Quotulatiousness

May 4, 2013

Ron Paul on the so-called “Marketplace Fairness Act”

Filed under: Business, Economics, Government, USA — Tags: , , , , , , — Nicholas @ 09:28

As you probably guessed, he’s against it:

David French, Senior Vice President of the National Retail Federation, the major industry group lobbying for the so-called “Marketplace Fairness Act,” (more aptly named the “National Internet Tax Mandate”) recently commented that “…the law [governing Internet sales] today is a 20th-century interpretation of an 18th-century document…” Mr. French’s comments are typical of those wishing to expand government power beyond the limits established by the United States Constitution.

[. . .]

The National Internet Tax Mandate overturns the Supreme Court’s 1992 Quill v. North Dakota decision that states can only force businesses to collect sales tax if the business has a “physical presence” in the state. Quill represented a rare instance where the Supreme Court properly interpreted the Commerce Clause. Thanks to the Quill decision, the Internet has remained a tax-free zone, though some states require consumers to later pay taxes on products they purchased online. This freedom has helped turn the Internet into a thriving and dynamic sector of the economy, to the benefit of entrepreneurs and consumers.

Now that status is threatened by an alliance of big business and tax-hungry state governments seeking new powers to force out-of-state business to collect state sales taxes. Far from updating the Constitution to fit the needs of the 21st century, the National Internet Tax Mandate is a throwback to 18th century mercantilism.

The National Internet Tax Mandate will raise the costs of doing business over the Internet. Large, established Internet companies, such as Amazon, can absorb these costs, whereas their smaller competitors cannot. More importantly, the Mandate’s increased costs and regulations could prevent the creation and growth of the next Amazon.

This is why cash-rich Apple is borrowing money on the bond market

Filed under: Business, Economics, USA — Tags: , , — Nicholas @ 09:20

In one word, taxes:

What a crazy world. Apple, a company with $145 billion of cash, is issuing some $17 billion of debt to buy back its own shares. Why doesn’t it just use its cash to do the same thing? First, because a lot of that cash is overseas, and bringing it back to America would incur a tax charge. Second, because interest rates are low and debt interest is tax-deductible, making this look a great arbitrage.

But think of it from the point of view of the hard-working American taxpayer. Apple’s money will still sit overseas and not be invested at home to create jobs. Apple’s tax bill will fall, as it offsets the interest payments against its profits. The buy-back will probably push up the share price in the short term, boosting the value of executive options; profits from those options will probably be taxed at the long-term capital gains tax rate of 15%, lower than the rate many workers pay. Organising a bond issue, rather than using a company’s own cash, incurs costs in the form of fees to bankers on Wall Street; the same bankers taxpayers helped support five years ago.

Why the terror-through-shipping-container threat has not materialized (yet)

Filed under: Business, Military, USA — Tags: , , , — Nicholas @ 09:11

Strategy Page explains why the much-discussed threat of terrorists smuggling in weapons of mass destruction using the ubiquitous shipping container has not actually happened:

A decade ago there was much talk about how vulnerable the United States was to a terror attack via shipping container. It never happened. It’s also unlikely because of the large number of variables the terrorists face. The problems associated with using cargo containers to move a nuclear or conventional bomb are manifold. The big problem is that these containers often don’t arrive right on schedule. Sometimes the ship breaks down or encounters bad weather. This last event leads to thousands of containers a year falling off cargo ships and going to the bottom with their cargo. Sometimes containers get lost “in the system.” More frequently containers get robbed or opened by mistake. Customs officials open a small percentage (this varies by port) for inspection. Another problem, whether the bomb goes off or not, is the fact that containers have to have documentation like bills of lading and such. These can be faked, but the problem is that a paper trail is being created and that can lead to terrorists getting arrested. All containers must officially belong to someone, they are tracked and any that aren’t being tracked tend to get noticed. Many countries do scrutinize containers coming from certain countries in an attempt to catch people smuggling drugs or arms. Large bombs, be they nuclear or conventional, are relatively fragile and may not survive (in working condition) the punishment received during a long sea voyage. If all that weren’t enough to make terrorists nervous, container ships can be delayed when trying to enter a port because of congestion. This can delay arrival by days, or even weeks.

Israeli air attack on missile shipment in Syria

Filed under: Middle East, Military — Tags: , , , — Nicholas @ 09:05

It’s almost anti-climactic to report that the Israeli defence ministry is confirming that an air strike was launched against Syria yesterday. The unexpected part of the news is that the attack was on a shipment of missiles, not a chemical weapons depot:

Israeli officials said the shipment was not of chemical arms, but of “game changing” weapons bound for the Lebanese militant group. The airstrike took place early on Friday, but did not say where it took place.

American officials earlier told the Associated Press of an airstrike. One report had suggested the strike was on a chemical weapons facility.

Benjamin Netanyahu, the Israeli prime minister, has repeatedly warned in recent weeks that Israel would be prepared to take military action if chemical weapons or other arms were to reach Hizbollah.

Lebanon’s army said pairs of Israeli airplanes entered Lebanese airspace on three occasions overnight between Thursday and Friday.

The move will raise tensions in the Middle East and comes amid mounting pressure over the alleged use of chemical weapons by president Bashar Assad’s regime.

Tax “competition” is a feature, not a bug

Filed under: Government, USA — Tags: , , , — Nicholas @ 08:49

At the Adam Smith Institute blog, Tim Worstall explains that Adam Smith was right about conspiracies to raise prices, especially when we look at governments:

Imagine that you don’t like the taxes that are being imposed upon you. No, go on, just imagine. You as an individual voter don’t actually have much influence over this. Which is why that option of exit is so important. The ability to simply say “The hell with you lot” and leave. We should note that there are very definitely some campaigners who insist that that exit route should be closed off. As, largely, it already is for US citizens. They can leave the US, certainly, but find it very difficult indeed to escape the clutches of the IRS.

Mitchell’s also making a very good Smithian point there. It is indeed true that once businessmen have gathered together for that conspiracy against the public then it is indeed competition from alternative suppliers that is said public’s only method of beating the conspiracy. And so it is with government: we can only preserve a modicum of freedom (and a modest portion of our wallet) if we are indeed free to choose among competing providers of those governmental services.

Which is what much of the conspiracy among governments is all about: seeking to deny us that exit, that protection from their monopoly.

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