[youtube:http://www.youtube.com/watch?v=XgVYG_53_LQ 285 234]
January 2012
Good news and bad news for drivers from federal Transportation Secretary Ray LaHood. The good news is:
LaHood said he firmly opposes raising the federal gasoline tax in the current recession.
The bad news is that, because people are using less gas as they switch to more fuel-efficient vehicles and just plain drive less, LaHood is thinking of taxing us according to how many miles we drive – a VMT (Vehicle Miles Traveled) Tax. Now in some ways, this is a more equitable taxation scheme to fund road maintenance than the gas tax – it’s more reflective of the amount you use the road – and is therefore less objectionable, especially if it replaces rather than supplements the gas tax. However, it comes with a host of ramifications.
Most seriously, it will entail government surveillance of our driving habits. So there are obvious civil liberty concerns. Older Britons – and not so old – will remember the government asking them, “Is your journey really necessary?” This will give the government the chance to ask that question more directly.
More generally, the tax may be self-defeating. It will serve as a disincentive to drive, thereby reducing the amount it raises. For those who have to drive long distances, because they have a long commute or because their job requires it in other ways, it will also serve as a burden on economic activity (although perhaps no more than the current gas tax). Environmentalists may worry that it will reduce the incentive to switch to more fuel-efficient vehicles. While this would probably be a good thing in terms of road safety, environmentalists are not ones to let 2000 deaths a year get in the way of their war on oil, so my betting is that the VMT tax will, in fact, supplement a gas tax, putting your journey in double jeopardy.
Finally, if the Secretary is so opposed to a gas tax, what does he think of cap-and-trade of greenhouse gas emissions, which will be functionally equivalent to a gas tax? That’s administration policy. So it looks like the Secretary is actually in favor of a gas tax, as long as we don’t call it that.
UPDATE: I meant to include a few words about an even better idea. The redoubtable Jerry Taylor has instead done it for me at The Corner: T
hat said, there is an even better reform — get rid of federal gasoline taxes altogether and send all road construction and maintenance programs back to the states. All the bridges to nowhere, all the Robert Byrd memorial thises and thats, all the corruption associated with log-rolling transportation earmarks in Congress . . . all goes away. Alas, not even the late, great President George W. Bush dared entertain such an idea, and with all roads to recovery thought to come out of some shovel-ready highway somewhere, LaHood most certainly won’t go there.
The current administration long ago decided to elevate the executive branch of government to a new level of purity by not allowing former lobbyists to hold senior appointed positions. We wouldn’t want anyone who had ever been affiliated with a for-profit company or DC pressure group to be holding the levers of power in Washington, right?
Of course not. Unless, that is, someone decides that the person in question is really a great guy and we should make an exception for him (or her). As it turns out, there are a lot of exceptions in Washington these days. Our old friend Tim Carney elaborates:
Washington lobbyist Christine Varney is poised to take her third pass through the revolving door of lobbying and government with her nomination by President Barack Obama to be his administration’s top antitrust enforcer.
Also, on Thursday, Obama nominated Derek Douglas, a former lobbyist for the O’Melveny & Myers law firm and Center for American Progress, as special assistant on urban affairs.
As with most of the at least 14 former lobbyists nominated or hired by Obama, Varney and Douglas appear to be not covered by his executive order restricting the official activities of former lobbyists.
So apparently it’s not a categorical imperative to keep former lobbyists out of the administration. Which begs the question, why have the rule in the first place?
Good article today by Bloomberg columnist Michael Sesit, who lays out the protectionist actions many countries are taking in the midst of the worldwide economic slump and warns that accelerated trade protectionism would plunge the world into a depression.
Unless governments get serious about arresting the trend soon, the chatter about 2009 morphing into a replay of the Great Depression will become a self-fulfilling prophesy. The U.S. Smoot-Hawley Tariff Act of 1930 increased duties on more than 20,000 goods, inviting retaliation by other countries. Within two years of the law’s enactment, global trade declined 70 percent.
One of the signs of increased protectionism in the U.S. comes on the tail of the stimulus bill’s “Buy American” provisions, which mandate that public projects funded by the package must use goods, including iron and steel, manufactured in the U.S. Not satisfied with that, now the steel industry wants to protect the rest of its market by increasing tariffs on imported steel. According to today’s Wall Street Journal, expect to see steelmakers file anti-dumping complaints this spring. They’ll have to wait a bit, ‘though, because their profits during the first three-quarters of 2008 were healthy, and one can assume that wouldn’t make a strong case.
The automakers have come back for more taxpayer money, which is exactly what we warned would happen when the first bailout was granted last year. The restructuring plans merely represent an attempt to acheive the results of bankruptcy, with the taxpayer picking up the costs. What is needed is not more taxpayer money, but a way to make US automakers competitive again. As I said in my recent Detroit News piece, we can do that through a simple, cost-free, program that will remove burdens Congress has unfairly placed on the US auto industry. These include:
• Repeal federal fuel economy requirements. They restrict consumer choice by insisting that fuel economy take precedence over safety and impose restrictions on design that reduce the competitive advantage of Detroit automakers. If a reduction in fuel use is a necessary policy goal (I would contend it is not, but that’s an argument for another time), there are other policy options that would not impose direct costs on the automakers or restrict consumer choice. One is to remove the absurd “two fleet” rule that uniquely hampers U.S. automakers by prohibiting them from counting their foreign-made vehicles toward their fleet fuel economy average. Moreover, by reducing the weight of vehicles, high fuel economy mandates remove the single most cost-effective safety design feature of all, so this bailout measure would also save thousands of lives each year.
• Reduce the burden of safety legislation. There are too many safety rules that are counter-productive, such as mandated air bags, which have proved dangerous to children and people of less-than-average height. Consumers should be free to pick from a menu of safety options that allows them to take their own circumstances and preferences into account. This does not mean that automakers should be free to build cars that explode on ignition. There is a range of safety considerations, from safe to extremely safe. The United States is requiring too many “extremely safe” features while perversely reducing safety though fuel economy requirements. Again, the Detroit manufacturers feel these more intensely than other manufacturers because of the sort of vehicles they have specialized in.
• Halt the march of further design regulations. My colleague Wayne Crews has identified 22 new regulations that were being pursued last year that would increase the costs of designing and manufacturing new cars.
• Remove artificial barriers to merger through too strict interpretations of antitrust law. Federal antitrust authorities have stopped attempts at a merger of General Motors and Chrysler because the two firms together would have a dominant position in the “light truck market.” Yet the recent oil price spike proved that customers easily substitute passenger cars for light trucks, showing that there is no such distinct market. If GM and Chrysler could merge, there would be plenty of scope for eliminating inefficiencies, which would allow the merged company to compete more effectively.
• Allow automakers–and, indeed, all firms–to repatriate foreign profits without double taxation. This will provide a much needed injection of funds. No other country handicaps its own companies in this way.
• Suspend particulate matter regulations emanating from California — but imposed on the United States. These regulations prevent automakers from selling in America the kind of high-mileage diesel-powered cars that sell well in Europe and meet all European emissions requirements. This will immediately reduce fuel usage and reduce the Detroit companies’ research and design costs, which must now go toward meeting California standards. Moreover, because the cars already meet European Union environmental and safety standards, there would be no significant reduction in those protections.
With such a “liberate to stimulate” program in place, US automakers will be able to regain their place as world leaders. Instead, we see GM begging Congress for $8 billion to design cars as fuel-efficient as ones they already sell in Europe. This is absurd and must end.
I revoke my previous apology to the Swiss, and reiterate my previous disapproval. As evidenced by the latest outcome in the U.S. tax case involving UBS, we have moved beyond troubling and into something much worse.
...the world’s largest wealth manager in terms of assets, agreed to pay a $780 million fine and disclose information about some of its clients to settle a landmark U.S. tax case.
As I said in my older post: “In direct contradiction to their own legal view of tax evasion. Even though some may argue that this is moot because the U.S. does not consider a financial transaction as something beholden to privacy rights, the Swiss do–and besides, the U.S. view is wrong. A person’s financial records should be considered as sacred as their medical records.”
And with an eye toward history, let us not forget:
One issue of the time that reinforced the passage of this law [Swiss Banking Secrecy Act] came during the era of Hitler when a German law stated that any German with foreign capital was to be punished by death. Swiss banks were watched closely by the German Gestapo. It was after Germans began being put to death for holding Swiss accounts that the Swiss government was even more convinced of the need for bank secrecy.
Reading the comments on left-leaning blogs, you hear cheers and a tinge of jealousy about the whole thing. No matter if UBS did or did not help people avoid U.S. taxes, I cannot read this without envisioning a slippery slope argument. If the current climate continues, it won’t be too far-fetched to imagine laws like that of WWII Germany criminalizing and imprisoning people for choosing where to put their own money. And I won’t even mention the new Treasury Secretary. Oops
[youtube:http://www.youtube.com/watch?v=bEZB4taSEoA 285 234]
A recent survey of 1,000 likely voters, conducted in January by the consultancy McLaughlin & Associates, finds an overwhelling majority opposed to the so-called Employee Free Choice Act (EFCA), when they find out what the legislation actually entails.
Three out of four voters (74%) oppose the “The Employee Free Choice Act”. It is interesting to note, union households also strongly oppose the Employee Free Choice Act, 74% oppose to only 20% support….
When given a more detailed description of the Employee Free Choice Act, nearly 9 out of 10 voters, 86%, feel the process should remain private and only 8% feel it should be public information. Again, even union workers feel strongly that the process should be kept private, as 88% said private and only 8% said public….
Four out of five voters, or 82%, favor having a federally supervised election as a means to “protect the individual rights of workers”.
For more on EFCA, see here and here. (Thanks to Christine Hall for the tip.)
President Obama is in Canada today to meet with Canadian Prime Minister Stephen Harper on a range of issues – chief among those trade and protectionism.
Canada is the U.S.’s largest trading partner and the largest exporter of oil to the U.S., so trade talks are a critical issue, especially in the wake of the “Buy American” language in the stimulus bill. That provision stipulates that all of the iron, steel and manufactured goods used for any project funded by the act must be produced in the U.S. In response to harsh criticism of this protectionist provision, a vague caveat was added that applying that provision must be consistent with international agreements, such as that under the World Trade Organization.
The Canadians were offended by the “Buy American” section, as about 75 percent of its merchandise exports are to the U.S. Canada’s leaders are also still wary about candidate Obama’s promise to renegotiate the North America Free Trade Agreement – pushed by trade unions led by the AFL-CIO – though the President’s rhetoric has cooled since then.
With the current worldwide downturn, exports from every country are suffering, as manufacturers and consumers hold off on buying plans. However, trade protectionism could plunge the global markets into a worse tailspin. As Prime Minister Harper said in a recent CNN interview:
If there is one thing that could turn a recession into a depression, it is protectionist measures across the world.
Let’s hope he stresses that in his talks with President Obama.
RSS Updates 
RSS E-Mail Updates 
Twitter 
Facebook 
CEI.org 
WorkPlaceChoice.org 
GlobalWarming.org 
CEI On Demand Video 
Liberty Week Podcast 
