From the Archives: Attorney General Ken Cuccinelli says Obamacare decision is 'a win for liberty'

Attorney General Ken Cuccinelli says Obamacare decision is 'a win for liberty'
June 28, 2012 11:30 AM MST

In a press conference today, Virginia Attorney General Ken Cuccinelli said that the Supreme Court’s health-care decision was a “victory for individual liberty” and that his initial reaction to the ruling was more negative than it ought to have been.

Speaking to reporters in Richmond and via telephone conference call, Cuccinelli called the ruling “a win for liberty” and explained that for the first time in 85 years, the Supreme Court had set “an outer limit” on the expansion of federal authority through the Commerce Clause.

He said that by its 5-4 ruling on the limits of the Commerce Clause, the Court had put in place a “critically important containment of federal power” and that in the parts of the ruling dealing with Medicaid, the justices had for the first time since the New Deal said that Congress has limited power to compel states to act through its spending authority.

Politics and legislation
Moreover, Cuccinelli argued, by defining the individual mandate as a “tax,” as Chief Justice Roberts did in his majority opinion, the Court opened up political challenges to the law because Congress’s taxing authority is the most accountable and sensitive of its powers to popular will.

By calling it a tax, he said, the Court (specifically the Chief Justice) removes the political cover for those legislators who claimed not to have voted for a tax increase. They can no longer go back to their home districts and say they did not vote for a tax, he said, and thus they will be subject to the judgment of voters on Election Day.

Given that, Cuccinelli predicted that, with the impending elections this November, the ruling will show the critical role that voters play in “ensuring that their liberties are preserved.”

‘Bipartisan failure’
As a policy matter, Cuccinelli said, health-care legislation has been “a bipartisan failure” and that the Affordable Care Act is such a “bad policy” that even the people who supported it are backing away from it, as a constitutional matter, “individual liberty has been substantially preserved in this case.”

He also noted that, apart from the aspects of the law addressed in the decisions delivered by the Court today, there are still matters about the ACA that continue to be litigated. He gave as an example the lawsuit filed by the Catholic bishops with regard to contraceptives.

Federalism preserved
Cuccinelli said that the justices came to their decision in an “unlikely way,” but that “if there had been five votes to compel us into commerce, federalism would have been dead,” pointing out that Justice Ruth Bader Ginsburg, in her dissent on the Commerce Clause part of the ruling, claimed that the “Commerce Clause power is plenary,” that is, unlimited.

Wrapping up, the Virginia Attorney General said that upon reflection, his analysis of the Supreme Court’s health-care ruling is more muted than his initial reaction was, and that “by and large” the decision preserved individual liberty.


Publisher's note: This article was originally published on Examiner.com on June 28, 2012. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: 'Keep the Lottery -- It's Better Than Taxes" (1997)

This article originally appeared in the Norfolk Virginian-Pilot on Tuesday, April 29, 1997, under the headline, "Keep the Lottery -- It's Better Than Taxes."

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A minor tempest is brewing in the Virginia attorney general's race. Two candidates for the Republican nomination for that office have attacked the Virginia Lottery. State Sen. Mark Earley of Chesapeake complains there ``is too much state-sponsored gambling'' while former Public Safety Secretary Jerry Kilgore proposes that if lottery proceeds are not returned to local governments, then voters should have an opportunity to repeal the lottery's authorization.

Virginia State Capitol, Richmond

Pointing out that the lottery brings in more than $330 million to the Virginia treasury each year, state Sen. Ken Stolle of Virginia Beach criticizes his opponents for being fiscally irresponsible, challenging them to ``show me the money.'' Similarly, Fairfax attorney Gil Davis, the fourth candidate for the GOP nomination, asks them to explain how they will make up for lost revenues.

While Stolle and Davis seem to be looking at the lottery from a pragmatic perspective, all of the candidates seem to be missing the larger point: When compared to taxes, a lottery is a morally superior means to raise money for government programs.

The reason for this moral superiority can be explained simply. Taxes are always obtained through coercion (the threat of punishment for nonpayment) while lottery proceeds are obtained from voluntary action (an individual willingly purchases a lottery ticket). Acts that are coerced are always morally inferior to those that are done voluntarily.

As Robert Ringer wrote in his 1979 book, Restoring the American Dream, ``It is instructive to note that, among the many dictionary definitions, a `tax' is described as: `a heavy demand'; `a burden'; `a compulsory payment of a percentage of income . . . for the support of a government.''' Ringer adds: If something is compulsory, it means you are forced to do it. And the use of force is . . . the act of aggressing on a person's rights.'' Thus he concludes: ``No matter how much good certain people may believe is accomplished with `tax' money, the good can never negate the immorality of theft. You cannot change the nature of stealing by calling it taxation and explaining that it is a patriotic means of `raising revenue.'''

There is also a pragmatic case against taxes, made succinctly by the Cato Institute's David Boaz in his 1997 book, Libertarianism: A Primer:

``Now let's consider an ever-popular form of coercion by which governments extract money directly from those who earn it: taxation. Taxes reduce the return each individual gets from economic activity. Since one of the important functions of income - including profits and losses - is to direct resources toward their most highly valued uses, an artificial reduction in the return has a distorting effect on economic calculation. . . . Taxes always have different effects on different economic actors. They drive the marginal supplier or the marginal purchaser out of the market. . . . High taxes discourage work effort. Why work overtime if the government will take half of what you earn? Why invest in a risky business opportunity when the government promises to take half of any profit but to let you bear the losses? In all these ways, taxes reduce the productive effort directed toward serving human needs.''

A lottery is preferable to coercive taxation because compulsory actions eliminate the possibility of virtuous behavior: Virtue is only possible as the result of free will. The 19th century German philosopher Karl Wilhelm Von Humboldt explained it this way: ``Coercion may prevent many transgressions; but it robs even actions which are legal of a part of their beauty. Freedom may lead to many transgressions, but it lends even to vices a less ignoble form.''

Opponents of the lottery argue that gambling is itself an ignoble act. Yet buying a lottery ticket is always and everywhere a free choice. No one holds a gun to your head to force you to buy a ticket, and no one will throw you in jail if you refuse to buy one.

Other opponents argue that the lottery is more tempting, and therefore more burdensome, to the poor, who buy more tickets as a proportion of their income than wealthy people do. This is patronizing and ultimately insulting, for the essence of the argument is that poor people are not smart enough, or prudent enough, to decide for themselves how to spend their own money, but ``we who know better'' can decide for them.

A strong pragmatic and moral case can be made for reducing taxes and expanding the lottery and other voluntary means to raise government revenue (such as increasing user fees paid by those who actually benefit from government services).

Our attorney general candidates should be on notice: Rather than eliminate the lottery, a morally superior form of raising government revenues through voluntary (rather then coercive) means, we should expand it.

Memo: Richard Sincere Jr. is state coordinator for the Republican Liberty Caucus of Virginia.

From the Archives: Virginia’s school supplies ‘tax-free holiday’ more complicated than necessary

Virginia’s school supplies ‘tax-free holiday’ more complicated than necessary
August 4, 2011 11:34 PM MST

From 12:01 a.m. on Friday, August 5, through midnight on Sunday, August 7, shoppers in Virginia will be able to enjoy a sales tax holiday on a limited number of items. The tax holiday’s goal is to ease some of the burden on families with children who are purchasing school supplies in anticipation of the coming academic year.

The first tax-free school shopping holiday took place in August 2006 and has been repeated each year since then.

Shoppers save $4.3 million

Governor Bob McDonnell explained in a statement released by his office:

“Returning to class is an exciting time for students, but it can also be a stressful time for their parents. Saving 5 percent on their purchases is not a great deal, but every bit helps in this struggling economy. I urge all Virginians to go out and save money, while supporting our retail community.”

The governor’s office estimated that this year’s tax-free holiday will save Virginia shoppers $4.3 million in sales taxes that they would otherwise pay.

Delegate Rob Bell (R-58) of Albemarle County pointed out in an email to constituents that during the tax-holiday weekend, “a variety of school supplies will be tax-free as long as each item costs $20 or less. Most clothing items and footwear will also be exempt from the 5 percent sales tax as long as they are priced at $100 or less each. There is no limit on the number of items you can purchase tax-free as long as each item qualifies.”

Whatever its merits, the sales-tax holiday’s framework is far more complicated than it needs to be. The Virginia Department of Taxation provides a lengthy list of those items that are eligible and others that are ineligible for the sales tax exemption through the weekend. It would have been much simpler for the General Assembly to decree that all consumer items priced at $100 or less would be tax-exempt for the 72-hour period of the tax holiday.

Mix of inconsistencies

Instead, the list offers a higgledy-piggledy mix of inconsistencies, in which “athletic supporters” are eligible items, but “cleated or spiked athletic shoes” are not. Computers and computer peripherals (like printers) are ineligible, but “all calculators, including those with printing capabilities” are eligible for the exemption.

Some eligible items have little or no relation to school supplies: choir and altar clothing; diapers, children and adult, including disposable diapers; and wedding apparel, including veils, to name a few.

“Book bags” are tax exempt but “briefcases” and “handbags” are not. Clothing items that dancers wear -- leotards and tights -- are eligible but ballet and tap shoes are not.

The lengthy and inconsistent list should be evidence that neither the General Assembly nor the Department of Taxation has thought through all of the ramifications of the tax-free holiday.

Business logic

Retail businesses, however, have thought things through to their logical conclusion.

In years past, some stores have simply absorbed the sales taxes on items left off the official list, declaring that virtually everything on their shelves would be tax-free for the weekend.

If the government behaved as rationally as businesses, that policy would be true across the board, in 2011 and in the future.

Publisher's note: This article was originally published on Examiner.com on August 29, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Charlottesville radio host Joe Thomas assesses two years of the Tea Party

Publisher's note: This article was originally published on Examiner.com on April 24, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Charlottesville radio host Joe Thomas assesses two years of the Tea Party
April 24, 2011 12:34 AM MST

Since its first rally on April 15, 2009, the Jefferson Area Tea Party has sponsored two more Tax Day rallies, in addition to events on Independence Day and regular meetings for its members and supporter at various locations in and around Charlottesville.

The group’s latest Tax Day event took place on Friday, April 15, at the Free Speech Monument near Charlottesville’s City Hall. The emcee was WCHV radio talk-show host Joe Thomas, bedecked in colonial-era costume.

After the rally ended and the crowd began to disperse – or to stick around and attend the first Fridays After Five concert of 2011 – Thomas spoke to the Charlottesville Libertarian Examiner about the state of the Tea Party movement, the issues that have persisted for the past two years, and the release of Atlas Shrugged-Part One.

Tea Party rhetoric
Thomas worries that the Tea Party movement could be co-opted by professional political consultants.

"There’s been a change in the rhetoric” since the Tea Party first surfaced in early 2009, Thomas said, “but remember, politics, as we have it right now, is driven by a very, very smart group of consultants. They see the 1,500 people we had at the first Tax Day Tea Party rally [and] every Tea Party rally across the country, and they say, ‘We have to work the language of the Tea Party into the rhetoric.’”

The economy is uppermost in Thomas’ mind, as it is with many Tea Party activists.

“Something that was said here is very important: one month’s worth of interest on the debt covers seven or eight very major departments’ entire budgets,” he pointed out.

“We need to realize that the borrowing is what’s going to kill the country,” Thomas explained. “This country is strong because it was one of the great marketplaces. The citizens of this country consume goods from around the world and other countries want to sell here. If our dollar stops being valuable, as it will if they continue to print [more money], that’s when we fail.”

Core focus
Thomas believes there has been consistency in the Tea Party’s ability to focus on a few central issues and not be distracted.

“The core is still about the taxing and the spending,” he said.

“How many groups,” he asked, “have libertarians and Moral Majority crowds in the same group?”

That may engender some “friction that the Tea Party feels sometime,” Thomas suggested. “Do they go to the social right or to the libertarian right?”

Despite this source of potential conflict, he said, the Tea Party has “stayed focused on the economic ground,” echoing the advice James Carville gave to Bill Clinton: “It’s the economy, stupid.”

With regard to the possible social/fiscal split, Thomas counseled: “If we can afford to live and we can afford to pay our bills, the rest can be handled between adults.”

‘Atlas Shrugged,’ the movie
Thomas suggested that the growth and success of the Tea Party may have been partially responsible for the long-awaited release of a movie based on Ayn Rand’s novel, Atlas Shrugged.

“I know that they had been working on [the movie] for some time,” he said, noting that he had interviewed Objectivist philosopher David Kelley of the Atlas Society, who had been an advisor to the producers of the film.

Kelley told him, he said, that the project “really started to move forward when they started to see the interest in the libertarian mindset of the Tea Party.”

Seeing that, he said, the producers thought, “‘Now may be the time to get this moving.’”

Joe Thomas can be heard weekdays from 5:00 to 9:00 a.m. on WCHV radio (1260 AM and 107.5 FM). He also cohosts “The Afternoon Constitutional,” on WCHV-FM in Charlottesville and on WFJX-AM in Roanoke.

From the Archives: Va. Senate candidate Jamie Radtke hopes her message resonates with libertarians

Publisher's note: This article was originally published on Examiner.com on April 21, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Va. Senate candidate Jamie Radtke hopes her message resonates with libertarians
April 21, 2011 2:17 PM MST

U.S. Senate candidate Jamie Radtke is carrying her message that “something has to be done” about spending and the debt to Republican unit committees, Kiwanis clubs, Tea Parties, and Rotaries around Virginia where, she says, “people get it. I don’t know if politicians get it, but people get it.”

Radtke was campaigning April 20 at the 63rd Annual Shad Planking in Wakefield, along with two of her opponents for the 2012 GOP Senate nomination, George Allen and David McCormick. Standing at her campaign’s booth in unusually warm spring weather, she answered questions from the Charlottesville Libertarian Examiner about the issues she is emphasizing and what she would do to attract the votes of Virginia libertarians.

In her campaign, she explained, “we’re talking about a constitutionally limited government [and] what is the role of the federal government.”


'Right in line' with libertarians

“Our message is right in line with the libertarian vote,” Radtke said, especially “as far as the spending and the debt and getting the fiscal house in order. The PATRIOT Act is another one that really irritates the libertarian people. Infringing on civil rights is an issue with me, as well. All those things are important.”

She said that when talking about the budget, “you’ve got to look at entitlements” and, from a libertarian point of view, entitlements “should be consumer-driven. People should have skin in the game.”

Things like that, Radtke explained, “resonate with people in the Libertarian Party.”

Even defense spending should be on the table, she said.

“The priority, the absolute priority, 100 percent should be our military and our veterans,” she said, “but the size of the Defense budget is so astronomical that even the Department of Defense is talking about places where there can be savings” without adversely impacting current troops or veterans.

“All of those things,” she concluded, “are things that we have in common” with libertarian voters.

Budget deal 'horrible,' 'sham'
The budget deal worked out in Congress earlier this month is “horrible,” Radtke said.

“I think that promising $100 billion in cuts and then ending up at $68 billion and then saying it’s $38 billion and then it really being $353 million is a complete sham,” she complained.

“I don’t think that that’s what people are looking for” in terms of congressional action on the budget, she added.

“When you look at Standard & Poors coming out and downgrading our outlook to negative, saying you have two years to do something, [but] our big idea is to cut $353 million and start talking about raising the debt ceiling, that is the absolutely wrong message to be sending.”

Radtke also believes there needs to be fundamental tax reform.

“We have a tax system that’s all about special interest loopholes,” she explaind. “We need to get to a place where everyone has skin in the game, not only half of America.”

Prefers Fair Tax
The options she sees are a flat tax or the Fair Tax. “One or the other. Not this optional flat tax thing where [you] try to make everyone happy and straddle the fence. You’re going to have to have a flat tax, or have a Fair Tax.”

Radtke’s preference is for the Fair Tax. “I think it’s good to tax consumption and not tax income,” she said, but added that she has talked to economists “who say that you can structure a flat tax that sort of acts as a consumption tax. My preference is taxing consumption.”

She worries, however, that politicians cannot be trusted to do the job right.

“My fear with the Fair Tax is politicians,” she explained. “That’s my fear with the Fair Tax, because you know you have to repeal the Sixteenth Amendment in order for the Fair Tax to work. I don’t trust politicians that they’ll pass the Fair Tax” without first repealing the Sixteenth Amendment and the result that “all of a sudden we’ve got a consumption tax and an income tax, combined.”

Radtke acknowledged that the original Fair Tax bill, which was introduced by former Congressman John Linder of Georgia, has sequential requirements of first repealing the income tax amendment in the Constitution and then instituting a consumption tax, but that does not allay her fears.

“Knowing how deals get made and things get added to the bill at the last minute,” she is concerned that Congress “would pass the Fair Tax [while] the income tax was still in existence.”

Radtke reiterated that, as she talks to voters around the state, “the key issues are spending and the debt, talking about entitlement reform and what has to be done.”

Her warning to Congress is this: “You can talk about spending and debt all you want but if you’re not going to talk about entitlements, then you’re really not serious about spending and the debt.”

From the Archives: April 15 Charlottesville Tea Party attracts protesters, onlookers, sunshine, and obscene reactions

Publisher's note: This article was originally published on Examiner.com on April 16, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

April 15 Charlottesville Tea Party attracts protesters, onlookers, sunshine, and obscene reactions
April 16, 2010 2:47 AM MST

Tax Day – April 15 – was the day that the Jefferson Area Tea Party chose to organize a protest in favor of smaller government and against high taxes. The group attracted 150 to 200 people to a demonstration at the Post Office building on Route 29 north of Charlottesville.

Local radio talk show host Rob Schilling, whose weekday program appears on WINA-AM, said the program “started out with a bang,” when a counter-protester hurled obscenities at him. Police were called in to settle the situation, and the man was briefly detained. Schilling offered him the opportunity to apologize on videotape in return for dropping assault charges, which the man readily agreed to do. (The video can be seen on The Schilling Show blog.)

Ken Boyd, a member of the Albemarle County Board of Supervisors and a candidate for Congress in the Fifth District of Virginia, said that the rally represented “a great showing of Americanism and people coming together who are not happy with what’s going on in Washington and they want to make their voices heard. There are people from all walks of life, as you look around. I just think it’s great, the enthusiasm and the passion are what it’s all about.”

Boyd described the protesters’ primary message as “they got the kind of change they don’t want from the Obama administration and they would like to change it to the way it was before.”

Bill Hay, one of the founders of the Jefferson Area Tea Party who is now affiliated with congressional candidate Laurence Verga’s Fifth District campaign, said he thought the message of the rally was “smaller government, cut taxes, and throw Tom Perriello out of office.” He added that drivers passing by on Route 29 were providing “a lot of horn beeping, a lot of thumbs up, maybe a few middle fingers.”

Former Albemarle County GOP chairman Keith Drake, who now serves as communications director for the Jefferson Area Tea Party, said “This is truly a revolution. Nobody’s shooting guns, nobody’s fighting in the streets. But other than that, there’s every bit of passion you would see in a revolution, and I’m very optimistic about the future direction of our country.”

Drake explained the purpose of a new organization he co-founded (with Schilling) called IMPACT (“I’m Paying Additional County Taxes”) as “an opportunity for people who don’t think they’re paying enough [in taxes] to actually pay more, to make a donation to local county government.”

So far IMPACT has received one donation in the amount of $25.

From the Archives: Charlottesville-area Libertarians use 2011 Tax Day to argue against taxes

Publisher's note: This article was originally published on Examiner.com on April 15, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Charlottesville-area Libertarians use 2011 Tax Day to argue against taxes
April 15, 2011 12:14 AM MST

Each month members of the Jefferson Area Libertarians, a local division of the Libertarian Party of Virginia, meet for a social hour at West Main Restaurant in Charlottesville.

This month the meeting took place on the eve of the traditional date for Americans to complete their federal tax returns. (The Internal Revenue Service has extended this year's deadline from Friday, April 15, to Monday, April 18.)

James Curtis, treasurer of the Libertarian Party of Virginia (LPVA), and Jim Lark, secretary of the Jefferson Area Libertarians (JAL), will be guests on April 15 on The Schilling Show on WINA (1070 AM) to talk about tax policy. The two activists gave the Charlottesville Libertarian Examiner an exclusive preview of the topics they will address on the radio Friday afternoon.

‘Grossly overtaxed’
Lark said he plans to talk about “the nature of what taxes are and the extent to which most libertarians feel that we are grossly overtaxed.”

The government, Lark explained, does many things it “should not be doing and we’re paying for those. There are many things that, even if government should be doing them – and that’s debatable – we’re still paying too much.”

Lark said he and Curtis will try to convey to Rob Schilling's listeners “the idea that perhaps we can cut the cost of government substantially. We can cut taxes; we can cut spending substantially.”

For his part, Curtis said that one point he wants to make is that there has been “a lot of discussion lately that the federal government’s not experiencing an income issue, it’s more of a spending matter. I politely disagree with that. I think it is a revenue issue also.”

Curtis explained that he thinks “the federal government actually takes in too much revenue” and it is “taxing us too aggressively, putting too much strain on the economy.”

How to transform the tax system
Offered a “magic wand” that could transform the country’s tax system, Lark and Curtis gave similar but not identical wish lists.

“If they give the magic wand to me,” Lark said he would get rid of the tax system “entirely” and instead would like to see “a society where taxes look more like user fees or something like that, where people actually pay for goods and services” that they use.

Given “a less powerful magic wand,” however, Lark said he would “probably go to some sort of flat-tax scheme at a very low rate.”

Curtis said that he would “repeal the individual and corporate income taxes and payroll taxes. Individual taxes are theft.”

Under those circumstances, he explained, “government would have to do without most of its unconstitutional programs,” while remaining programs “would have to be put into its reduced budget.”

He noted that much of the federal government’s revenue comes from “excise taxes, tariffs, and such” and that many people have a misconception that “if we got rid of the income tax, the federal government would go out of business.”

Curtis pointed out, however, that individual income taxes only constitute about 32 percent of federal revenues, “so we’re potentially talking about cutting the budget by a third if we repeal the income tax.”

What about the Fair Tax?
Both Curtis and Lark are reluctant to endorse the Fair Tax, a consumption tax popularized by nationally syndicated radio host Neal Boortz and former Georgia Congressman John Linder, designed to replace the income tax.

“I’ve always been a friendly skeptic about the Fair Tax,” said Lark. “I certainly understand what they’re trying to do and I’m very sympathetic to a lot of the ideas that motivate it, but I’m not sure that it would be a step in the right direction.”

Noting that he has “a lot of friends who are major Fair Tax enthusiasts,” Lark conceded that “if it were passed, it very well may be an improvement over what we now have,” but his own preference is to “move in a different direction.”

To Curtis, the Fair Tax is “better than what we have now but the polite way to put it is I’m not a fan.”

Tax Day Rallies
The Jefferson Area Libertarians will be participating in two events marking Tax Day 2011.

On Friday at 5:00 p.m., the group’s chairman, John Munchmeyer, will speak at a rally at the Free Speech Monument on Charlottesville’s downtown mall, sponsored by the Jefferson Area Tea Party.

On Monday, from 3:30 to 5:00 p.m., JAL will have its own educational demonstration outside the main Charlottesville Post Office on Route 29 North, hoping to reach local taxpayers as they drop their income tax returns into the mail box.

From the Archives: Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation

Publisher's note: This article was originally published on Examiner.com on February 20, 2013. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation

Speaking at the Heritage Foundation on February 20, author Amity Shlaes reminded her audience, “if you want to know only one thing about Calvin Coolidge,” the subject of her new biography, “it is that when he left office in 1929” – 67 months after he had succeeded Warren Harding -- “the federal government was smaller than when he had become president in 1923.”

That singular achievement is one of the aspects of Coolidge's life that motivated Shlaes, a syndicated columnist for Bloomberg View and director of the Four Percent Growth Project at the George W. Bush Presidential Center, to write the simply-titled Coolidge, which is both follow-up and prequel to her previous best-selling book, The Forgotten Man: A New History of the Great Depression.

“I'm on a mission of reputation-building,” Shlaes said, in light of the fact that Coolidge tends to be ranked low among historians of the presidency. She identified parallels between the time Coolidge took office in post-World War I America and the present day, when crises seemed to emerge day after day, tempting the government to “do something.”

Parallels to today

For instance, federal debt had grown by a factor of 20 since before the First World War. The times were “troubled,” Shlaes said, because thousands of returning veterans had been unable to find work and as many as one-third of them were disabled.

At the end of the Wilson administration, she explained, “the machine of government was broken. They had gridlock,” not unlike the current standoff between Republicans in Congress and the Obama White House.

In 1920, the presidential ticket of Ohio Senator Warren G. Harding and Massachusetts Governor Calvin Coolidge ran on a platform of “no” – as Shlaes put it, “not kinder, gentler, but 'no'” to spending, to taxes, to expanding government.

During Harding's term, Congress passed the Budget and Accounting Act, which established the forerunner of today's Office of Management and Budget (OMB). For the first time, the federal government was able to invoke independent analysis of budget proposals with an overarching view of how programs added up. Previously, appropriations were made on an ad-hoc basis, which made it difficult for presidents, when asked for something, to say “no.”

Cutting tax rates

After Harding died, Coolidge continued and built upon his program of austerity. With Treasury Secretary Andrew Mellon, he cut the top marginal income tax rate to 25 percent, resulting in increased revenues paid to the U.S. Treasury. (No other president has been able to achieve such low marginal rates since then. Ronald Reagan, Shlaes pointed out, was only able to cut the top rate to 28 percent.)

Coolidge made cutting government into an art. He used the political skills he had honed since first being elected to public office at age 26 to veto 50 bills over six years. He also made ample use of the “pocket veto,” which requires no message of explanation and, because Congress is not in session when the president quietly rejects the bill, it cannot be overridden. Coolidge, Shlaes said, “was like an Isaac Stern of the pocket veto.”

Coolidge's use of the veto and pocket veto reflected his view that “it's better to kill bad laws than to pass good ones.” As then-prominent political commentator Walter Lippmann put it, Coolidge used “dullness and boredom as a political device,” in order to prevent bad legislation.

Bothersome Prohibition

In reply to a question posed by the Charlottesville Libertarian Examiner about Coolidge's role in Prohibition, Shlaes said he regarded it “as a bother.” Earlier in his career, she explained, he had seen commerce in alcoholic beverages as beneficial to local farmers and businesses. He also understood that Prohibition was unpopular among recent immigrants, and he was concerned about his party (the Republicans) losing immigrant votes – something, she pointed out, with parallels today.

Coolidge, she explained, “tried to ignore [Prohibition] as best as he could” but felt constrained to uphold it because it was the law of the land. He disfavored Prohibition because “there was too much social legislation when economic legislation is more important.”

Still, before the repeal of the 18th Amendment, Coolidge bought stock in a grocery-supply company that sold a great deal of yeast, a major component of making beer and other fermented beverages. He was betting, Shlaes said, that Prohibition would end sooner rather than later.

As it turned out, of course, Coolidge ended sooner than Prohibition. He died on January 5, 1933; Prohibition was repealed on December 5 that same year, exactly 11 months later.

Should Virginia taxpayers subsidize the film industry?

Regal Cinemas: 'Welcome Virginia Film Festival'

How should Virginia's relate to the film industry?

The Commonwealth has become a popular location for shooting prestige motion pictures. Steven Spielberg's Lincoln used Richmond as a stand-in for 1860s Washington, and Spielberg used the Shenandoah Valley as a stand-in for Massachusetts in his 2005 War of the Worlds remake. Other movies shot on location here include Gods and Generals, Sommersby, Killing Kennedy, Evan Almighty, Giant, Toy Soldiers, and Swedish Auto (those last four made in the Charlottesville area).

Not simply a location for making films, Virginia often is an early venue for seeing other big movies.

For example, one of the Oscars' Best Picture nominees for 2013, Alexander Payne's Nebraska, had pre-release screenings both at the Virginia Film Festival in Charlottesville, where co-star Will Forte and producer Ron Yerxa discussed the film, but also at the new Middleburg Film Festival, where Yerxa appeared with lead actor (and Oscar nominee) Bruce Dern. The 2013 Virginia Film Festival also screened Philomena, another Best Picture nominee this year. In 2011, eventual Best Picture winner The Artist was a closing night feature at the Virginia Film Festival. Oscar-winning live-action short subject West Bank Story also had an early screening at the 2005 festival in Charlottesville.

It's clear that Virginia has strong ties to the film making industry. But should Virginia taxpayers have to pay for them?

Although Virginia has, for some time, offered substantial tax benefits to movie companies that come here to make films, a bill introduced in this year's General Assembly -- and passed by both chambers -- would expand tax credits to the millionaires who would probably do business here anyway.

According to the summary of HB 460, patroned by Terry Kilgore (R-Gate City) and copatroned by Chris Peace (R-Mechanicsville, the bill

Changes the motion picture production income tax credit by (i) increasing the percentage of qualifying expenses eligible to be claimed from 15 percent to 20 percent, and from 20 percent to 25 percent for productions in an economically distressed areas, (ii) increasing the total biennium cap for all such credits from $5 million to $25 million, and (iii) having the credit expire on December 31, 2023. The bill also requires the Department to publish information regarding the credit regardless if it does not prevent the identification of the taxpayer claiming the credit. The bill is effective for taxable years beginning on or after January 1, 2014.

Does this make good sense as policy? Economists say no.

Even uber-liberal Robert Reich, the Clinton administration's Labor Secretary, agrees that states that subsidize the film industry are making a mistake.

According to Variety, Reich

called the bonanza of states offering production tax credits a “race to the bottom,” as competition sees governments sweetening the pot to try to lure movies and TV shows within their borders.

“These tax credits and tax incentives are a zero sum game,” he said in an interview last week. “They don’t create a single new job. They just move jobs around, and they rob the states of the money they need for education and infrastructure.”

Closer to home, the Mercatus Center at George Mason University headlined an article by one of its scholars, Antony Davies, "The Film Tax Credit Farce." Davies, an economist at Duquesne University, wrote:

According to the nonpartisan Tax Foundation, every independent study of film tax credits has found that the credits are money-losers for the states. Arizona's Department of Commerce calculated that Arizona made back 28 cents in tax revenue for every $1 it “invested” in film tax credits. Connecticut's Department of Economic Development estimated that the state earned 7 cents in tax revenue for every $1 it lost. State agencies in Massachusetts, Michigan, New Mexico and even Pennsylvania's Legislative Budget and Finance Committee found that state coffers received less than 30 cents for every dollar they paid out in film tax credits.

If film production is such a great cash cow, why aren't venture capitalists lining up for a piece of the action? The problem is that the film industry wants special treatment. It wants someone else to shoulder the risk of investment while it keeps the profit for itself. No investor would agree to such a deal, and that is why the film industry has turned to our state government.

Filmmakers know the state can force taxpayers to invest in something taxpayers would never choose on their own.

Some politicians are getting the message that tax credits for the film industry do not bring states the benefits touted by their proponents. Variety quotes another GMU source, economist Eileen Norcross:

Other arguments against incentives hold that they don’t help the states that offer them. In March, the Massachusetts revenue commission issued a scathing report on the state’s tax credit program, which stated that two-thirds of the total $175 million awarded in 2011 went to out-of-state spending. “The critique is that while they appear to bring in short-term temporary activity to a state or community, a lot of those benefits flow to the production companies,” says Eileen Norcross, a senior research fellow at George Mason U. “The people who are hired locally tend to be (in) more low-wage service industry jobs. It provides a temporary economic blip on the radar, and then it’s sort of fleeting.”

In a commentary piece for U.S. News and World Report, Norcross explained the case against film industry subsidies. States, she said, are

finding that it is barely worth the lost revenue. A recent report by the Massachusetts Department of Revenue found that of the $44 million in tax credits awarded in 2011, two-thirds of the $175 million in spending generated due to economic activity went to out-of-state workers, and 47 percent of the wages generated, or $53 million, went to those earning over $1 million.

On net, Massachusetts' film credit program is costing the state more than it delivers. After subtracting payments to out-of-state residents and the budget reductions required to fund the credits, only $39 million in state economic activity resulted. The findings have prompted Governor Deval Patrick to cap the state's program to $40 million in annual credits.

North Carolina's Legislative Services Office analysis shows their film credit program realizes even less impressive returns. In 2011, the state awarded $30.3 million in film credits – reimbursing productions that spent over $250,000 up to 25 percent for qualifying expenses. Yet, the program could only claim about 55 to 70 new jobs. Based on their model, the report claims that if instead North Carolina's business taxes had been reduced across the board by $30.3 million, between 340 and 450 jobs and $14 million in personal income would have materialized.

Why, against all this evidence, are states -- including Virginia -- continuing to transfer tax dollars from poor- and middle-class residents to rich out-of-state film producers?

There's a widely held belief that putting the state's locales on film encourages more tourism. That's dubious. Consider the examples above: Tom Cruise fought Martians in the hills near Lexington, Virginia, in War of the Worlds. But Virginia was never mentioned in the film. Virginia played Massachusetts. Daniel Day-Lewis was Abraham Lincoln while Richmond was Washington, D.C.

Of course, even 50 years after it was made, The Sound of Music still brings tourists to Salzburg, Austria, and its environs, and The Lord of the Rings trilogy became the basis to attract tourists to New Zealand. Those are outlying exceptions, however, with cult followings that films like Evan Almighty and Swedish Auto can't match.

In addition, politicians hopefully believe connections with film producers, directors, and actors bring with them "movie magic," as though having Sally Field or Dakota Fanning in town will result in fairy dust falling on Richmond or Lexington. Even governors and senators are dazzled by celebrity, not to mention delegates and city council members.

As Variety's David Cohen pointed out on public radio's Here & Now,

place after place has discovered these things are rife with corruption and they don't deliver the returns that they expect. But there's always another politician or another city that's willing to be seduced by Hollywood glamour.

It turns out that HB 460 passed both chambers of the General Assembly and was signed into law by Governor Terry McAuliffe on April 6, with an effective date of July 1, 2014.

Too bad the governor failed to listen to his friend Bill Clinton's old friend Robert Reich.  He has helped  Virginia join the "race to the bottom."

Adapted from an earlier post on Bearing Drift.

@rick_sincere | facebook.com/ricksincere

Victoria's Secret Elementary School

Year after year, as Virginia's annual "tax free" back-to-school shopping weekend rolls around, I find a reason to take aim at the program and set phasers to mock.

In 2011, for example, I pointed out on Examiner.com how the tax-free holiday is "more complicated than necessary":

Whatever its merits, the sales-tax holiday’s framework is far more complicated than it needs to be. The Virginia Department of Taxation provides a lengthy list of those items that are eligible and others that are ineligible for the sales tax exemption through the weekend. It would have been much simpler for the General Assembly to decree that all consumer items priced at $100 or less would be tax-exempt for the 72-hour period of the tax holiday.

Instead, the list offers a higgledy-piggledy mix of inconsistencies, in which “athletic supporters” are eligible items, but “cleated or spiked athletic shoes” are not. Computers and computer peripherals (like printers) are ineligible, but “all calculators, including those with printing capabilities” are eligible for the exemption.

Some eligible items have little or no relation to school supplies: choir and altar clothing; diapers, children and adult, including disposable diapers; and wedding apparel, including veils, to name a few.

That led to an interview with the Newsplex in Charlottesville in which I noted:

"We have these weird combinations where an athletic supporter is tax exempted but athletic shoes with cleats are not."

My solution?

"Simplify it, simplify it, simplify it."

Sincere suggests tax breaks for anything $100 or less across the board, not just school.

"Easy to understand, much easier for our retailers who have to program their computers."

As far back as 2006, on the occasion of the first such sales-tax holiday in Virginia, I made the same recommendation:

The easiest, most logical, most consumer- and business-friendly thing to do for the tax holiday would simply have been to decree that on this particular three-day weekend, all items with a retail price of $100 or less would be tax-exempt. That would be simple to program into stores' computers, and it would be simple for the average customer -- that is, taxpayer -- to understand.

Then in 2008, I asked:

How about this idea? A tax-free year. Is that too much to hope for?

These reminiscences are prompted by a report by Watchdog.org's Virginia bureau, which points out another ridiculous anomaly in the list of acceptably tax-free items:

Planning on buying your daughter some sexy lingerie for her first day back to school this fall?

Well, now you can — free from Virginia state sales tax, thanks to this weekend’s back-to-school clothing and supplies tax holiday.

But, if you’re planning on purchasing some new shin guards for your same soccer superstar daughter who plays on her school’s team, forget it.

That isn’t exempt from the state sales tax during the Friday-through Sunday tax holiday, because state officials decided that doesn’t fall under the category of “clothing.”

Watchdog.org also points to a compelling "top ten list" of reasons that explain why sales-tax holidays are a flawed idea, if not actually counterproductive, courtesy of the Tax Foundation. It's a PDF but well worth the read.

This year's back-to-school sales-tax holiday begins Friday, August 2, and extends through Barack Obama's birthday on Sunday, August 4.

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Tax-Free Shopping Revisited

In 2006 and 2008, I wrote blog posts about Virginia's tax-free holiday for back-to-school shoppers.  The first such holiday was in August 2006, which means that this year's "celebration" is the sixth consecutive one.

Last night, I published an article about the tax-free holiday weekend on Examiner.com, which made the argument that the lengthy list of tax-exempt and non-exempt items is inconsistent, confusing, and needlessly complicated.  It would be better, I said, for the General Assembly to simplify the whole matter by declaring that all retail items priced at $100 or less should be tax-free during the tax-free holiday period.  (Both the 72 hour window and the $100 limit are arbitrary.  Each of those numbers could be bigger or smaller.)

The article caught the attention of Jim Hanchett, news director at CBS19 TV in Charlottesville (part of the Charlottesville Newsplex, which also includes the local Fox and ABC affiliates).  He assigned reporter Frankie Jupiter to do a story on the topic, which included an interview with me conducted at the Ix Building studios of the Newsplex.

Here's the video from tonight's 5:00 o'clock newscast:

Jupiter also interviewed a local sporting-goods store owner, and he pointed out that swimming trunks are tax-exempt, but swimming goggles are not. (I had pointed out, in my article and the interview, that dancer's clothing, like leotards and tights, is tax-exempt, but ballet and tap shoes are not.) Jupiter said he found the list of exempt and non-exempt items from a link in my Examiner.com article and was amazed at the complexity and inconsistency.

Some excerpts from the print version of the interview:

The first day of school is right around the corner, which means back to school shopping, and this weekend in Virginia you can do yours tax free.

But Rick Sincere, a local blogger, says the rules on what is tax free and what isn't are way too complicated.

"We have these weird combinations where an athletic supporter is tax exempted but athletic shoes with cleats are not."

* * *

"A lot of the things on the list that are tax exempt have no relation to school at all. Wedding dresses, now if you can find a wedding dress for less than $100 you deserve a lot of credit," said Sincere.

And items such as printer paper, printer ink and zip drives are not tax exempt.

"Simplify it, simplify it, simplify it."

Sincere suggests tax breaks for anything $100 or less across the board, not just school.

"Easy to understand, much easier for our retailers who have to program their computers."

My article for Examiner.com is headlined "Virginia’s school supplies ‘tax-free holiday’ more complicated than necessary" and can also be found through Google News.

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Jefferson Area Tea Party's Grass-roots Bona Fides

If you need evidence that the Tea Party movement is made up of grassroots, neophyte activists, look no further than this email invitation sent out on Friday by the Jefferson Area Tea Party, which is based in the Charlottesville area.

If the amateurishness of this email message is not immediately apparent, don't worry that you've missed it.  It took me several minutes to figure it out.

A truly professional operation -- the alleged "grass tops" that exercise cynical control over the Tea Parties from some undisclosed hideaway in Washington -- would never have let this pass, because a basic piece of information is missing.

Did you figure it out yet?

The invitation to the rally does not tell recipients of the message where they should go to protest Congressman Tom Perriello. 

Yes, it does say "Carysbrook Performing Arts Center," but unless you live in Fluvanna County or near Fork Union (where the Carysbrook Center stands), you're unlikely to know where it's located.  I had to look it up on Google, and even then got the impression that it was near Lake Monticello.  (Maybe it's near both places; my sense of rural geography is not well-formed.)

I can imagine that other Tea Partiers from Albemarle, Greene, and Nelson counties, as well as from the city of Charlottesville, scratched their heads in ignorance.  How many would have bothered to look up the name of the performing arts center to learn where they should be on Saturday morning?

It's a simple rule of political activism:  Spoon feed the troops with information as much as you spoon feed the media.  They're not going to bother to find out for themselves what you should be telling them in the first place.

The accusations of top-down manipulation of the Tea Party are clearly misdirected.  Professional political operatives don't make these kinds of basic mistakes.

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