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Reason Alert - VAT, Immigration, GM's Phony Payback

Plus John Stagliano's federal obscenity trial and nanny of the month

April 30, 2010

- Value Added Tax Isn't the Solution
- Immigration Law Restricts Freedom for the Rest of Us
- GM's Phony Bailout Payback
- This Land Is Your Land
- Videos on Obscenity, X PRIZE and Nanny State
- New at Reason
Value Added Tax Isn't the Solution
"Compared to the H&R Block subsidy program that is the US tax code, the VAT is a straightforward way for governments to skim 20% or so off the top of every transaction. By penalizing consumption and not earnings, it encourages savings and resists gaming by well-connected special interests. In an ideal world, you could enact a VAT while slashing America’s corporate income tax rate, which is the globe’s second-highest. But as the last 18 months of federal misgovernance has aptly demonstrated, we do not live in anything like an ideal world. The only reason VAT is even on the table right now is that bureaucrats like VAT enthusiast Nancy Pelosi have an appetite for spending that far outpaces Americans’ willingness to cough up their hard-earned dough. Every statehouse and city council across the land is literally out of money, and turning to the only people who can print the stuff: Washington. The federal government spent $3.5 trillion last year while taking in just $2.1 trillion, producing a deficit-to-Gross Domestic Product ratio of 10%, a level not seen since World War II. By contrast, the European Union requires member countries to keep deficits at 3% of GDP. If America was in Europe, we’d be Greece. What’s worse for us is that we’ve pretty much given up trying to address the root problem, which is the decade long spending binge initiated by George W. Bush and then tripled down on by Barack Obama." - Reason magazine Editor in Chief Matt Welch writing in the New York Post
Immigration Law Restricts Freedom for the Rest of Us
Reason magazine Editor in Chief Matt Welch writes, "I have sympathy for people who are freaked out by desperate immigrants and ruthless smugglers trampling over their property in southern Arizona, and as I've said elsewhere, us pro-immigrant types too easily skate over rule-of-law objections. Federal immigration policy is a failure, and poses real public policy challenges that no amount of righteous indignation and/or handwaving makes disappear. But anti-illegal immigration crackdowns almost always end up restricting freedom for the rest of us. And giving cops more power is almost always felt more on the receiving end by people–including people just as law-abiding as you and I–who don't look like the norm. Remember, the stated goal of the new law is 'to make attrition through enforcement the public policy of all state and local government agencies in Arizona.' Those who think you can surgically accomplish 'attrition' without inflaming and driving out legal residents, too, are kidding themselves."
Matt Welch: If I Lived in Arizona, They Could Seize My Car
Shikha Dalmia: Arizona's Un-American Immigration Law
Jacob Sullum: Does Arizona's Law Make Every Government Employee an Immigration Agent?
GM's Phony Bailout Payback
In her Forbes column, Reason Foundation's Shikha Dalmia writes, "...when [GM CEO] Whitacre publishes a column with the headline, 'The GM Bailout: Paid Back in Full,' most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case. Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate--a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.) But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount. But wait! Even that's not the full story given that GM, which has not yet broken even, much less turned a profit, can't pay even this puny amount from its own earnings. So how is it paying it? As it turns out, the Obama administration put $13.4 billion of the aid money as 'working capital' in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan."
This Land Is Your Land
"The federal government owns nearly 30 percent of all the land in the country. In the West, those numbers soar even higher. The federal government controls more than 84 percent of the land in Nevada, more than 50 percent of the land in Alaska, Utah, Oregon and Idaho, and more than 40 percent of California, Arizona, New Mexico and Wyoming. It's safe to say that many of these states are getting tired of the feds. Utah recently passed a law authorizing it to seize federal land through eminent domain. The law, while likely unconstitutional, reflects a widely felt sentiment in Western states: Let states control the land within their borders. The U.S. Forest Service holds more than 156 million acres of land - nearly equivalent to the size of Texas - west of the Mississippi River. It controls 155 national forests and 600 ranger districts. With an ever-growing federal bureaucracy and massive budget deficits, it is time to let states manage this land, taking up to $5 billion a year off the federal books." - Reason Foundation's Leonard Gilroy in the Washington Times Videos

Film Producer, Director John Stagliano Faces Federal Obscenity Trial

Interview With Peter Diamandis, Chairman and CEO of the X PRIZE Foundation

Reason's Adrian Moore Discusses California's Spending and Unions on Fox Business's Nanny of the Month
New at Reason
SEC Surfs the Internet, Wastes Taxpayer Dollars
Robert Poole: Flight Delay Rules Will Cause Cancellations
Saving the Internet from the FCC
John Stossel: Everyone Prospers With Free Trade
250th DNA Exoneration Raises Questions About Sending the Wrong People to Prison
"Right" to Videotape On-Duty Cops Isn't Enough
How Ron Paul's Foreign Policy Views Are Shaping Rand Paul's Senate Race
The New York Times' Inconsistent Defense of the First Amendment
Forget Peak Oil. What About Peak Lithium, Peak Neodymium, and Peak Phosphorus?
That's Some Mighty Authoritarian Tea
How Much Does Society Owe to People Who Don't Pay Their Debts?
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