Progressive Tax, Progressive Problems

We are in the heart of budget season, and a particularly contentious one at that. This of course leads to the inevitable discussion about taxes. When times are rough, we should be focused on removing the portion of income that government takes from individuals. I don’t care who you ask; the $2730 per person ($819B/300M) the government is prepared to spend could be put to better use by the individuals from whom it is being taken. I, for example, could afford to buy my casebooks for this whole school year and pay a month of rent. People would put money into the industries that really need it: retail, banking, real estate, automobiles, etc.

But I digress. My post today isn’t about the financial wisdom of the bailout bill. It’s about our system of taxes.

I, of course, truly morally oppose income taxation. But for the sake of discussion, I won’t propose abolishing the income tax at all. I’m just going to propose a way to achieve our stated goals.

In my Income Tax class, we pointed out that there are three principles to which the tax code tries to adhere. Progressivity, or vertical equity is one (why they use the word “equity” for an inherent inequality is beyond me). The second is horizontal equity between individuals or married units. Third is neutrality between remaining single and getting married.

This discussion is based on the terms “marriage penalty” or “marriage bonus.” The idea here is that persons may have an economic incentive or disincentive to get married or work once married. The marriage penalty occurs when two individuals of roughly equal income get married. Individually, they would be in one income bracket (say 15%), so if they file independently, they would pay a total of 15% in taxes. However, their combined income pushes them into a higher tax bracket, perhaps 20%. Just for getting married, there is a 5% penalty.

Before we go on, yes, I realize I am simplifying this and not including a broad number of things, including progressive marginal tax rates and tax credits. I’ll come back to that momentarily.

As you can see, in our current system, we can achieve the first two principles, but fail on the third. We are not neutral between being single and being married. But at least we have achieved progressivity and horizontal equity.

Lawmakers often talk of “eliminating the marriage penalty”. The way they do this, as the Bush tax reforms attempted to do, is to adjust the width of brackets and play with tax credits and deductions. That may achieve near neutrality, but it screwed up the second principle. Now we treat married units who file individually different than married units who file jointly.

The truth is, there is no way to achieve both horizontal equity and neutrality between married persons and single persons. At least, not by staying in the tax system that we have had for the last hundred years. The more you try to create neutrality, the less equal you make the system. Like a balloon, you squeeze one and expand somewhere else.

My cynical nature says that politicians want it this way. First, they can all stump on removing the marriage penalty, thus sounding like people with good family values. But they don’t fix it wisely. They try to achieve their goals by adding other deductions and credits, further complicating the tax code. And as we all know, it’s so confusing right now that even the people writing the tax code (I’m talking to you, Barney Frank) and other politicians (you too Daschle, Killefer, and Geithner) can’t figure it out.

Of course, there is one way to simplify the tax code while still achieving equity and neutrality. Of course, it’s the one that few politicians actually talk about. Why not tinker with the first principle: progressivity? After all, whereas equity and neutrality should be goals of every good government, progressivity isn’t exactly something about which people revolt. “Darn you, George III, why won’t you tax rich people at higher rates than me?!?!”

Let’s assume that you have a flat tax of 10%. If people combine their incomes at marriage, they still will pay only 10%. If you decide to stay single, you still only pay 10%. If that couple over there pays 10%, this couple over here will pay 10% too. We have achieved equity and neutrality while sacrificing only this antiquated notion of progressive rate structures. 10% is 10%, no matter who you are or how much you earn. Even Tim Geithner could figure that one out.

Yes, there could still be tax credits that would have the effect of a progressive tax code. The EITC and Child Tax Credit could still exist. Poor people could still get perks in the tax code that just aren’t available to the wealthy. But at least we could say we are trying to be equal while still doing something about it.

Of course, such a system would require the government to spend less. I could talk about that for months. But I won’t. Government should have to spend less. But whether you agree with me on that point or not, I hope we can see eye-to-eye on a flat tax and eliminating the prejudicial, archaic, biased progressive tax system.

One of my friends once tried to defend the progressive tax system by using a logical fallacy. “Progressive means moving forward, achieving progress. You don’t want to be moving backwards do you?” Fallacy aside, the progressive tax doesn’t move us forward or achieve progress. It means that people are treated differently based on their income. Just because it’s the reverse of what most people think of as income discrimination doesn’t mean it’s any less invidious. Reverse-racism is just as bad as racism. We should focus on treating all Americans equally before the law.

After all, that’s what we were founded on.


Thanksgiving Thoughts

It's probably clich├ęd to make a blog of all the things you're thankful for on Thanksgiving, so I won't do that. I think most of that stuff speaks for itself. I do want to wish everyone a happy Thanksgiving, and give best of luck to all of my law school comrades who have only a couple weeks left until finals.

As for me, I've been spending my time working in the IUSA Congress. It has been my passion, and as a result I've been in several hours of meeting for the past few weeks. Will this make it harder to study for finals? Yes, but I'm okay with that. In the coming weeks (okay, probably not until next semester starts) I'll be making a big announcement regarding my future in which folks at IU will have at least a modicum of interest. That will have to wait until after finals and Christmas Break.

Until then, have a happy Thanksgiving break.


Thoughts on Election Day 2008

Well, I just got back from voting. No, I didn't vote because of the hundred and twelve pieces of junk left on my door by certain campaigns. I voted because I always have, and always will. I pride myself on doing the research on everything on the ballot. I pride myself on never voting for only one party. I pride myself on thinking about the public questions, and analyzing decisions by the judges up for retention. Yes, I love voting, because it's the reason my ancestors came to this wonderful country.

That said, I disagree fundamentally with the "duty to vote" that we keep hearing about. Voting is a right. Not a fundamental right, since it can be taken away. But nowhere is there a duty to vote. It is a disgusting campaign tactic to get people to mindlessly support the candidate of the day. They say, "If you don't vote, your voice won't be heard." That's right, but my mom always said you should think before you speak, and a lot of voters don't.

Today at my polling place, a woman came into the booth beside me and immediately asked for assistance. She asked the assistant if she could vote for just one party. Of course the assistant pointed out the straight ticket buttons, and reminded the woman that there were several other things on the ballot that weren't ticket items: judicial retention, public questions, and races that are non-partisan here in Monroe County. "No," the woman said, "I just want to vote for the democrats today."

This is what is wrong with American voting mentally today. It doesn't matter if she blindlessly supports Democrats, Republicans, Libertarians, or anyone else. The problem is that she isn't taking the time to think anything out. She's ignoring public questions. She's ignoring the judiciary. All she cares about is putting her party into office. That is stupid voting.

I propose that we eliminate the straight ticket buttons. If you want to vote for all one party, you can take the minute and a half to push their individual names. But at least then you'd have to go through the seven pages and answer the damn questions. See what it is you're voting for. Think for five seconds about whether assessments should be run through the township or the county.

My biggest problem with this woman and voters like her is that she ignored the public questions. She obviously supports "democracy," and yet she chose to ignore the one area where we are democratic. No, we vote in a republic in almost all ways. Our representatives makes the laws, not us. The closest thing to actual democracy we have in this country is public questions. We the people make the law. Incredible. But she doesn't care. No one does.

And that is the problem.


Election 2008: Texas Turns... Yellow?

As some will know, I am a pretty big supporter of third-party rights in this country, believing that both of the two major parties are in need of some serious revision. So I was delighted to hear about a suit filed in Texas by Libertarian Party candidate Bob Barr, contesting the presence of John McCain and Barack Obama on the ballots in November.

According to the campaign's press release:
"The seriousness of this issue is self-evident," the lawsuit states. "The hubris of the major parties has risen to such a level that they do not believe that the election laws of the State of Texas apply to them."
Texas election code §192.031 requires that the “written certification” of the “party’s nominees” be delivered “before 5 p.m. of the 70th day before election day.” Because neither candidate had been nominated by the official filing deadline, the Barr campaign argues it was impossible for the candidates to file under state law.
"Supreme Court justices should recognize that their responsibility is to apply the law as passed by the Legislature, and the law is clear that the candidates cannot be certified on the ballot if their filings are late," says Drew Shirley, a local attorney for the Barr campaign, who is also a Libertarian candidate for the Texas Supreme Court.
A 2006 Texas Supreme Court decision ruled that state law "does not allow political parties or candidates to ignore statutory deadlines."

It's true that too often, the two major parties break election rules and allowed to get away with it because both parties violated them. Essentially, why would McCain complain about Obama breaking a law, when he knows that Obama will do the same thing right back to him? This is an example of why multiple parties keep the election process [more] honest. Smaller parties are forced to know the election laws forwards and backwards, because they have to follow every letter to survive the attacks the major parties put on them (see, for example, the removal of Barr from the West Virginia and Connecticut ballots).

Other states have kicked Barr and others off the ballot because they did not meet filing deadlines. If it's fair to remove candidates for failing to meet deadlines when they represent minor parties, then turnabout should be fair play. If I were a resident of Texas (or any other state that placed their deadline earlier than August 27, the day the Democrats officially declared Obama their candidate), I would be tremendously offended that the major parties thought they were more important than my state's laws.

Of course the point of deadlines so early is to make certification for minor parties extremely difficult. But if the major parties are too cocky to read the rules of every state, then the Secretaries of State for the various states should boot the punks off their ballot and let parties that know how to read appear on the ballot.

Of course I'm not hopeful for the success of this lawsuit. The judges in Texas are elected on a partisan basis, so they owe a debt to their parties. And when it gets appealed up, the judges were all appointed by partisan elected officials, so they still owe a debt. Not quite fair, I know, but it would be nice if judges would simply read the law and apply it equally in all cases. Either they filed by August 26 or they didn't. Risk getting kicked off the bench to do the right thing.

But as we all know, "...some are more equal than others."

Public Understanding of Bankruptcy Law

I'm deep into this semester, and my schedule is quite heavy. In addition to coursework in Constitutional Law, Criminal Procedure, Secured Transactions, Federal Criminal Law, and Evidence, I am in the depths of Moot Court (and that is all I'm allowed to say about Moot Court, apparently) as well as representing the student body as a member of the Indiana University Student Association. That would explain why I haven't blogged since I got back from the ABA Annual Meeting in New York (which, incidentally, was one of the most enjoyable law-related activities I have yet to participate in).

There is no doubt that the press sometimes picks up stories about the law and frames them in the context of "Judge is evil for enforcing law X". Sometimes I agree; the law in question is sometimes abhorrent and should be overturned on Constitutional grounds. Even better, here in Indiana, let a jury find that the law is something other than it seems to be. But other times, the press is making something sound horrible without considering anything in the world of the law.

Today the AP picked up a story about a bankruptcy court ordering a victim to pay back a thief. The story begins:
Mark Poveromo feels ripped off twice over. A judge ordered him to repay money he collected from a builder convicted of stealing from him — and told him to kick in the thief's attorney fees and court costs, too.
Some legal experts say the case, in which a criminal case in Connecticut intersects a bankruptcy judgment filed in St. Louis, shows a need for Congress to revise the nation's bankruptcy laws to better treat people who are awarded money as part of ruling in a criminal case.

Apparently, the builder stole a lot of money from Mr. Poveromo. Then, two months before being convicted, the thief declared bankruptcy because, well, he was bankrupt. The thief paid off a large portion of the stolen property. Then the bankruptcy judge took it back because, as we all know, Article 9 of the U.C.C. says unsecured creditors are on the bottom of the totem pole (nevermind that the reporter never mentions the law behind this judge's reasoning... just make the judge out to be a jerk).

Now, a few months ago I may have thought to myself that this is completely unfair; a miscarriage of justice! But I've taken a few weeks of Secured Transactions now, and, unlike the general populace, I won't fall for this reporter's trickery.

The story advocates altering the bankruptcy code to allow victims of crimes to essentially become secured creditors after their judgment. As the law exists now, as Mr. Poveromo puts it, "Crime does pay." Obviously, this would be a hard law to write. Why limit the law to protect only victims of crime? If your legislative intent is to protect victims, shouldn't every victorious plaintiff in a tort claim be granted this secured status? And what makes a victim more important than a commercial lender? After all, if a new class of secured parties suddenly appears, lenders will be less likely to grant loans (because they will be in a worse position), or at least will demand higher interest rates to compensate them for the additional risk.

Do I feel bad for victims who, unfortunately, don't get the protections of Article 9? Sure. They've been wronged, and they deserve restitution. But why should we put them above commercial lenders, or anyone that was wise enough to get a security agreement? Mr. Poveromo's lawyer should have done enough research to know that the thief had filed for bankruptcy.

Of course, my biggest complaint here is the reporter who covered this story. He should have at least put the judge's reasoning in the article instead of making judges out to be evil dictators taking money from victims to compensate thieves (or, as one law professor was quoted, making "outrageous decision[s]" and executing a "miscarriage of justice"). If the populace feels judges are acting improperly, the press is certainly responsible for leading them in that direction.


Come on, Allen County!

What is going on in Allen County's courts?

This week we got news that a state panel cited Judge Kenneth R. Scheibenberger for official misconduct. Apparently, back in November, he put on his robe and walked into another judge's courtroom (misstep number one). Then he listened to an alleged drug dealer get sentenced by the other judge. He then threw a bit of a fit and started swearing the the family of the defendant (misstep number two). He claims that the drug dealer sold his son drugs that resulted in his son's death.

Well, today's News-Sentinel reports that the Circuit Court judge in Fort Wayne, Judge Thomas J. Felts, was operating his vehicle while drunk, and let it "coast backward" into a police cruiser in Indianapolis. He was pulled over near Monument Circle, and instead of putting the vehicle into park, he put it in reverse. This is his re-election year, but is running unopposed.

I have to wonder what the voters in Allen County think about all this. Fort Wayne is one of the busiest court systems in Indiana, and they really can't afford to lose their Circuit judge and one of their Superior judges.

Further, what were these judges thinking? Scheibenberger couldn't have thought anything good would come of going to this sentencing in his robe. In doing so he tarnished the reputation of judges everywhere. To swear up a storm while in your robe just looks bad all around.

I'm glad I work for a Judge this summer. I'm also glad it's not in Allen County, which has to be in chaos right now.


More on: The Real Reason for Number Two

Kyle Michael at KMitB was kind enough to post a response to my previous post praising the Heller decision. Always in the mood for a good discussion, I want to respond to his response.

Michael writes:
You may have noticed that you don’t see many good militias these days; I suspect they’re hard to get together. Blair sticks to his guns (so to speak) here, maintaining that this is still a relevant purpose. That’s fine, if silly, but it fails to account for the use of guns for other purposes. Where does hunting fit in? Or, for that matter, why should you be allowed to use a gun to defend yourself against any threat other than an “oppressive government” or an invasion? The 2nd Amendment doesn’t mention anything about any of this; you’d think Scalia would have a problem with that.

I should first point out that I don't believe that the Second Amendment exists solely for the purpose of protection from an oppressive government. While that may be its most important purpose, there are certainly others - anything from self-defense to sport hunting. The language of the Amendment doesn't even mention invasion or self-defense.

Presumably, Michael is making the ill-fated grammar-based interpretation of the Second Amendment, that suggests that the preamble of the Amendment (i.e. "A well regulated militia, being necessary to the security of a Free state,") means that it applies only to organized militias and the security of the state. George Mason law professor Nelson Lund destroyed this position in his amicus brief in Heller. One need only examine other documents from the same time period to know that writing preambles was the fad, and that those preambles are not all-inclusive.

For example, one can look at Article 3 of the Northwest Ordinance ("Religion, morality, and knowledge, being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged"). I doubt many people will argue that the only reason we encourage schools in this nation is because education makes for good government and happiness, or that religion, morality, and knowledge are their only purpose. Sure, those are pretty good reasons, but they are not the only reasons.

Michael continues:
Like Blair, Scalia combines the 2nd Amendment with a common law right to self defense. In doing so, and in endorsing the dipshit view that keeping handguns in the home for self-defense is a good idea, Scalia writes (and I swear I am not making this up): "[a handgun] can be pointed at a burglar with one hand while the other hand dials the police."

The Cato Institute's amicus brief in Heller discusses the English roots of the right to bear arms, which does cover the fact that the common law right to bear arms is derived from, and must be understood with, the common law right to self-defense. The English Bill of Rights of 1689 supports it, as does Blackstone and a variety of other English sources. Whether it is a "good idea" is a separate matter. Michael falls back on tired rhetoric to argue that kids will find the gun and do harm with it. Even if you take that position and do intelligent things, like putting the gun away and teaching kids about gun responsibilities from a young age, the point is irrelevant. The Second Amendment doesn't cover stupid parents; it covers a right that cannot be taken away from an individual.

I do, however, agree with Michael about one point. Justice Scalia's reliance on the notion that I will call the police while holding a gun is a poor choice in his opinion. I will shoot first with both hands (as you're taught to do in firing ranges), then call the police with both hands.


The Real Reason for Number Two

The past few days have given the blogosphere much to talk about in regards to the Supreme Court, and in due time I plan to get to the ones I care about. The one that I care the most about, Heller, is the main focus of this post.

For the past 28 hours or so, I have seen plenty of status updates from friends who are upset by the ruling, wishing that it could have been decided after some of Obama's appointments were on the Court. Completely disregarding the chickens-hatching time quandry presented there, I can't help but ask my friends where they put their copy of the Bill of Rights. In case you lost it, the words "shall not be infringed" are still there.

One columnist in northern Indiana posed this question: "If our forefathers lived in 21st century America - with its ungodly crime and murder rates, its wealth of deadly weaponry, and its attempt to interpret a document written more than two centuries ago - would they be celebrating or castigating Thursday's landmark ruling?"

I'm fairly certain the answer to that question is an obvious "celebrate, but with hesitation". Yes, they would have been quite pleased with the outcome of the case. They would have been less pleased that an originalist believed that there are some acceptable firearm regulations.

Certainly the Second Amendment refers to a militia, like the National Guard in New York, or the entire population in Indiana. Taking weapons away from a militia would be counter-productive and wonderfully ironic. The concept of a universal (all free white men) militia can be traced back to at least 12th century England. But the more vital American interpretation of the right to bear arms became abundantly clear during the years preceding the American Revolution.

The British government couldn't help but notice those pesky colonists arming their militias while talking about how much they disliked the Crown. Parliament sought to disarm their militias, despite the Declaration of Rights and the common law right to self-defense. Conveniently, they had no problem with the right to self-defense (in fact, John Adams used the defense in the Boston Massacre trials), just with colonists possessing firearms.

It was those very firearms that allowed Americans to throw off the chains of British rule. The newly formed United States owed their freedom to their firearms. So they enshrined their right to firearms in their most important document, the Constitution.

This leads me to my main point, that the real reason for the Second Amendment was not solely to arm and regulate a militia. Yes, we wanted our citizens armed in case Britain, or Canada, or Mexico, or anyone else, tried to invade (indeed, this may have been the primary reason Congress passed the Second Amendment). But the reason the States ratified the Second Amendment was because they remembered the oppression of the last all-powerful government. Their firearms were the only thing that saved them.

Yes, the main reason to support the Second Amendment is because, if and when our government becomes too oppressive, our firearms will be the only thing stopping them from crushing us. When the firearms go, so too does the rest of the Bill of Rights. The Second Amendment is the one the ensures the rest.


Freedom to Spank your Brats

On Tuesday, the Indiana Supreme Court ruled in Willis v. State that parents have the legal right to discipline their children physically, even if it leaves marks or bruises. In the case, the defendant was a mother of a son who had a history of lying and stealing. The boy stole some of his mother's clothes and gave them away at school. As a punishment, the mother struck him five to seven times with a belt. The school nurse saw the bruises, the son told the nurse from where they came, and the nurse called the police, who charged the mother with battery, a D felony.

Corporal punishment is sometimes acceptable. The Model Penal Code says so. The Second Restatement of Torts says so. Blackstone says so. Heck, the last four thousand years of human history says so.

It is a sad state of affairs that any time a parent tries to punish a child, the state thinks it should come to the child's aid. How long has this been going on? When did we become a nation of wimps? The sad truth is that American kids feel entitled to do whatever they want, and they have been too eager to complain to authorities when they get a spanking. Is it any wonder that, as the Fort Wayne Journal Gazette reports, Indiana is 6th in the nation for juveniles locked up? When parents don't punish appropriately, the law will eventually have to.

I don't mean to suggest that child abuse is acceptable. I have seen many CHINS cases this summer, and there are some parents that really are doing it wrong. And punishment that leads to permanent or severe injuries should be, and is still, illegal. But I am glad to see that Indiana is taking a step back in the proper direction of letting parents punish their children as they see fit.


In re Marriage Cases

A friend asked me today what I thought about the result in the recent California Supreme Court decision overturning the same-sex marriage ban in that state.

I must admit that I'm somewhat torn. On one hand, I don't like courts stepping in to overturn the will of the electorate. Prop 22 passed, and that seems to suggest that at least half of Californians didn't want same-sex marriage recognized by the state. However, the legislature twice passed bills legalizing same-sex marriage that were vetoed by the governor (who, incidentally, said that if they wanted gay marriage, then they would have to take it to the state Supreme Court). So "the will of the people" here seems a bit cloudy.

On the other hand, as any long-time reader of this blog could tell you, I am a pretty big supporter of gay rights, and I do personally believe that if government recognizes marriage at all, it should do so for any type of couple (not that I believe that government should be in the business of recognizing marriages). To me, it seems like most arguments against same-sex marriage are based on religion, which makes me squeamish in government. In fact, very few counterarguments that I have heard when debating this topic end up relying on anything other than morality.

I don't feel like beating this to death right now, mostly because I have made my position very clear in the past, and because the rest of the blogosphere seems to be discussing it just fine without me. For a particularly interesting set of discussions, try looking at the Volokh Conspiracy's stream of posts. So, to answer my friend's question, I agree with the general outcome of the case (giving the right to marry to gays) but disagree with the method (in court, rather than democratically).