Tyranny By Regulation

Here is why people, average people, don’t trust government to be involved in something as personal as healthcare. Time and again the Federal and state governments demonstrate that being a participant and a rule maker is impossibly conflicted and the result is byzantine regulations and processes that constitute a form of tyranny on the citizenry. The majority opinion in a tax case recently reviewed by the D.C. Appeals Court sums up nicely how this works.

Comic-strip writer Bob Thaves famously quipped, “A fool and his money are soon parted. It takes creative tax laws for the rest.” In this case it took the Internal Revenue Service’s (“IRS” or “the Service”) aggressive interpretation of the tax code to part millions of Americans with billions of dollars in excise tax collections. Even this remarkable feat did not end the IRS’s creativity. When it finally conceded defeat on the legal front, the IRS got really inventive and developed a refund scheme under which almost half the funds remained unclaimed. Now the IRS seeks to avoid judicial review by insisting the notice it issued, acknowledging its error and announcing the refund process, is not a binding rule but only a general policy statement.

[From TaxProf Blog: D.C. Circuit Slams IRS, Opens Door to Billions of Dollars Telephone Excise Tax Refunds]

Another example of this is governments invoking redevelopment, eminent domain, or environmental regulation to strip property owners of their rights. The city of Half Moon Bay faced bankruptcy, until the state intervened to give them a lifeline, after using environmental laws to forestall development of a housing project. The $37 million judgement for the plaintiff against the city was greeted with dismay and threats by city officials that police officers would no longer patrol the streets and house fires would burn unrestrained… it would appear that the last bastion of scoundrels is not patriotism but public safety.

The reaction of the Half Moon Bay City Council to the $36,795,000 judgment was a mixture of shock, mystification and dismay – akin to a 16-year-old being given the keys to his first car and realizing for the first time the cost of gasoline, insurance and maintenance. In addition to compensating Ms. Yamagiwa for the loss of private property, it is hoped that Chief Judge Walker’s opinion will remind all government decision makers at the state and local levels, when considering the implementation of environmental policies, to first ask the question: “What about the Constitution?”

Links, Lotsa Links…

After Firefox started repeatedly crashing because of how many windows and tabs I had open, I realized it was time for a long overdue links post.

  • Online aggregators and newspaper strategy. Picard debunks the myth that newspapers perpetuate, that online search and aggregators are stealing content from them. Money quote: “Newspapers are now getting between 7-10 readers online for every reader they have in print. This plays an important role in making their sites attractive to advertisers, a development that generated the $3.2 billion in online advertising revenue that newspapers received in 2008.”
  • The Omnivore’s Delusion, a rebuttal to critics of factory farming. “Today’s turkeys may not be aware that they are a part of a morally reprehensible system”
  • Wikipedia’s growth tumbles, but I wonder if that is a strategic failing or simply the inevitable slowing down that comes with maturity and so much content already created.
  • FastPencil lets you write and publish a book online.
  • North Carolina puts “Amazon tax” in budget, which would have the consequence of Amazon eliminating Affiliates in NC… which kind of makes you wonder why states are doing this if they know Amazon will simply drop them. The only real losers are the residents of the state who are benefiting from the Amazon program.
  • Fever reads your feeds and picks out the most popular links.
  • A few misconceptions about economic recovery plans… “The ‘economic recovery’ plans put forth by just about everyone in Washington is based on keeping us on this track – which is a formula for an even longer term disaster than the one we currently face.”