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Wednesday, March 17, 2010

I'm a little behind in responding to this story, but as long as Americans continue to smoke cigarettes, calls to increase taxes on the purchase of cigarettes will also continue. Reuters reported in a one-sided story that a $1 per pack tax increase on cigarettes would "reap" over $9 billion in increased tax collections.

The story quotes John Seffrin, chief executive of the American Cancer Society Cancer Action Network:

An increase in tobacco tax rates is not only sound public health policy but a smart and predictable way to help boost the economy and generate long-term health savings for states facing deepening budget deficits.
The American Cancer Society, in conjunction with the Campaign for Tobacco-Free Kids and various other advocacy groups, have long touted increased taxes as a means to deter smoking, often under the guise of increasing tax collections. These are two separate motives, and I will address each separately.

First, and most importantly, why do nonsmokers feel the need to FORCE smokers to quit? You should not be proud of making an activity too expensive for a person if they truly enjoy partaking in it. Some people truly enjoy smoking and do not want to quit. By making cigarettes more expensive, you will do one of two things to this type of smoker: 1. force them to spend more on cigarettes and less on other goods and services, or 2. force them to quit an activity they love. This should not be a proud moment for anyone.

The second motive is to supposedly increase tax collections for states. This, of course, assumes this is a state tax increase as opposed to a federal tax increase, as a federal tax increase will only serve to decrease states tax collections from cigarettes.

John Seffrin's quote states that cigarette taxes are a "smart and predictable way to help boost the economy." In one way, he is correct. Increasing cigarette taxes will surely boost the sales of black market cigarettes. A recent study found:
...hiking taxes $1 per pack will lead to a leap in the total smuggling rate in Washington from 39.3 percent to 51.5 percent. That is, 51.5 percent of the cigarettes smoked in the state of Washington will be contraband.

Commercial smuggling involves large-scale organizations that ship semi-tractor trailers and vans long distances and maintain complex distribution systems.

Our estimates indicate that nearly 30 percent of the smuggling will come from these commercial haulers. It’s worth noting that some of the trailers are actually hijacked from underneath legitimate truckers themselves.

In researching this post, I came across a report by the aforementioned Campaign for Tobacco-Free Kids entitled, "Raising State Cigarette Taxes Always Increases State Revenues." I have a general rule that when the title of an article contains a lie, there is not much need to read the rest of it.

For example, according to a Commonwealth Foundation study, in Pennsylvania:
After a 35 cent per pack increase in 2004, revenue fell by $72 million, and tax revenues remained below 2004 levels since then.
Of course, the more damning evidence against the projection that a $1 per pack tax increase would raise over $9 billion in new tax collections is that these projections have consistently been overestimated. The same Commonwealth Foundation study stated:
Of 57 state excise taxes imposed from 2003 through 2007, only 16 were found to raise as much revenue as projected. Thirty-nine state tax increases fell short of estimate by a range of 2% to 181%.
This doesn't exactly strike me as "smart and predictable."

Posted by Eleutherian 4 comments
Monday, March 15, 2010

I recommend this great article by James Stephenson, Seen Not Heard: How Obscure Security Makes School Suck. It's not very long and worth the read to get an idea of what our children are exposed to under the guise of security.

One of my favorite points made in the article (emphasis mine):

A common justification for cameras is that they make students safer, and make them feel more secure. I can tell you from first hand experience that that argument is bullshit. Columbine had cameras, but they didn't make the 15 people who died there any safer. Cameras don't make you feel more secure; they make you feel twitchy and paranoid. Some people say that the only people who don't like school cameras are the people that have something to hide. But having the cameras is a constant reminder that the school does not trust you and that the school is worried your fellow classmates might go on some sort of killing rampage.
See my previous post on why 'I Have Nothing to Hide' Is a Poor Argument against Privacy.

Posted by Eleutherian 3 comments
Monday, March 8, 2010

The White House’s new cyber-security chief, Howard Schmidt, recently declassified the highly-secretive policies behind the much rumored NSA-backed Homeland Security cyber attack defense program known as Einstein.

Mr. Schmidt deserves credit for taking the steps to declassify this important information, regardless of his motives. However, this should not make us feel any more at ease about this program. According to the Wall Street Journal:

The program is designed to look for indicators of cyber attacks by digging into all Internet communications, including the contents of emails, according to the declassified summary.

Homeland Security will then strip out identifying information and pass along data on new threats to NSA. It will also use threat information from NSA to better identify emerging cyber attacks.

As Homeland Security increases the size of the haystack from which they are trying to find the needles, they will increase continue to increase the number of false positives, treating innocent law-abiding strands of hay as if they were treasonous needles. Yes, in this analogy, hay is the U.S. population and needles are terrorists.

In a previous post on privacy, I stated:
Advocates of security over privacy will often justify their position on data mining by touting the technology as the solution to finding a needle in a haystack. However, the combination of surveillance and processing created the haystack in the first place. These techniques also create a problem known as the false positive paradox.

Let's assume that a terrorist test is 80 percent accurate. In New York City, the test would indicate false positives for over 4 million citizens. Instead of finding 10 terrorists, the test would label millions of citizens, who likely love their country, as enemies of the state.
Even if you do not plan on ever committing any serious crimes, the odds of you being falsely accused will continue to increase with the expansion of programs like Einstein.

Posted by Eleutherian 3 comments
Saturday, March 6, 2010

  • Government interferes in private market by passing regulations that discourage new entries into the industry.
  • Two private companies in this industry want to merge.
  • Government prevents merger due to lack of competition.
The above summary tells the tale of the voting machine industry since the 2000 presidential election. Like many economic problems, it all started with unwarranted government intervention in the private market.

The Associated Press reports that the Justice Department is attempting to undo a merger that occurred six months ago between the country's two largest voting machine companies. Since the new, merged company now operates machines in 70 percent of the nation's voting districts:
Critics say the merger could cause foul-ups at the polls on Election Day, and some even characterize it as a national security risk.
If a merger that occurred six months ago (more than one year before the mid-term elections) runs the risk of causing "foul-ups," then how would undoing a merger just nine months before mid-term elections reduce this risk? It doesn't.

Surprisingly, the AP prominently reported on the real cause behind the lack of competition in the industry:
The emergence of one megaplayer in the electronic voting machine industry may be an unintended consequence of reforms enacted after the presidential election debacle in Florida a decade ago. Few companies can afford to get into the business due to the expense of developing the electronic voting safeguards that reformers insisted on.
Instead of admitting their previous mistakes and introducing regulatory reforms, the government has decided to cause further damage to the voting machine industry by breaking up an economically viable business contract.

Posted by Eleutherian 1 comments