a service of NPRI


July 28, 2005 
Vol. 1, No. 23
 

 

Property rights
Attack on Taxpayer’s Bill of Rights should be repelled

By Alison Acosta Fraser
The Heritage Foundation

A serious effort is underway in Colorado to bypass the effective tax and spending controls imposed by the Taxpayer’s Bill of Rights (TABOR) and permanently increase the size of the state government.

TABOR limits how fast state tax revenues can grow by requiring that the state refund taxes collected over the limit to the taxpayers. Therefore, TABOR also, in effect, limits spending. This has kept the burden of state government low and has led to a stronger state economy.

But TABOR is under attack. Elected officials have placed Referendum C on the ballot for this fall, asking Colorado citizens to let the legislature keep (and spend) $3 billion in surplus taxes over TABOR limits instead of refunding those revenues to the taxpayers.

As voters ponder this referendum, it is helpful to examine why TABOR was necessary and why it should be retained.

TABOR’s Background Colorado voters passed TABOR in 1992 to end the undisciplined spending and tax increases of the 1980s, which increased the effective state income tax rate by 15 percent and the gasoline tax by 214 per­cent.

Chart 1 shows how effective TABOR has been in controlling spending. Before TABOR, state spend­ing increased dramatically in relation to taxpayers’ ability to pay, even briefly surpassing the national average. After TABOR, the burden of government declined and Colorado’s competitiveness with the rest of the nation improved.

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Taxes
Estate tax hurts small business

By Dick Patten
American Family Business Institute

As the U.S.
Senate prepares to debate the permanent repeal of the estate tax, the famous political mantra hangs in the air -- follow the money. Who benefits from repeal, how does it affect the federal budget and who is fighting to keep the tax in place?

The answer is not as obvious as opponents of estate tax repeal like to believe. Polls have consistently shown that as income levels drop, support for repeal actually increases, while the most prominent supporters of the estate tax are some of the United States' richest people. Why? Is everyone that hopelessly confused about their own interests?

Prominent estate tax booster Warren Buffett is famously aware of what's good for his own finances. In his annual letters to shareholders, he continually reassures investors that upon his death, no large tax will be paid and that the bulk of his estate will be left to charity.

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Terror war
The Smell
of Fear

By Caleb Carr
Wall Street Journal

The ultimate targets of the London bombings were not, of course, human beings.

Rather, they were a set of governmental policies that the terrorists hoped to change by separating political leaders from the support of their shaken citizenry.

Despite this distinction, however, the underlying psychological principles involved in investigating such crimes remain the same as they would were we studying a mass- or serial-murder case, of which terrorists are in many respects the politicized version.

Is this to say that the four young men suspected of being the instruments of terror on this occasion can be classified as clinical sociopaths?

We will likely be unable to answer that question with certainty, now that they are dead. What we can focus on, however, are the motivations and perversities of the vastly more dangerous Islamist clerics and terrorist organizers who sought out youthful pawns and instilled in them a theology of murder.

[continued] This article will be available to non-subscribers of the Online Journal for up to seven days.


Finance
Is the Euro forever?

By Grant Nülle
Ludwig von
Mises Institute

Leaders of European Union member states have been reeling from the double rejection of the proposed European Constitution by two of the six founding members, the Netherlands and France. Given a chance to express their opinion on “ever closer union,” for the first time in over a decade and ever, respectively, French and Dutch voters spurned the controversial text against the wishes of their countries’ political, media and commercial elite.

The reasons for rejection were varied and contradictory, but at its roots was dissatisfaction with present economic conditions –foremost persistently high unemployment- and perceived indifference and arrogance with which national politicians subordinate domestic concerns to busy themselves with constructing a supranational entity.

One particular object of derision and scrutiny is the euro, the currency adopted in 1999 by 12 of the 15 member states that comprised the EU before the admission of 10 Central and Eastern European states in 2004. Three ministers in Italy’s governing coalition have augured for a reconstituted lira tied to the dollar and leaders of the German Finance Ministry have at least been privy to pessimistic discussions among private banks concerning the euro’s future. Since the referendums the value of the euro has dropped. As of June 21, the euro was nearing a nine-month low against the very shaky dollar..

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WHY BusinessNevada


AFL-CIO crackup
Whistling past the graveyard?

By Steven Miller
BusinessNevada

Nevada labor officials are telling news reporters that the defection of two major unions from the AFL-CIO and the looming departure of two others won’t make a difference in the Silver State.

But the reality is that unions disaffiliating from the AFL-CIO nationally are legally barred by the union federation’s constitution from continuing to be affiliated at the state level. So far, the relevant provisions remain unchanged and national officials—hurt and angry—don’t appear about to change them.

So while Nevada AFL-CIO boss Danny Thompson assured the Las Vegas Sun this week that there “is no problem in Nevada,” he may well be whistling past the graveyard. Eighty percent of the union members ostensibly under Thompson’s leadership belong to the anti-AFL-CIO coalition.

Calling itself “Change to Win,” that coalition includes the largest union in the U.S., the service employees (SEIU), and the Teamsters, who have both already officially left the AFL-CIO. Change to Win also includes two other unions threatening to quit: Unite Here, which represents apparel, hotel and restaurant workers, and the United Food and Commercial Workers (UFCW).

All four dissident unions are active in Nevada. The state’s largest local—Culinary Local 226, reporting 50,000 resort industry members—is part of Unite Here. SEIU Local 1107 represents approximately 11,000 government employees with Clark County, the Las Vegas Convention and Visitors Authority, McCarran International Airport, the Las Vegas and North Las Vegas housing authorities and the Clark County Health District.

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Unions
Zogby Poll: Just 3 in 10
workers would unionize

Seven-in-Ten Content With Jobs

Zogby International

With union memberships in decline nationally, a new Zogby International poll shows that just one-in-three (35%) non-union workers would consider voting to unionize their workplace, while a 56% majority would not.

The poll also finds workers nationwide are generally content with their jobs and their employers. The survey of 802 workers nationwide was conducted June 14 through 21, 2005, and has a margin of error of +/-3.6 percentage points. Polling was performed by Zogby International on behalf of the Public Service Research Foundation.

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Nevada politics
State quest for Canadian drugs continues

By Michelle Swafford
InBusiness LV

The Nevada Pharmacy Board says it is one step closer to making Canadian drugs available to Nevadans.

Pharmacy Board lawyer Louis Ling and incoming executive director Larry Pinson visited with about 20 Canadian pharmacies in Winnipeg, Manitoba, for a few days last week.

The pharmacies are interested in selling prescription drugs to Nevadans—at a lower rate on brand-name drugs than is available from U.S. pharmacies. Canada has mandated discounts imposed on pharmaceutical manufacturers, while the United States does not.

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Government waste
Delayed Justice Center
undergoes mold removal

By Tony Illia
LVBusinessPress

The Regional Justice Center in downtown Las Vegas is taking so long to complete that it now needs $250,000 worth of mold removal. Clark County recently hired Walker Specialty Construction of Snohomish, Wash., to clean several mold-contaminated areas inside the overdue, unfinished building.

The project calls for water repairs and mold remediation on 11 of the building's 18 levels. It's a two-month task that entails removing and replacing ceiling tiles, drywall, fire sprinklers, windows and carpet, among other things. Certain types of mold, if left untreated, can cause serious health problems.

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Tax reform
Tax cuts lead low-income
single mothers to jobs

By David R. Francis
NBER

Reducing taxes on low-income single mothers can have an especially favorable effect, an important National Bureau of Economic Research study has found.

“After the 1993 tax reform under President Clinton," says the working paper, "single mothers worked fewer hours per year, but this decline was overwhelmed by a solid increase in low-income mothers going to work.”

In Evaluation of Four Tax Reforms in the United States: Labor Supply and Welfare Effects for Single Mothers (NBER Working Paper No. 10935), coauthors Nada Eissa, Henrik Kleven, and Claus Kreiner look at the tax acts of 1986, 1990, 1993, and 2001 and find that each added to the economic welfare well-being of the nation. Each reform reduced taxes owed by single mothers, thereby shrinking government revenues but also providing an incentive for them to substitute work for welfare payments.

[more]


Law
Hard to assign dollar value
to famed Las Vegas slogan

By David McKee
LV Business Press

A lawsuit against a Placerville, Calif. shirt vendor could be the tip of the iceberg, if the Los Vegas Convention & Visitors Authority and its longtime ad agency, R&R Partners, intend to stop the use of the slogan, "What happens in Vegas, stays in Vegas" on intimate apparel currently sold in a number of Las Vegas casino resorts.

The LVCVA and R&R are seeking to prevent designer Dorothy Tovar and Adrenaline Sports from marketing the T-shirts, tank tops and camisoles, arguing that Tovar's trademark phrase infringes upon their own "What happens here, stays here" marketing campaign, unveiled in January 2003. Tovar told the Business Press that she received federal trademark approval for her marketing slogan on February 28, 2003, with Nevada approval following in April 2003.

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Politically correct science
Did fluoridation researchers
ask the right questions?

New evidence: Fluoride increases risk of bone cancer in boys

By Sharon Begley
Wall Street Journal

Questions about fluoridation have returned because of allegations of scientific misconduct against a prominent researcher at the Harvard School of Dental Medicine. The Environmental Working Group, an advocacy organization in Washington, charged last month that Chester Douglass misrepresented an unpublished study about bone cancer and fluoridated tap water.

The study was conducted by one of his doctoral students, Elise Bassin. She started with the same raw data as her mentor—139 people with osteosarcoma (a rare bone cancer) and 280 healthy “controls”—but saw a way to improve on it. Since most of the 400 people diagnosed in the United States each year with osteosarcoma are kids, and since any ill effect of fluoride would likely come when bones are growing most quickly, she focused on the 91 patients who were under 20.

Her result: Among boys drinking water with 30 to 99 percent of the fluoride levels recommended by the U.S. Centers for Disease Control and Prevention, the risk of osteosarcoma was estimated to be five times as great as among boys drinking nonfluoridated water. At 100 percent or more, the risk was an estimated seven times as high; the association was greatest for boys six to eight.

[continued] This article will be available to non-subscribers of the Online Journal for up to seven days.


Public policy
How Medicaid sabotages the
long-term care insurance market

By Les Picker
NBER

“The presence of Medicaid is sufficient to explain why at least two-thirds of all households would prefer not to purchase private long-term care insurance,” says a new working paper from the National Bureau of Economic Research.

Most health insurance in the United States is provided through a mix of public and private sources. Often the public insurance—although heavily subsidized from the individual’s perspective—offers only limited protection. This holds true in many other countries as well, where public insurance against risks such as longevity and high medical expenditures usually provides only partial coverage.

[continued]


Real estate
Report: Big supply poses risk
for young commercial market

By Kevin Rademacher
InBusiness LV

The commercial real estate market in Las Vegas improved in the second quarter of the year, according to Moody’s Investors Service.

But it didn’t help much.

In a Moody’s report on the well-being of major commercial real estate markets, the Las Vegas metropolitan area posted a score of 57, up from a 51 score in the first quarter. Only eight markets scored worse than Sin City in the report, including Dallas, Pittsburgh, Charlotte, N.C., and Stamford, Conn.

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