Nanny State

Post image for Utah Doubles Down on Gambling Prohibition

It’s not news that regulators in Utah are often uncomfortable allowing residents to make their own decisions about how, when, or if they engage in morally questionable behavior. The Beehive State has a well-known bee in its bonnet when it comes to alcohol, but what many non-Utahans may not know is that it is just as strict, if not more so, when it comes to preventing residents from gambling — even if they are in their own home. As federal lawmakers and many states edge toward legalizing, regulating, and taxing online wagering, some Utah legislators want to clarify the letter of their state law to make it absolutely clear that their residents don’t have a choice: gambling in Utah is illegal, whether it’s at a business, in your home, or on your smart phone.

As Eric Bianchi over at CalvinAyre.com reported last week, Utah state Rep. Stephen Sandstrom introduced legislation (HB 108) that would make it illegal for residents of the state to gambling over the Internet and on handheld devices. This is the second measure meant to address the increasing ease with which Utah residents are skirting the state’s strict gambling laws. Last month, the Utah House passed a bill (HB 40) that eliminated “vague working in the state law” that Internet cafes had reportedly been exploiting to allow online gaming — or as the bill’s sponsor Rep. Don Ipson charmingly put it, made them “havens for criminal activity.”

Utah is only one of two states in the nation that doesn’t have any form of legalized gambling, such as a casino or lottery (Hawaii is the other). But that doesn’t mean that residents aren’t doing plenty of gambling anyway.

Of course, that’s always the problem with prohibition, isn’t it? Bans never actually stop people from engaging in a behavior, it simply makes them a criminal if they do. If Utah’s Internet gambling ban is approved, especially as other states move toward legalizing the activity, Utahans will continue to gambling on and offline. Utah will lose tax revenue to neighboring states and residents will not have the protections of their government if their rights are violated while engaging in online gambling. Apparently, Utah regulators would rather try to protect the purity of the souls of their constituents rather than doing the job they are charged with which is to protect their right to life, liberty, and the pursuit of happiness.

It’s April 2012. You are a conscientious congressional staffer who still takes seriously the need to be a steward of taxpayers’ money. (Yes, I know for a fact, there are more than a few of these folks around on Capitol Hill.) You are watching closely events surrounding an “omnibus” or “minibus” spending bill deemed even by conservative Republican members as “must-pass” because it funds the military as well as other parts of government.

Suddenly, you hear about an outrageous earmark about to be slipped into the bill that would enrich a Fortune 500 company. You know how these things work; once the bill hits the floor, it’s very hard to excise one provision. So you decide to alert a network of fiscal watchdogs you’ve met with over the years to wage an instant campaign against this piece of corporate welfare.

You have all the information in the e-mail and are about to hit “send.” But then you remember something from a briefing you attended a couple days ago. The subject was the STOCK (Stop Trading on Congressional Knowledge) Act – aimed at stopping “insider trading” by members and employees of Congress – that your boss and nearly every other member of Congress voted into law in February.

At the time, you didn’t think the law would affect you since the only trading you do is indirect, through your mutual funds and pension. You were surprised to learn, however, that you now have a broad “duty of confidentiality” that encompasses not just trading on “material, nonpublic information,” but disclosing information to those who might.

You sit back and think, “It is indeed possible that someone I send this to could buy stock in the company, or could short the company based on the coming outrage.” You stare at the computer screen wondering how virtually no one noticed how this law could have potentially criminalized an act of whistleblowing as abetting “insider trading.”

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Keeping quiet can seal your fate if you are a professor facing a campus kangaroo court after being wrongly accused of racial or sexual “harassment” based on your classroom speech. Civil-liberties advocates, like the Foundation for Individual Rights in Education, rely heavily on adverse publicity to save wrongly accused professors from being disciplined and fired by campus disciplinary bodies. They put to good use Justice Brandeis’s insight that publicity deters wrongdoing and helps cure social evils. As Brandeis once noted, “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

But as the plight of Lawrence Connell at Widener University School of Law illustrates, if an accused professor speaks up, resulting in possible adverse publicity for his accusers, he increasingly risks being punished for “retaliation” against them, even when harassment charge is baseless. Connell was convicted of “retaliation” because he and his lawyer denounced meritless racial harassment charges against him over his classroom teaching. Retaliation charges have become a growing threat to academic freedom, fueled by court rulings that provide murky and conflicting guidance as to what speech can constitute illegal “retaliation.”

Professor Connell was charged with racial harassment and removed from Widener’s campus because he discussed hypothetical crimes in his criminal law class, including the imaginary killing of the law school dean, Linda Ammons, who happens to be black. (He was also accused of harassment because he “expressed his philosophical concerns about the fairness and utility of hate crime” laws.)

But Connell did not select the dean for use in these hypotheticals because of her race, nor was there any evidence that he had a racist motive for doing so. (Comments are not “racial harassment” unless they target a victim based on her race, and are severe and pervasive, according to Caver v. City of Trenton, a ruling by the Third Circuit Court of Appeals, which has jurisdiction over Widener.) Far from being a racist, Connell had spent 15 years successfully working to save the life of a black man who had been sentenced to die after he was convicted of murder by an all-white jury.

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Syndicated columnist Steve Chapman is criticizing President Obama’s proposal in the State of the Union address to require students to attend high school longer before being allowed to leave. As I noted earlier, the president would like to require students to attend school until they are at least 18, and the National Education Association, one of his biggest supporters, wants to require students to stay in school until age 21.

As Chapman notes, “Most states now allow students to drop out at 16 or 17.” The reason for this is that while most students benefit greatly from staying in high school, “the youngsters who are most likely to drop out are the ones who are least likely to learn if they stay. If they are 1) struggling to pass, 2) unwilling to apply themselves, 3) chronically tardy and absent, or 4) simply not very bright, they won’t learn much from being [in] a classroom—for two extra years.” As Chapman points out, experts are skeptical of Obama’s proposal (skepticism echoed by analysts quoted in the Washington Examiner):

James Heckman, a Nobel laureate economist at the University of Chicago who specializes in education, is skeptical of the proposal. At the college level, he told me, “The returns to people who are not very able or not very motivated are typically quite low.” There is evidence that kids may get some benefit from being required to stay in high school until 16 instead of 15, he says, but “it’s a weak reed to lean on.”

Let’s also not forget that the highest dropout rates are in the worst schools. Even the kids who want an education often graduate from these schools barely able to read. Where does Obama get the idea that the reluctant students, compelled to remain, will reap a rich harvest of learning?

It might be argued that even if there is no benefit from keeping these students around till they turn 18, there can’t be any harm. But think again.

The presence of disruptive, unmotivated kids in a class is a drain on teachers, a distraction to other students, and a daily obstacle to learning. One of the best things you can do for students who want to do the right thing is to remove those who would rather goof off or make trouble.

It’s not clear that laws like this will even work. A 2010 Johns Hopkins University study found that when six states raised the mandatory attendance age, three saw no increase in graduation rates—and one saw a decline. . .

If you want to keep unwilling students in school, you can spend money on truancy enforcement, which means taking money away from the willing students. It would be more rational to use the funds on education improvements so more kids will choose to stay.

A private company—or a private school—whose customers are fleeing has to come up with ways to keep them around. In Obama’s public sector, there is a quicker solution: Lock the exits.

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In national news: Congressman Kurt Schrader of Oregon announced last week that he is withdrawing his support of the CARE Act, the piece of legislation that will likely make it more difficult for small producers of wine, beer, and spirits to reach the market. In his statement, Rep. Schrader noted that after listening to the concerns of Oregon’s wine growers he now believes the legislation would be detrimental to their industry.

Also in national news: The Small BREW Act picked up a new cosponsor. Congressman Brad Miller of North Carolina signed onto the act that will reduce costs for small brewers and allow them to brew more while still being considered “small.” Currently, small brewers are defined as those making not more than 2 million barrels a year. The BREW Act would up that to 6 million barrels a year. The act also cuts the excise tax rate on the first 60,000 barrels for small brewers from $7 a barrel to $3.50 a barrel. The additional barrels after 60,000 and up to 2 million will be taxed at $16 a barrel.

Arizona: A ballot initiative is underway in Arizona that could give residents the chance to vote on whether or not they’d like a new tax on their alcohol. The tax would amount to 25 cents on every gallon of hard liquor and a dollar on every gallon on beer and wine. Like many other “sin taxes,” this will go to community programs and is sold as a remedy to the financial toll that alcohol abuse has on communities. Of course, this new tax would be in addition to the alcohol taxes that Arizona already has. Currently, the state of Arizona extracts $3 per gallon of spirits, 84 cents on every gallon of wine, and 16 cents on each gallon of beer. There are no plans to give money back to people for the scientifically proven health benefits of moderate alcohol consumption.

Connecticut: Earlier this month, Connecticut Governor Malloy released details of his plans to update the state’s alcohol laws. Among other things, Malloy hopes to legalize Sunday sales of alcohol, get rid of the holiday sales bans, and eliminate minimum pricing. If successful, the new laws will hopefully reduce costs for consumers and prevent residents from buying their booze in neighboring states.

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Post image for Buffett’s Secretary, Romney’s Return, and the Crushing Double Taxation on Investment Income

There has been much waxing in the last few days about how unfair it supposedly is that Mitt Romney was taxed at around 15 percent. And that Warren Buffett supposedly pays a lower tax rate than his beleaguered secretary does.

But as my colleague Trey Kovacs and I pointed out in a Wall Street Journal op-ed this week, these “low” tax rates are a charade. This is because “our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%—which even President Obama acknowledges [he, in fact, did so in the State of the Union] is one of the highest in the world … The law taxes corporations as if they were separate beings from the shareholders who own them and then levies a separate tax on shareholder payouts and gains. This double taxation brings the effective tax rate on investment income to as much as 44.75%.” In fact if you factor in the estate tax or “death tax,” the rate goes to 64 percent on this income. And that doesn’t even include state and local taxation.

As we note in the op-ed, “The most popular tax reforms—from the “9-9-9 plan” of former candidate Herman Cain to flat tax proposals—all have in common the reduction or elimination of double taxation on investment.”

My friend and mentor the late Richard Nadler found a few years back that polling showed that middle-class investors had “internalized their new role as capitalists” and “display favorable attitudes toward programs that reduce taxes on savings and investment.” New research seems to confirm this middle-class savers still retain these views even after the financial crisis.

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Many soundbites sound good, but have very harmful consequences in the real world. That’s the case for President Obama’s proposal in his State of the Union Address to not allow anyone to leave school until age 18 or graduation. This proposal originated with “the National Education Association, which stands to gain from the idea a measurable boost to its dues-paying ranks, and which has in fact proposed mandatory schooling for nongraduates up to age 21.” This proposal could result in an increase in school violence by bored and frustrated 17-year-olds who hate school but are forced to attend. It would also make it even harder for teachers to maintain order in dangerous schools, contributing to an exodus of talented teachers who would rather teach than be babysitters or policemen. And it could result in truancy charges and arrests for parents who fail to get their stubborn, fully-grown offspring to attend school.

As one commenter notes, “If the union is really pushing something like this, I wonder how many of the members actually welcome it. How many teachers really want to deal with a 17 year old who doesn’t want to be in school? The type that drop out can’t be a joy to teach.” Commenting on the NEA’s ultimate desire to keep people in school until age 21 (Obama wants every American to attend college or at least get “more than a high-school diploma”), another commenter notes, “I suppose Obama would send the cops after those notoriously unproductive dropouts Bill Gates and Mark Zuckerberg.”

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Post image for California’s Condom Mandate: Some Things Shouldn’t Be Up for a Vote

Some things should not be up for a vote. Among those things is whether consenting adults should be required to use condoms when they have sex. For many years, the AIDS Healthcare Foundation (AHF) has called for a mandate on condoms in adult films and recently collected enough signatures to add their legislation to the next city ballot. And last week the LA city council voted in favor of denying permits to adult films that do not abide by the condom requirement. While these efforts may be well-intentioned, a condom mandate violates actors’ rights to free speech, association, and choice—and likely will be counterproductive.

Current national workplace safety standards, as stipulated by the Occupational Safety and Health Administration (OSHA), require employers to provide personal protective equipment (PPE) for workers in hazardous situations—for example, hard hats for construction workers. Notably, OSHA laws provide exemptions for workers who refuse to use the PPE on religious grounds. Unlike many other OSHA protection rules, this condom mandate does not allow for any flexibility in the type of protection workers may use: it requires some form of barrier protection and would not allow actors to voluntarily not use the protection (though I doubt any actor would seek a religious exemption). While sexually transmitted infection is certainly a risk on adult film sets, a condom mandate is a one-size-fits-all solution that certainly doesn’t “fit all”.

As many in and out of adult film industry have noted, the mandate prevents actors and filmmakers from expressing themselves as they wish—a clear violation of the First Amendment. While “obscene” speech is not guaranteed the same constitutional protection as other types of expression, the adult industry as a whole cannot be lumped into the obscenity category. The “Miller Test,” which is used to determine obscenity based on the 1973 Supreme Court case, Miller v California, would have to be applied to every film before the state of California would have the right to restrict their expression.

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A school superintendant has labeled a column in a school newspaper that criticized homosexuality as “bullying.” (The Shawano High School newspaper decided to run dueling student opinion pieces on whether same-sex couples should be able to adopt children; the student article that was labeled as “bullying” answered the question “no.” The school district also publicly apologized for the column, and said that it is “taking steps to prevent items of this nature from happening in the future.”)

Whatever the wisdom (or lack thereof) of featuring something like that in a school newspaper, it seems strange to argue that a viewpoint in a student newspaper is “bullying.” (The Shawano School District’s bullying policy provides that “bullying” may lead to “warning, suspension,” “expulsion,” etc.) A conservative Christian who thought that homosexuality was immoral successfully challenged a school “harassment” code that punished students with such viewpoints in Saxe v. State College Area School District (2001), a case in which a federal appeals court ruled that there is no “harassment” exception to the First Amendment for speech which offends members of minority groups. Speech cannot be banned simply by labeling it as violence, either: for example, in Bauer v. Sampson, another federal appeals court ruled that a campus newspaper’s illustration depicting a college official’s imaginary death was protected by the First Amendment, even though the college declared it a violation of its policy against “workplace violence.”

But schools and anti-bullying activists have adopted incredibly overbroad definitions of bullying. The anti-bullying website NoBully.com, and schools like Fox Hill and Alvarado Elementary, define even “eye rolling” and other expressions of displeasure or hostility as bullying, even though doing so raises First Amendment problems.

The Obama administration claims bullying is an “epidemic” and a “pandemic.” But in reality, bullying and violence have steadily gone down in the nation’s schools, as studies funded by the Justice Department have shown. The Obama administration’s StopBullying.gov website defines a vast array of speech and conduct as bullying: it classifies “teasing” as a form of “bullying,” and “rude” or “hurtful” “text messages” as “cyberbullying.” Since “creating web sites” that “make fun of others” also is deemed “cyberbullying,” conservative websites that poke fun at the president are presumably guilty of cyberbullying under this strange definition. (Law professors such as UCLA’s Eugene Volokh have criticized bills by liberal lawmakers like Congresswoman Linda Sanchez (D-Calif.) that would ban some criticism of politicians as cyberbullying.)

In December, a federal appeals court ruled in Flynn v. Holder that the National Organ Transplant Act of 1984 (NOTA) does not forbid compensation for the majority of “bone marrow donors.” That was great news for patients needing bone marrow transplants: As CEI’s Greg Conko noted earlier, the court’s ruling clarified that it is legal for approximately 70 percent of donors to be paid for their life-saving contribution, compensation that is essential because around 3,000 Americans die every year waiting for a marrow transplant because an appropriate match cannot be found. Only compensation provides an incentive for additional donors to come forward and contribute their life-saving cells.

I put “bone marrow donors” in quotes, because the majority of “marrow donations” are not actually donations of marrow at all. Instead, peripheral blood stem cells are isolated from circulating blood, and those stem cells develop into bone marrow in the new patient. That procedure is not covered by the plain language of the NOTA statute, which only bans sales of organs and organ parts, not blood parts.

Now, the Obama administration is asking the appeals court to vacate its ruling allowing donors to be compensated, and to rehear the case en banc. It argues that whatever the text of the NOTA statute may say, its reach should be judicially extended beyond organs to peripheral blood stem cells, in order to guard against the evil of “market forces”:

The Obama administration has asked a federal appeals court to reconsider its decision last month to allow compensation to people donating bone marrow cells harvested from their bloodstreams.

In a petition for rehearing by the full U.S. 9th Circuit Court of Appeals, Atty. Gen. Eric H. Holder Jr. argued that the court ignored the intent of Congress to shield all organ sales from “market forces” when a three-judge panel ruled unanimously on Dec. 1 that marrow cells collected from blood aren’t covered by the 1984 National Organ Transplant Act.

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