Wednesday, June 27, 2012

SCOTUS and Obamacare

This piece lays out the constitutional case asserted by the individual
mandate suit in a way that I think is very interesting to those of us
who are not legal scholars.

In the narrow scope of focusing on Obamacare, pulling out the
individual mandate is like pulling the catalytic converter out of a
truck because you don't like trucks - the individual mandate is
central to the system as constructed, and if you're not pulling apart
the whole system (which, based on severability, actually could
happen), you don't wanna pull out a critical piece. Thus, I'm strongly
hoping it's "all or nothing" - overturn the whole PPACA or don't
overturn any of it, but overturning the individual mandate without the
rest of it is dangerous.

That said, this particular article makes a very convincing case about
the dangers of the precedent set by the individual mandate. The talk
of "limiting principles" is important. I absolutely acknowledge the
problems the PPACA is trying to address, even if I don't particularly
like the PPACA's way of dealing with these problems, and the law is
Congress' effort to address a major problem in society... so if you
don't believe severability should sink the whole law*, do you overturn
an important piece of Congressional legislation on a major issue to
preserve an important precedent for all future legislation, or do you
allow the law in its better form to stand as-is, and then cross the
constitutional bridge when you get to it?

I understand that for people who don't see Federal government power as
an issue, that answer is obvious, but for those of us who do... I
honestly don't know. My dislike for the PPACA's method of doing things
means that I won't be too upset if the whole thing gets overturned
(this would be especially the case if I gave either side any credit
for willingness to come together and create a legitimately bipartisan
healthcare bill, which, as I've detailed in this blog, I don't believe
was ever attempted with PPACA**). But if the bill is ruled to be
severable without a severability clause... it's going to be an
interesting ride.

* Which I can see both sides for - on the one hand, one clause
overturning a contract can be ridiculous in a contract comprised of
lots of separate pieces. However, on the other hand, the whole point
of a lack of severability is this type of case - if you have a complex
system that needs all its pieces to function properly, you don't wanna
leave an incomplete and broken system in place.

** Supporters of the law often claim "The Democrats would have acceded
to almost any Republican demand to get that bill passed, but they
didn't make any constructive suggestions!" To which my analogy is "If
a bunch of religious wingnut conservatives said that any doctor who
performs an abortion is sent to jail, but they're very open to working
with Democrats on figuring out the sentencing guidelines, would the
Democrats have been stepping up with suggestions and demands?"

Friday, June 1, 2012

Am I the only one who finds the ex-Patriot act extremely disturbing?

Chuck Schumer proposed the ex-Patriot Act, cosponsored by a bunch of
Senate Democrats and receiving positive praise, though not yet voting
support, from Senate Republicans. It states that the State Department
is allowed to determine that if somebody renounces their American
citizenship for tax reasons, they can be forced to pay a 30% capital
gains tax instantly and will be banned from ever entering America
again. This would be an escalation of a current law that states that
anybody wealthy who leaves the country needs to pay 15% of the value
of their property.

Details here:

I'd like to state from the outset that I don't think it's a
particularly good life choice to leave a country just to avoid
taxation on a major taxable event. On a Facebook-level sum of money,
the taxes aren't going to prevent you from doing anything because
you'll have enough money, and on a smaller sum of money that isn't
quite so life-changing, I'm not sure why anybody would think it's
worth it to leave a country just for that smaller amount of cash.
Maybe I overvalue the connection I have to my job, friends and
coworkers, but personally, I would only renounce US citizenship if I
were in a place in my life where there were a happiness-related reason
for me to go elsewhere and become a member of that society - either a
career that I want to build elsewhere as a member of that society, or
the desire to live in a culture that I've never had long term exposure
to (or that I have and like enough to want to be in - as many Jews do
with Israel, because being surrounded by other Jews and being a
citizen of that society gives you a sense of community that
individually-focused America doesn't have, for many people at least),

That said, on a fundamentally moral level, as well as a governance
one, it's hard to overstate how scary this is. Firstly, the moral
presumption behind the act is that America fundamentally "owns" a
portion of all of its citizens' assets and having them leave means the
US is entitled to its "cut". The justification is very close to the
justification of asset expropriation by Latin American countries - and
there's not a very good reason why a proportion less than 100% is
somehow morally different than a proportion of 100%, they're both
unacceptable. In addition to being a gross violation of property
rights, it furthers a regulatory climate that discourages risk taking
and entrepreneurship that benefit the country. It's also highly
inconsistent with a society that likes to label itself "free" - you
can't be free if you're not also free to leave without suffering a
lifetime ban from returning.

If you want to keep your capital, create a tax environment that
encourages people to stay, rather than using force.

I'm coming around to a more fundamental view against taxation. More
fundamentally, taxation should be considered a necessary evil, with
emphasis on both words. It's evil, because it is the result of a
collective violation of property rights. It is undeniably, on some
level, theft. However, from a zero tax base, it's almost undeniable
that most people would prefer to have a positive tax rate than a zero
rate on people in their income class (setting aside the desire to
exclude themselves), because government does provide a number of
services that they cannot purchase themselves and are necessary for a
stable society. As a result, in the face of property rights, taxation,
as forcible theft, is justifiable up to the point (and only up to the
point) where the taxed class is probabilistically better off for that
tax money having been taken from them. Taking taxes from expatriates
clearly does not pass this test; expats can in no way be made better
off by having that tax money taken from them and thus are not really
an appropriate target for tax targeting. Doing so is outright theft.

This implies that you pay for the continued benefit of being a US
citizen, not the past benefits you have accrued (the taxes you paid at
the time were what you paid for being a US citizen at that point), but
that's fundamentally a provision of the way we tax for income - we
don't select your marginal tax rate based on aggregate lifetime income
to that point, we tax based on how much you earned in that period.
Which makes perfect sense, but you need to be morally consistent when
you're dealing with something as fraught as taxation.