from tobacco companies constituted a conflict of interest, it stands to reason that past remuneration from direct competitors of those companies, such as manufacturers of smoking-cessation drugs, would also constitute a conflict of interest.

Judge Leon’s ruling bars the FDA from using a 2011 TPSAC report on menthol, and it also “enjoins the FDA to reconstitute TPSAC’s membership so that it complies with the applicable ethics laws.” Dr. Samet is the only conflicted member remaining on TPSAC, as chair (until 2016). Another member, Claudia Barone, may have a conflict, because she received a Pfizer Educational Grant through 2013 and was appointed to the TPSAC on April 1, 2014.

Although the ruling applies specifically to committee actions on menthol cigarettes and dissolvable products, it is relevant to all TPSAC activities until conflicted members are removed.

It is common for experts to be co-opted by financial support from organizations committed to a tobacco-free society, a euphemism for the obliteration of the tobacco industry (an objective that is at odds with the principle of regulation).  Any individual who is funded by organizations such as the American Cancer Society, the American Heart Association, the American Lung Association, the National Cancer Institute, the Centers for Disease Control and Prevention, or the Robert Wood Johnson Foundation should be ineligible for membership on TPSAC.

Anatomy of a Trojan Horse: California’s permissive single-subject rule

July 23, 2014, 12:10 PM

When it comes to winning at the polls, hoodwinking voters by confusing the issues is a strategy that has stood the test of time. This November, Propositions 45 and 46 on California’s general election ballot will again test the efficacy of that approach in a venue particularly ripe for manipulation – the initiative process.

California’s initiative process is a product of the so-called “progressive era” of the state’s politics. Republican Gov. Hiram Johnson led the charge for the use of various direct appeals to the electorate (initiative, referendum and recall) when he ran for office in 1910. In 1911, voters gave approval to the new governor’s proposals.

Johnson’s levers of direct democracy have gone through periods of heavy use and disuse over the past century in California. According to the Public Policy Institute of California, most initiatives are met with failure. Of late, voter reluctance has turned into outright cynicism. They perceive the initiative process, in particular, to be beholden to special interests. Relatedly, Californians also have struggled with voting for initiatives because of their complexity. It is easy to understand why.

Initiatives often focus on issues that defy easy explanation. While the narratives crafted for voters focus on vague but positive constructs of the purported outcomes, highly technical legal elements undergird and give meaning to initiatives.

In an effort to avoid confusion among the electorate, there are 14 states that limit initiatives or constitutional amendments to “single subjects.” While seemingly straightforward, the application of such rules is anything but.

In California, the word “subject” remains unmoored from statutory or constitutional definition. Thus, it has fallen to the courts to craft the necessary meaning. Unfortunately, the result has been calamitous. California’s single-subject rule centers on a “reasonably germane” test that is exceedingly lax. For example, Propositions 45 and 46 have qualified for the November ballot, even though both clearly include “second” subjects.

Prop 45 is nominally an initiative focused on the prior approval of health insurance rates. Still, the property/casualty industry in California would be well-served to pay careful attention, because Prop 45′s language goes further:

“With respect to health, automobile and homeowners insurance, the absence of prior insurance coverage…shall not be a criterion for determining…rates, premiums or insurability.”

In a throwback to California’s automobile insurance portable persistency discount rating battles (Prop 17 and Prop 33), the initiative’s backer, Consumer Watchdog, is making a move to further circumscribe the use of automobile insurance persistency discounts. One wonders, prospectively, whether the currently admissible practice of offering non-portable persistency discounts will be challenged under the auspices of Consumer Watchdog-friendly precedent.

As deceptive and dangerous as Prop 45 is, Prop 46 may pose an even greater threat. It focuses on increasing the amount of non-economic damages recoverable under the Medical Injury Compensation Reform Act (MICRA). Such a change is of great significance to health-care providers, insurers and trial attorneys, but means little to the average voter. For this reason, proponents of the initiative included a second “hot button” subject, a provision to force drug tests on doctors.

In the words of the initiative’s chief proponent, including the drug-test provision was the “ultimate sweetener.” According to the Los Angeles Times, “when his group brought the proposal before focus groups…’the only thing that made them light up was drug testing of doctors.”‘

Compounding the confusion in the single-subject test is the fact that a partisan elected official, the attorney general, drafts initiative descriptions. In the case of Prop 46, Kamala Harris has opted to obfuscate the true purpose of the initiative by not mentioning MICRA until the fifth and final sentence of the initiative’s description. How does that look?

It would be in the best interests of California’s direct democracy for the California Supreme Court, should it have a chance, to attach greater significance to its ruling that one of the purposes of the single-subject doctrine is “to minimize the risk of voter confusion and deception.” In the cases of Prop 45 and 46, confusion and deception reign. As a result, California’s democracy suffers.

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Survey: Coloradans oppose efforts to tax sales by out-of-state Internet retailers

July 23, 2014, 9:21 AM

From Denver Business Journal:

The survey, conducted by the National Taxpayers Union and the R Street Institute, asks specifically about the Marketplace Fairness Act that passed the U.S. Senate in 2013 and has languished in the House of Representatives since then.

But officials from the two organizations said that they hope the results can inform Colorado lawmakers as well if they consider taking any further steps to allow state officials to go after these retailers and make them apply local sales taxes to the prices of their goods.

“I think that this does have implications to the state level as well,” said Andrew Moylan, executive director of the Washington, D.C.-based R Street Institute, a free-market think tank. “I think that this suggests that this is a powerful issue that has been lying dormant … I think that people are overlooking the strength of this issue because of the potential backlash.”

Building again in Natomas is too risky

July 22, 2014, 3:10 PM

From the Sacramento Bee:

This is misguided enthusiasm, said Ian Adams, a policy analyst specializing in insurance markets for R Street Institute, a libertarian think tank. “Overhauling the levees makes sense for existing residents, but not as a basis for further development…

…Federal flood insurance data is illuminating. Over the life of a 30-year mortgage, homes in Natomas have a 26 percent chance of flooding. In the free market, insuring a $300,000 home in Natomas with $280,000 in coverage would cost about $21,000 annually. The cost under the federal government’s National Flood Insurance Program is $353 annually – what Adams calls “a massive transfer of risk from a small percentage of homeowners onto the backs of all U.S. taxpayers.”

Read more here: http://www.sacbee.com/2014/07/22/6572292/bruce-maiman-building-again-in.html#storylink=cpy Read more here: http://www.sacbee.com/2014/07/22/6572292/bruce-maiman-building-again-in.html#storylink=cpy

Market freedom paying off in South Carolina

July 21, 2014, 11:15 AM

Maintaining pricing freedom and a light regulatory touch is paying major dividends in South Carolina’s property insurance market, where the state is reaping the benefits of the ongoing soft reinsurance market and seeing a major reduction in the size of its wind pool.

The South Carolina Wind and Hail Underwriting Association reports that, over the past three years, it has shrunk from 47,366 policies to just 40,625 policies, as more and more residents of coastal Beaufort, Charleston and Colleton counties find they are able to obtain multi-peril homeowners policies that cover wind from private market insurers. (The chart below, from the Property Insurance Plans Service Office, shows some of the progress the SCWHUA already had made through 2012.)

The so-called “Beach Plan” operates as a joint underwriting association of property insurers that do business in the state. Any resident of South Carolina’s coastal region may be eligible for coverage.

Amid calls from some quarters for a more onerous “prior approval” regulatory system for rates, R Street President Eli Lehrer and Associate Fellow Ernst Csiszar – a former South Carolina insurance director – determined in a March 2013 paper that the state’s system was holding up fairly well, producing reasonable rates with sufficient choice for consumers.

Of particular note, Lehrer and Csiszar found, is that South Carolina taxpayers faced significantly lower risk of post-storm assessments (sometimes called “hurricane taxes”) than other coastal states, such as Florida, Louisiana, Texas and Mississippi – all states with more stringent rate-making rules. The most recent numbers are bearing that out:

The soft reinsurance market is also having an effect. The windpool recently secured enough catastrophic coverage so it should be able to withstand up to a one-in-200 year storm.

“That reduces the chance we will send those insurers a large assessment,” said [SCWH Executive Director Smitty] Harrison.

We can only hope other coastal states – notably Florida and Texas – will look to the success in South Carolina as a model.

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How many Americans smoke?

July 21, 2014, 9:00 AM

I answered that question on my blog a few years ago, saying it was:

Either 45.3 million or 52.7 million in 2010, depending on which federal agency does the counting. This wide variance [among adults 18+ years] of age underscores the discordant findings from government smoking data.

I wrote:

It is unacceptable that two federal surveys differ by over 7 million in their adult smoking counts. Even worse is the way the government uses the divergent data to spin different stories about smoking. They use the lower [National Health Interview Survey] numbers [43.5 million] to boast about declining smoking rates, which they attribute to higher taxes and smoking bans. They use the higher [National Survey on Drug Use and Health] numbers [52.7 million] to argue for even more onerous anti-tobacco measures.

The irregular counting continues today, and the discrepancy between NHIS and NSDUH is actually growing. Earlier this year, the CDC released its count for 2012, which is 42.1 million, based on NHIS. My analysis of the 2012 NSDUH, which is sponsored by the federal Substance Abuse and Mental Health Services Administration (SAMHSA), indicates that there are at least 51.6 million adult smokers. That’s a difference of nearly 10 million smokers!

My research sheds light on this discrepancy. It’s time for the federal government to acknowledge their data conflict, and resolve it.

Learning from Detroit

July 21, 2014, 8:00 AM

R Street Executive Director (and Detroit native) Andrew Moylan took part this past week in the Cities on the Brink forum presented by the Manhattan Institute and State Budget Solutions, focusing in particular on the first anniversary of Detroit’s municipal bankruptcy, the largest in U.S. history. You can watch video of the full panel presentation below.

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Think tank survey shows significant opposition to federal Internet tax

July 20, 2014, 2:34 PM

From 90.5 WCBE:

The D.C.-based think tank R Street says more than 56% of Ohioans polled are against out-of-state taxation on e-commerce.  
Executive Director Andrew Moylan says the federal proposal known as the Marketplace Fairness Act would create an unlevel playing field.  
Moylan: “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.” 

Survey says most Ohioans oppose a federal Internet sales tax

July 20, 2014, 2:06 PM

From 89.7 WKSU:

The D.C.-based think tank R Street says more than 56 percent of Ohioans polled are against out-of-state taxation on e-commerce.

Executive Director Andrew Moylan says the federal proposal known as the Marketplace Fairness Act would create an un-level playing field.

“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,” Moylan says.

Jerry Brown provides a powerful argument for California separation

July 20, 2014, 2:04 PM

From RealClearPolicy:

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…


Slenderman and the ‘mythos’ of modernism

July 20, 2014, 1:41 PM

From the American Conservative:

Vice chalks the violence up to poorly-managed hormones and small-town boredom. And Mytheos Holt at R Street asks whether their violence could have been prevented by addressing mental illness openly. Farhad Manjoo at the New York Times makes Slenderman’s faceless horror emblematic of the “selfie” age—an attempt to use fear to push against compulsive, narcissistic self-documentation.

Three things conservatives wrote this week that everyone should read

July 18, 2014, 12:56 PM

From ThinkProgress:

So the conservative think tank R Street and author Ian Adams came to the plan’s defense this week, pointing to California’s socioeconomic diversity and some conceptual arguments that California Governor Jerry Brown himself inadvertently opened the door to rhetorically…

…However, as Adams shows, Draper’s scheme is so out-there it at least has value as an intellectual exercise, blowing up the preset ideological divides and forcing us all to think hard once again about some of our more foundational and usually-unexamined assumptions.

Anti-tax groups say Iowans oppose online tax collectors

July 18, 2014, 12:31 PM

From the Des Moines Register:

The National Taxpayers Union and the R Street Institute this week released a poll of 400 likely Iowa voters who were surveyed in May. They said 67 percent of Iowa respondents were opposed to the idea of a plan that would “allow tax enforcement agents from one state to collect taxes from online retailers based in a different state.” Twenty-three percent were in favor. The survey was conducted by Mercury Public Strategies and had an error margin of plus or minus 4.9 percent.

“Voters in the Hawkeye State evidently believe that the Internet should exist to improve the lives of Iowa’s citizens, rather than serve as a highway to bigger government,” said Andrew Moylan, executive director and senior fellow at the R Street Institute, a Washington, D.C.-based group that supports free markets and limited government.

Conservative group releases poll on online sales tax collections in Ohio

July 18, 2014, 12:01 PM

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.”