You are browsing the archive for 2013 October 03.

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Shostak on the Taper: The Fed May Wait Until Next Year

October 3, 2013 in Economics

By Mises Updates

6546

Writing in Mises Daily, Frank Shostak notes that the Fed still fears a taper could hurt the feeble recovery:

If Fed policymakers were to decide to taper bond purchases, most experts are of the view Fed policymakers are likely to announce that the U.S. central bank is going to keep its near-zero interest rate policy for a prolonged period of time. This, it is held, should prevent negative side effects coming from the reduction in bond purchases.

For instance, in 1994 when the Fed started a tightening cycle the federal funds rate rose from 3.05 percent in January 1994 to 6.04 percent in April 1995. This, it is argued, caused a sharp fall in the pace of economic activity. The yearly rate of growth of industrial production fell from 7 percent in December 1994 to 2.7 percent by December 1995.

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Source: MISES INSTITUTE

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BREAKING: Shooting at U.S. Capitol

October 3, 2013 in Blogs

By Janet Allon, AlterNet

Woman said to have tried to ram White House gate, car chase and shooting ensued—woman shot; officer wounded.


Shots rang out near the U.S. Capitol this afternoon, and a “shelter in place” was in effect during what was at first described as an “active shooter situation.” Various news outlets have since reported that that the order has now been lifted. And it appears that there was no shooter, but rather a woman who tried to crash the White House gate with her car, then fled.

According to Reuters, the shots were fired near the Hart Senate Building at 2nd Street and Constitution Avenue, a just a few blocks from the Supreme Court. The incident reportedly began when the woman tried to crash the White House gate. A car chase ensued. She then bailed, and was shot.

Capitol Police Chief Kim Dine said in a press conference that the woman has been shot by law enforcement. He said she appears to be a lone shooter, and not connected to any terrorism. He said her condition is unknown, and that there was also a child in the car. Some news outlets are saying the woman is dead.

Emergency vehicles swarmed to the scene, and officers with machine guns were seen running through the Capitol. Both the Senate and the House of Representatives were in session at the time, and the shots were heard in the vicinity of the chamber.

Senator Harry Reid reportedly told CNN correspondent Dana Bash that one Capitol police officer has been wounded. But Chief Dine said that the officer was hurt in a car crash, not shot.

These events occurred on the 3rd day of the government shutdown, and just one mile from where the recent mass Navy Yard shooting occurred. The Capitol Police who responded are currently not being paid due to the shutdown.

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Source: ALTERNET

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On The 100th Anniversary of the Income Tax

October 3, 2013 in Economics

By Mises Updates

Woodrow Wilson signed the Income Tax into law one hundred years ago today. As direct taxation of Americans was prohibited by the Constitution, a constitutional amendment was necessary before what would become the Revenue Act of 1913 could be legally imposed. The income tax, and the enabling amendment, were sold to the voters as necessary for a tax on rich people that would mean lower taxes and cheaper goods (due to lowered tariffs) for everyone else. Only one percent of the population was subject to the tax then, and the tax rate was one percent.  The voters need not worry, they were told, because regular people would never ever pay the income tax.

A Brief Income Tax Reader:

Frank Chodorov :: Income Tax: Root of All Evil

The Origin of the Income Tax - Adam Young – Mises Daily

Real Tax Reform – Laurence M. Vance – Mises Daily

The Consumption Tax: A Critique – Murray N. Rothbard – Mises Daily

“The Tax Was Most Popular Before It Was Laid” :: The Circle Bastiat

1040 Plunder – Lee S. Wishing – Mises Daily

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Source: MISES INSTITUTE

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12-Year-Old Kidnap Victim Forced to Sit Out of Therapeutic Volleyball Game Because She Dressed Wrong

October 3, 2013 in Blogs

By Rod Bastanmehr, AlterNet

Coach and school refuse to bend rules for traumatized youngster.


Twelve-year-old Dezi Hughes, one of two girls kidnapped by a convicted sex offender this year in Dayton, Ohio, was forced to sit out a volleyball game because she didn't dress “school-spirited” enough—a team rule on game day. Hughes and her friend Kathlyn Shepard were kidnapped together, but Hughes managed to escape. Shepard was murdered.

According to her mother, who spoke to WHO-TV, Hughes has been depending on volleyball as a sort of therapeutic exercise in the months since her kidnapping ordeal, both in an effort to rid herself to memories and to simply focus on being a kid again, and it is vital to her recovery. But her coach thought it more important to establish the rule for the team involving game day dress code in an effort to amp up school spirit. On this day, Hughes wore shorts and a long sleeved shirt, and the coach wasn't willing to budge. 

“Every therapist that we have seen so far tells us that she needs an extracurricular activity, ” said Jeanette Andrews, Hughes's mother. “Something that does not pertain to what happened. Therapy pertains to what happened. School pertains to what happened. They (had) seen each other every day at school,” she said, referring to Dezi's murdered friend.

Superintendent Launi Dane, however, sides with the coach, stating that while she understands that volleyball is part of Hughes's therapy, “there are certain expectations, there are rules for playing these sports…rules that need to be maintained.”

“It’s the one place where she doesn’t have to think about it,” said Andrews. “She just has to hit a ball and win for her team. What’s wrong with that? Just let her do it.”

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Source: ALTERNET

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The Income Tax: A Century Is Enough

October 3, 2013 in Economics

By Chris Edwards

Chris Edwards

Alexander Hamilton won in the end. As Treasury Secretary in the 1790s he championed an array of “internal” taxes to supplement federal revenues from import tariffs. Thomas Jefferson despised Hamilton’s internal taxes as assault on liberty, and when elected in 1800 he made sure that they were abolished.

The Jeffersonian view held sway for decades, but by the late 19th century the growth in government and concerns about high tariffs led to calls for new revenue sources. The first income tax was imposed to fund the Civil War and lasted until 1872. Another income tax was imposed in 1894, but it was struck down by the Supreme Court as unconstitutional.

At the turn of the 20th century, the rise of Progressivism and the Democratic opposition to high tariffs generated support for an income tax. President William Howard Taft proposed a Constitutional amendment for an income tax in 1909. It was passed by the House and Senate, and then ratified by the states in early 1913. Congress got to work on legislation, and the modern income tax was signed into law by President Woodrow Wilson exactly 100 years ago today, October 3, 1913.

It’s time to scrap the income tax and replace it with a consumption-based flat tax.”

That’s when the problems started. The 16th Amendment allowed for “taxes on incomes, from whatever source derived,” but it did not define how “income” should be measured. It turned out that defining “income” is a tricky matter, and liberal and conservative economists and policymakers have never agreed on how to do it. The many economic interest groups affected by the tax have different views as well. The result of all the disagreement is that we’ve had a constantly changing and increasingly complex tax code.

The number of pages of federal tax rules soared from 400 in 1913 to 73,954 today, according to CCH Inc. Unlike a product in the marketplace that improves over time — like the century-old automobile — the government’s income tax has become ever more inefficient and damaging. After 100 years, it is a bigger challenge than ever to create a simple, pro-growth structure for federal taxation.

The key problem is that liberals have favored an expansive definition of income that is anti-growth and punishing to savers and investors. The liberal “Haig-Simons” income has been the starting point for our income tax, and it includes all labor income, capital income, and …read more

Source: OP-EDS

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Looking Backward for Insight on Immigration Reform

October 3, 2013 in Economics

By Alex Nowrasteh

Alex Nowrasteh

Forty-eight years ago, President Lyndon Johnson (D) signed the Immigration Act of 1965, the most comprehensive immigration reform in generations. Now, decades later, Congress is contemplating another serious immigration reform that would legalize millions of unauthorized immigrants and allow for increased legal immigration going forward. It is often said that we should learn from history, and immigration reform is no exception. A look back at the 1965 Act can inform today’s debate.

The 1965 Act was hailed by many as a major reform that partially reopened immigration. From 1790 to 1921, with the exception of the shameful Chinese Exclusion Act in 1882, the U.S. had mostly free immigration. Immigrants getting off the boat at East and West coast immigrant processing centers like Ellis Island were allowed to enter upon passing health and criminal inspections.

Ships full of immigrants bearing Italians, Jews, Russians and Poles did not sail up to American beaches and disgorge their human cargo in the hope that they would evade a Border Patrol (which did not exist until 1924). Because so many could come legally, unauthorized immigration was rare.

That ended in the early twentieth century with the Progressive Era’s emphasis on protecting labor unions. Beginning temporarily in 1921, and then permanently in 1924, new national origin quotas limited immigration to countries from Northern and Western Europe, whose immigrants were more skilled and less likely to join unions.

On the 48th anniversary of the Immigration Act of 1965, let’s hope Congress has learned from that mistake and recognizes the benefits of increased legal immigration.”

Worse, those laws were also inspired by the Progressive eugenics movement at the time. Northern and Western European immigrants were welcome because they were thought to be genetically superior. Eastern and Southern Europeans, Asians, and others were either barred outright or heavily restricted because of their supposed genetic inferiority.

That sounds ridiculous today, but ninety years ago it was very serious. In fact, a commission established by Congress in 1907, the Dillingham Commission, confirmed that supposed inferiority. Based on poor statistical methodology and absurd reasoning, it claimed that 67 percent of Polish Jewish students and 64 percent of Southern Italians students were “retarded.” According to the report, Italian, Jewish, Eastern European, and Asian immigrants were so inferior that their assimilation into American culture would be impossible.

The national origin quotas that cropped up in the 1920s were not fully repealed until the Immigration …read more

Source: OP-EDS

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Kentucky Enquirer Op-Ed: Kentuckians not buying Obamacare

October 3, 2013 in Politics & Elections

On Tuesday, the law we’ve come to know as Obamacare officially went online. The federal government can now force you to buy a product it wants you to buy – one that will cost more than it ought to. And, if you don’t like it, tough; the feds will just hit you with punitive taxes.
Gov. Steve Beshear seems to think this is a good deal for Kentuckians. He took to the pages of The New York Times to sing Obamacare’s praises and blast both of us for daring to oppose a law that so many Kentuckians want to see repealed. For those concerned about Obamacare, the governor’s message was basically this: ‘Get over it.’
We’re sure that won him some applause in Manhattan. But the self-congratulatory rhetoric won’t do much for families like yours. Obamacare might sell in New York, but Kentuckians aren’t buying it.
Both of us have heard your concerns in letters, phone calls and countless health care town halls. Like you, we understand that for many this law is going to mean lost health plans, layoffs and smaller paychecks. Some have already started to see the effects. Recall, as just one example, the spouses recently forced off health plans at some of our state’s largest employers.
And yet, the governor described his implementation of Obamacare in glowing terms. We heard the same kind of spin two years ago when he moved Kentucky’s Medicaid recipients to a managed care system. That was before Kentuckians found out about patients being denied treatments or forced to travel long distances as a result, or about doctors and hospitals left for months with unpaid bills. Kentucky’s largest newspaper called the rollout ‘disastrous.’ Now, Beshear wants to add hundreds of thousands more to this broken system. But our state needs an additional 3,700 doctors just to meet current demand, so he seems to be promising Kentuckians insurance he can’t deliver. That’s not right.
The governor likes to tout his so-called discounts for health insurance too. What he won’t tell you is that most Kentuckians won’t receive them, and that the subsidies will be financed by higher taxes and cuts to Medicare.
As for the supposed economic benefits of Obamacare, good people can debate the numbers he cited. But this much is clear: The law is imposing nearly two dozen new taxes, many of which will affect middle-class families. And he said almost nothing about the fact that …read more

Source: RAND PAUL

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Sen. Paul Appears On the Record with Greta Van Susteren- October 2, 2013

October 3, 2013 in Politics & Elections

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Source: RAND PAUL

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Happy 100th Birthday Income Taxes! Or How the Rich Have Gamed the System to Pay a Smaller Share

October 3, 2013 in Blogs

By Joshua Holland, Moyers and Company

Loopholes have been with us since day one.


 

Today marks the 100th anniversary of the federal income tax. That is, the income tax that we have today – the first US tax raised on earned incomes was a temporary one imposed to help pay for the War of 1812. Another helped pay for the Civil War, but was allowed to expire in 1872.

But it’s also true that the income tax burden has shifted from corporations to individuals. At the beginning of World War II, individuals and families paid 38 percent of federal income taxes, and corporations picked up the other 62 percent. That’s changed significantly — last year, individuals and families paid 82 percent of federal income taxes, and corporations kicked in just 18 percent.

Since the mid-1960s, the top tax rates for both individuals and corporations have fallen significantly, but individual rates have fallen much further. Of course, the tax rate on the books isn’t important — it’s what one pays that counts (corporate lobbies often complain that the US has the highest corporate tax rates in the world, which is true, but our companies pay a much smaller effective tax rate — and it dropped by 58 percent between 1960 and 2012).

How is it that American corporations are paying a smaller share of federal income taxes when the rates paid by individuals dropped much further?  It’s simple: ordinary American families don’t have teams of lobbyists to win them loopholes or armies of tax accountants and attorneys to exploit them.

As Bruce Bartlett wrote this week in The New York Times, this reality has been of concern since the income tax was first established:

Even before the income tax was enacted, the issue of loopholes came up. An article discussing them appeared in The New York Times as early as April 13, 1913. By 1915, one congressman complained: “I write a law. You drill a hole in it. I plug the hole. You drill a hole in my plug.”

Of course, there’s a lot more than federal income taxes to consider when thinking about who pays what. Payroll taxes – which burden working people far …read more

Source: ALTERNET

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Study Shows Louisiana's Choice Program Improves Racial Integration

October 3, 2013 in Economics

By Jason Bedrick

Jason Bedrick

In the name of civil rights, the U.S. Department of Justice (DOJ) is seeking to keep low-income black students in Louisiana from attending the schools of their choice. However, new research from two PhD students at the University of Arkansas shows that Louisiana’s school choice program improves racial integration, further undermining the DOJ’s claims to the contrary.

The Louisiana Scholarship Program (LSP) provides school vouchers to low-income families attending low-performing public schools rated a “C,” “D,” or “F” on an A-F scale. The LSP was piloted in New Orleans in 2008, then expanded statewide in 2012. In the 2012-13 school year, the program granted vouchers to nearly 5,000 students from across Louisiana, nearly 90 percent of whom were black.

In August, the DOJ filed a motion in a decades-old federal desegregation lawsuit to enjoin the LSP from issuing any further vouchers without federal approval, arguing that the LSP negatively impacts desegregation efforts. However, the DOJ’s procedural case is weak—the federal desegregation orders are silent on transfers to private schools—and its substantive case is practically nonexistent.

The DOJ’s attempt to enjoin future vouchers serves no purpose but to prevent low-income black students from attending the schools of their choice.”

The DOJ’s brief cites two public schools where it claims desegregation efforts were harmed by the LSP. In one public school, six black students left using LSP vouchers, thereby “reinforcing the school’s racial identity as a white school in a predominantly black school district.” The change in the racial composition of the 750+ student school was less than one percent. Likewise, the DOJ cited a public school that “lost” five white students to the LSP, which also changed the racial composition of the school by less than one percent. According to the DOJ, the net “loss” of students was only up to 13 students per school per year in just 13 of the 22 school districts under desegregation orders where students accepted vouchers.

If the DOJ’s case was already like a house of cards resting atop a rickety stool, then the new University of Arkansas study kicked out the stool. The study, “The Louisiana Scholarship Program,” by Anna J. Egalite and Jonathan N. Mills, finds that the transfers resulting from the LSP vouchers statewide “overwhelmingly improve integration in the public schools students leave (the sending schools), bringing the racial composition of the schools closer to that of the broader …read more

Source: OP-EDS