State Marriage Benefits Betray State Intrusions

Last week the Supreme Court heard oral arguments concerning two different cases that relate to the constitutionality of the Defense of Marriage Act (DOMA). DOMA was signed into law in 1996 in order to delegitimize any attempt by the states to legalize homogender marriage by disqualifying members of such unions from receiving certain federal “benefits.” So even if a state did legalize and recognize such marriages they would always remain somehow second-class in terms of government-mandated benefits. However DOMA proved to be an irrelevant impediment and several states have since enacted laws recognizing homogender marriage. So, once again the question of federalism falls before the court: wherever federal and state law conflict, which shall take precedence? The constitution was written in such a way that state law supersedes in all cases except where the constitution has expressly delegated such authority to the federal government. Progressives typically fall into the category of those who believe the constitution to be a “living document” insofar as they routinely discover new “expressly delegated” authority that tends to align with their worldview. Conservatives however view the document more through an “original intent” lens. Oddly enough though the rolls are reversed with respect to DOMA. Now it is the progressives insisting that the constitution does not give Congress any implied authority to regulate marriage and it is the conservatives claiming there is clearly an unwritten mandate in the constitution to defend “pillars of our society” such as marriage. My, my, it seems the constitution can be all things to all people when it suits their partisan purpose.

The more compelling message of DOMA, which both sides and the media have managed to ignore, is the idea that there even exists such a thing as “federal benefits”. Every so-called benefit is connected in some way to some illegitimate intrusion of government in our lives. Government takes away our liberties and intrudes on our rights and then graciously metes them back out piecemeal as “benefits” for those that play nice and follow their rules. Consider the following contested benefits: Tax benefits (income and estate tax are immoral confiscation of productivity), insurance benefits (employers should have no role in providing insurance of any kind), Social Security benefits (Social Security is a fraudulent compulsive quasi disability/ponzi scheme that should not exist in a free society), immigration benefits (there should be no limits on immigration).

But the biggest intrusion of all: Marriage itself – the government, neither at the federal nor state level has any business whatsoever in regulating, validating or approving of marriage. Marriage (for legal purposes) is simply the voluntary association of one or more individuals for a specified or unspecified length of time. Advocates of marriage regulation base their argument on an appeal to the concept of government playing a role in maintaining the structure of society. There is only one problem with that argument: government has no such role. Churches may play that role for some and to the extent people freely associate with those churches and abide by those teachings that is entirely legitimate. But the state has no role in embodying in law the teachings of certain religious institutions.

Remember, democracy is a dangerous weapon as it cuts both ways. For example a law passed last year (by majority) in Denmark forces churches there to marry gay couples by some representative of that church. Using government to either require or forbid some action is equally wrong no matter who does it. All sides should join together in dismantling the ability of government to intrude on our rights. Government is a powerful weapon. We need to stop using that weapon against each other.

Internet Tax

“The word bipartisan means some larger-than-usual deception is being carried out” – George Carlin.

 

The above quote may be from a comedian but the sentiment is no laughing matter. Late last week the US Senate held a vote on a budget resolution and decided they would sneak in a wholly unrelated bill, the euphemistically named “Marketplace Fairness Act”. Sadly there was strong bipartisan support for this embedded bill (75 for 25 against). The putative goal of this legislation is to put brick and mortar stores on an equal footing with online retailers with respect to sales tax collection. Presently, if you purchase goods online from a seller that has no “nexus” (that is, no physical presence) in your state then YOU, not the reseller, are responsible for submitting the appropriate sales tax to your state. As I’m sure you’re aware this is hardly ever enforced (as it would be political suicide).

The politically expedient route then is to go after out of state retailers who have no voice or vote and shake them down for tax money. So apparently if Party A is harmed and Party B is not, it makes more sense to start harming Party B rather to stop harming Party A. Brilliant.

My goal is not pick through everything wrong with this bill (and there is a lot) but rather to suggest a simple and viable alternative. Instead of forcing retailers to keep track of a myriad of different taxing authorities and a multitude of filing deadlines and burdensome paperwork (the claim that this bill simplifies filing is a ruse), why not simply impose the sales tax on the source of the sale rather than the destination? This is how our current sales tax system operates. Brick and mortar retailers do not vary the tax they charge based on their customer’s zip code. There is no functional difference between a buyer driving out of state, buying a good, then driving back home versus that same buyer buying that same good on-line and paying a shipper to retrieve said good.

Internet based retailers should therefore collect sales taxes just as though the customer walked into their premises and made the purchase. Then they only have one tax rate and one taxing authority to deal with and their locality benefits from those sales just as they would from a local sale. This approach entirely undercuts the arguments of brick and mortar stores. 1) Most of the country has sales taxes so anything bought on line will not be “tax free” but will bear the cost of the local sales tax of the seller and 2) for every sale “lost” to a remote seller the local retailer can also “steal” sales by selling their wares on line (this is already taking place: Amazon and Ebay have become a virtual shopping mall of brick and mortar stores selling on line).

The only plausible objection to this plan would be that online retailers would move their operations into low or no sales tax regions of the country or that high tax region retailers would be at a disadvantage relative to low tax regions. Tough. If that is the case then either (a) those businesses can leave or (b) they can bring political pressure to bear on their LOCAL politicians to lower their rates. The tax competition arising from this system will tend to equalize tax rates across the country as they are shifted downward toward the absolutely minimum sustainable level (just as competition pushes prices down in any market). Source based taxing exposes the tax policies of each region to the worldwide “wallet voting” of potential customers. However destination based taxing limits interregional competition and removes the possibility of locals benefiting from lowered taxes due to outside tax competition. Government doesn’t like competition, so it is little wonder the destination based system is favored by the political class.

At the end of the day it’s a gamble: you can go with the destination taxing and gain taxes on internet sales to locals while losing out on taxes on internet sales to non-locals or go with source taxing and have the reverse. The former is an untested, complicated and burdensome system, the latter far simpler and requires no procedural changes from our current method of sales tax collection. Of course the simplest way to “level the playing field” would be to simply eliminate all sales taxes. But that is an altogether different discussion.

Theft by any other name

“The state is a gang of thieves writ large.” Murray Rothbard

It is curious that this simple fact is not more widely accepted, however given that the state itself has mastered the magician’s art of misdirection (via state apologists given a platform in the public media coupled with the indoctrination of our children into venerating the state) it should perhaps not be all that surprising. We remain as blissfully unaware of our cage as fish are to the invisible boundaries of their aquarium. But sometimes cracks develop in those transparent walls revealing the deceit that has been there all along. A case in point is the recent EU-IMF bailout of Cyprus’ troubled banks this weekend. For those whose eyes glaze over at the prospect of a discussion of Eurozone financial policy I will spare you the gory details. In fact, skipping the details and looking at the big picture makes the crime occurring all the more clear. The bottom line is that the Cypriot government is confiscating between 6.5% – 10% of all money on deposit in Cypriot banks (more precisely they are being forced to buy an equivalent amount of bank stock). The short narrative is this: Cypriot banks gambled away depositors’ money on bad financial bets, then turned to the government to bail them out, who on their behalf went before the EU & IMF with hat in hand begging for a loan lest all their banks go bankrupt. The IMF agreed to a loan based bailout only upon condition the Cypriot government could prove it had the tyrannical cojones to take what it wanted from the people thus assuring the IMF of the loan’s solvency (insofar as the solvency rests on the ability of the government to confiscate and repay). This is simply gang initiation at the state level. It is crony capitalism at its worst and most blatant.

However it is as Barack Obama would say “a teachable moment.” What the Cypriot government has done is no different than what our government did with the TARP and other bailouts of our banks in 2008-9. The only difference is form, the result is identical, namely theft of the citizen’s money in order to benefit the banking elite. The countries that use the Euro cannot simply print up more to their heart’s content as we can with the US dollar. Therefore the only way to obtain needed euros is to a) borrow them or b) take them. The US government has a third funding source, which is c) inflate them (which is just a variant of (b)). Of course no government is honest enough to say “we’re taking your money” – no, this is a “one time tax.” So while the Cypriot government will simply take what it wants from depositors through the front door, our government comes in through the backdoor and through the inflation tax chips away at the value of the money on deposit. Naturally the whole scheme was justified on “greater good” grounds in that had they not gotten the bailout then the whole banking system might have collapsed and all depositors might have lost their money. Yes, the whole “you might benefit if we help these other people, therefore you must provide us with the means to help them” argument (put forth by every persuasion of statist, from the so-called conservative that supports publicly funded schooling to the super progressive advocating socialized medicine) is forever the justification for any and all types of state sponsored intrusion into the lives of individuals.

So for anyone taking solace in the notion that such bank account confiscation could never happen here please realize that it already has in the form of inflation sponsored bailouts. As long as we maintain a system of fractional reserve lending, legal tender laws, a central bank (Federal Reserve) and government “monetary policy” we will never rid ourselves of the gang of thieves bailing out their big banking friends with our money.

Nullification

Following up on my post last week on jury nullification I would like to now delve into State Nullification.

Jury nullification is a right of the sovereign individual to exert their authority over that entity (government) whom they have created and granted limited authority to act on their behalf. Likewise, the states (acting on behalf of the sovereign individuals) created a federal government and granted to it some rights originally reserved by the states. ALL rights not specifically granted to it were reserved to the states or the people (10th Amendment). That means simply state nullification is a state right precisely because it is NOT mentioned in the constitution – anything not listed nor prohibited is by default a state right, not a federal right.

The mainstream media and the political elites condescendingly portray state nullification as some backwards invention of ignorant racists. Nothing could be further from the truth. They only betray their own ignorance of the historical, ethical, and philosophical validity of state nullification. Here are some of the common objections to state nullification:

1)    “Didn’t the Civil War settle this?” If by “settle” you are suggesting murderous violence is a legitimate method of dispute resolution, then no. All the Civil War “settled” is the notion of an “indivisible” forced union – literally the state equivalent of “until death do us part” (as in “I’ll kill you if you leave”). If you are suggesting that because the north won that makes any northern practice legitimate and any southern practice illegitimate, then given the fact that the northern states used nullification to nullify the Fugitive Slave Laws that would I suppose only legitimize the practice of nullification.

2)    “Ok, maybe nullification was used against slavery but it was also used to oppose civil rights laws, right?” True, but that is not so much an indictment of nullification as it is an indictment of democracy itself. Over the course of history democracies big and small have promoted laws inimical to civil rights. The “justness” of laws in a democracy do not scale with territorial area. If the bigger democracy is always justified in forcing its laws onto its smaller member states then one must conclude it would be wholly legitimate for a racist federal government to impose racist laws on non-racist member states. Democracy is the problem, not nullification.

3)    “Doesn’t the Supremacy Clause (of the US Constitution) trump any notions of state nullification?” No, and in order to understand why one must read the WHOLE clause and not merely cherry-pick the parts they like. It states: “This Constitution, and the Laws of the United States which shall be made in pursuance thereof… shall be the supreme law of the land…” The “made in pursuance thereof” is the operative phrase relative to nullification. Nullification is simply the right of a state to say such and such law has NOT been made in pursuance thereof THEREFORE it is illegitimate.

4)    “Yes, but isn’t it up to the Supreme Court to decide if laws are constitutional?” It may do so through what could be called horizontal nullification (i.e. the checks and balance system that exists between the three branches). However only the sovereign people, acting through their proxy the states, have the final vertical nullification authority over all three branches. To suggest the federal government should be the sole and final arbiter of its own powers is an open invitation to abuse. The fact that the federal government has discovered so many new powers for itself only underscores the legitimacy of these concerns.

If you would like to learn more about state nullification please visit Liberty Classroom/nullification, or purchase “Nullification” by New York Times best-selling author and historian Tom Woods. And if you are tired of being spoon-fed an incomplete version of history by the state run public school system and main stream media and would like to learn the truth for yourself please visit Tom Wood’s www.learnrealhistory.com.

The Debate that Never Happened

I was recently involved in the “Debate that Never Happened” at UGA through the Phi Kappa literary society where the question “Is full employment possible under capitalism?” was the topic. Unfortunately the audio is a bit low… if you turn it all the way up and sit in a quiet room I think you can just about make out what I’m saying. I guess if I get to do something like this again I’ll be sure to shout into the microphone 😉

The Debate That Never Happened from Phi Kappa Literary Society on Vimeo.

1 – 1 = 0

Parental responsibilities and authority have well understood boundaries even though no formal written contract exists between parent and child. It is wholly non-controversial that any parent exceeding such boundaries should have their authority curtailed if not entirely rescinded. It is then a rather curious circumstance that when government, whose duties and authorities are clearly articulated in written forms (constitutions, charters, etc.), exceeds its legitimate authority it is considered nearly an act of treason to merely point out that its actions fall outside the scope of its authority.

Representative democracy (e.g. a republican form of government) is relatively insensitive to the will of the people insofar as the representatives are not obligated to act in every circumstance as would the people. This can be beneficial in tempering a mob mentality toward governance (tyranny of the majority), however that benefit can easily become a liability when rent-seeking special interests co-opt and corrupt the system (tyranny of the minority).

There does at least remain one avenue by which the people can expediently and directly make their voice heard: jury nullification. It is the final arrow in the people’s quiver against a tyrannical government. Georgia House Bill 25 (“Fully Informed Jury Action of 2013”) has recently been introduced into the Georgia state legislature. It would protect the right of the defense in a trial to build a case on the grounds of illegitimacy of the law in question. Jury nullification is already a de facto right of juries (in that jurors are not required to disclose their reasoning thus one is always free to rule based on their conscience). However judges (and prosecutors) typically prefer that jurors remain ignorant of this right as they feel the interpretation and application of “law” is their sole domain and that jurors’ only responsibility is to answer questions of fact (“did he do it or not?”). Judges will often outright prohibit any mentioning of nullification lest a mistrial be declared. House Bill 25 would end such prohibitions. This is a uniquely powerful check on government power insofar as juries are composed of one’s peers, not distant bureaucrats or politicians. If the citizens who voted in the politicians do not agree with what they are doing they have the right nullify what they are doing now as there is no guarantee that future voting will undo the harm that has been wrought. Just as jury nullification (and state nullification) was used to ignore unjust and illegitimate laws like the Fugitive Slave Law of the 1850s, it may also be used today to ignore similarly illegitimate laws related to drugs, unpasteurized milk sales, and similar victimless “crimes”.

Government is established when sovereign individuals convey certain rights to their local state government (while retaining all non-conveyed rights to themselves). Likewise the federal government was established when the states granted the federal government certain “powers” (see 10th Amendment to the US Constitution) while retaining all others not specifically conveyed. So, just as the individual can nullify certain state laws based on a breach of authority so too can the states nullify federal laws on a breach of constitutional authority. To argue that jury or state nullification is invalid is to argue that it is better that some be made the victims of immoral and unjust laws rather than sacrifice the appearance of unity of the polity.

I shall address next week several of the common objections to nullification. Stay tuned…

False Alarm

It seems that can our government kicked down the road back on January 1 is upon us in the form of the looming March 1 “sequestration” cliff. One can both admire and be sickened by the hyperbole employed by politicians when discussing these impending “cuts”. President Obama in his 2013 State of the Union address  described them and their effects as “harsh” and “devastat(ing)” to our “priorities” as well as “jeopardizing” military readiness. Really? So a 5% cut is going to jeopardize essential government operations? That’s funny, because the governments own Congressional Budget Office report states that “If no additional appropriations are provided by then, nonessential functions of the government will have to cease operations.” The operative word there being “non-essential.” If all the things the President pointed out are truly “priorities” then there should be nothing to worry about as only non-essential items will be cut. Of course this begs the question as to why these “non-essential” things were funded in the first place. Isn’t government only supposed to do what is essential by definition? Claiming that essential programs will be devastated by a 5% cut is to claim that the government lacks the common sense of any citizen. If your ability to spend is reduced do you immediately cut back on your food budget in order to keep paying your cable bill? No, you prioritize. Those things valued most highly are paid for first, those things valued least are paid last or cut. It’s the same ruse they used during the debt-ceiling crisis in 2011 that precipitated this whole mess. At that time they suggested grandma wouldn’t get her social security check. Yes, that’s right, let’s pick the thing everyone values the most and claim it will be the first thing to be cut. That makes so much sense. I mean, how stupid do they think we are? (Don’t answer that.)

But I have to hand it to Obama, somehow he deftly managed to imply that everyone’s oft paraded and favored government employees (teachers, police, and firefighters) would be laid off if sequestration takes place. It’s really more of an assertion as it has no basis in fact whatsoever. They are funded at the local level and would not be in any way affected by sequestration. This is just another scare tactic that the dishonest use to mislead the uninformed.

So, if a 5% cut is devastating then I don’t know how this country survived a mere 10 years ago when the federal budget was about 50% smaller than it is today! Even adjusting for the ratio of budget to GDP, the Clinton years should have been a time of societal and defensive collapse with a mere 18% federal budget burden to GDP. Today it is over 22% and cuts that might bring it to 23% are impugned as bringing about the end of civilization as we know it. Wait, 23% is not down from 22% is it? Read on.

Federal outlays are projected to be $47 trillion from 2014-2023 and these cuts amount to removing $1.2 trillion from that total or a 2% decline in overall federal spending. But even this is not a true decrease. Even if the 2014 projected budget were frozen for 10 years the total outlay would be $36.2 trillion. So even with these “cuts” total federal outlays will increase by 27% which is still an increase from 22% to 23% of GDP. Repeat after me. There are no cuts. There are no cuts. There are no cuts.

Obama and his ilk are simply trying to sell us the government diet. That’s the diet where you gain 10 pounds but claim you lost 5 lbs because you “projected” you were going to gain 15 lbs.

A tax by any other name

And so it has come to pass – nearly 100 years since the post office ceased Sunday mail delivery (dropped in 1912 primarily due to religious and workers rights reasons) the United States Postal Service will cease Saturday mail delivery later this year. This time the reasons are financial rather than ecclesiastical. The Postal Service expects this change to save $2 billion a year – although this barely scratches the surface of a $15.9 billion loss in 2012 (although $11.1 billion of that loss was the result of a Congressional mandate forcing it to pre-fund future retiree health benefits – something it requires of no other federal agency). The Postal Service is a quasi-private entity. It technically receives no funding from Congress, however it’s ability to operate is tightly controlled by Congressional whim. But one area where it does benefit from its governmental relationship is with respect to the “Private Express Statutes”. These are a set of statutes that confer on the US Postal Service a legal monopoly of letter delivery. This monopoly is enforced by a mandate that any entity delivering “letters” must charge at least 6 times the current rate for the first ounce of a single piece First-Class mail letter. Fortunately “parcels” do not fall under that mandate; otherwise FedEx and UPS would be nothing but big “What ifs”.

Although Congress is specifically authorized in the Constitution (Article 1, Section 8) to  “establish Post Offices”, such authorization does not on its face imply that the federal government is the ONLY entity permitted to do so, merely that this is one thing it MUST do. The reasoning behind establishing a monopoly position in the marketplace was the concern that private business would simply come in and “poach” business away from the more profitable mail routes. This would then mean either prices would have to rise on the less profitable (rural) routes or tax dollars would need to be employed to subsidize costs along these less profitable routes. Gee, with a justification for monopoly like that I don’t understand why we don’t establish a monopoly within each sector of the economy. Why not give Publix a monopoly on groceries in this country? Then they wouldn’t have to waste money on competing or advertising and could provide “affordable” food prices for everyone by subsidizing less profitable stores with the receipts from the more profitable stores.

Mandated monopolies, whether in private industry (e.g. utilities), or in government (Postal Service) make no economic sense. Consider the argument here: private mail delivery companies would out compete the Postal Service by charging less thereby depriving the Postal Service of income. So instead of overcharging some customers in order to subsidize the undercharging of other customers it would be necessary to overtax some people in order to provide a net benefit to some other people. How are the two processes different exactly? Both involve individuals in Group A paying more than necessary in order that individuals in Group B pay less than necessary. So if the worst outcome (raising taxes) is equivalent to what you are doing right now, then there is nothing to lose in trying the alternate approach. Best case it is a zero sum game (the money people save is simply taxed away to fund the Postal Service losses). The more probable outcome is that there is a net benefit to society when multiple entities compete for the customer’s dollar. Perhaps private competitors might be so efficient that they could provide mail service to even the “unprofitable” areas at an “affordable” price (which is what I believe UPS and FedEx currently do in the area of package shipments).

Congress should eliminate the monopoly provisions on mail delivery, let the chips fall where they may and let the market solve this problem. In the age of $20 cell phones somehow I doubt there will be an issue in providing “affordable” delivery of folded pieces of paper.

Barking at Ethics

Georgia House Bill 142 (introduced on January 29, 2013) attempts to reform ethic laws in this state. Sadly, legislators have, in their zeal to cast a wider ethical net, broadened the definition of lobbyist so wide that it now encompasses basically everyone except elected officials themselves (just wait, that will come next!). Yes, this includes even you and me. The particularly onerous portions of this bill, the reporting requirements, do not apply to individual citizens expressing “personal views” UNLESS they are speaking to someone elected statewide who was not elected within their district. In other words, as the law is written (as of today February 10, 2013) if you wish to speak to the Governor, Secretary of State, Public Service Commissioner, etc. and discuss anything other than the weather or sports you technically would need to register with the state of Georgia as a lobbyist and pay a $300 annual fee for the privilege thereof.

This provision clearly violates the 1st Amendment to the US Constitution (in conjunction with the supremacy clause) or the 14th Amendment (take your pick) insofar as the 1st Amendment guarantees “the right of the people… to petition the Government for a redress of grievances.” That key phrase “right of the people to petition” – defines precisely what “lobbying” is. Therefore any laws that in any way hinder the ability of anyone to petition (lobby) are violations of this core Constitutional right. It is immaterial toward the exercise of this right whether I (or a group of people) personally petition the government or if I hire someone to act on my (or our) behalf.

The idea that society requires the intervening hand of a strong, beneficent governing body in order to keep us all in line relies upon the argument that, in general, people are bad and need to be governed. This faith in a paternalistic government rests squarely on the assumption that elected officials must necessarily be “better” than the rest of us, for if they are not, what is the point in being ruled by those no better than we? And if they are indeed not any better than we (as evidenced by the apparent need for various ethics and transparency laws), this then begs the question: if the problem with society is imperfect humans, why put imperfect humans in charge? We make the problem worse by conferring special power privileges to those in charge that invite a level of abuse that would otherwise be impossible absent such special privilege.

The fact that we find it necessary to pass ethics laws demonstrates the fundamental flaw of monopoly government. Abuse of power. Ethics laws are mere band-aids that do not address the underlying incentive problem. It is in man’s nature to abuse power just as surely as it is in a dog’s nature to bark. You can muzzle the dog, but he still barks, albeit softly. Ethics laws simply shift unethical behavior underground. I suppose if sweeping dirt under the rug constitutes “cleaning” then ethics laws “solve” ethical issues equally well.

I, like so many others, am justifiably upset with the power and sway some lobbyists seem to hold over many in government. But I’m not upset with the lobbyists; rather I’m upset with a system that encourages rent seeking by a small but vocal minority (rent seeking being the activity of manipulating the power of government so as to benefit oneself at the expense of others). The only way to solve “ethics” problems in government is to remove the incentives to “buy” power. Eliminate the monopoly power government has over the activities being lobbied. I don’t lobby McDonalds to build a restaurant near me, rather, I eat at Burger King. If McDonald’s wants my dollar, they have to earn it. So too should it be with government.