I beg of you, listen to Reason
Here’s Virginia Postrel:
Wielding subpoenas demanding information on anonymous commenters, the government is harassing a respected journalism site that dissents from its policies. The U.S. Attorney’s Office for the Southern District of New York claims these comments could constitute violent threats, even though they’re clearly hyperbolic political rhetoric.
This is happening in America — weirdly, to a site I founded, and one whose commenters often earned my public contempt.
Los Angeles legal blogger Ken White has obtained a grand jury subpoena issued to Reason.com, the online home of the libertarian magazine I edited throughout the 1990s. The subpoena seeks information about commenters who posted in response to an articleby the site’s editor Nick Gillespie about the letter that Silk Road founder Ross Ulbricht wrote to Judge Katherine B. Forrest before she sentenced him to life in prison without parole. Ulbricht was convictedof seven felony charges, included conspiracies to traffic in narcotics and launder money, and faced a minimum sentence of 20 years in prison. The letter was an appeal for leniency.
Gillespie, who declined to comment on the subpoena, aptly described the letter as “haunting.” In it, Ulbricht expressed the libertarian ideals he said animated his creation of Silk Road — the same ideals that Reason upholds. The portion Gillespie reproduced reads:
I created Silk Road because I thought the idea for the website itself had value, and that bringing Silk Road into being was the right thing to do. I believed at the time that people should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else. However, I’ve learned since then that taking immediate actions on one’s beliefs, without taking the necessary time to really think them through, can have disastrous consequences. Silk Road turned out to be a very naive and costly idea that I deeply regret.
Silk Road was supposed to be about giving people the freedom to make their own choices, to pursue their own happiness, however they individually saw fit. What it turned into was, in part, a convenient way for people to satisfy their drug addictions. I do not and never have advocated the abuse of drugs. I learned from Silk Road that when you give people freedom, you don’t know what they’ll do with it. While I still don’t think people should be denied the right to make this decision for themselves, I never sought to create a site that would provide another avenue for people to feed their addictions. Had I been more mature, or more patient, or even more worldly then, I would have done things differently.
The letter depicts Silk Road as an attempt to bring libertarian ideals into the real world — a virtual version of the seasteading schemes for new countries, hopelessly naive, perhaps, but certainly not evil in its intentions.
Judge Forrest handed down a sentence even more draconian thanprosecutors had sought and made a point of condemning Ulbricht’s political views. “In the world you created over time, democracy didn’t exist,” she said. “Silk Road’s birth and presence asserted that its…creator was better than the laws of this country. This is deeply troubling, terribly misguided, and very dangerous.”
Whatever you think of Ulbricht or Silk Road, you can see why libertarians might be upset. A federal judge has just made the belief that it’s good for people to have “the freedom to make their own choices, to pursue their own happiness, however they individually saw fit” part of her justification for the most punitive sentence short of the death penalty. Her rationale offends libertarians on two grounds: It punishes political views and it punishes their particular political views.
In the future, selling pot will be legal in all 50 states. Historians will look back in disbelief that 400,000 people were in prison for using and selling drugs. They’ll read about Republican politicians who only began worrying about dirty needles when it affected their voters. They’ll read about Democratic politicians who were more interested in inequality, gay marriage and a few hundred terrorists in Guantanamo than in 400,000 people (disproportionately African American) in prison for engaging in capitalism between consenting adults. People like Ulbricht (and Ed Snowden) will be viewed as martyrs. Both parties (and much of the media) are so corrupt, so authoritarian, that the voters are finally rising up in one state after another. It’s a pretty sad state of affairs when the masses have more enlightened views on criminal justice than the elites.
Update: Some commenters thought I was implying that gay rights are not important. On the contrary, I think they are very important. But I think that right now the war on drugs is a far more important problem. In 1950 I would have argued (I would hope) that gay rights were a far more pressing issue than the war on drugs.
PS. Five more states will vote on pot legalization in 2016, including California.
PPS. Legislators don’t want to legalize drugs because of the political clout of the prison industrial complex. Something similar is at work in taxes. Everyone from Jeb Bush to Barack Obama has endorsed the Estonian approach to taxes, which is so simple that people don’t need to hire expensive (and incompetent) tax preparers. But it has no chance of passing because of corrupt legislators:
Sounds wonderful — maybe it’s something the United States could benefit from?
Well, as it turns out, President Barack Obama proposed something much like this during his 2008 campaign. Obama said he would direct the IRS to “give taxpayers the option of a pre-filled tax form to verify, sign and return to the IRS or online. This will eliminate the need for Americans to hire expensive tax preparers and to gather information that the federal government already has on file.”
But a funny thing happened on the way to enactment: Crickets. PolitiFact rated it a Promise Broken.
Why? According to the Sunlight Foundation, “companies that prepare taxes are throwing millions at Congress to oppose making tax filing easier.” The foundation writes that the companies “warn that IRS-prepared returns will cost millions to develop and will result in more filing errors and missed refunds for taxpayers. Grover Norquist, president of Americans for Tax Reform … calls the system ‘a money-grab by the government‘ and points out the conflict of interest that arises from a tax collector like the IRS preparing taxpayers’ returns.”
If you win the presidency, Gov. Bush, you’ll get your chance to make it happen.
Our ruling
Bush said “you can fill out your tax return in Estonia online in five minutes.” If anything, Estonian tax filers tell us, it takes even less than that. We rate Bush’s claim True.
There is almost no chance of this sort of tax reform in the near future. The only way it could get enacted is if we had a democratic political system like Switzerland, and voters could pass a referendum simplifying taxes.
PPPS. Why do I say that tax preparers are incompetent? I know a couple 90 year olds who had “professionals” do their taxes. The total tax bill was $12,000, and they sent the money to the IRS. I suggested they hire someone else, and file an amended return. Their actual tax bill was zero. The problem? The first tax preparer assumed that the entire sale price of a standard diversified mutual stock fund bought in 2005 and sold in 2010 was profit. 100%. That’s our system in a nutshell.
End of rant.
Tags:
11. June 2015 at 07:01
So Scott, tell us what you think of: (1) trolls who annoy people but don’t make death threats, but get banned from places like Econlog when they make good points, (2) consensual sex between a minor and an adult, when the minor is close to being an adult themselves (Google: Romeo Law Texas), bestiality where no animal is harmed, cockfighting where the cocks are harmed, dog fighting, dogs as food, Jehovah’s Witnesses and the denial of life-saving blood transfusions for their kids, assisted death (euthanasia), the Trolly Thought Experiments, and, last but not least, what if any effects NGDLT will have on the short term economy, and whether you think the US economy is still in the short term after the events of 2008. Ball back in your court.
11. June 2015 at 07:09
Ray, we’re all politicians on some level.
11. June 2015 at 07:20
I definitely don’t know enough information to agree or disagree with the subpoena, but it seems to me if people were making credible death threats on a website, that’s reasonable ground for a subpoena. The question of whether or not the threats are credible is definitely in doubt since it’s the internet and what (many) people are willing to say vastly exceeds their willingness to act.
11. June 2015 at 08:04
And people still find “puzzling” why RGDP potential is lower than before …
11. June 2015 at 08:20
Didn’t Ulbricht try to hire a hitman to kill someone? I wouldn’t say that’s martyr behavior.
11. June 2015 at 08:30
It’s a close call as to who is showing the least amount of reason and the greatest lack of judgement here: the commenters making those stupid comments or the United States Attorney’s Office. One would definitely expect the reasonableness bar to be set higher for the latter. Just because you can doesn’t mean that you should.
As far as tax preparers are concerned, you are painting with a pretty broad brush, Scott. One can find incompetent “professionals” in any field, but that does not mean that everyone in the field is incompetent. This includes economists. Despite efforts to change the rules, tax preparers don’t need a license. Only those who represent clients before the IRS do. Libertarians lead the pack in opposing competency exams and licensing. Something to think about.
http://www.accountingweb.com/article/court-rules-irs-cant-license-tax-return-preparers/220806
11. June 2015 at 08:55
John Hall, yes, that’s what I heard. He was trying to arrange a murder. Here’s what Wikipedia had to say about that:
“Ulbricht was indicted on charges of money laundering, computer hacking, conspiracy to traffic narcotics,[32][33] and attempting to have six people killed.[34] Prosecutors alleged that Ulbricht paid $730,000 to others to commit the murders, although none of the murders actually occurred.[34] Ulbricht ultimately was not prosecuted for any of the alleged murders.[35]”
http://en.wikipedia.org/wiki/Silk_Road_%28marketplace%29
11. June 2015 at 09:28
Ray, I’ve already blogged on some of those topics.
Econlog has much better taste than I do, that explains their higher standards.
John, If true, then I obviously withdraw my claim about him being a martyr. I relied on what I read. But if true, then why wasn’t he prosecuted for those crimes?
Vivian, Licensing doesn’t work in other professions, why would it work here? In any case, if licensing was a solution, the free market would set up an accreditation scheme. But I have a better solution, abolish tax preparers by abolishing the income tax.
BTW, I went to H&R Block once, and I’ll never go back.
On the other hand I’d support a licensing scheme where no one could be an economist unless they knew that low interest rates don’t mean easy money. Right now there is no licensing system for economists, a plumber could serve as head of the Federal Reserve.
11. June 2015 at 10:07
Good post although I’m not so convinced that the battle for equality for the tens of millions of LGTB Americans (statistically speaking, about 30 million in & out of the closet) is as minor as you imply. Yes, being in jail is worse than being a second-class citizen outside of jail but let’s not pretend that being a second-class citizen is some small thing.
I’d also argue that the complete denial of habeas corpus for the people in Guantanamo is worse than locking people up for drug possession; at least the drug offenders got trials before being immorally imprisoned.
11. June 2015 at 10:10
‘Despite efforts to change the rules, tax preparers don’t need a license. Only those who represent clients before the IRS do.’
Even that isn’t really true. I represented a friend before the IRS once, with no license or even credentials. All he had to do was sign a piece of paper attesting that I did his bookkeeping for his little landscaping business, and thus had relevant knowledge.
The IRS had been asking for $30,000 in back taxes from him. After I waved a few spread sheets at the supervisor, I was thanked for my input. A couple weeks later my friend got a letter from the IRS saying his new ‘bill’ was zero dollars.
11. June 2015 at 10:12
‘… a plumber could serve as head of the Federal Reserve.’
But would he do a worse job?
11. June 2015 at 10:36
” Legislators don’t want to legalize drugs because of the political clout of the prison industrial complex.”
I’m skeptical. It took 40 years for people to get on board with marijuana legalization. Most people (typically liberal) think I’m crazy when I say we should legalize drugs. Politicians might be more hesitant for the reason you stated, but it mostly results public support for the war on drugs. The good news is its starting to fall in popularity. In 2055, the public might well support legalizing LSD!
11. June 2015 at 10:36
“Licensing doesn’t work in other professions, why would it work here? In any case, if licensing was a solution, the free market would set up an accreditation scheme.”
Again, that’s a pretty broad brush. You don’t define “doesn’t work”. No licensing or accreditation scheme is going to be fool proof. The issue is whether, given the external costs, it does more good than harm. Does that mean that we are worse off with the classic licensed professions such as doctors, lawyers, CPA’s and nurses than we would be if there were not accreditation and standards against one is held accountable? Sure, I’d bet that if state mandated licensing schemes were eliminated, the private sector would step in with all sorts of accreditation schemes (there are already on top of what we’ve got.. But, those private schemes don’t make accreditation mandatory and it does it doesn’t really help your 90 year-olds who probably don’t have the resources of knowledge to go online and check it all out. Same goes for most folks who use fly-by-night preparation services.
Look at the pathetic state of the economics profession. Nobody is accredited or licensed and nobody gets sued if they are negligent and don’t live up to minimum standards of competence. If you know of such a case, let me know because I’ve been searching in vain for one. And yet, economists more than anyone else are trying to eliminate accreditation largely, I suspect, because many want to practice law.
@Patrick
I’m pretty sure you were not representing a client. You were providing input essentially as a witness. But, if you are part of the “profession”, I guess that’s living proof that not everyone within it is incompetent as Scott suggested.
11. June 2015 at 10:40
“Right now there is no licensing system for economists, a plumber could serve as head of the Federal Reserve.”
But not a goy 😉
11. June 2015 at 10:51
It’s realy wierd to throw gay marriage in there. It’s very similar to drug legalization on the left: politicians have been dragging their feet and proving ‘moderate’ credentials by being against it for decades in the face of a growing grassroots movement. The fact that the grassroots movement swayed public opinion a little faster than on drugs and now cowardly politicians are starting to line up with the new consensus is not a ‘distraction’ from reforming drug policy. It’s a part of the same wave.
11. June 2015 at 11:05
‘… a plumber could serve as head of the Federal Reserve.’
But would he do a worse job?
Well he would ensure plenty of liquidity.
Bah dum boom!
11. June 2015 at 11:32
Njnnja,
That was a good one, and I say that as someone who prefers dry humour.
11. June 2015 at 12:25
Randomize, You said:
“Good post although I’m not so convinced that the battle for equality for the tens of millions of LGTB Americans (statistically speaking, about 30 million in & out of the closet) is as minor as you imply. Yes, being in jail is worse than being a second-class citizen outside of jail but let’s not pretend that being a second-class citizen is some small thing.”
I obviously think gay rights are a very important issue, and never said or implied the opposite. I’m very pleased by the recent progress in that area.
I disagree on Guantanamo. It’s a valid issue, but nowhere near as important as drug laws.
Patrick, And don’t get me started on the IRS.
Cameron, It’s not the only reason, but it’s one very powerful lobby.
Vivian, The medical profession is a perfect example of what’s wrong with licensing. The profession has captured the process, used it to keep out the competition, and this has driven medical costs much higher. In Ireland you do not need to go to college before medical school, and health care is much cheaper than in the US. What good does accreditation do if people can’t afford health care?
In the tax case I mentioned the mistake was 100% due to laziness. Licensing doesn’t solve that problem.
Sami, Are there any qualified goys? I doubt it. 🙂
Nick, I’m not saying people shouldn’t press for gay marriage, I’m just talking about a sense of proportion. This is a monstrous crime being committed by our society and I see very little discussion of it. Even police brutality now gets more attention in the press. Could anyone seriously claim that police brutality hurts the poor as much as the drug laws? Our current drug laws could be compared to gay rights 100 years ago, a time when gays were imprisoned.
And perhaps my views on gay marriage are distorted by the fact that I don’t believe the government even has any valid reason to know who is or isn’t married; it should be an entirely private affair, not appearing in any government rules or regulations. I suppose in that sense I’m also opposed to “legalizing” heterosexual marriage. So maybe I have a blind spot and shouldn’t have used that example, but I still think it’s a less important issue.
11. June 2015 at 12:35
Scott,
Do you mean to tell me that Ireland does not require doctors practising there to be licensed or accredited?
And that the reason for the lower medical costs in Ireland is due to the fact that they have a six year medical school program rather than 4?
11. June 2015 at 12:53
Randomize and Nick, take a look at the update to my post.
Vivian, No I don’t mean that. Take a look at section 2 of this post:
http://slatestarcodex.com/2015/06/06/against-tulip-subsidies/
11. June 2015 at 13:09
So, the case you are making is against undergraduate education before med school and not against accreditation or licensing as was the original discussion?
I agree that a lot of specialist training doesn’t require an undergraduate degree. On the other hand, if we hadn’t dumbed down US high school to the point where an undergraduate degree is the substitute, your case would be stronger. My perception is that US K-12 education is substandard to comparable systems, say in Ireland.
Again, this says nothing at all about licensing, and very little about the overall cost of medical care.
11. June 2015 at 13:17
You definitely would need to simplify taxes in order to have the government prepare them. Even so, it raises other questions: Right now, you’re liable with heavy penalties for unreported income, and you don’t always know what the IRS knows about. Suppose the IRS did do your taxes for you, based on what income it knows about. Wouldn’t that give carte blanche to cheat by failing to report anything about which they didn’t know? Then there’s the issue of legal liability; if you would still be liable for anything that they didn’t know about or made a mistake on, then a lot of people would still need to double-check their taxes, possibly with a tax advisor.
I do think that many people end up not paying taxes on things like nannies or home contractors or so forth, but wouldn’t it exacerbate the problems without reform?
“I’d also argue that the complete denial of habeas corpus for the people in Guantanamo is worse than locking people up for drug possession; at least the drug offenders got trials before being immorally imprisoned.”
But then I could easily argue that being killed by drones (or US troops) instead of being captured and held at Guantanamo is even worse; at least those at Guantanamo are still alive. For some reason, though, killing them is apparently the more humane alternative.
11. June 2015 at 13:19
For one thing, having the IRS prepare our taxes would be a lot easier if the US switched to a territorial system, like most civilized countries.
11. June 2015 at 14:50
My favorite medical licensure story is from Sherwood Schwartz;
http://www.emmytvlegends.org/interviews/people/sherwood-schwartz#
We may have had one less physician, but we got Gilligan’s Island out of it.
11. June 2015 at 15:36
Egads. Great ranting.
Vivian: Of course lawyers should de-licensed and various areas of law vastly simplified so that they could be handled by pink-collar types.
Earn a two-year coomunit college degree in real estate law, pass a basic test, perhaps apprentice for a few months and then become a useful member of the middle class.
11. June 2015 at 16:05
There are not tens of millions of gay Americans. The best guess is around 3% of the population which is 9.5 million.
The attempted murder thing happened when some people stole money from Ulbricht. An FBI undercover officer offered to put Ulbricht in touch with some people who would murder them. He was put in touch with what he thought were hit men and arranged for them to kill the people in exchange for money. They then took some pictures of a faked murder scene and sent them to Ulbricht. He believed the pictures and paid the money. This happened on two occasions.
He probably was not charged with this because they had him on the other stuff and it might be hard to convict because no actual crime took place.
11. June 2015 at 18:47
Profe Sumner
do u believe that Silk Road was important to development/popularization of covert e-commerce? do u believe Silk Road and its successors would only sell drugs?
my great-uncle worked on the Manhattan project, along with an army of world-class hotshots. in the decades since, stronger nukes have been built by a tiny pariah state, and several infamously crappy governments, including several who were parties to blood feuds with bigger, better armed, more competent states at the time of their ascension to the nuclear club
computers fit in airplane hangars and now they fit in pockets. they were for geniuses, by geniuses, but now any idiot can operate one. a lot of tech seems simpler and stronger and less expensive all the time, and I don’t approve of everyone’s right to bear all of it
400k is a lot relative to the preciousness of the crime, sure, but it’s not really a lot relative to the number of users. weed might b useful as an indicator of risk-tolerance, or a pretext for imprisonment of delinquents a la Capone tax evasion. the laws mainly complicate the supply chain and the Mexicano gangs compete viciously among themselves for the rent. excited to hear that California will legalize. that should really thump the cabrones
11. June 2015 at 21:41
Tiny Estonia only copies larger Denmark in having automatic tax returns.
https://www.nordisketax.net/main.asp?url=files/dan/eng/i05.asp
Maybe you should retire to Copenhagen, not California?
11. June 2015 at 21:43
Norway and Finland are the same.
12. June 2015 at 03:50
Prof Sumner,
Sorry, I didn’t mean to imply you thought gay rights were unimportant. I was trying to say that, regardless of their relative importance, we are seeing the same thing happen with both issues. Yes, Gay rights activists have been extremely successful in the last fifteen years and have moved their ball more than anti drug war folks. One is outpacing the other at the moment, but both are currently moving quite quickly relative to the previous three decades, and they are allied movements thriving on the same demographic trends. Future will not see our current politicians as leaders on either issue, and I don’t think people will see them as making a choice to favor one over the other. People will see them as standing pat on injustice until public opinion overtook them on both matters.
12. June 2015 at 04:39
Vivian, You said:
“Again, this says nothing at all about licensing, and very little about the overall cost of medical care.”
Of course it says something about licensing. If we didn’t have licensing of doctors how could the cartel operate? How would 100,000s of doctors get together and collude to restrict entry?
John, You are supposed to look at the income they put down and make sure it got reported. For most people that’s easy, but for some it’s more difficult. I believe the self-employed need more than 5 minutes in Estonia.
Good point about drones.
Sourcreamus, If true, then he’s obviously no martyr. But this particular sentence is still excessive, for the crimes being prosecuted.
Daws, I’m afraid that I know little about Silk Road. I’m sure that lots of bad guys used it, just as lots used to use phone lines.
James, I’m told Sweden is the same. Plus no marriage penalty in Sweden. I’ve previously said that I much prefer the Nordic tax laws. Sweden also has no inheritance tax.
Sometimes I like to juxtapose one issue against another for shock value. A Silicon Valley executive was recently fired for anti-gay marriage sentiments. When people start being fired for believing drugs should be illegal then I’ll agree with you. Right now I don’t think the two cases are at all similar, even though progress is being made on pot legalization. My point is that most liberals in America still think it’s OK that people involved in drugs are put in prison. Sorry, but that view simply should not be acceptable in polite society.
(Now someone will claim I am saying people should be fired for their opinions. No, just showing how different the two cases are.)
12. June 2015 at 05:21
Now I don’t know what you are trying to say … You are talking about Eich resigning from Mozilla? But you are not trying to say drug legalization groups should threaten boycotts to further their political agenda?
Personally, I don’t think gay rights activist accomplished anything at Mozilla, and may have hurt their cause in the long run. But I may be wrong! The (again, totally grassroots) activists behind gay rights have consistently pushed the envelope in the last 15 years with great success, forcing reluctant politicians on the left to bend to their will. I have thought they overreached before and been wrong. So if what they did their becomes wider replicated and
activists who fight against the drug war would be well advised to try similar stunts! As you say, an injustice is being done to millions of Americans, and boycotts (or threats of boycotts) are sometimes as effective as lobbying politicians.
In many places ballot initiatives may be enough but if legalization continues to lag behind gay rights in political progress despite having similar public support, copying the tactics of the extremely successful activists in the gay rights movement would be much more productive than shaking your fists at what you perceive to be acceptable to ‘most liberals’.
12. June 2015 at 05:23
Oops!
Should read ‘widely replicated and successful then activists …’
12. June 2015 at 07:41
I thought for sure Sumner would use some of his pull to get me reinstated at Econlog.
They booted me bc I insisted on calling Steve Sailor a racist. BC
1. Steve Sailor is a racist.
2. I gave evidence : “What you won’t hear, except from me, is that “Let the good times roll” is an especially risky message for African-Americans. The plain fact is that they tend to possess poorer native judgment than members of better-educated groups. Thus they need stricter moral guidance from society”
3. Lauren at Econlog told me they didn’t care.
Suffice to say, Econlog is a second rate operation IMO.
12. June 2015 at 08:36
“Of course it says something about licensing.”
Scott,
Again, in support of your position you put forward the example of Ireland—a country that requires its doctors be accredited or, if you will, licensed. If Ireland has lower costs of medical care, it certainly is not because they don’t have licensing.
12. June 2015 at 11:15
The juxtaposition of the gay marriage and drug issues is an interesting one. The pro-marijuana groups and the pro-gay marriage groups have used opposite tactics to achieve their goals. The pro-marijuana groups have used direct democracy to bypass existing legislators and win legalizations state by state. The pro-gay marriage groups first convinced the legal profession and then used lawsuits to force states to recognize gay marriage even when citizens passed referendums explicitly not recognizing gay marriage. The result is that 4 states plus dc have legalized marijuana, while gay marriage is recognized in 37 states. It says something unfortunate about our democracy that convincing judges is a better way to win your issue than convincing voters.
12. June 2015 at 11:56
“They’ll read about Republican politicians who only began worrying about dirty needles when it affected their voters…Both parties (and much of the media) are so corrupt, so authoritarian, that the voters are finally rising up in one state after another.”
Isn’t the government providing needle exchanges totalitarian? It’s fine to legalize drugs, but why do taxpayers need to be complicit in their use? If a civil-society charity with voluntary donations wants to do so, then it should be legal to do so. The point is for government not to be involved at all, not for it to be involved in your preferred way.
12. June 2015 at 15:06
Morgan, “Sailor” or “Sailer?”
12. June 2015 at 16:10
@ Vivian might “less licensing” b meaningful, even where “no licensing” remains to b achieved?
12. June 2015 at 23:59
Daws,
I try to be pragmatic about things and that largely means drawing conclusions from experience rather than abstract theories. Sure, my experience is that in many cases irrelevant criteria are established that must be meet in order to meet minimum standards for licensing and perhaps, in some cases where they now exist, licenses are not necessary. I don’t care whether a doctor has an undergraduate degree in English literature as long as they have demonstrated competence before he or she is allowed to hold himself out as a physician. It depends on the job or profession and the type of risk involved. For example, if I get a bad haircut, it’s not the end of the world. I’ll wear a hat for a while and won’t go back for another. If I get a botched gall bladder removal, that’s a different story.
This is not an “all or nothing” issue as it appears you are trying to set it up as and cleverly try to draw me down the line to “nothing”. It is about setting relevant and intelligent standards and by that I don’t mean setting up irrelevant barriers just to keep out competition. If by “less licensing” you mean we should have more relevant and intelligent criteria, then I agree. But, again, this is essential about setting standards. And, my experience over a considerable period of time is that we are lowering standards rather than raising them. An advancing culture should expect the reverse—standards should be raised, not lowered. Yet, in today’s culture everyone thinks they should be entitled to a high school diploma, a college degree, a PhD in Economics and the right to hold themselves out as tax preparers, or practice law or medicine without having to do any work or meet any standards. If you want to set the bars low or even eliminate them, I think you’re heading for the third world. ‘m often puzzled on the licensing issue why libertarians, particularly economic libertarians, want to exacerbate this standards problem. Perhaps it is because anyone can call himself or herself an “economist” (after all, Jared Bernstein does) and I suspect this is where the frustration of many economists on this issue lies.
So, in a sense I agree with your “less licensing” stance; however, in a different sense I disagree profoundly in that we should insist on more competence and not less before someone can say they have a high school diploma, a college degree or are a “doctor”, “lawyer” or “economist”. There should be barriers to entry, so long as the standards set are relevant.
And, not to be too pedantic about it, but I’m not sure spelling “be” as “b” is going to win you any spelling bee contest. Which “b” do you mean? Oh, I see, *that* b.
13. June 2015 at 06:15
Nick, I was just trying to show that one movement is much further along than the other. Again, you may have read too much into what I said. I try to say exactly what I mean. I said nothing pro or con on boycotts.
Morgan, I don’t try to tell Econlog how they should run their blog, especially given that their comment section is much more polite than this one.
Vivian, It seems like you are confusing necessary and sufficient conditions. It’s very simple; if you stopped licensing doctors they would no longer have to go to college. That doesn’t prove that not licensing doctors is a good idea (and you could mention Ireland), but it does prove that not licensing doctors is relevant to the question of whether they have to go to college. It’s ONE solution to the problem.
sourcreamus, I also prefer direct democracy.
Tom, I’d be thrilled if the government was not involved in drugs in any way. I’m sure the Chinese could export clean needles at an extremely low price.
13. June 2015 at 08:42
Scott, I’m not at all confused, but this is one of the most muddled responses you’ve ever offered in this space:
“It seems like you are confusing necessary and sufficient conditions. It’s very simple; if you stopped licensing doctors they would no longer have to go to college. That doesn’t prove that not licensing doctors is a good idea (and you could mention Ireland), but it does prove that not licensing doctors is relevant to the question of whether they have to go to college. It’s ONE solution to the problem.”
I’m not sure which “problem” you are talking about, but if one eliminates licensing, then obviously doctors would not need to go to college (or med school) or grade school. I wonder, really, whether we would then have “doctors” or bloodletters.
And, this:
“but it does not prove that licensing is relevant to the question of whether they have to go to college”.
It is not clear what “it” refers to or what you mean by “relevant” in this context. Whether licensing or accreditation are desirable is a separate issue from what conditions should be met to get that license or accreditation (here, it seems, you are confused). So, as with Ireland, you have licensing of doctors but take the reasonable position that to get that license one does not have to have an undergraduate degree. That doesn’t mean anyone can be a doctor or practice medicine (as one might reasonably define that). Your original missives on this subject indicated that we should eliminate licensing altogether.
Welcome to the Brave New World in which anyone can claim to not only be an “artist”, an “economist”, a “public intellectual” (the latter, it seems, a favorite new self-accredited profession among those who want to have it all); but, now, a doctor, a lawyer or a professional tax preparer! You name it. Life has never been so good—or so easy!
13. June 2015 at 10:42
‘If I get a botched gall bladder removal, that’s a different story.’
All you need to do now is demonstrate that government licensing of physicians guarantees, 1. That you even need the surgery in the first place, and 2. That the surgery is less likely to be botched.
13. June 2015 at 11:11
Patrick,
Let’s do a little test, shall we? Why don’t you volunteer to have your gall bladder removed by an unlicensed surgeon, preferably your local butcher in an unlicensed butcher shop, and then report back to us with the result. That’s all the proof we’ll need.
13. June 2015 at 11:12
PS. If your gall bladder is already gone, choose a kidney.
13. June 2015 at 13:55
Why do I say that tax preparers are incompetent?
I don’t know. Why?
I’ve been doing tax work for 30 years, with a law degree and graduate education in economics and finance. So I’d like to know Why you say I am incompetent.
(But please don’t tell my clients!)
I know a couple 90 year olds who had “professionals” do their taxes…
Ah, you have a anecdotal story about one who made a $12,000 mistake.
Well, I have a bunch of anecdotal stories about (fully licensed!) doctors who made mistakes that killed people close to me — put one in a brain-dead coma that became a famous national “right to die” legal precedent, costing a fortune and running for years, a nightmare for the family of course, by blatantly malpracticing the ether. Another time they fatally failed to check a close friend who had just returned from the Caribbean for simple-to-cure parasites that infect people in the Caribbean. (“She was in New York, it never occurred to us”.)
And for my own 88-year old mother they ran re-hydration fluids directly into her lungs, instead of her veins, not *quite* killing her but causing a “Code Blue” to bring her back from the dead (just like in the TV shows, but not as entertaining to watch in real life) after which she spent months in a nursing home trying to recover though never doing so until she did die. They killed her as the person she was.
So I am at least as entitled to say “doctors and medical professionals are incompetent”, right?
And, hey, in the last few years I’ve heard *lots* of stories about economists being incompetent, really screwing things up for all of us. Many right here on this blog – about “professional” economists and “professional” central bankers who believe low interest rates mean easy money and dangerous risk of inflation, so that they urge – and actually even impose! — tighter money even in the middle of a Great Depression or Great Recession. So economists are incompetent.
And really, what is the humble incompetence of mere tax return scriveners like me to get upset about, compared to that of these murderers, and economy-destroying unemployers of millions? As to all the anger and upset, priorities, please!
13. June 2015 at 14:13
End of rant.
Whoa … OK, you really don’t like our tax system, but let’s try to not let dislike distort factual realities.
Counter rant!
[] Cognitive dissonance alert…
Everyone from Jeb Bush to Barack Obama has endorsed the Estonian approach to taxes, which is so simple that people don’t need to hire expensive (and incompetent) tax preparers. But it has no chance of passing because of corrupt legislators
“Politicians of all stripes have endorsed this, which has no chance of being enacted because of all the corrupt lying politicians”.
[] Reality checks…
(1) No, neither Jeb Bush nor Barack Obama has ever “endorsed the Estonian approach to taxes” – a near flat 21% personal tax rate, 21% corporate rate on distributed profits only, the limited revenue the lower rates supplemented by a 20% VAT and a land (not property) tax – nor has either ever endorsed anything close to like it.
If you can find either of them actually doing so, please quote same. I’ll send him a contribution.
(2) President Barack Obama proposed something much like this during his 2008 campaign. Obama said he would direct the IRS to “give taxpayers the option of a pre-filled tax form to verify, sign and return to the IRS or online. This will eliminate the need for Americans to hire expensive tax preparers
Ah, he proposed Estonian-like tax *filing* – without endorsing anything at all like an Estonian tax system. Wow. And what was his proposal for how the IRS would “pre-fill” tax forms with information known only by the individual taxpayers — such as depreciation costs claimed by landlords (such as you, IIRC), individual tuition expenses for millions of college kids, etc. etc.? Maybe that’s why Obama didn’t direct the IRS as he promised after being elected. Lyin’ corrupt politician that he is.
It seems what Obama did was propose to give everyone a pony, while not proposing (and certainly in fact opposing) any provisions for pony-feeding, pony-clean-up, pony-stabling, and even providing the ponies. Jeb’s now doing the same.
Why do politicians keep proposing to give everyone ponies?
(3) I’m curious, why do you not mention the IRS Free File program under which 70% of taxpayers, 100 million, already are eligible to get their tax returns prepared online through the IRS web site *for free*? With data automatically loaded electronically into tax forms from W-2s and such. Using no “expensive tax preparers”.
Isn’t this just what you are saying you want? Estonian-like tax filing to the extent possible with the US tax code? Free?
Why? According to the Sunlight Foundation, “companies that prepare taxes are throwing millions at Congress to oppose making tax filing easier.”
The last published number I saw was 43 million users for IRS Free File so far. Looks like those “thrown millions” missed their target, eh? (Or perhaps you don’t understand what the lobbying is really about. I could explain, but only in response to some sign of genuine, open-minded interest from someone).
[] Conflation and confusion alert…
Your post continually conflates two very different things, tax filing and tax law substance. Tax filing is as complex as it is (for non-Free Filers) primarily, because of tax law substance, created by Congress, and secondarily by the X0,000 pages of Regulations the IRS imposes to administer substance (compounding exponentially as the substance becomes more complex) while serving its own interests and its political masters.
Yet you say this complexity is because tax return preparers “are throwing millions” at Congress. Are you serious?
First, in my dreams!, I WISH the ABA Tax Section plus all the tax return scriveners combined had the influence of the AMA and Teachers Unions. But alas, we are mere mercenaries, all the money belongs to our clients and they are on all sides of every issue.
Second, by what business model do you imagine that it *helps* Turbo Tax et al to get hit with massive re-write costs every year due to all the insane filing complications the IRS throws into the Regs, peeving off millions of customers when they come out with it late or make a mistake … and helps ME to lose substantial billable hours of income every year and be forced to replace them with the cost of ‘education’ on all these inane changes, plus increase my risk of facing malpractice if I don’t grasp the changes right?
If we all did have the power you ascribe to us, filing would be a damned sight *simpler* — what simplicity there is in filing comes from push-back by the tax professionals against the IRS’s stupider rule-making, as you’d know if you watched the facts on the ground. But you imagine we **profit** from all these costs and complications dropped on us? Really??
One continues to see how, just as business people don’t understand economics anywhere near as well as they imagine they do, so it is also the other way around equally at least.
OK, that’s as to filing complexity, as to the entirely different thing of tax law substance complexity….
If you don’t want to deduct any of the landlord expenses that you are entitled to claim, like interest expense, then just don’t deduct them. Your return will be much simpler. If you can convince all other landlords that they shouldn’t be able deduct them either, then all their returns will be simpler. Ask, see what they say about that.
Then go on and ask Barack and Jeb to publicly endorse replacing our current tax system with a lower flat-rate income tax, and the mass extinction of deductions, exclusions, credits and exemptions, plus the imposition of a 20% VAT, to create an Estonian-like tax system — and find out just how deeply sincere they are in proposing Estonian-like filing.
Why do politicians keep promising people ponies? Because it works. Even among “professional” fact checkers like the Sunlight Foundation and highly educated persons with libertarian leanings who are well-informed about public choice, it works. Free ponies are hypnotic.
I’ll tell you who the real villains are in all this: Not us tax scriveners, you’ll have a hard time squaring our “incompetence” and the Machiavellian system-twisting powers both ascribed to us.
And not Obama and Jeb and the other politicians, even though they are flat out *lying* when they say they support “five-minute Estonian tax filing” when not letting themselves be seen within 5,000 miles of supporting an Estonian type tax *system*.
The real villains are your fellow landlords. Politicians are cowards and followers — look how hard Clinton and Obama fought to defend their former positions against gay marriage. They give people what they want.
If you can convince a large number of your fellow landlords to want Estonia-type tax rules for the property rental business, and to start lobbying for it, they *will* get some politicians representing them, and it will be a start. Good luck with that!
OTOH, if you can’t, face the fact: The reason why we don’t have an Estonian-type tax system here isn’t the tax return preparation industry and isn’t the lying corrupt politicians.
It is that functionally nobody, 0% of the population, wants it. Blame them.
13. June 2015 at 22:15
Jim
I’d agree. The top guys at H&R Block don’t campaign for greater tax system complexity, they just know it won’t ever stop growing more complex. It makes them cynics, but there’s no law against that.
14. June 2015 at 07:52
‘Why don’t you volunteer to have your gall bladder removed by an unlicensed surgeon, preferably your local butcher in an unlicensed butcher shop, and then report back to us with the result. That’s all the proof we’ll need.’
Replying with the crudest of false dichotomies is enough to convince Aristotle that you’ve lost this argument.
14. June 2015 at 09:12
Vivian, I said:
“but it does prove that not licensing doctors is relevant to the question of whether they have to go to college.”
and then you quoted me as saying:
“but it does not prove that licensing is relevant to the question of whether they have to go to college”.
If you’d quote me correctly you might have an easier time understanding my argument.
Yes, my proposal would allow for bloodletters, but we have the equivalent of that already, as lots of very costly and painful tests are done despite the science saying that they are useless.
I find your faith in government licensing, despite all evidence to the contrary, to be quite touching. Unlike you, I don’t think economists are, on average, any less qualified than doctors. At least most economists understand how to interpret statistical significance. I also find that very few economists with a grade school education are able to find jobs–maybe the market works better than you think.
JIm, I disagree, I think the preparers love the complexity.
Below is my reply (the last part dealing with California really gets at the corruption of the tax preparers.) The material after the link is from an article.
http://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing:
NEW April 14, 2014: Intuit and its allies are continuing to work against proposals for what’s known as return-free filing..
***
This story was co-produced with NPR.
Imagine filing your income taxes in five minutes “” and for free. You’d open up a pre-filled return, see what the government thinks you owe, make any needed changes and be done. The miserable annual IRS shuffle, gone.
It’s already a reality in Denmark, Sweden and Spain. The government-prepared return would estimate your taxes using information your employer and bank already send it. Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours in prep costs and time, according to one estimate.
The idea, known as “return-free filing,” would be a voluntary alternative to hiring a tax preparer or using commercial tax software. The concept has been around for decades and has been endorsed by both President Ronald Reagan and a campaigning President Obama.
“This is not some pie-in-the-sky that’s never been done before,” said William Gale, co-director of the Urban-Brookings Tax Policy Center. “It’s doable, feasible, implementable, and at a relatively low cost.”
So why hasn’t it become a reality?
Well, for one thing, it doesn’t help that it’s been opposed for years by the company behind the most popular consumer tax software “” Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing.
Intuit has spent about $11.5 million on federal lobbying in the past five years “” more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit’s disclosures pointedly note that the company “opposes IRS government tax preparation.”
The disclosures show that Intuit as recently as 2011 lobbied on two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free. The company also lobbied on bills in 2007 and 2011 that would have barred the Treasury Department, which includes the IRS, from initiating return-free filing.
Intuit argues that allowing the IRS to act as a tax preparer could result in taxpayers paying more money. It is also a member of the Computer & Communications Industry Association (CCIA), which sponsors a “STOP IRS TAKEOVER” campaign and a website calling return-free filing a “massive expansion of the U.S. government through a big government program.”
In an emailed statement, Intuit spokeswoman Julie Miller said, “Like many other companies, Intuit actively participates in the political process.” Return-free programs curtail citizen participation in the tax process, she said, and also have “implications for accuracy and fairness in taxation.” (Here is Intuit’s full statement.)
In its latest annual report filed with the Securities and Exchange Commission, however, Intuit also says that free government tax preparation presents a risk to its business.
Roughly 25 million Americans used TurboTax last year, and a recent GAO analysis said the software accounted for more than half of individual returns filed electronically. TurboTax products and services made up 35 percent of Intuit’s $4.2 billion in total revenues last year. Versions of TurboTax for individuals and small businesses range in price from free to $150.
(H&R Block, whose tax filing product H&R Block At Home competes with TurboTax, declined to discuss return-free filing with ProPublica. The company’s disclosure forms state that it also has lobbied on at least one bill related to return-free filing.)
* * *
Proponents of return-free filing say Intuit and other critics are exaggerating the risks of government involvement. No one would be forced to accept the IRS accounting of their taxes, they say, so there’s little to fear.
“It’s voluntary,” Austan Goolsbee, who served as the chief economist for the President’s Economic Recovery Advisory Board, told ProPublica. “If you don’t trust the government, you don’t have to do it.”
Goolsbee has written in favor of the idea and published the estimate of $2 billion in saved preparation costs in a 2006 paper that also said return-free “could signiï¬cantly reduce the time lag in resolving disputes and accelerate the time to receive a refund.”
Other advocates point out that the IRS would be doing essentially the same work it does now. The agency would simply share its tax calculation before a taxpayer files rather than afterward when it checks a return.
“When you make an appointment for a car to get serviced, the service history is all there. Since the IRS already has all that info anyway, it’s not a big challenge to put it in a format where we could see it,” said Paul Caron, a tax professor at University of Cincinnati College of Law. “For a big slice of the population, that’s 100 percent of what’s on their tax return.”
Taxpayers would have three options when they receive a pre-filled return: accept it as is; make adjustments, say to filing status or income; or reject it and file a return by other means.
“I’ve been shocked as a tax person and citizen that this hasn’t happened by now,” Caron said.
Some conservative activists have sided with Intuit.
In 2005, Norquist testified before the President’s Advisory Panel on Federal Tax Reform arguing against return-free filing. The next year, Norquist and others wrote in a letter to President Bush that getting an official-looking “bill” from the IRS could be “extremely intimidating, particularly for seniors, low-income and non-English speaking citizens.”
Norquist, founder of Americans for Tax Reform, declined to comment, but a spokesman pointed to a letter he and other conservatives sent this month to members of Congress. The letter says the IRS wants to “socialize all tax preparation in America” to get higher tax revenues. (Update 4/18: Norquist’s spokesman, John Kartch, disputes that “Norquist declined comment.” During the course of reporting the story, we contacted Kartch to get a comment from Norquist, to which Kartch simply referred us to the letter.)
A year after Norquist wrote Bush, a bill to limit return-free filing was introduced by a pair of unlikely allies: Reps. Eric Cantor, R-Va., the conservative House majority leader, and Zoe Lofgren, D-Calif., a liberal stalwart whose district includes Silicon Valley.
Intuit’s political committee and employees have contributed to both. Cantor and his leadership PAC have received $26,100 in the past five years from the company’s PAC and employees. In the last two years, the Intuit PAC and employees donated $26,000 to Lofgren.
A spokeswoman said in an email that Cantor “doesn’t believe the IRS should be in the business of filling out your tax returns for you,” and that the bill was designed to “prevent the IRS from circumventing Congress.”
Lofgren did not respond to requests for comment.
* * *
Intuit did not issue public statements on the return-free filing bills, but CCIA President Ed Black has called return-free filing “brilliantly Machiavellian.” When Sens. Ron Wyden, D-Ore., and Dan Coats, R-Ind., introduced a bipartisan tax reform bill in 2011 that included a return-free plan called “Easyfile,” Norquist blasted it.
“The clear goal of this measure is to raise taxes in a way that leaves politicians with clean hands,” he wrote in a letter to the two senators.
Political opposition hasn’t been the only hurdle. Supporters say return-free filing has been overshadowed in a tax debate that has focused more on rates, deductions and deficits.
Further, return-free filing would not be available to everyone. It’s best for the slice of taxpayers with straightforward returns who don’t itemize or claim various credits.
Still, past studies estimate that this group might include 40 percent of filers or more; the IRS expects to process 147 million individual returns this year.
In separate reports, the CCIA and a think tank that Intuit helps sponsor argue that potential costs outweigh return-free filing’s benefits. Among other things, the reports say that not many taxpayers are likely to use return-free, that new data reporting requirements could raise costs for employers, and that taxpayers could face new privacy and security risks.
The reports and Intuit also note that many taxpayers can already get free tax filing through the Free File Alliance, a consortium involving the IRS and a handful of companies. But last tax year, only about 3 million filers had used Free File, according to a Treasury tally through April 28.
In an SEC filing, Intuit said it provided about 1.2 million free federal returns for the 2011 tax season. The company and competitors typically advertise free federal filing on the Web but also pitch other paid services, such as filing certain state returns.
Government studies have split about whether a return-free system would save or cost the IRS money, according to a 2003 Treasury report. Unless the tax code was simplified, the report said, it would add work for employers and the IRS, which would have to process tax records sooner.
Some independent tax experts see potential problems with a return-free system.
Eric Toder, co-director of the Urban-Brookings Tax Policy Center, said the IRS, “an overpressed agency that’s being asked to do a lot of things,” shouldn’t be asked to do what software companies could easily do.
James Maule, a professor at Villanova University School of Law, said the average taxpayer probably wouldn’t scrutinize a pre-filled return for accuracy or potential credits. “Some people might get this thing that says this is your tax bill and just pay it, like with property tax bills,” said Maule.
* * *
So far, the only true test case for return-free filing in the U.S. has been in Intuit’s home state.
In 2005, California launched a pilot program called ReadyReturn. As it fought against the program over the next five years, Intuit spent more than $3 million on overall lobbying and political campaigns in the state, according to Dennis J. Ventry Jr., a professor at UC Davis School of Law who specializes in tax policy and legal ethics.
Explaining the company’s stance, Intuit spokeswoman Miller told the Los Angeles Times in 2006 that it was “a fundamental conflict of interest for the state’s tax collector and enforcer to also become people’s tax preparer.”
The following month, an ad in The Sacramento Bee, paid for by the CCIA, cautioned “Taxpayers beware” and said ReadyReturn “could be very harmful to taxpayers.” The ad pointed to a now-defunct website, taxthreat.com, opposing ReadyReturn.
Former California Republican legislator Tom Campbell recalls being surprised at the opposition.
“The government imposed the income tax burden in the first place,” he told ProPublica. “So if it wants to make it easier, for heaven’s sake, why not?”
In a Los Angeles Times op-ed at the time, Campbell wrote he “never saw as clear a case of lobbying power putting private interests first over public benefit.”
Joseph Bankman, a Stanford Law School professor who helped design ReadyReturn, says he spent close to $30,000 of his own money to hire a lobbyist to defend the program in the legislature. Intuit made political contributions to scores of legislative candidates, Bankman said, and gave $1 million in 2006 to a group backing a ReadyReturn opponent for state controller.
ReadyReturn survived, but with essentially no marketing budget it is not widely known. Fewer than 90,000 California taxpayers used it last year – although those who do use it seem to be happy. Ninety-eight percent of users who filled out a survey said they would use it again. The state’s tax agency has also praised ReadyReturns, saying they are cheaper to process than paper returns.
Bankman thinks national return-free filing could make many others happy, too. “We’d have tens of millions of taxpayers,” he said, “no longer find April 15 a day of frustration and anxiety.”