IPI PolicyBytes

Merrill Matthews in Townhall.com: The Failures of Government-Run Healthcare

Erin Humiston — Wed, 27 Aug 2008 13:26:36 -0500

IPI resident scholar and health care expert Dr. Merrill Matthews is featured with a brand new op/ed on Townhall.com discussing “The Failures of Government-Run Healthcare.”

“Democratic presidential candidate Barack Obama, in a rare moment of honesty on what he’d really like to do about health care reform, recently asserted that if we were starting from scratch he would probably choose a single-payer health care system.

That’s a system in which people pay higher taxes and the government pays most medical bills.

Obama’s not alone in that opinion. Filmmaker Michael Moore took his “Sicko” audience to England, among other places, where we learned that doctors in that single-payer system made good salaries, had nice homes and cars, and patients were very satisfied.

But anyone who reads the English press will find a different message, including waiting lines, angry patients, rationed and often subquality care. Consider these recent news stories about England’s National Health Service (NHS) quoted directly from the British press."

To read the full op/ed, please visit TownHall.com.

New Peter Ferrara Op/Ed Today in American Spectator: ’Obama’s New Tax Welfare’

Erin Humiston — Wed, 27 Aug 2008 12:07:09 -0500

In a new op/ed by IPI's Peter Ferrara featured today in American Spectator entitled "Obama's New Tax Welfare," Ferrara says:

In 1984, Walter Mondale ran for President promising to raise taxes if elected. He consequently made it to the dustbin of history even before the Soviets, averting a 50 state shutout by just 1,200 votes in his home state of Minnesota.

The recently released details of Barack Obama's tax plan, published on his campaign website, along with an article by his top economic advisers in the Wall Street Journal, confirm that Obama makes Mondale look like a moderate. For Obama pledges not just to raise taxes. He proposes to raise every major federal tax. The recently released details confirm that:

* Obama would raise individual income taxes, increasing the top two income tax rates, with the top rate climbing by 13%, to almost 40%. This tax increase particularly hits small business, which creates the most new jobs in America.

* Obama would raise the top capital gains tax rate by 33%, to 20%.

* He would also raise the top dividends tax rate by 33%, to 20% as well.

To read the full article, please visit Spectator online here.

Peter Ferrara live on Little Rock talker today, "The Dave Elswick Show"

Erin Humiston — Wed, 27 Aug 2008 11:20:02 -0500

IPI director of entitlement and budget policy Peter Ferrara will appear live today at 4:10 pm CT on the Dave Elswick Show to discuss Barack Obama’s “tax welfare” program.

To catch the discussion, tune in to Little Rock talker KARN on 102.9 FM or 920 AM.

To read Peter’s op/ed on the subject, please visit the Wall Street Journal.

SoundBytes 156: Why Do Some Companies Move Offshore?

SoundBytes — Wed, 27 Aug 2008 09:54:02 -0500

Why do some companies move offshore?

The Institute for Policy Innovation’s Dr. Merrill Matthews says Congress should learn a lesson from them.

Senator Hillary Clinton is mad—that is, angry.

She claims a growing number of companies are flocking to places like the Caymen Islands to avoid paying U.S. taxes. And she wants to punish them by denying them any government contracts.

But she never addresses why some companies move offshore. The U.S. has one of the highest corporate tax rates in the world. And some Democrats want to raise them even higher.

Clinton says she wants to reward “responsible companies” that stay inland.

Of course, Exxon does just that, yet many Democrats want to punish it and other oil companies with a huge “windfall profits tax.”

Truth is responsible companies, like responsible people, try to legally minimize their tax bill. Wouldn’t it be nice if Congress would do the same?

Click on the icon below to listen to this 60 second SoundByte, that has aired or is currently airing on XM Satellite Radio's CNN and Fox News channels.

New Pieler-Laurson OpEd: The Power of Propaganda in South Ossetia

Erin Humiston — Tue, 26 Aug 2008 10:16:23 -0500

IPI senior fellow George Pieler and International Affairs Forum editor-in-chief Jens F. Laurson are featured today on Forbes.com with a new piece discussing the powerful, artistic propaganda used to paint the Russians as liberators for the ‘oppressed’ South Ossetians in Georgia.

An excerpt:

Apart from the regular bullets and tanks, the South Ossetian war between Georgia and Russia has brought forth some alternative methods of warfare. There was an alleged cyber-attack on Georgian Web sites that served as a premonition to the military action. More significant, though, were the harshly harmonious sounds of Dmitri Shostakovich's Seventh Symphony, performed in South Ossetia's capital last Thursday.
Called "Leningrad," the symphony came to symbolize the Nazi resistance movement during Word War II. By conducting this piece, Valery Gergiev--an ethnic Ossetian and maestro par excellence who performs with the London Symphony Orchestra, the Rotterdam Philharmonic and the Metropolitan Opera--propagandized the Russian "liberation" of South Ossetians from the cruel hands of their Georgian oppressors...

To read the full article, please visit Forbes online.

TaxBytes 5.31: The Tank is on Empty

TaxBytes — Tue, 26 Aug 2008 09:51:08 -0500

This can’t be good!

The Detroit Free Press reported August 5 that the country’s top three automakers are looking for a bailout from Washington. So, you ask, what else is new?

Answer: the money and the likelihood.

Apparently, the “asking price” just a few months ago was about $20 billion, but now insiders say it may need to be closer to $40 billion. By the time the election rolls around, who knows? $80 billion? $100 billion?

And with Washington in a bailout mood these days, there’s little reason to hope for restraint.

The paper reports that Democratic presidential candidate Barack Obama, who never misses a chance to throw money at causes, has already offered to toss in $4 billion to help Detroit build “cars of the future.” No word yet whether consumers will be any more excited about those future cars than they have been about what Detroit has been pumping out lately.

And the bailout may not depend solely on Obama winning the presidency. When former Republican presidential candidate—and possible vice presidential candidate—Mitt Romney was touring the state earlier this year, he greeted Michiganders’ open arms with hints of an open wallet, if only they would vote for him.

But a financial bailout for Detroit may be the lesser of two evils. In the past few years, GM, Ford and Chrysler executives have been trolling Washington looking for a bailout on their health care obligations—the so-called “legacy costs.”

Of course, the two are intertwined. If it weren’t for the high labor costs, including health care and pension benefits, the car companies might not need a huge financial bailout. Note that Toyota and Honda, which also make cars in the U.S., aren’t racking up the frequent-flier miles to DC.

For our part, we’re opposed to either a financial or a benefits bailout. But if Washington is determined to do one or the other, it should probably stay with a limited financial bailout.

That’s because Washington is already facing its own looming health and pension bailout, otherwise known as Social Security, Medicare and Medicaid. And as anyone who’s listened to former U.S. Comptroller General David Walker lately knows, the country’s entitlement tank is on empty.

How the media spins the facts to fit the story they want to write

Tom Giovanetti — Fri, 22 Aug 2008 17:47:10 -0500

This is a little outside of IPI's usual fare, but I couldn't help but note today's outstanding example of how the media write the story they want to write, regardless of the facts.

Today, an AP news headline, which was repeated on MSN, Yahoo, and other major news outlets, was Americans skip Labor Day trips as costs rise.

Here's how the story starts:

KANSAS CITY, Mo. - After missing out on summer vacations because of high fuel prices and a weakening economy, many Americans won't be going anywhere over the Labor Day weekend either.

The number of people traveling 50 miles or more will drop by 0.9 percent this Labor Day weekend compared with last year, the biggest drop in at least eight years, according to travel and auto group AAA.

Wait a minute, what was that statistic? The number of American travellers who plan to not travel this Labor Day weekend is, less than one percentage point?

Doesn't that mean that 99.1 percent of Americans who usually travel over Labor Day weekend plan to continue to do so despite higher gasoline prices?

Doesn't that mean that the real story is that the vast majority of Americans plan to travel over Labor Day weekend despite higher energy costs?

Isn't that the real story?

In fact, the real story is that Americans largely plan to do what they usually do, despite higher gas prices. But that isn't the story as AP sees it, because that isn't the story AP wanted to write.

Now, is this a big deal? It may not seem so, but you have to understand that the news media do this all the time. They write the story with the slant they want to write, regardless of whether it fits the actual facts or not. And most people, sheep-like, simply absorb the message the media want them to absorb, and don't think about it.

Peter Ferrara live tonight on Seattle AM talker ’The David Boze Show’

Erin Humiston — Thu, 21 Aug 2008 14:09:06 -0500

Catch Peter Ferrara, IPI director of entitlement and budget policy, live today discussing more economic policy differences between presidential hopefuls Barack Obama and John McCain. Tune in to Seattle-Tacoma’s “The David Boze Show” on 770 AM KTTH at 7:30 pm Eastern/4:30 pm Pacific.

To read Peter’s new op/ed co-authored by Jack Kemp on National Review Online, “Which Way To Prosperity?” click here. ...

Peter Ferrara: Poverty and Welfare in America

Erin Humiston — Thu, 21 Aug 2008 14:04:30 -0500

Peter Ferrara’s provocative new op/ed featured today in the American Spectator online discusses “Poverty and Welfare in America.”

An excerpt:

“…BUT I WANT TO FOCUS here on Obama's answer to the question about why he wants to be President and what motivated him to go into politics. He referenced the biblical injunction from Jesus Christ in the Book of Matthew, saying, "Whatever you do to the least of these you do unto me." Obama expressed his concern that America is not doing enough for the least among us, the poor, the sick, the old. He wants to be President most of all to lead the government to do more for these most vulnerable and weakest of citizens, and ensure that they are cared for adequately.
This sentiment is what motivates most grassroots Democrats, who hold the vague and uninformed notion that America is not doing nearly enough to combat widespread poverty. Obama's background, rhetoric and policy proposals suggest to me there is something more to his motivation, that he fundamentally rejects our entire economic system as immoral, and is really looking for basic "change" in that system. But I want to focus here on the more moderate grassroots Democrat sentiment about the poor, which is widely held among our upper income professional classes.
A recent book that explores this issue in great depth is Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit, by Edgar K. Browning, Professor of Economics at Texas A&M University. Browning is a world-class scholar who grounds his discussion in thorough facts and careful analysis reflecting decades of academic work (though the book's title may be overly provocative). What leaps out at you in reading the book is that you are dealing with a top mind.”
To read the full op/ed, please visit the American Spectator online here.

New Kemp/Ferrara Op/Ed Today in National Review Online: "Which Way to Prosperity?"

Erin Humiston — Thu, 21 Aug 2008 13:51:19 -0500

Jack Kemp and IPI’s Peter Ferrara co-author a new op/ed featured today in National Review Online building on their discussion regarding the differences between McCain’s and Obama’s economic policies.

”The central question in this election is, Which candidate can most improve our wobbly economy? Here, the McCain-Obama contrast could not be sharper.
Obama has proposed increases in every major federal tax. He has proposed to increase individual income taxes, with the top rate to rise to almost 40 percent. He has proposed to increase the top capital-gains tax rate by 33 percent. He has proposed the same for the top tax rate on dividends. He has proposed to increase payroll taxes, with a rate increase of 16 percent to 32 percent for workers earning over $250,000 a year. He has proposed to reinstate the death tax (estate tax), now phasing out under current law, with a top rate of 45 percent. He has proposed several increases in corporate taxes, including a so-called windfall-profits tax on oil.”

Please visit National Review Online to read the full article. You can catch Peter live today discussing this topic on Seattle-Tacoma’s “The David Boze Show” on 770 AM KTTH at 7:30 pm Eastern/4:30 pm Pacific.

TechBytes 5:29: Start Spreading the News—I’m Leaving Today

TechBytes — Thu, 21 Aug 2008 10:07:02 -0500

Those famous lyrics from “New York, New York” just might have to be changed, at least for online retailers.

“Start spreading the news
I'm leaving today
I [don’t] want to be a part of it, New York, New York
These vagabond shoes
Are longing to stray
And make a brand new start of it
[anywhere but] New York, New York”

A new law from the state of New York thumbs its nose at the Supreme Court’s Quill decision, which held that for a state to require sales tax collections from a retailer that retailer must have some physical connection with the state.

In a frenzy to tax anything that could fill a hole caused by overspending, New York overrode the Supreme Court’s legal standard with an act of legislative imagination: Its new online sales tax law is widely interpreted to mean that having an advertising or marketing presence in New York is enough to trigger tax collection. To impose mandatory sales tax collection requirements on vendors for Internet purchases is not only bad for business and the state’s economy, but also flies in the face of Supreme Court standards.

In “New York: Double Dealing on Retail Taxes,” IPI senior fellow George Pieler says the law to collect out-of-state sales tax from online merchants selling goods to New York-based consumers is a “simple Ponzi scheme being played on taxpayers,” and the Internet should not be used as a new way to force the collection of sales taxes.

Furthermore, the Empire State risks driving away more businesses, both large and small, which fear getting caught in the tax squeeze. If forced to become out-of-state tax collectors, small start-up businesses—“the very genius of Internet commerce”—could be chased out of the state. But the damage goes even beyond the small operations.

New York has already seen large companies ceasing to do business within the state, such as in the case of Overstock.com terminating its affiliations with any New York-based companies. As a result, New York companies have lost valuable business, and the state has lost valuable revenues.

Chasing after every last dollar of theoretically collectible tax always costs more revenue than it gains. If this kind of tax-raising competition gains steam, there won’t be any extra tax dollars—just less economic growth, and then even less tax collected.

Is 2008 really the year to pursue that particular policy line?

Peter Ferrara Live Thursday Morning at 9:33 am ET on "The Lynn Woolley Show"

Erin Humiston — Wed, 20 Aug 2008 15:07:59 -0500

Listen live online Thursday morning at 8:33 am CT/9:33 am ET as IPI director of entitlement and budget policy Peter Ferrara discusses Obama’s tax policy with radio host Lynn Woolley.

In a new op/ed featured this week in the Wall Street Journal, Ferrara explains how Barack Obama’s tax-cut policies are just a new form of welfare.

To listen live online at 9:33 am ET, click here. ...

SoundBytes 155: Should Politicians Decide Which Restaurants You Can Choose From?

SoundBytes — Wed, 20 Aug 2008 09:59:02 -0500

Should Politicians Decide Which Restaurants You Can Choose From?

Dr. Merrill Matthews of the Institute for Policy Innovation say Los Angeles may lose some fast-food freedom.

A Los Angeles city councilwoman thinks Angelenos are too fat. So she’s pushing legislation that bans new fast food restaurants like McDonalds and KFC.

While Los Angeles does have an obesity rate some 4 percentage points higher than the national average, lower-income areas tend to have higher obesity levels.
Of course, there’s already some 400 fast-food restaurants in the targeted area. So the bill doesn’t eliminate access to fast food.

And McDonalds serves fresh salads and yogurt—if people want to buy them. While more expensive restaurants often serve hamburgers and fried chicken. So why target fast food?

The real question is whether the government should decide your restaurant options or what you eat.

What really needs slimming down in Los Angeles is the government.

Click on the icon below to listen to this 60 second SoundByte, that has aired or is currently airing on XM Satellite Radio's CNN and Fox News channels.

Peter Ferrara Live This Morning on ’The Right Balance’ Discussing Obama’s Tax Plan

Erin Humiston — Wed, 20 Aug 2008 09:22:30 -0500

Catch IPI director of entitlement and budget policy Peter Ferrara live this morning with Greg Allen on “The Right Balance.”

Peter will be discussing presidential hopeful Barack Obama’s tax policy, what Ferrara calls not a tax-cut plan at all, but rather a welfare plan.

To listen live online, click here.

Cautionary Tales of Patent Reform

Solveig Singleton — Tue, 19 Aug 2008 19:54:44 -0500

The Wall Street Journal recently ran has an important article by Stuart Weinberg, "Caught in the Crossfire." It describes the difficulties that small firms face in licensing patents to large firms. The fuss about bad patents and so called "patent trolls"--firms that own patents, but do neither research nor production, and that make their money from suing other firms--has lead legislators and courts to consider steps to make it easier to challenge and less disastrous to infringe patents. But the result is significantly less protection for small firms that do invent and then license.

"Caught in the Crossfire," describes the efforts of one firm, which was in the midst of negotiations to license its patents to Microsoft, when Microsoft initiated proceedings at the patent office questioning the validity of all its patents. Whatever the merit of the technology at issue, clearly this sort of proceeding has a bad flavor. Large firms can afford to exploit legal procedures in ways that small firms cannot, and although to some extent this kind of game is inevitable, small firms are key to the innovation process, and the patent process ought not to be designed in such a way that their rights can be routinely eroded in this way. Maybe the judicial process can screen against bad faith challenges, but maybe not.

Now, perhaps the patents are, after all, "bad" ones that ought never to have been granted. But if the end result is that these patents are invalidated, that is still not a happy ending. A lot of people who relied on the patent process as a step on their way to operating and funding an innovative research start-up will have lost their dream, and had a very expensive education. This is a waste of perfectly good venture capital.

Following the arguments of Mark Lemley that the vast majority of bad patents don't matter, most patent reforms have been focussed late in the patent process, ignoring questions about the troubles internal to the patent office itself. But late-process procedural reforms allowing the challenge to patents after they have been granted seem particularly likely to be used to rob small inventors or to impede competitors. It may be time to rethink the "more lawyers are better" approach to the problem of the bad patent, and focus on measuring and improving quality at the patent office itself.

IPI’s Peter Ferrara to Appear Live Today on Fox News Channel to Discuss Obama’s Tax Plan

Erin Humiston — Tue, 19 Aug 2008 12:55:16 -0500

IPI director of entitlement and budget policy Peter Ferrara will be a guest on the Fox News Channel’s “Your World with Neil Cavuto” today at 4:20 pm ET to discuss presidential hopeful Barack Obama’s tax plan.

In a brand new op/ed published today in the Wall Street Journal, Ferrara discusses how “Obama’s Tax Plan is Really a Welfare Plan.”

"Barack Obama's tax plan is the opposite of supply-side economics. He proposes to raise marginal rates for just about every federal tax. He also proposes a raft of tax credits that taxpayers can receive if they engage in various government-specified activities.
Moreover, the tax credits would mostly go to those who pay little or nothing in federal income taxes. His trick is to make the tax credits "refundable." Thus, if the tax credit is for $1,000, but the taxpayer would otherwise only pay $200 in taxes, the government would write a check to the taxpayer for $800. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $1,000.
Such credits are not tax cuts. Indeed, they should be called The New Tax Welfare. In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall."

For Obama, tax policy is about social policy, not revenue

Tom Giovanetti — Tue, 19 Aug 2008 11:18:03 -0600

IPI's Peter Ferrara has a compelling op/ed in the Wall Street Journal today which explodes the fact that Obama's tax policy outline is misleading, and is focused on promoting welfare, not economic growth.

We'll have much more to say about Peter's op/ed and subsequent media appearances shortly.

Reinforcing Peter's point is another piece in the WSJ today by William McGurn, which points out that Obama is fully aware that raising the capital gains tax rate will lower the amount of money that comes into the federal government--that raising the tax RATE results in reducing the tax REVENUE. In other words, a tax rate hike on taxpayers is actually a tax revenue cut to the federal government.

But that doesn't trouble Obama, because for Obama, taxes aren't about revenue--they are purely social policy.

From McGurn's column:

And he [Obama] stuck to it on capital gains, even after ABC's Charlie Gibson noted that the record shows increased taxes on capital gains--which would affect 100 million Americans--would likely lead to a decrease in government revenues: "Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness."

Translated into ordinary English, what that means is that it doesn't really matter whether a tax increase actually brings in more revenue. It's not about robbing from the rich to give to the poor. Robbing from the rich will do, especially if its done in the name of fairness.

This is truly frightening. I don't believe in my lifetime a presidential candidate has viewed the tax code solely as a means of redistribution of income.

In this way the Obama campaign is truly about "change", but it's truly a stupendously bad change.

TaxBytes 5.30: More Transparency We Can Believe In

TaxBytes — Tue, 19 Aug 2008 09:44:32 -0500

Jim Frogue, the state project director for Newt Gingrich’s Center for Health Transformation, has proposed an idea that worth’s considering.

In recent testimony before the House Energy and Commerce Committee’s Subcommittee on Health, Frogue suggested a way to bring the transparency movement to Medicaid.

Transparency in government—which we discussed in the last TaxByte in relation to state budgets—is the notion that the public should have access to information about what politicians and others who spend taxpayer money are doing with those funds.

The federal-state Medicaid program provides health coverage for some 52 million Americans at a cost of about $330 billion (for 2007). And we know Medicaid is fraught with sub-quality care and fraud.

As Frogue points out in a recent analysis of one state’s Medicaid program:

Only 17 percent of women over the age of 50 were getting the recommended annual mammogram;
4,000 people had gotten six or more Oxycontin prescriptions;
Less than half the children had gotten well-child checkups, and;
One person had visited the emergency room 405 times in three years.

So how do we shine a light on some of this data so the public can find it and demand some accountability from our elected representatives?

Frogue suggests requesting the states release Medicaid patient-encounter data and posting that information on the Internet.

We would have to “de-identify” the information so that patients’ names cannot be linked with their specific data. But Frogue thinks that most of the information is already being collected and the processes to make it available are available.

If it could be done, the public would begin to see utilization patterns and even identify egregious excesses. And that would force politicians to find ways to address some of these bad patterns—which they don’t have to do now until some enterprising journalist exposes a problem.

But there is another reason for doing something along these lines: All the government-run health care advocates use the public’s ignorance of the problems in Medicare and Medicaid to their advantage, allowing those advocates to claim the government can provide better health care for less money—without being seriously challenged.

Anyone who knows the problems in Medicaid knows that’s not true. And a little transparency will help us make that case.

Peter Ferrara Live Today on ’The Lars Larson’ Show

Erin Humiston — Fri, 15 Aug 2008 12:54:40 -0500

IPI’s Peter Ferrara will be a guest on the nationally syndicated “The Lars Larson Show” today at 6:20 pm ET/5:20 pm CT to discuss his recent op/ed on the ‘flower power’ energy policies of Barack Obama.

To find a station near you, click here.

To read Peter’s op/ed in the American Spectator, click here.

Peter Ferrara on Obama’s ’Flower Power’ Energy Policies

Erin Humiston — Fri, 15 Aug 2008 10:19:02 -0500

In a new op/ed featured online in The American Spectator, IPI’s Peter Ferrara discusses Barack Obama’s proposed centralized government energy policies that Ferrara calls “flower power.”

An excerpt:

"Barack Obama proposes that we seize the profits of the oil companies and use them for $1,000 "energy rebate" checks to every working family in America. That is what he said in his speech in Lansing, Michigan on August 4, 2008, entitled "New Energy for America." Economist Donald Boudreaux pointed out that seizing all oil profits would still not be enough to fund these $1,000 giveaway checks.

If the government is going to target an industry it has vilified in the public mind, loot all its profits, and then use the money for giveaway checks to buy votes, then what has our nation become?

If the government can do that to the oil industry, then why can't it do the same to any other industry, or group of people, that it successfully paints as unpopular? What then has happened to the whole notion of private property?

Why couldn't President Obama then decree that every owner of a four bedroom home take in two homeless people? Surely there would be room for them somewhere. Why couldn't he just seize every gas guzzling SUV, sell them for scrap metal, and use that money for $1,000 rebate checks to every Democrat voter as well?

This is why people say Obama is a socialist..."

To read the full article, please visit the American Spectator online.