Misstating the Constitution

The problem with the D.C. statehood movement

Legend has it that Abraham Lincoln once posed a riddle: How many legs does a dog have if you count his tail as a leg? Came the answer, “Five.” Replied Lincoln, “No, four. Counting a tail as a leg doesn’t make it a leg.”

Tell it to the sponsors of a bill to give the District of Columbia a full-fledged member of the House of Representatives. They resolutely dismiss the hurdle presented by the Constitution, which says, “The House of Representatives shall be composed of members chosen every second year by the people of the several states.” Not “states and any other entities under federal control,” but states, period.

The District is a unique enclave, set apart by the founders as the seat of national government. But for this purpose, the advocates assert, it is functionally no different from Maine or Montana.

The fantasy has captured many minds. The House passed a similar bill in 2007, Barack Obama has endorsed the idea and the Senate is expected to approve it this week. To maintain the current party balance, the House would expand from 435 members to 437, with Republican-dominated Utah getting an extra seat to match the one given to the Democratic-leaning District.

The bill is pretty much a sure thing to become law. But it won’t banish the reality that the District is not a state and can’t be treated as though it were.

Capital residents used to understand this vexing constraint. Decades ago, they wanted the right to vote in presidential elections. So they proposed and, in 1961, got a constitutional amendment to reach that end.

In 1978, Congress approved another amendment, this one to give the capital the same representation (a House member and two senators) it would have if it were a state. The measure died in 1985 after being approved by just 16 of the 38 states needed for ratification. In 1992, a similar amendment went nowhere.

The result has been intense frustration among Washington’s inhabitants, who have to bear the same burdens as other Americans—paying taxes, being subject to military conscription, enduring life without a secretary of commerce—but have no say on such matters in Congress.

They are entitled to elect a House delegate who enjoys the same prerogatives as other members—except the power to vote on floor legislation. Getting a House member who can’t vote is like being invited to don a wet suit before entering the hot tub. District license plates carry a protest motto: “Taxation without representation.”

Dissatisfied with the status quo but unable to alter it with a constitutional amendment, Washingtonians finally exclaimed: Amendment? We don’t need no stinkin’ amendment!

The rationale is that the Constitution, which provides for the capital, gives Congress the power “to exercise exclusive legislation in all cases whatsoever, over such District.” Therefore, it may do just about anything it pleases, including give the District a vote in the House.

But the argument proves too much. The same provision gives the national legislature “like authority over all places purchased … for the erection of forts, magazines, arsenals, dock-yards and other needful buildings.” If Congress can give the District a voting representative, it may give voting representatives to Fort Hood, the White Sands Missile Range and the Rock Island Arsenal. Which, obviously, it may not.

Washingtonians imagine they are victims of an injustice caused by a mere oversight, insisting that the framers never meant to disenfranchise them. Jonathan Turley, a law professor at George Washington University (location: Washington, D.C.), punctures this beguiling myth.

“The absence of a vote in Congress was clearly understood as a prominent characteristic of a federal district,” he wrote last year in the George Washington Law Review. “Moreover, being a resident of the new capital city was viewed as compensation for the limitation. The fact that members would work, and generally reside, in the District gave the city sufficient attention in Congress.”

A proposal by Alexander Hamilton to give the District congressional representation failed. So the founders knew what they were doing.

If Americans think they were mistaken on this point, the way to correct the error is a constitutional amendment. For the president and Congress to pretend none is needed betrays an alarming casualness about the Constitution. If they can look there and find the authority to give the District a seat in the House, they can probably also find a five-legged dog.

COPYRIGHT 2009 CREATORS SYNDICATE, INC

Paying income tax in America is Voluntary

This look voluntary to you?

Is it just me or do libertarians’ favorite words get hijacked more often than others?

Witness the evolution (devolution?) of terms like “liberal” and “public” (some “classical” liberals keep hoping everyone will ditch the term “public school” in favor of “government school”).

Sadly, another libertarian fave, “voluntary,” has been taking a beating.

Used to be that we were all on the same page with what “voluntary” meant, but then came the redefiners: New urbanists insisting that property owners who got out of the way of bulldozers dispatched via eminent domain were choosing to move “voluntarily;” Harry Reid (above) claiming paying taxes is “voluntary,” and now an Ag secretary suggesting that country-of-origin labels are “voluntary.”

Cafe Hayek’s Don Boudreaux explains in this letter to CBS Radio:

18 February 2009

Editor, CBS Radio World News Roundup

Dear Editor:

You reported in today’s 9 a.m. edition that the Department of Agriculture proposes to have meat processors put country-of-origin labels on their products. In this report you note that “Agriculture secretary Tom Vilsack said that the program is voluntary, but could become mandatory if meat processors don’t comply.”

It’s clear that if Mr. Vilsack were an armed robber he’d assure persons looking down the barrel of his gun that he seeks only voluntary compliance with his requests that they hand over their money and jewels – but also that he’ll shoot those persons who reject his requests.

Thanks to Kerry for the tip.

Banned in Boston: Erroll Tyler’s Fight for Economic Liberty

It should not take seven years and a team of lawyers to open a small business.

Yet that is precisely the case for Erroll Tyler, an aspiring Boston-area entrepreneur who has been trying to open Nautical Tours, a cutting-edge amphibious vehicle tour service based in Cambridge.

Even though Erroll’s vehicles won’t pick up or drop off passengers in Boston, the city insists that he needs a special sightseeing license. Were he in business now, Erroll would face fines and a month in jail if his passengers were caught looking out the window. In a cruel twist, the city refuses to even consider granting him the special license.

The evidence is overwhelming that the real reason behind keeping Erroll off the streets and out of the water is to protect a seven-company cartel that controls all the existing sightseeing licenses. There are serious concerns about insider-dealing in the Boston sightseeing industry.

That is why on February 18, 2009, Erroll teamed up with the Institute for Justice – the nation’s leading legal advocate for the rights of entrepreneurs – to file a major federal civil rights lawsuit against the City of Boston to secure his rights to earn a living and to travel.

A victory for Erroll will establish important constitutional precedent protecting entrepreneurs across the country.

Real Man of Genius: Joe Biden

Think About the Grandkids . . .

Columnist Ron Hart writes a great letter to his future grandkids:

The people of my generation were selfish and were appropriately dubbed the “Me Generation.” We fought no wars, we built up the citizenry’s dependence on government, and we spent money on ourselves for which we will leave you the tab.

For that, I am eternally apologetic.

I did my part to avoid this by working hard, paying taxes, and never asking the government for anything but to leave me alone. And I wrote a column that tried to educate people on the power of capitalism, minimal government, and prudent fiscal policies. It took our country 230 years to rack up $7 trillion in debt, and only two presidencies to increase that debt by 50 percent….

Our leaders bought votes by borrowing the money, which by your coming of age will either bankrupt the country or burden your generation with so much debt that government cannot provide the basic services such as roads and national defense. We squandered $1 trillion and our national credibility on a poorly thought out war in Iraq.

We were attacked in 2001 by religious zealots who envied our economy and our freedoms. Our leaders responded by restricting those freedoms and nationalizing more of our economy. Our government’s response to the attack was to create the TSA (we called it “Thousands Standing Around”), which hurt our economy and humiliated us when we flew on airplanes by making us take our shoes off and forcing 65-year-old ladies to dispose of three ounces of shampoo….

I wish we could have left you a more sane, solvent and reasoned country.

A few of us tried.

Found on Reason.com

Economic Change We Can Believe In

To improve the economy, eliminate the corporate income tax

President Barack Obama’s stimulus proposal entails an awkward tradeoff between spending and efficiency. Fiscal stimulation suggests large, rapid increases in spending, while efficiency means cautious, modest increases. Similarly, Obama’s plan favors tax cuts for low-income families, since they are most likely to spend rather than save, yet the drive for efficiency means cutting marginal tax rates on high-income consumers.

One policy change, however, can stimulate both the economy in the short-run and enhance efficiency in the long-run: repeal of the corporate income tax, which collects up to 35% of the difference between revenues and costs of incorporated businesses.

From the efficiency perspective, the corporate income tax has never been sensible policy. Economic theory holds that an efficient tax system should not tax capital income, since this distorts the incentives to save and invest. Even if the tax base includes capital income, corporate income taxation is overkill. All income earned by corporations accrues to households as dividends or capital gains, and this income is then taxed by the personal income tax system.

Proponents argue that the corporate income tax makes sense because high-income taxpayers own corporations at a disproportionate rate. This desire to redistribute income can still be achieved using the personal tax system. That approach is better targeted than taxing corporate income, since many low and moderate income households own corporations via their pensions and 401(k)s. The true burden of corporation taxation falls not just on stockholders, but on employees through lower wages and on consumers through higher prices. Thus corporate taxation hits taxpayers across the income spectrum.

Corporate income taxation has other negatives. It requires a complicated set of rules and regulations, over and above the personal income tax system, generating compliance costs. Special interests ensure that corporate tax systems favor specific industries or activities, further distorting private investment decisions. Along those lines, corporation taxation reduces financial transparency, making it harder for investors to monitor corporate behavior.

So repeal of the corporate income tax is good policy independent of the state of the economy and would provide short-run stimulus.

Repeal means higher stock prices and improved cash flow. Corporations would respond to this change by investing in plant and equipment, and by hiring additional workers. These investments would be more productive than the ones funded by stimulus projects, since corporations respond to market forces, not to political influence. Since corporations could more easily invest out of retained earnings, repeal would also circumvent many banks’ reluctance to lend.

The budgetary impact of a corporate income tax repeal—roughly $300-350 billion per year—might seem daunting, but this amount falls well short of the Obama fiscal package. The long-run impact will be less than what is implied by current revenues, since repeal will expand economic activity and therefore increase other kinds of tax revenue.

The stimulus impact of a corporate income tax repeal is likely to be substantial. Recent estimates by Christina Romer, the head of Obama’s Council of Economic Advisers, suggest that tax cuts have a multiplier of three, meaning that repeal would increase GDP by roughly $1 trillion. By comparison, the administration’s assumption that the government spending multiplier is about 1.5 suggests that the $500 billion in the Obama stimulus package would increase GDP by about $750 billion.

Elimination of the corporate income tax is a no-brainer. It benefits the economy in both the short-run and the long-run, with modest implications on the government budget.

The broader lesson here is that policymakers should attempt to improve the economy by eliminating currently existing bad policies, not just by adding new layers of government. By focusing equally on efficiency and stimulus, policymakers can set the stage for a sustained and healthy recovery.

Jeffrey A. Miron is a senior lecturer in economics at Harvard University.

Found on Reason.com