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Today a narrow and unusual Supreme Court majority ruled that the DMV – of all government agencies! – is allowed to censor speech it considers to be “offensive.” To wit, the four “liberal” justices and Justice Clarence Thomas somehow found that the specialty license plates Texas drivers can choose to have on their vehicles actually constitute state speech – and of course the state can control its own messages, including rejecting a plate proposed by the Texas branch of the Sons of Confederate Veterans. This is so even though the specialty-license-plate program encourages Texans to come up with their own designs and slogans, which has resulted in around 400 plates that express support for a plethora of nonprofit organizations, commercial entities, affinity groups, and myriad other causes.

By this logic, Texas has long been endorsing Dr. Pepper, ReMax, and an assortment of burger and taco joints. Indeed, both Longhorns (UT-Austin) and Aggies (Texas A&M) will be dismayed to learn that the Lone Star State cheers for the Sooners (University of Oklahoma) and Cowboys (Oklahoma State). Surely at least one person is “offended” by each of the above examples, yet the DMV has refused to act in the face of such (macro)aggression. As the dissenting justices point out, it’s even more bizarre that, under the majority’s reading, “rather be golfing” is official state policy. It’s a wonder that the state has become America’s engine of economic growth!

To add hypocrisy to insult, the author of today’s decision, Justice Stephen Breyer, contradicted his own writing in the key recent precedent, a case regarding monuments in a city park. In the 2009 case of Pleasant Grove City v. Summum, Breyer concurred in the Court’s opinion “on the understanding that the ‘government speech’ doctrine is a rule of thumb, not a rigid category. Were the City to discriminate in the selection of permanent monuments on grounds unrelated to the display’s theme, say solely on political grounds, its action might well violate the First Amendment.”

Indeed. The ruling in Walker v. Texas Division represents a fundamental misunderstanding of what’s going on here. Texas doesn’t have to have specialty license plates, but if it creates this money-making program, it can’t then censor speech it simply doesn’t like.

As Cato wrote in our amicus brief, one man’s offensive speech is another’s exercise of social commentary or personal expression. And unlike, say, child pornography and “fighting words,” “offensive” speech is protected by the First Amendment.

It’s the Supreme Court that has offended the freedom of speech today. And now we know that the First Amendment is one thing that’s smaller in Texas.

In many areas of the tax system, loopholes create horizontal inequity in that two nearly identical people pay very different taxes for trivial differences in behavior. Tax schemes for the financially sophisticated abound, such as paying mortgages early, converting 401k funds, and even dodging death taxes.

Obamacare provides a particularly egregious loophole for reporting income. It is a very lucrative yet an unintended scheme. Despite Sen. Orrin Hatch calling it a “fraudster’s dream come true” back in 2013, the loophole still exists today.

To illustrate the Obamacare reporting loophole, consider the health insurance marketplace in Hialeah, Florida with two consumers. The first, Michael, is single, age 49, a non-smoker, and makes $46,000. The second, Lisa, makes $47,000 but is otherwise similar. Both find themselves ineligible for a taxpayer subsidy on HealthCare.gov and in searching more than 80 plans decide on a Humana Bronze plan with an annual premium of $4,092.

Where’s the reporting loophole? If Michael reports that he expects to make just $12,000 during 2015, he’ll ultimately pay $1,250 for his health insurance. If Lisa does the same, she’ll be on the hook for full amount. The Obamacare reporting loophole lowers Michael’s payment by more than $2,800, even though he wasn’t eligible for a taxpayer subsidy at all.

How does Michael profit from this? Obamacare offers sizable taxpayer subsidies to those with low income. Even so, many would have difficulty paying more than $4,000 in advance for health insurance. Instead, consumers can report their anticipated income and then have the subsidy advanced directly to the insurance company. Advanced reporting of income runs into a practical issue: Michael or Lisa might make an inaccurate report. If so, the advance subsidy would be incorrect. One might expect that Michael or Lisa would have to square up during tax filing season, a process the IRS calls reconciling. For single individuals like Michael with income under $46,680 (400% of the poverty line), the way in which the advance subsidy is reconciled encourages misreporting. Michael faces a repayment limit of at most $1,250, if the taxpayer advance to the insurance company was too large. In contrast, there is no upper limit on repayment for Lisa, because her income is above 400% of the poverty line.

The graph below shows how Michael or Lisa profit purely from misreporting, as income changes in relation to the poverty line. In technical terms, if the unsubsidized cost of the second lowest-cost silver plan for an individual exceeds $370 per month in 2015, the Obamacare reporting loophole can lead to misreporting subsidies of nearly $3,000. Similar incentives exist for married couples, but with different thresholds and amounts.

What can be done about this loophole? Misreporting arises because repayments are capped. Those above 400% of the poverty line have no incentive to misreport because they would have to fully repay the advance. Aligning incentives to report with actual income by uncapping repayments, as is done for those over 400% of poverty, would remove this loophole. As consumers, financial advisors, and healthcare navigators learn about the Obamacare misreporting loophole, it will be tempting for many people to abuse it, ultimately harming taxpayers.

The Vatican has released a new papal encyclical on the environment. Based on the version of Laudato Sii leaked ahead of time, the document is a highly political discussion of the theology of the environment.

Pope Francis mixes heartfelt concern for ecology with an often limited or confused understanding of the problem of pollution and meaning of markets. Humanity’s obligation for the environment is complex and the Pope discusses ecological values in the context of economic development and care for the poor.

Unfortunately, the document’s policy prescriptions sound like they were written by an advocate. The resulting factual and philosophical shortcomings undercut the larger and more profound theological discussion.

For instance, the encyclical complains much of capitalism as well as property rights, which, in the Pope’s view, allow selfish individuals to act against the public interest. Yet capitalism provides the resources and technology to improve environmental protection. Indeed, he acknowledges that “science and technology are a wonderful product of human creativity that is a gift from God.”

Market prices operate as signals. Laudato Sii complains that disproportionate consumption steals from “future generations.” Yet rising resource prices encourage people to use less, producers to find more, manufacturers to operate more efficiently, and entrepreneurs to create substitutes. Claims that humanity was running out of resources and destroying the ecology go back centuries and so far have been proved wrong.

Markets also compare the costs and benefits of different means to achieve a common end. In fact, markets and property rights are the most important means to provide people with what the Pontiff calls “a dignified life through work.” However, jobs are not created, like the earth, ex nihilio. The more regulatory dictates and higher energy prices, the fewer the jobs and lower the salaries.

The Pontiff asserts the “social function of any form of private property.” Property rights may not be absolute, but the legal right to land is most important for those who lack wealth and influence. Property rights also create incentives for environmental stewardship. Ownership vests both costs and benefits with a sole decision-maker who can be held responsible.

Most environmental problems occur because of what economists call externalities—costs and benefits that fall on others. Without an appropriate legal regime, industry can spew emissions far and wide. Drawing the line requires balancing complex interests: prosperity, liberty, ecology.

The encyclical lacks much sense of the flawed nature of government. The Pope is disappointed that environmental efforts “are often frustrated not only by the refusal of the powerful, but also by the lack of interest of the other.” However, public choice economists diagnosed this problem decades ago: concentrated benefits, diffuse costs.

Laudato Sii also argues for redefining progress. The Pontiff should encourage people to ask, “How much is enough?” But it is important that those living in comfort in the industrialized West not try to answer for those living in the impoverished Third World.

As I point out in American Spectator: “The Vatican’s comparative advantage is not legislation. At one point the encyclical asserts the importance of education on turning off ‘unnecessary lights.’ The discussion of climate change is partisan, even though the encyclical notes the Church’s obligation to ‘listen and promote honest debate among scientists, respecting the diversity of opinion’.”

In contrast, the Pontiff truly is acting as spiritual leader when he advocates a personal, social, and spiritual transformation in how people relate to the environment. His proposed “ecological conversion” should spark much discussion.

Moreover, Pope Francis wants to change behavior. He contends: “if we feel intimately united with all that exists, sobriety and care will arise spontaneously.” It is committed individuals who form the “innumerable variety of associations” advocating on behalf of the environment, cited by Laudato Sii, and whose reformed buying behavior can “change the behavior of firms.”

The Vatican is ill-equipped to assess environmental problems and develop policy solutions. The Pontiff’s duty is much more fundamental. Hopefully Laudato Sii, despite its practical shortcomings, will advance the larger and more important theological debate.

Education historian Diane Ravitch, in a recent Huffington Post piece, came out in support of school choice, but only choice in which you pay once for public schools, and a second time if you want or need something different than what those schools provide. In a familiar refrain, Ravitch argued that we pay through taxes for highways, police, firefighters, public beaches, and libraries even if we don’t use them, and schools should be no different. They are public goods.

Aside from the feel of circularity in Ravitch’s argument – these things are public goods, therefore you must pay taxes for them; because you pay taxes for them they are public goods – the crucial problem with Ravitch’s argument is the monumental difference between education and, say, building highways. Education is about shaping young people’s minds, something so intimately connected to values, identities, and basic freedom that it could never be tantamount to deciding whether to resurface roads or maintain a company to put out fires. And policing, most basically, is about ensuring one person doesn’t impose himself on another through force or fraud. That doesn’t come close to saying “we will require all people to pay for the inculcation of government-approved facts, ideas, and values in children.”

There is simply no meaningful equivalence between education and building roads or putting out fires. Except, perhaps, that when we force all people to support a single system of schools we ignite constant social conflagrations, fires that are often only put out when one side loses, or as Ravitch herself has documented, seemingly anything potentially flammable – but also often valuable – is removed.

Our nation very much needs fundamental tax reform, so it’s welcome news that major public figures - including presidential candidates - are proposing to gut the internal revenue code and replace it with plans that collect revenue in less-destructive ways.

A few months ago, I wrote about a sweeping proposal by Senator Marco Rubio of Florida.

Today, let’s look at the plan that Senator Rand Paul has put forward in a Wall Street Journal column.

He has some great info on why the current tax system is a corrupt mess.

From 2001 until 2010, there were at least 4,430 changes to tax laws—an average of one “fix” a day—always promising more fairness, more simplicity or more growth stimulants. And every year the Internal Revenue Code grows absurdly more incomprehensible, as if it were designed as a jobs program for accountants, IRS agents and tax attorneys.

And he explains that punitive tax policy helps explain why our economy has been under-performing.

…redistribution policies have led to rising income inequality and negative income gains for families. …We are already at least $2 trillion behind where we should be with a normal recovery; the growth gap widens every month.

So what’s his proposal?

…repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this “The Fair and Flat Tax.” …establish a 14.5% flat-rate tax applied equally to all personal income, including wages, salaries, dividends, capital gains, rents and interest. All deductions except for a mortgage and charities would be eliminated. The first $50,000 of income for a family of four would not be taxed. For low-income working families, the plan would retain the earned-income tax credit.

Kudos to Senator Paul. This type of tax system would be far less destructive than the current system.

That being said, it’s not perfect. Here are three things I don’t like.

  1. The Social Security payroll tax already is a flat tax, so it’s unclear why it should be wrapped into reform of the income tax, particularly if that change complicates the possibility of shifting to a system of personal retirement accounts.
  2. There would still be some double taxation of dividends, capital gains, and interest, though the destructive impact of that policy would be mitigated because of the low 14.5 percent rate.
  3. The earned-income credit (a spending program embedded in the tax code) should be eliminated as part of a plan to shift all means-tested programs back to the states.

But it’s important not to make the perfect the enemy of the good, particularly since the debate in Washington so often is about bad ideas and worse ideas.

So the aforementioned three complaints don’t cause me much heartburn.

But there’s another part of the Paul plan that does give me gastrointestinal discomfort. Here’s a final excerpt from his column.

I would also apply this uniform 14.5% business-activity tax on all companies…. This tax would be levied on revenues minus allowable expenses, such as the purchase of parts, computers and office equipment. All capital purchases would be immediately expensed, ending complicated depreciation schedules.

You may be wondering why this passage is worrisome. After all, it’s great news that the very high corporate tax rate is being replaced by a low-rate system. Replacing depreciation with expensing also is a huge step in the right direction.

So what’s not to like?

The answer is that Senator Paul’s “business-activity tax” doesn’t allow a deduction for wages and salaries. This means, for all intents and purposes, that he is turning the corporate income tax into a value-added tax (VAT).

In theory, this is a good step. After all, the VAT is a consumption-based tax which does far less damage to the economy, on a per-dollar-collected basis, than the corporate income tax.

But theoretical appeal isn’t the same as real-world impact.

Simply stated, the VAT is a money machine for big government.

All of which helps to explain why it would be a big mistake to give politicians this new source of revenue.

Indeed, this is why I was critical of Herman Cain’s 9-9-9 plan four years ago.

It’s why I’ve been leery of Congressman Paul Ryan’s otherwise very admirable Roadmap plan.

And it’s one of the reasons why I feared Mitt Romney’s policies would have facilitated a larger burden of government.

These politicians may have had their hearts in the right place and wanted to use the VAT to finance pro-growth tax reforms. But I can’t stop worrying about what happens when politicians with bad motives get control.

Particularly when there are safer ways of achieving the same objectives.

Here’s some of what I wrote last year on this exact topic.

…the corporate income tax is a self-inflicted wound to American prosperity, but allow me to point out that incremental reform is a far simpler – and far safer – way of dealing with the biggest warts plaguing the current system.

Lower the corporate tax rate.

Replace depreciation with expensing.

Replace worldwide taxation with territorial taxation.

So here’s the bottom line. If there’s enough support in Congress to get rid of the corporate income tax and impose a VAT, that means there’s also enough support to implement these incremental reforms.

There’s a risk, to be sure, that future politicians will undo these reforms. But the adverse consequences of that outcome are far lower than the catastrophic consequences of future politicians using a VAT to turn America into France.

To wrap things up, there’s no doubt that Senator Paul has a very good proposal. And his heart is in the right place.

But watch this video to understand why his plan also has a very big wart that should be excised.

The Value Added Tax: A Hidden New Tax to Finance Much Bigger Government

For what it’s worth, I’m mystified why pro-growth policy makers don’t simply latch onto an unadulterated flat tax.

That plan has all the good features needed for tax reform without any of the dangers associated with a VAT.

P.S. You can enjoy some good VAT cartoons by clicking herehere, and here.

The Department of Veterans Affairs (VA) spends $60 billion a year providing health care benefits to service veterans. Its mismanagement is well-known and widespread. A recent letter provided to the Washington Post and Congress suggests that as much as 10 percent of the VA’s annual spending is in violation of federal contracting rules, representing billions of taxpayer dollars.

Employees of a New York VA facility used their government purchase cards to buy prosthetics for patients in a manner that violates standard operating procedures. Per the VA’s rules, purchasing cards are available to buy supplies costing less than $3,000. Items costing more require a contract and invoice.  The facility purchased at least 2,000 prosthetics for $24,999, well above the $3,000 limit and only $1 less than the card limit of $25,000. All told, $54 million was spent by this facility in violation of policy.

When congressional investigators heard about the questionable purchases at the Bronx facility, investigators asked for the accompanying contracts to prove the purchases were legitimate. VA employees tried to cover their missteps and blame the missing documents on Superstorm Sandy, according to the Washington Post.

VA officials had received an inquiry from Congress in September 2012 about the Bronx payments, but a letter signed by former secretary Eric Shinseki did not go out until July 2013. The agency had prepared to say that the records had been transferred to VA’s medical center in Manhattan, where they were destroyed in Hurricane Sandy, documents obtained by The Post show.

But in reviewing the claim that the records had been destroyed, a senior adviser in Shinseki’s office was skeptical. “Gemma — this isn’t going to work,” the adviser wrote in an e-mail obtained by The Post.

“The [congressman’s] letter was dated 26 Sept and the storm was 28 October. Yet we talk about visits in December 2012 and again in January. Not clear why we didn’t figure out in December that we lost the records and had to go back in January,” he wrote in April 2013.

“This is not cleared.”

Rice said in a statement Monday, “The damage caused by Superstorm Sandy was devastating and far-reaching, but the claim that all of these documents were destroyed strikes me as all too convenient and must be substantiated. We need to know exactly what happened to the documents, how and why this money was spent without written contracts, and who is accountable.”

This is just one instance of malfeasance. Jan R. Frye, VA’s deputy assistant secretary for acquisition and logistics, and now a VA whistleblower, found the actions at the NY facility were not an isolated event. Frye found a total of $1.2 billion in prosthetics purchases without a contract over an 18 month period in 2013 and 2014. Frye sent a 35 page memo to the VA Secretary, Robert McDonald arguing that laziness is the motivating factor behind the VA’s mismanagement. Purchasing cards are much easier than using the contract process.

Frye is not the first to criticize purchasing card usage by the VA. The Washington Post says:

Some of his [Frye’s] concerns were previously flagged by VA’s inspector general, who has reported for years that weak contracting systems put the agency at risk of waste and abuse. Thousands of pharmaceutical purchases were made without competition or contracts in fiscal years 2012 and 2013, often by unqualified employees, investigators found. And according to documents that have not been made public, the inspector general’s office has warned VA repeatedly that its use of purchase cards needs better oversight.

As much as $6 billion of VA’s annual spending violates federal contracting rules. Internal stakeholders have raised the issue in the past, now it is time for the VA to finally tackle the issue.

This is the fourth post in a series covering the advance of educational choice legislation across the country this year. As I noted in my last entry in May:

[At the beginning of the year,] the stars appeared to be aligned for a “Year of Educational Choice.” By late April, state legislatures were halfway toward beating the record of 13 states adopting new or expanded school choice laws in 2011, which the Wall Street Journal dubbed the “Year of School Choice.” The major difference in the types of legislative proposals under consideration this year is that more than a dozen states considered education savings account (ESA) laws that allow parents to purchase a wide variety of educational products and services and save for future education expenses, including college.

Since the end of May, five more states enacted new or expanded educational choice programs, bringing the total to 13 new or expanded programs in 10 states so far this year. Of these, the most exciting new choice program is Nevada’s education savings account, the fifth ESA in the nation and the first to offer nearly universal eligibility.

In addition, at least eight states are still seriously deliberating educational choice legislation. Here’s the tally so far:

New Educational Choice Programs

  • Arkansas: vouchers for students with special needs.
  • Mississippi: ESAs for students with special needs.
  • Montana: universal tax-credit scholarship law.
  • Nevada: tax-credit scholarships for low- and middle-income students.
  • Nevada: nearly universal ESA for students who previously attended a public school.
  • Tennessee: ESAs for students with special needs.

Expanded Educational Choice Programs

  • Alabama: Raised the annual scholarship tax credit cap from $25 million to $30 million and raised the contribution cap from $7,500 to $50,000. However, the expansion came at a price: the legislation lowered income eligibility threshold from 275 percent of the federal poverty level to 185 percent (from about $67,000 to about $45,000 for a family of four). Current scholarship recipients are grandfathered in.
  • Arizona: Expanded ESA eligibility to include students living in Native American tribal lands.
  • Arizona: Expanded the types of businesses that can receive tax credits for donations to scholarship organizations.
  • Indiana: Increased amount of tax credits available for donations to scholarship organizations ($2 million over two years).
  • Indiana: Eliminated cap on the number of vouchers available for elementary school students.
  • Louisiana: Expanded school voucher program (funding roughly 600 additional vouchers).
  • Oklahoma: Expanded eligibility for its special-needs tax-credit scholarships and raised the tax credit value from 50 percent–tied with Indiana for the lowest in the nation–to 75 percent. 

Pending Legislation 

  • Delaware: Considering ESA legislation.
  • Florida: Earlier this year, both the FL House and FL Senate unanimously passed slightly different versions of legislation to expand the state’s ESA program. However, due to a legislative standoff over unrelated matters, the legislature failed to reach an agreement before adjourning for the summer and the legislation appeared to be dead. Nevertheless, on Monday legislative leaders reached an agreement to include a significant expansion of the ESA program in the budget, more than doubling the funding and expanding the eligibility requirements to additional categories of students with special needs. 
  • North Carolina: Both the NC House and NC Senate passed budgets that expanded funding for the state’s voucher program and increased the size of vouchers for students with special needs.
  • Ohio: Considering an expansion to the state’s school voucher program.
  • Pennsylvania: Considering an expansion to the state’s Opportunity Scholarship Tax Credit.
  • Rhode Island: Considering ESA legislation.
  • South Carolina: The legislature is considering a new “refundable” scholarship tax credit that blurs the line between tax credits and vouchers. A wiser path would be expanding the state’s existing scholarship tax credit to include all students and provide enough tax credits to meet demand for scholarships.
  • Wisconsin: The WI Legislature’s Joint Finance Committee approved an expansion to the statewide school voucher program that eliminates the restrictive and arbitrary 1,000-student enrollment cap. The proposal would also make students with special needs eligible.

Education reformers also experienced two major disappointments this year. The state senates in both Texas and New York passed tax-credit scholarship legislation with the support of their respective governors, only to see the proposals blocked by the legislatures’ lower chambers.

Educational Choice Lawsuits

With educational choice policies ascendant in the state legislatures, defenders of the status quo are fighting to block them in court. Fortunately for students, the courts are increasingly rejecting such challenges.

Earlier this year, the Alabama Supreme Court ruled that the state’s tax-credit scholarship law is constitutional. Two months later, a circuit court judge in Florida threw out a challenge to the state’s 13-year-old tax-credit scholarship law. In the wake of the judge’s decision, the Florida School Board Association dropped out of the lawsuit, though the state’s main teachers union said it will appeal the decision.

Meanwhile, the education establishment is also challenging the constitutionality of educational choice laws in Colorado, Georgia, and North Carolina. Despite being in legal limbo for two years, the North Carolina Supreme Court has not yet ruled on the constitutionality of school vouchers in the Tar Heel state. Unfortunately, the legal uncertainty is worrying parents of voucher students, and likely scaring some would-be voucher parents away.

In a similar situation in New Hampshire, parents who could not afford private school tuition without a scholarship were reluctant to apply for one knowing that the program might be ruled unconstitutional. In that case, they would be forced to pull their kids out of their chosen school and away from their new friends and send them to their assigned district school. Fortunately, New Hampshire’s choice law ultimately prevailed. The educational choice laws in Colorado, Florida, Georgia, and North Carolina should prevail as well.

Live Free and Learn: Scholarship Tax Credits in New Hampshire

Two hundred years ago today, on June 18, 1815, the forces of the self-proclaimed Emperor Napoleon were defeated near Waterloo by a multinational European army. The battle ended years of war in Europe and allowed the rising tide of liberalism to produce a century of relative peace and unprecedented economic and technological progress. As I wrote in The Libertarian Mind (do you have your copy?)

In both the United States and Europe, the century after the American Revolution was marked by the spread of liberalism. Written constitutions and bills of rights protected liberty and guaranteed the rule of law. Guilds and monopolies were largely eliminated, with all trades thrown open to competition on the basis of merit. Freedom of the press and of religion was greatly expanded, property rights were made more secure, international trade was freed….

After the turmoil of the French Revolution and the final defeat of Napoleon in 1815, and with the exception of the Crimean War and the wars of national unification, most of the people of Europe enjoyed a century of relative peace and progress….

This liberation of human creativity unleashed astounding scientific and material progress. The Nation magazine, which was then a truly liberal journal, looking back in 1900, wrote, “Freed from the vexatious meddling of governments, men devoted themselves to their natural task, the bettering of their condition, with the wonderful results which surround us.” The technological advances of the liberal nineteenth century are innumerable: the steam engine, the railroad, the telegraph, the telephone, electricity, the internal combustion engine. Thanks to the accumulation of capital and “the miracle of compound interest,” in Europe and America the great masses of people began to be liberated from the backbreaking toil that had been the natural condition of mankind since time immemorial. Infant mortality fell and life expectancy began to rise to unprecedented levels. A person looking back from 1800 would see a world that for most people had changed little in thousands of years; by 1900, the world was unrecognizable….

Toward the end of the nineteenth century, classical liberalism began to give way to new forms of collectivism and state power….

By the turn of the century the remaining liberals despaired of the future. The Nation editorialized that “material comfort has blinded the eyes of the present generation to the cause which made it possible” and worried that “before [statism] is again repudiated there must be international struggles on a terrific scale.” Herbert Spencer published The Coming Slavery and mourned at his death in 1903 that the world was returning to war and barbarism.

Indeed, as the liberals had feared, the century of European peace that began in 1815 came crashing down in 1914, with the First World War. The replacement of liberalism by statism and nationalism was in large part to blame, and the war itself may have delivered the death blow to liberalism. In the United States and Europe, governments enlarged their scope and power in response to the war. Exorbitant taxation, conscription, censorship, nationalization, and central planning—not to mention the 10 million deaths at Flanders fields and Verdun and elsewhere—signaled that the era of liberalism, which had so recently supplanted the old order, was now itself supplanted by the era of the megastate.

More on libertarian history in The Libertarian Mind. More on the peaceful 19th century from Jim Powell.

Today, our friends at the Institute for Justice launched a new challenge to yet another instance of egregious civil asset forfeiture abuse.

Charles Clarke is a 24-year-old college student who found out the hard way that government officials can confiscate property on the mere suspicion that it has a “substantial connection” to a crime or is the proceeds of a crime. No underlying conviction is required. Functionally, this means that officers can claim that “something was a little off” about your behavior, or that “something smells a little like drugs” and then have carte blanche to take whatever cash you have on you. After that, your cash is presumptively guilty, and it is up to you to prove its innocence.

In the winter of 2013, Charles was stopped at the Cincinnati/Northern Kentucky airport based on the officers’ assertion that his bag smelled like marijuana. Actually, it was based off of a drug dog’s “signal” that his bag smelled like marijuana. By claiming that a dog “alerted” an officer can obtain probable cause, but in reality the dogs are about as reliable as Clever Hans.

After searching his bag, the officers found no drugs or other illegal substances. They then asked him if he was carrying any cash. Charles volunteered that he was carrying $11,000–clearly thinking, not unreasonably, that in a just world there is no way the officers could just take his money. Charles’s mistake, however, was thinking that he lives in a just world, and the officers walked away with his life savings.

Charles had saved the $11,000 over the previous five years, from work, financial aid, educational benefits, and gifts from family. Now he must overcome the officers’ hunches by proving that his money came from legal sources.

By now, hopefully you’re familiar with civil asset forfeiture. Thanks in part to the excellent work of the Institute for Justice, as well as biting commentary from John Oliver and dogged investigative journalism from the Washington Post and the New Yorker (as well as Cato’s own work), civil asset forfeiture no longer exists in the shadows, where the perpetrators would have prefered it to remain. In a time of sharp political divides, there’s one thing we all should agree on: police and other law enforcement officials should not be allowed to take assets based only on the suspicion of criminal activity and then be permitted to use those assets to purchase needed things for the department, like margarita machines.

Charles–who admittedly smoked marijuana on the way to the airport–lost his life savings to what amounts to legalized piracy. It seems Mancur Olson was on to something when he described the government as “stationary bandits.”

Thankfully, Charles has the saintly lawyers at the Institute for Justice on his side, who use the money from IJ’s generous donors to defend people like him from the most powerful organization in human history–the United States government. Otherwise, Charles would be out of luck. His confiscated $11,000 is just small enough to make it almost not worth it to pay thousands in attorney’s fees in order to possibly get some of it back. It’s almost as if the officers who confiscated his money thought that Charles would be unlikely to have the resources to fight the seizure.

Last year, the officers at Cincinnati/Northern Kentucky airport had a “good” year taking things from people who haven’t been convicted of a crime, raking in $530,000 from travelers similar to Charles. Under the federal “equitable sharing” program, the departments of the deputized airport police are allowed to keep up to 80 percent of that money.

The Institute for Justice is not only seeking to recover Charles’s money, they are challenging the constitutional deficencies of the civil asset forfeiture program in general. 

For more on Charles’s case, see Vox’s story.

For more on civil asset forfeiture, see our episode of “Free Thoughts” featuring Scott Bullock from the Institute for Justice.

According to the California Labor Commission, a San Francisco-based Uber driver who filed a claim against the rideshare company is an employee and not, as Uber argued, an independent contractor. The ruling orders Uber to pay the driver about $4,000 for expenses.

The non-binding ruling could potentially have devastating implications for Uber in California. If similar rulings are issued regarding other rideshare companies like Lyft or sharing economy players such as Airbnb, Instacart, and TaskRabbit, we could see the growth of these popular and innovative companies stifled as they cope with the costs associated with having providers classified as employees.

The California Labor Commission ruling states that Uber is “involved in every aspect of the operation.” It is true that Uber provides a technology and that it carries out background checks on drivers. But Uber does not provide vehicles or set any hours or for its rideshare drivers. In fact, according to research on Uber wages conducted by Princeton economist Alan Krueger and Uber’s Jonathan Hall, only 38 percent of Uber drivers rely on Uber as their sole source of income.

Regulators and lawmakers ought to realize that Uber drivers, who are often driving for Uber part-time while using their own vehicles on their own schedule, shouldn’t be treated the same as traditional workers.

Uber might seem like something relatively new given that it relies on users hailing rides with smartphones, but fundamentally it is making a very familiar experience easier. People were offering car rides in exchange for money long before the rise of the Internet, let alone smartphones. What makes Uber and other rideshare companies like Lyft so popular is that if someone wants a ride, they no longer have to find a friend ready and willing to give a ride at a particular time or stand on a street corner waving their hands in the hope of hailing a taxi. Rather, they can simply open an app and find a driver who is ready and willing to give a ride in exchange for a fare in a matter of minutes.

Uber and the sharing economy more broadly fit awkwardly into existing regulatory frameworks, but this should be welcomed as an opportunity to revise outdated regulations and laws, not an opportunity to regulate popular new companies as if they are the older incumbents they are competing with.

As the commission itself noted, Uber would not exist without drivers like the one who filed the claim. Certainly, Uber as we know it will become a very different company if its drivers in California are classified as employees. It will begin to look more like its traditional competitors rather than an innovative technology company, which would be a great shame.

The Obama administration’s Food and Drug Administration today announced a near-ban, in the making since 2013, on the use of partially hydrogenated vegetable fats (“trans fats”) in American food manufacturing. Specifically, the FDA is knocking trans fats off the Generally Recognized as Safe (GRAS) list. This is a big deal and here are some reasons why: 

* It’s frank paternalism. Like high-calorie foods or alcoholic beverages, trans fats have marked risks when consumed in quantity over long periods, smaller risks in moderate and occasional use, and tiny risks when used in tiny quantities. The FDA intends to forbid the taking of even tiny risks, no matter how well disclosed. 

* The public doesn’t agree. A 2013 Reason-RUPE poll found majorities of all political groups felt consumers should be left free to choose on trans fats.  Even in heavily governed places like New York City and California, where the political class bulldozed through restaurant bans some years back, there was plenty of resentment

* The public is also perfectly capable of recognizing and acting on nutritional advances on its own. Trans fats have gone out of style and consumption has dropped by 85 percent as consumers have shunned them. But while many products have been reformulated to omit trans fats, their versatile qualities still give them an edge in such specialty applications as frozen pizza crusts, microwave popcorn, and the sprinkles used atop cupcakes and ice cream. Food companies tried to negotiate to keep some of these uses available, especially in small quantities, but apparently mostly failed. 

* Government doesn’t always know best, nor do its friends in “public health.” The story has often been told of how dietary reformers touted trans fats from the 1950s onward as a safer alternative to animal fats and butter. Public health activists and various levels of government hectored consumers and restaurants to embrace the new substitutes. We now know this was a bad idea: trans fats appear worse for cardiovascular health than what they replaced. And the ingredients that will replace minor uses of trans fats – tropical palm oil is one – have problems of their own. 

 * Even if you never plan to consume a smidgen of trans fat ever again, note well: many public health advocates are itching for the FDA to limit allowable amounts of salt, sugar, caffeine, and so forth in food products. Many see this as their big pilot project and test case. But when it winds up in court, don’t be surprised if some courtroom spectators show up wearing buttons with the old Sixties slogan: Keep Your Laws Off My Body. 

The lackluster defense spending of U.S. allies is again in the news. At the G7 Summit in Germany earlier this month, President Obama implored British Prime Minister David Cameron to reverse the decline in the UK’s defense spending, which is widely expected to fall below NATO’s 2 percent of GDP mandate next year.

This is not the first time in recent months that the topic has come up. During a private meeting in Washington in February, Obama reportedly told the Prime Minister: “if Britain doesn’t spend 2 percent on defense, then no one in Europe will.”

In fact, hardly any of America’s NATO allies meet their NATO commitments. In 2014, only Greece, Estonia, the U.S. and the U.K. spent as much as 2 percent of GDP on defense. Excepting NATO member Iceland, which is exempted from the spending mandates, the 23 other NATO members failed to spend even two cents of every dollar to defend themselves from foreign threats. And Greece only met the 2 percent threshold because their economy is falling faster than their military spending.

But the problem of inadequate defense spending by America’s allies goes even deeper. The U.S. and the U.K. are the only two NATO member states that met both the 2 percent of GDP floor, and the mandate that at least 20 percent of military spending be “dedicated to research, development and acquisition of major defence equipment” in 2014. If current trends continue, the United States will be the only NATO member to meet both mandates starting next year.

Of course, this is hardly a new phenomenon. U.S. taxpayers have been subsidizing European defense for decades. Indeed, many pundits like it that way. They fret that U.S. allies might go their own way, or simply botch the job of defending themselves. The Wall Street Journal’s Bret Stephens explains, “America is better served by a world of supposed freeloaders than by a world of foreign policy freelancers.”

Most Americans disagree. They are tired of being forever on the hook to pay to defend wealthy allies that are certainly capable of defending themselves. And their anger and resentment would surely grow if they understood how their tax dollars are, in effect, funding Europe’s bloated welfare states. Freed from the obligation to spend on defense, the one core function expected of any government, European governments have chosen to divert their resources into other nice-to-have things. In 2013, the United States, for example, allocated over 20 percent of government spending to its military; NATO’s other members spent, on average, 3.6 percent.

This Cato infographic, painstakingly assembled by my colleague Travis Evans, attempts to put all of these facts into perspective.


As you can see, in 2013 – the last year for which NATO provides detailed spending breakdowns – the United States spent an estimated $735 billion, or 4.4 percent of its GDP, on defense (based on the NATO definition). That amounts to $2,305 spent by every man, woman and child in America, 5 times more than in NATO founding states, and 8 times more than was spent in those member states that have joined NATO since the end of the Cold War. U.S. taxpayers contributed nearly 72 percent of all NATO defense spending, even though the economies of the other NATO members states collectively exceeded U.S. output by nearly 11 percent. And the free riding problem has only been getting worse. Total military spending by NATO’s European members was less in real terms in 2014 than in 1997 – and there are 12 more member states in NATO today.

In fairness, one can hardly blame NATO’s other members for failing to spend more on defense. And one shouldn’t expect that they will willingly change course, despite faint signs that some European members are finally getting serious about their security. After all, why pay for something that someone else is willing to provide for you, for free? America’s allies consistently underprovide for their own security, and that has been the case all along. (Mancur Olson and Richard Zeckhauser explained this dynamic in the late 1960s; and John R. Oneal revisited the theory in 1990).

The free ride could come to an end if Washington wants it to. The modest spending restraint imposed on the Pentagon’s budget by the bipartisan Budget Control Act of 2011 has already forced the military services to make some difficult choices. The really hard choices may soon fall on the Pentagon’s civilian masters, who so far have refused to prioritize roles and missions. They should stop deploying the U.S. military in ways that discourage other countries from doing more, and stop expecting U.S. taxpayers to foot the bill.


Infographic Sources:

NATO: Public Diplomacy Division.Financial and Economic Data Relating to NATO Defence.” Brussels, Belgium, 2014.

Central Intelligence Agency. “The World Factbook 2013.” Washington, D.C., 2013.

The International Institute for Strategic Studies. The Military Balance 2015. Edited by James Hackett. London: Routledge, 2015.

What do Slobodan Milosevic, Robert Mugabe, and Nicolás Maduro have in common? The Communist Manifesto and inflation.

At 480% per annum, Venezuela’s inflation is currently the world’s highest. The Bolivarian Revolution is pushing prices up at a rate of 36% per month. Will these punishing inflation numbers spell the end of President Nicolás Maduro’s reign? Maybe not. Milosevic’s Yugoslavia and Mugabe’s Zimbabwe witnessed much higher inflation rates, and both hung on for many years.

Slobodan Milosevic was in the saddle when inflation gutted the rump Yugoslavia. Milosevic’s inflationary madness reached its peak in January 1994, when the monthly inflation rate hit 313,000,000% – almost nine million times greater than Venezuela’s current monthly rate. Nonetheless, Milosevic retained his grip on what was left of Yugoslavia for another six years.

In 2008, Zimbabwe out-did Yugoslavia when Zimbabwe recorded the second-highest hyperinflation in history. With Robert Mugabe at the helm, hyperinflation peaked at a staggering 79,600,000,000% per month, or a daily rate of 98%. Despite this astronomical figure, Mugabe remains in office to this day – over seven years since the hyperinflation ended.

While hyperinflation is not a recipe for building a politician’s popular support, it is not a certain death knell, either. Don’t count Maduro out, yet. As long as he retains popular support and “controls” the ballot boxes, he will stay in the saddle.

The House GOP leadership’s hostility to reforming the U.S. Intelligence Community is on full display this week. The House Rules Committee (which is controlled by House Speaker John Boehner) blocked several key reform amendments to the annual Intelligence Authorization bill from even reaching the House floor for consideration.

Furious over an op-ed by Privacy and Civil Liberties Board chairman David Medine that called for an independent review of the executive branch’s “assassination-by-drone” policy, House Intelligence Committee chairman Devin Nunes (R-CA) included language in the annual Intelligence Authorization bill banning the PCLOB from examining the “covert” drone program. A bipartisan amendment (led by Rep. Jim Himes of Connecticut) that would have struck that language was barred from consideration.

Last week, the House passed a bipartisan amendment to the annual Defense Department spending bill baring the federal government from using taxpayer dollars to search the stored communications of Americans collected by NSA. That same amendment would also prevent the federal government from mandating that American tech companies build encryption-defeating “back doors” into their products. The authors of that amendment, Democrat Zoe Lofgren of California and Republican Thomas Massie of Kentucky, wanted to make those provisions permanent, but their amendment was also blocked.

An amendment by Florida Democrat Alan Grayson would’ve banned the federal government from undermining encryption standards promulgated by the National Institutes of Standards and Technology, which has been under fire for its relationship with NSA. That amendment was also disallowed.

Republican Justin Amash offered an amendment to strike language in last year’s Intelligence Authorization bill that permits “the acquisition, retention and dissemination” nonpublic telephone or electronic communications of United States persons without the consent of the person or proper legal process. It was also ruled out of order.

And of course, the bill continues to bar the processing and release of prisoners at Guantanamo who have long been cleared for departure and repatriation.

So just as it has for years, the House Permanent Select Committee on Intelligence is taking zero action to deal with clear violations of Americans’ Fourth Amendment rights revealed by Edward Snowden, as well as long-standing “war on terror” policies that are clearly harming, not helping, defeat the likes of ISIS.

However, the bill expands the U.S. Intelligence Community by creating a new bureaucracy: the National Cyber Threat Intelligence Integration Center. How the NCTIIC’s operations will be reconciled with the already existing U.S. Cyber Command is not at all clear. And Cyber Command will continue to dwarf NCTIIC in both personnel (3000+ vs. 50) and budget—which means Cyber Command (and thus NSA) will continue to be the driving force behind U.S. cybersecurity policies. One former senior DHS official resigned because of the implications of NSA’s dominance in cybersecurity issues, concerns that persist but that the committee has ignored.

All of the expertise of the military and intelligence community in cyber defense has clearly not translated into better cyber “hygiene” by other federal departments and agencies, as we’ve seen with the recent, massive hack into the Office of Personnel Management’s database. Yesterday, I got my own “You may have been hacked” letter from OPM, as did my wife (we are both former CIA analysts). It brought back memories of the last time my family got such a letter, in the wake of a hack of Department of Energy systems which involved more than just DoE employees.

That self-proclaimed “small government, fiscal conservatives” continue place faith in a nearly-porous federal IT infrastructure is just one more example of how badly Washington is broken.

Yesterday marked 200 years since the Battle of Waterloo and the British press was, understandably, eager to remind the world of the singular service the Anglo-Prussian alliance provided to humanity by finally ending the bloody career of the French megalomaniac dictator, Napoleon Bonaparte. Tucked in one of the articles was a sentence that caught my attention. Following the battle in which 55,000 men were either killed or wounded, the “dead… were hastily stripped and buried.” 

Why would anyone bother stripping the dead, when every hour increased the danger of putrefaction and disease?

The most likely reason was that prior to Industrial Revolution, clothing was extremely expensive. As such, the uniforms were, presumably, washed, patched up and reused. Consider that in 1760, Britain imported only 2.5 million pounds of raw cotton. By the 1830s, it imported 366 million pounds of cotton and the price of yarn fell to one-twentieth of what it had been. This was revolutionary!

As Carlo Cipolla observed in Before the Industrial Revolution: European Society and Economy, 1000-1700 “In preindustrial Europe, the purchase of a garment or the cloth for a garment remained a luxury the common people could only afford a few times in their lives. One of the main preoccupations of hospital administration was to ensure that the clothes of the deceased should not be usurped but should be given to lawful inheritors. During epidemics of plague, the town authorities had to struggle to confiscate the clothes of the dead and to burn them: people waited for others to die so as to take over their clothes – which generally had the effect of spreading the epidemic.”

Last but not least, why on earth did the British wear red coats? After all, red is conspicuous and easy to target. Again, economics suggests an answer. As Cato’s Connor Ryan reminded me, “Red coat [was] issued …[to Oliver Cromwell’s] New Model Army. The NMA was the first to try and standardize equipment and equip its soldiers with a standard coat. Red was the cheapest dye you could get, apart from natural grey which the Scots army had already adopted.”

Thankfully, today we can provide anyone with cheap clothing and our soldiers with sophisticated camouflage.

There is great interest in how the labor market will respond to the Affordable Care Act (ACA). Much of the popular discussion focuses on the implications of the newly-implemented and widely-anticipated employer mandate, which requires firms with 50 or more workers to provide health insurance for full-time employees (defined as workers with 30 or more hours per week). The employer mandate, unsurprisingly, creates strong incentives for companies to scale back employee hours (“29 hour work weeks”) and lay off workers or consolidate part-time jobs into full-time jobs in order to get under the 50 employee threshold.

There is comparatively less discussion of the incentives faced by workers. Although the Congressional Budget Office has provided estimates and discussion of the pertinent labor market effects, one issue that tends to get lost in all of this is how increasing a household’s income creates certain “notches” in a household’s budget constraint. By “notches”, economists mean very large changes in the subsidy (known as the “Premium Tax Credit”) received by a household for extremely small changes in income. These notches are well known in other transfer programs, particularly the “Medicaid notch” and the “public housing notch”. The ACA notch occurs in both states that expanded their Medicaid program, as well as those that didn’t.

To illustrate the sheer magnitude of the ACA notch, it is helpful to examine ACA subsidies for different individuals. First, consider a person who is expensive to insure – a 64-year-old – in a locality that generally has high insurance premiums. A good example is Clay County, Georgia (where Georgia also didn’t expand its Medicaid program). As the “Plan Preview and Price Estimator” from the federal government’s exchange shows, the premium tax credit goes up dramatically for this individual at an income of $11,671 and falls dramatically at an income of $46,679.

What’s going on? Subsides – discounts off the premiums for health plans offered on the exchange (known as the premium tax credit or “PTC”) – are related to household income as well as cost factors (namely an individual’s age and price of health plans in the local marketplace). Subsidies kick in at 100% of the Federal poverty line – or $11,671 for a one-person household – and turn off at 400% of the Federal poverty line – or $46,679. Thus, small changes in income lead can lead to very large changes in the subsidy.

Before discussing the labor market consequences, it is important to note that such ACA notches are more important for expensive-to-insure individuals and couples, and the size of the ACA notch also varies by location. The following table shows a high-cost individual (the 64-year-old) and a low-cost individual (a 30-year-old) in a high-cost location (Clay County, GA) and a lower-cost location (Andersen County, TN).

Sources: https://www.healthcare.gov/see-plans/39851/?state=GA and https://www.healthcare.gov/see-plans/37705/?state=TN (Accessed 6/11/2015).

There are several things to take away from this table. First, Georgia and Tennessee are among the 21 states that have not expanded their Medicaid program. The ACA only provides subsidies for individuals at or above 100% of the Federal poverty line; in states that expanded Medicaid, individuals below 138% of the Federal poverty line would qualify for Medicaid. Second, for the 64-year-old, the first ACA notch – in states without a Medicaid expansion – creates dramatic subsidies once income reaches 100% of the Federal poverty line, or $11,671. Earning the extra $1 after $11,670 raises the subsidy by $10,849 per year in Clay County, GA, but only $5,910 in Andersen County, TN. Both of these ACA notches – which wouldn’t be present in the Medicaid expansion states – create strong incentives to increase work effort to reach this threshold. As can also be seen, the ACA notches are present but less dramatic for the younger person. Third, there are “mini ACA notches” as income exceeds certain multiples of the Federal poverty line. As the 64-year-old individual earns the extra $1 in Georgia that raises income from $15,521 to $15,522 (133% of the Federal poverty line), the subsidy falls by $157. Fourth, once income exceeds 400% of the Federal poverty line, the subsidy disappears entirely. For this individual, that entails a loss of subsidy of $6,621 from earning the extra $1 that takes income from $46,679 to $46,680. This notch is also present in Tennessee, but to a smaller extent. Finally, in all cases we can see the subsidy typically erodes quite smoothly as income goes up – this is known as a benefit reduction rate or tax rate. As income increases by $33,000 from $12,000 to $45,000, the PTC falls by $4,061, resulting in an average tax rate of 12.3% just from the ACA. For the younger individual, the subsidy erodes to $0 before income reaches 400% of the Federal poverty line in both Georgia and Tennessee.

How do things look for married couples? Much like single individuals, the subsidies kick in and turn off at multiples of the Federal poverty line. Although the unsubsidized cost of a health insurance plan for two 64-year-olds is twice that of one 64-year-old, the dollar amounts for the poverty thresholds are quite different. The dollar amounts go up less than proportionally with family size. As a consequence, the notches look quite different – and in some cases are jaw-dropping – for a married couple. Consider the two areas we just considered, and assume that two individuals of the same age are married to each other. The first column in the next table shows that the ACA notch when reaching 100% of the Federal poverty line (of $15,731) is an incredible $21,850! That is, earning the extra $1 that brings income from $15,730 to $15,731 leads to a dramatic increase in the premium tax credit. The magnitudes are clearly different, but present, for all family types illustrated. As family income goes from $15,731 to $62,919 (or 100% to 400% of the Federal poverty line), for all couples, the subsidy more-or-less is smoothly taxed away (and in, fact, the young couple in the inexpensive market loses its subsidy before 400% of the Federal poverty line). For the first couple, as income goes from $18,000 to $60,000, the PTC falls by $5,374, resulting in an average tax rate from the ACA alone of 12.8%. The notch for older couples is dramatic at 400% of the Federal poverty line; in Clay County, GA, earning the extra $1 that takes income from $62,919 to $62,920 results in a loss of subsidy of $16,152! The results in Tennessee are also large, but not nearly as large as Georgia. In Tennessee, the older couple only loses $6,275 for earning the extra $1. Younger couples don’t completely escape this punitive tax. For younger couples, the ACA notch exists in Georgia, but the PTC is eroded completely in Tennessee before income reaches 400% of the Federal poverty line, so there is no ACA notch.

Sources: https://www.healthcare.gov/see-plans/39851/?state=GA and https://www.healthcare.gov/see-plans/37705/?state=TN (Accessed 6/11/2015).

How would such incentives affect the labor market? Abstracting away from other taxes and transfers, these notches create incentives in all cases to reach the earnings threshold of 100% of the Federal poverty line in order to qualify for subsidized health insurance. Moreover, there are very strong incentives to not exceed 400% of the Federal poverty line, especially because you must repay all of the premium tax credit. In states that did not expand Medicaid, the first effect – the incentive to raise earnings above 100% of the Federal poverty line – is present, but isn’t in states that expanded Medicaid. In all 50 states and DC, the second ACA notch at 400% of the Federal poverty line will be present, to larger or smaller degrees depending on health premiums and age. The larger the ACA notch, the greater the incentive to constrain earnings under the second threshold.

It is also the case that this structure creates unusual marriage taxes and bonuses, an incentive that has been examined in the context of Medicaid expansions from an earlier era. To illustrate, imagine that two unmarried, 64-year-olds in Clay County, GA each had annual income of $10,500. The first table illustrates that neither would be eligible for the PTC. By marrying, household income is $21,000, resulting in a premium tax credit of $21,526. However, not all couples look so good. Consider these same two individuals, each earning $33,000. As single individuals, they each receive a premium tax credit of $8,094, or a cumulative amount of $16,188. By marrying, their credit would fall to $0, because household income would exceed the limit of 400% of the Federal poverty line. Evidence from the ACA mandate to cover young adults shows that marriage taxes and bonuses are an important factor.

Graphical Summary 

Cited Work:
Wall Street Journal, “Unemployed by Obamacare,” August 21, 2014, Accessed from: http://www.wsj.com/articles/unemployed-by-obamacare-1408664211

Congressional Budget Office, “The Labor Market Effects of the Affordable Care Act,” February 2014, Accessed from: http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breako…

Internal Revenue Service, Publication 974: The Premium Tax Credit, March 2015, Accessed from: http://www.irs.gov/publications/p974/

Yelowitz, A., “The Medicaid Notch, Labor Supply and Welfare Participation: Evidence from Eligibility Expansions,” The Quarterly Journal of Economics, November 1995, 110(4): 909-939.

Yelowitz, A., “Public Housing and Labor Supply,” Mimeo, University of Kentucky, November 2001.

Kaiser Family Foundation, “Status of State Action on the Medicaid Expansion Decision,” Accessed from: http://kff.org/health-reform/state-indicator/state-activity-around-expan…

Yelowitz, A., “Will Extending Medicaid to Two Parent Families Encourage Marriage?” The Journal of Human Resources, Fall 1998, 33(4): 833-865.

Abramowitz, J., “Saying ‘I Don’t’: The Effect of the Affordable Care Act Young Adult Provision on Marriage,” Accessed from: https://appam.confex.com/appam/2014/webprogram/Paper10104.html