Author: Nansen Malin (Page 1 of 5)

Commentary | Find a Long-Term Solution to Net Neutrality

Another summer, another round of debate over so-called net neutrality. It is remarkable because there has been so much back-and-forth inside the Beltway the past few years—even though the internet blossomed for its first 25 years without politicians addressing it much at all. Congress needs to end this game of political football and find a long-term solution.

It would be a comical situation were it not for the uncertainty it creates for investors. They left their money on the sidelines after 2015, representing the first decline in internet investment outside of a recession. 2015 happened to be the year when the Obama Administration started regulating internet service providers (ISPs) like public utilities under Title II of the Communications Act of 1934, a law that was written to address the growing networks of landline telephones. 

Fortunately, the current Chairman of the Federal Communications Commission (FCC), Ajit Pai, abandoned this approach in 2017 in favor of a light-touch regulatory environment he believed would encourage innovation. But now Democrats in Congress have resurrected net neutrality once again, choosing to pander to their liberal base by threatening to use the Congressional Review Act (CRA) to overturn Chairman Pai’s decision.

This isn’t leadership; it’s just lazy. Congress should not retrofit antiquated laws to impose on modern issues; if it identifies a contemporary problem, ostensibly like net neutrality, then it should go through the actual effort of devising a contemporary, bipartisan legislative solution. Lawmaking is supposed to be hard because the Founders didn’t want unnecessary laws—or regulations by fiat.

As a writer and advocate, I talk with small-business owners regularly, including those in rural Washington state. Many of them are concerned that the regulatory red tape will create an environment far too complex for small startups and independent ISPs to compete.

As a result, it will be more and more difficult to build their networks and expand into underserved communities like rural America. In fact, 10 percent of all Americans and nearly 40 percent of rural Americans lack access to high-speed broadband capable of 25 Mbps or more.

That’s the real problem, not conspiracy theories about fast lanes and slow lanes. There is widespread agreement among the major ISPs that users should be able to go wherever they like online without fear of selective discrimination against different websites, internet traffic, or data. But heavy net neutrality restrictions are unnecessary, especially the preposterous public utility rules, and few things are truly as neutral as a free marketplace without government interference.

We need a law that ensures lasting open internet protections without the harms of utility-style regulations, one that will provide consistency for consumers and business certainty for investors, and is crafted to deal with specific factors unique to the internet.

Let’s have the debate; let’s hear from the on-the-ground stakeholders—all of them. Last summer, we heard from plenty of internet industry insiders on the matter. In fact, tech giants leveraged their considerable political clout to organize a “Day of Action” to demonstrate in favor of the 2015 decision. The only problem is, relatively few real people showed up. This time, let’s hear from real people.

In the meantime, the CRA has moved to the U.S. House of Representatives. In order to keep the economy growing and innovation on the rise, they must vote “no” on this misguided legislation.

Nansen Malin resides in a small beach community in Southwest Washington and uses technology to operate her business and maintain the involved lifestyle of the big city.

 

Tacoma’s red light camera vendor could be on precipice of financial collapse

A government vendor with contracts in Tacoma appears to be on the verge of bankruptcy, according to a report it released to its home country regulator earlier this week.

The contractor’s slide is raising questions with Tacoma officials about whether to continue dealings with the company, or move on, with speculation that its financial condition and ability to continue operating long-term are unlikely to improve.

Australia’s Redflex Traffic Systems, a supplier of traffic cameras to Tacoma, lost nearly $12 million over the last six months according to a report it filed with the Australian Securities Exchange, and which was obtained by opponents of traffic cameras.

Apparently, Redflex benefited from the recently-passed GOP tax reform package, but it was not enough to stop the bleeding.

Redflex originally shot to public attention in the US after being implicated in a Chicago criminal bribery scandal. A former executive of the company claimed in 2014 it had “bestowed gifts and bribes” including in Washington State.

According to traffic camera opponents, Redflex has been relying on fresh investments from shareholders to stay afloat. However, the company says that due to the termination of a contract in New York and less money flowing to the company via its contracts in Mexico, it is still losing money. Its legal situation in Chicago has apparently been a driver of financial misfortunes before this most recent period.

Reportedly, Tacoma officials are set to review their contracting arrangements with Redflex in the coming days.

 

[featured image: trekandshoot]

GOP should ignore the Democrats Goldilocks game-playing and move ahead on meaningful tax reform

I know one of the big criticisms of the tax reform bill is that the GOP moved it too fast and without enough input from the left. Then again, when doesn’t the left criticize what the GOP is doing?

As with any major policy overhaul, there are hairs to split if we choose to do so. But sometimes moving quickly to bring relief to a nation of overburdened taxpayers is more apropos than sitting quietly together and fretting over whose feelings are going to be hurt because they weren’t consulted early enough, long enough or just plain enough.

Two facts jump out at me as the tax reform debate rages. The first being that our tax code needs an update yesterday. The major reforms put in place by President Reagan were well suited to that time and economy…over thirty years ago. So yes, it is time for some codified tax reform and yes, the Republicans are in charge while it happens.

The other fact is big-D Democratic policies are bad for business. Any economic philosophy that champions government participation and depends on the government as a competent and key player is bound to fail, usually to the tune of billions of taxpayer dollars. A conservative approach is by definition pro-growth and pro-people. As a business owner (a few times over) and entrepreneur, I know firsthand what it takes to run a business well. I can tell you that spending what amounts to weeks of time and tens of thousands of dollars to comply with a tax code written a decade before cell phones were even a thing (they came into widespread use in 1996, for you younger readers) is not any business owner’s idea of best practices. The tax code needs to be simpler. Taxes on small businesses need to be lower. The current tax code doesn’t account for either of those so guess what? Time for some tax reform.

Entrepreneurs and small business owners are the bedrock of the American economy. If we want to keep America great domestically and as an international economic powerhouse, we need to make changes that pave the way for this to happen. I’m not saying government needs to make a way, I’m saying government needs to get out of its own way. The GOP tax reform plan will loosen the vise grip our tax code has on the throats of American businesses. More room to breathe in business means more hiring, more investment in our businesses, more goods and services produced to the benefit of all. Yes, even to the benefit of a government that will still be collecting taxes from these thriving, expanding businesses and their employees.

Conservative values result in life, liberty and the pursuit of happiness. Conservative values are driving this tax reform and conservative values will win the day when Congress votes on its final passage and sends the bill to the president. Representatives Reichert, Herrera Beutler, Newhouse and McMorris Rodgers deserve credit for supporting this package, and I hope they’ll stay on board as the final package emerges in the next few days.  Conservative values don’t depend on the approval, applause or even the participation of the left.

Biggest Players Silent on the ‘Day of Action’ for Net Neutrality

Last week I told you about net neutrality and the 2015 government takeover of the internet. The same day I posted, the issue was supposed to be front and center for the left-wing organizers’ “Day of Action” to “save” net neutrality.

Oh, you didn’t notice? Hardly anyone else did, either. Perhaps it’s because few people really care about net neutrality since they never had a problem to begin with. Or maybe they just don’t like the precedent of treating the internet like a public utility and potentially opening it up to endless regulation.

You have to hand it to the social justice warriors; their hearts are usually in the right place. They hear a word like “neutrality” and line right up. But the only thing that isn’t neutral is when big government places its thumb on the scale.

As I wrote last week, there is widespread agreement that users should be able to go wherever they like online without fear of selective discrimination against different websites, internet traffic, or data via Internet Service Providers (ISPs).

But heavy net neutrality restrictions are unnecessary, especially the preposterous public utility rules, and few things are truly as neutral as a free marketplace without government interference.

The interesting thing is the effort was originally backed by big names like Facebook, Airbnb, Spotify, Reddit, and Netflix, among others, sites that the protesters rely on daily, both for their lifestyle choices and their low-risk activism. Then it appears these companies, while supporting the “Day of Action,” kept a relatively low profile. Why?

The fact is that all of them are extremely powerful corporations worth tens or even hundreds of billions of dollars each. Would so many big-time companies really adapt left-wing causes out of the goodness of their hearts and an unshakable sense of justice?  Do they really care about fairness and all the malarkey about mom-and-pop shops?

Of course not; the activists got duped into supporting an objective that fortifies the bottom lines of these companies, the only thing that would compel them to take such bold steps.

Strict net neutrality protects their profitability for a few reasons. First, they are all well positioned now; in fact, near monopolies in their respective online spaces. Permissionless innovation can only loosen their grips, not tighten them. Breakthroughs in technology favor new entrants into the marketplace, unfettered by government, who can usurp the incumbent leaders. That’s why seemingly everyday Facebook simply buys up another new and innovative social media rival rather than compete with them.

Additionally, quasi-monopolies work best when they enjoy biased protections from the government. Overreaching net neutrality essentially protects them and discourages new investors because the utility regulations function similarly to price controls. Think about it: Google doesn’t want to pay more for better broadband just because investors want good returns on their investments.

So it turned out that on Tuesday, July 11th, the day before the Day of Action, Republican House leadership made it clear to Facebook, Google and Amazon that overly aggressive net neutrality activism could make it harder to work together on other policy issues that the companies really care about like privacy rules and legal liability for content on online platforms. So they abandoned, they toned down the resistance and left the millennials to fight the good fight.

As I said last week, the ultimate solution is to settle this issue once and for all by clearly defining the role of the federal government in the internet with a free-market based, legislative solution that locks in basic standards of net neutrality while also promoting continued private-sector investment and innovation. That’s a goal worth marching for.

Conservatives Need to Undo President Obama’s Damage to the Internet

What would you say if I told you that the federal government took an 80-year-old law, originally passed in order to regulate apples, and instead applied it today to oranges—rather than simply draft a new law specifically for oranges?

That’s far beyond the pale even for the feds, right?

Yet in 2015, that is exactly what happened. Let’s rewind to 1934, when Congress passed the Communications Act in order to address the growing network of telephones. Among other things, the law outlined provisions to regulate the Bell System as a “public utility.”

Eight decades later, President Obama and his Federal Communications Commission (FCC) Chief, Tom Wheeler, decided that very same law—written years before all but the most rudimentary computers even existed—would work just fine for the federal government to get its hands on the internet.

How ridiculous. It’s not just that this tactic was a regulatory non-sequitur, or that very few people consider the internet to be a public utility in any way, but it was clearly a cynical, abusive end around of Congress well-established constitutional authority to regulate interstate commerce. It isn’t hyperbole to say this amounted to an attempted government takeover of the internet.

The Administration’s excuse for these rules at the time was to implement so-called net neutrality principles. But that doesn’t change the fact that the internet has almost nothing in common with traditional public utilities.

Moreover, nearly everyone in the tech industry and public policy circles already agrees on the principles behind net neutrality, the idea that users should be able to go wherever they like online without fear of selective discrimination against different websites, internet traffic, or data via Internet Service Providers (ISPs). Those principles had never been significantly violated in the first two decades of the internet’s existence—so net neutrality was basically a solution to a problem that didn’t exist.

From the 1990s through the 2000s, investors poured billions of dollars in capital into digital services including high-speed network. The Clinton and Bush administrations realized that a hands off approach was best for the internet’s growth.  They didn’t want to interfere with the visionaries and entrepreneurs blazing trails few others could conceive of or act on. Under that light regulatory touch the internet grew our economy, created jobs,  and changed our lives immeasurably.

But in the years since President Obama designated the internet a public utility, investment in broadband networks has declined by 5 percent. What would happen to our economy over the long term if the internet remains a public utility open to government meddling?

There are two ways to undo the damage the Obama administration did.

First, we need conservatives in Washington to stand up and take on the issue of overzealous net neutrality by rolling back Obama Era regulations that are jeopardizing the future of the internet. President Trump’s FCC chairman is doing that now.

But, additionally, Republicans in Congress also need to codify a free-market based, legislative solution that locks in basic standards of net neutrality while also promoting continued private-sector investment and innovation and in so doing prevents further shenanigans by the next Democratic president.

Column | Medicare Part D Keeps Doctor-Patient Control Alive and Should be Allowed to Continue

Suppose the Federal government has created a program that saves taxpayers money, promotes individual freedom, and gets a 90% satisfaction rating from the people who use it.  Should it:

(a) Bury the evidence and let nobody speak of it again;

(b) Effectively dismantle the program by adding lots of new bureaucracy and interfering with what made it work; or

(c) Learn from the success and try to duplicate it in other places?

If you chose answer (c), you’re probably a reasonable tax-paying citizen. But that won’t get you very far in Washington. All too often, what matters there isn’t results — it’s grabbing power wherever you can. You and I can see a clear case of this misdirected bureaucratic energy in the push to have the government micro-manage the lives of people who use Medicare Part D.

Part D is an endangered species: A government-sponsored program that works really well. Since it went into effect in 2006, Part D has done some remarkable things.

First, it has given patients a great deal of choice. Most states have between 20 and 30 different program plans available. Those choices give patients the wide-ranging benefits of competition for their business. It’s hard to think of any business where the quality of customer service doesn’t rise when there is more competition to serve the same customers.

The competitive forces driving private providers to serve these patients also means that Part D has consistently delivered budget savings, costing the government much less than initial expectations and keeping costs to patients well in line, too.

But the most important feature of all is that Part D puts individuals and their doctors in the lead to determine what will lead to the best health and quality-of-life outcomes for patients. It’s easy to overlook the fact that many prescription drugs are used to prevent pain, suffering, and discomfort down the road.

Whether it’s a therapeutic prescription for a condition like high blood pressure or high cholesterol, an anti-anxiety medication being used to enhance a patient’s mental health, or an antibiotic or anti-rejection drug used to help someone recover quickly and successfully from surgery, most prescriptions are used to keep bad things from happening. That saves money, which is good — but it also prevents a great deal of suffering.

For this to work, however, patients and their doctors need to be in control — not bureaucrats. The threat of growing interference by office-holders and power-seekers in Washington could topple all of the benefits that come from today’s well-functioning Medicare Part D. We have heard politicians call for government to set price controls and establish firm ceilings on how much can be spent on patient care. But the big picture is that bureaucratic manipulation of prescription prices is nothing but window dressing. Proposals to force Pharmaceutical companies to pay a ‘rebate’ of up to 40% of their drug sales to Medicare is nothing more than a tax that will drive up the cost of prescriptions and insurance for seniors.

Part D works because of competition, not Washington pencil-pushing. The more government seeks to manipulate and take command over the program, the less patients will benefit from the power of competition. The cure to health-care costs isn’t to drive more decision-making to government, but to stay out of the way of patients and their doctors so they can use whatever therapies make the most sense to prevent illness and disease. Today’s Medicare Part D does that. It should continue to do so tomorrow.

 

Nansen Malin is a political activist living in SW Washington State. She is the former Americans for Prosperity WA State Director and is active in social media.

 

[photo credit: alexraths, depositphotos.com]

Repeal of Section 1031 Tax-Deferred Capital Gains Exchanges Would Only Choke Economic Growth | Op-Ed

If you were asked to design a tax code from scratch, you’d want to make sure that the rules would encourage things like investment and economic growth. After all, the more you do to enlarge the economic pie, the less pain we feel when the government takes out its slice to do the work it needs to do.

Since 1921, the federal tax code has contained a provision — Section 1031 — that does exactly that. It allows taxpayers to roll over their capital gains and defer the taxes on investments in things like real estate, equipment, and vehicles, so long as the savings are rolled directly back into like-kind investments.

It’s important to note that the taxes are deferred, not eliminated. But the deferral helps businesses like farms and construction companies to reinvest and grow, ultimately driving job creation and economic expansion. And that, in turn, generates even more tax revenue in the process.

Repealing Section 1031 would be a short-sighted way to collect more taxes today while choking off economic growth in the future. The government estimates it could collect a little over $40 billion in taxes over ten years by repealing Section 1031, but Ernst and Young estimates that a repeal could cost the economy as much as $3.20 in growth for every $1 in tax revenues raised.

A farmer would dismiss that as “eating the seed corn.” You’d have to be pretty bad at math to give up $3.20 to get $1 in return. Keeping Section 1031 in place ensures investment and economic growth, which we need now more than ever.

Centralized, Government-Controlled Price Fixing of Healthcare Does Not Work | Op-Ed

Depositphotos_30765241_s_editedIn the wake of the Affordable Care Act (ACA), healthy, hard-working Americans are facing higher health care costs and a sea of broken promises. Higher premiums, lost providers and plans, as well as increased prescription drug costs are among the negative side effects stemming from ACA implementation.

Amid the ACA fallout, efficient and already successful health care programs are at risk from interference. Medicare Part D, a prescription drug coverage program for seniors and disabled individuals, is the all too rare example of a successful government program. What makes this program work is the market-driven principles and competition built into its design. As a result, program subscribers have access to prescription drug benefits that are offered at substantial savings while simultaneously saving taxpayer money. Over 30 million are enrolled in Medicare Part D, chances are you know someone who is.

From a fiscal perspective, Part D should be viewed as a windfall for our national budget. According to the Congressional Budget Office (CBO), from 2004-2013, government spending on the program was 45 percent, or $348 billion less than originally projected. Unfortunately, myopic Beltway bureaucrats annually target Part D during the budget process and will again attempt to strip the market-driven components that make it efficient and widely popular among seniors and disabled veterans.

This is the real head-scratcher:  Why then would the Obama administration undercut Part D when it is working efficiently and coming in under budget?  It is dumbfounding. Yet, the federal government continues to look for ways to undercut Part D reducing the number of available plans, asserting price controls and instituting a rebate program that would reduce pharmaceutical research and development of new products.

Centralized, government-controlled price fixing is not the answer, and it would only drive prices higher. Furthermore, this is inconsistent with market-based reforms that promote competition and consumer choice. With Part D, prescription cost increases have held steady with the rate of inflation, and seniors have options from a variety of plans to select one that best suits their individual needs. So, rather than undermine Part D, the market-driven approach should be championed as an example of what is working in federal government.

The benefits of Part D extend beyond the fiscal savings. By improving access to prescription drugs, the overall health condition of beneficiaries is improved, decreasing hospitalization rates is realized. According to a Harvard study, Medicare Part D significantly reduced the likelihood of hospitalization for eight conditions, leading to nearly 4 percent fewer hospital admissions, or an estimated 77,000 fewer annual admissions.

While mounting evidence exists to save Part D, it is far from safe. It will likely be on lawmakers’ and regulators’ radars yet again. It is critical that we continue to defend and maintain Medicare Part D. Instead of derailing its success, the federal government should model other programs after Medicare Part D. As the numbers show, the security of Part D is not merely a concern for seniors and the disabled population. It impacts us all. The bottom line is that centralized, government-controlled price fixing is not the answer. All taxpayers benefit from Part D, and Washington, D.C., should stop its pattern of fixing something that is not broken.

[Image manipulated under license: Depositphotos.com]

Cap-and Trade is a Stealth Tax—Don’t Let Inslee Or Anyone Else Tell You Otherwise | Op-Ed

In a previous post, I wrote about two of Gov. Inslee’s highly ironic tax hike proposals. In this post, I’ll write about a third: His de facto tax wrapped up in his cap-and-trade proposal.

The objective of this plan is allegedly to get organizations emitting more than 25,000 tons of CO2 to rein in their carbon dioxide output. In reality, like most things progressives do that increases revenue, the objective is really the revenue bump, but never mind that. Let’s pretend that this is all about what Inslee says it is about, and nothing more. Would you be surprised to know that one of the companies set to see a huge bump in its tax bill is REC Silicon Solar, which makes Solar Polysilicon for use in solar applications?

According to data analyzed by the Washington Policy Center, REC will be forking over in excess of $4 million a year if this plan goes through.

Would you also be surprised to know that Wafertech, owned by Taiwan Semiconductor, which appears also to be in the solar business, would be hit?

According to the analysis, Wafertech will be forking over about $3.5 million a year, if the plan passes.

Others that would be getting a big tax bill include facilities that appear to be generating hydrogen, which is what a lot of environmentalists would like to see power our cars in future, because it’s greener than gas.

These aren’t the types of entity that a lot of progressives think of when they think about corporate polluters that need to be made to pay up for emitting too much CO2. In fact, they seem like the kind of businesses that progressives usually want to promote, stimulate and see more of because they are tied into the green energy economy and provide those famed green-collar jobs. So this is another respect in which Inslee’s proposed tax package is rife with irony.

Also set to be hit with a big cap-and-trade bill under the Inslee proposal are the University of Washington and Washington State University. Could that mean higher fees for students? If so, that’s another ironic, anti-progressive aspect of what Inslee is pushing. Aren’t progressives supposed to be for making college cheaper? (I will refrain from commenting on President Obama’s plan for 529 accounts here).

Again, legislators should think carefully about what is being proposed, and recognize that there’s a better way of dealing with budgetary challenges than this plan.

Gov. Jay Inslee’s New Tax Hikes Are the Wrong Direction for Washington State | Op-Ed

In light of ongoing state fiscal issues, Washington Gov. Jay Inslee is proposing a raft of tax hikes.

There are numerous problems with all of these proposed increases (and I’ll write about several of them in this and succeeding posts), but Inslee’s desired jump in taxes on cigarettes sold in our state is one of the three more ironic ones he’s pushing. Why? Inslee has always billed himself as a progressive Democrat. And yet he’s going all in for a tax hike that would if enacted be extremely regressive, as well as very fiscally unsound.

This 2012 study found that poor smokers spend about 14 percent of their household income on cigarettes. According to the left-leaning Center for Budget and Policy Priorities, 29 percent of poor adults smoke, compared to 18 percent of non-poor adults.  A 2007 study by the Heritage Foundation indicates that even before the economy hit rock bottom, more than 25 percent of smokers lived below the federal poverty line, with a further 25 percent living between the poverty line and 200 percent of it. These are the people Inslee wants to tax more, and in so doing, he wouldn’t even be shoring up the state’s revenue base in a sound manner.

There’s a general economic principle that if you tax something, you get less of it. In this case, what Inslee is trying to do is more heavily tax the consumption of legally purchased cigarettes. That might work well from a fiscal standpoint if no smokers were going to quit in response, or alternatively locate, buy and consume untaxed cigarettes that are purchased illegally. But when cigarette taxes go up, some smokers do quit just like anti-tobacco campaigners want them to (we’ll come back to Inslee’s solution to that problem in a bit). But most shift to buying illicitly sold smokes. Inslee doesn’t seem to have a solution to this conundrum, despite the fact that he’s trying to hike the tobacco tax in an already high-tax state that is full of Native American reservations where state tax is often not charged on cigarette purchases made by non-tribal buyers, and which borders Idaho (which has a much lower tax rate than Washington).

Given this situation, it is unsurprising that Washington has one of the highest rates of inbound cigarette smuggling of any state. Nearly half of all cigarettes consumed here are smuggled and thus have gone completely untaxed by Olympia or local governments. Nationally, cigarette smuggling deprives governments of $5.5 BILLION per year.  A fair chunk of this amount is the loss sustained by Washington.

It is unclear why Inslee wants to double down on this problem. Some more conspiracy-minded critics of his plan argue that by pursuing this kind of bad tax policy, he’s making it easier for Washington progressives to force through a state income tax, and a high one at that. More often than not, states that pursue cigarette tax increases wind up missing their revenue targets (in some cases, they even bring in less total revenue after the tax hike than they did before it, as happened in New Jersey and DC), meaning they have to find different, supplemental sources of revenue in future. In this case, that different, supplemental revenue source could be the kind of income tax we see in most American states, but which Washington voters oppose. Irrespective of the reason, doubling down on the smuggling and lost revenue problem seems to be exactly what Inslee is trying to do.

A second problematic component of Inslee’s tax plan is his proposal to jack up taxes on e-cigarettes. This, too, is ironic. Part of the logic for cigarette tax hikes is to force people to quit smoking or at least reduce their likelihood of killing themselves with cancer in chasing their nicotine fix. Higher e-cigarette prices mean more expensive devices of the type that a friend and her husband claim helped them quit smoking, and which various health studies and experts out there—including former U.S. Surgeon General Dr. Richard Carmona, former American Lung Association president and CEO Charles D. Connor, and Medical and Executive Director of the American Council on Science and Health Dr. Gilbert Ross—seem to think are less likely to kill than inhaling smoke from a tobacco-filled stick the user set on fire. (Side note: The R Street Institute also has a good post on why this tax increase is silly). But by setting a high tax rate on e-cigarettes, I suppose at least theoretically, Inslee might be dealing with the revenue problem posed by people quitting smoking, as long as they all try an e-cigarette instead of going cold turkey or using Nicorette (given the weather in the Pacific Northwest, I bet most will just go the Nicorette route, though).

Legislators should think carefully about the lack of logic behind these proposals as the session gets underway. There are better budgetary solutions than tax hikes, including the regressive, fiscally unsound and just plain nonsensical ones discussed here. I’ll write more about the third highly ironic tax hike proposal from Inslee in a separate post.

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