By: Cynthia Anderson
By M.O. Stevens (Own work) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons.
From cell phone searches to databases filled with internet-based communications, citizens’ privacy rights have been a hot topic in the United States recently. This has led to significant discussion about the government’s ability to obtain information without a warrant for use in ongoing criminal investigations. Recently, Supreme Court decisions in Riley v. California and United States v. Wurie, have largely been viewed as a win for privacy advocates. The Court in both cases held that police cannot conduct a warrantless search incident to arrest to obtain information contained on a cellphone. A lawyer in the Riley case predicts that Riley and Wurie will act as a catalyst for other potential Fourth Amendment issues relating to technology to make their way to the Supreme Court. I agree, and historic cell site location information (CSLI) should be one of the first topics to find its way to there. Obtained under the “specific and articulable facts” standard of 18 U.S.C. section 2703(d), historic CSLI has received increasing amounts of attention for allowing data to be collected for less than the probable cause standard.
Much of the case law related to historic CSLI has remained at the District Court level. Challenges have been raised as to both the applicability of the statute to historic CSLI and the constitutionality of the statute under the Fourth Amendment. The arguments against finding that historic CSLI can be obtained under section 2703 are fairly weak. They largely center on an attempt to classify a cell phone as a tracking device under section 3117(b), as in In re Application Authorizing Disclosure of Historic Cell Site. However, most opinions seem to recognize that this argument is flawed and go on to provide a constitutional analysis. It seems likely that any future Supreme Court decision would follow suit and resolve the debate on a constitutional rather than statutory basis.
Opinions that have concluded that obtaining historic CSLI is a search under the Fourth Amendment have typically done so based on language in newer Supreme Court cases such as United States v. Jones. Most recently, the Eleventh Circuit held that section 2703(d) as it applies to historical CSLI is unconstitutional because it violates “the subscriber’s reasonable expectation of privacy.” The opinion hinges its support on the Supreme Court cases Jones and Katz v. United States. In Jones, the government installed a GPS tracking device on the defendant’s car after its search warrant had already expired, and in a location not covered by the warrant. The opinion held that the Fourth Amendment had been violated because the government trespassed on the defendant’s private property when it installed the tracking device. Although the search was found to be unconstitutional without regard to the defendant’s reasonable expectation of privacy, the opinion did acknowledge that the Katz test would still apply in situations where a physical trespass had not occurred. The Eleventh Circuit concludes that historic CSLI must be obtained through a warrant based on two portions of the Jones opinion. First, an admission by the majority that the Katz expectation of privacy test still applies; and second, the concurring opinions’ assertions that GPS location tracking violates a reasonable expectation of privacy because it can show a person’s “visit to a gynecologist, a psychiatrist, a bookie, or a priest[.]” It further uses prior analysis by the Third Circuit to conclude that older Supreme Court decisions about citizens’ reasonable expectations of privacy, such as United States v. Miller and Smith v. Maryland, do not apply. Smith and Miller held that individuals have no reasonable expectation of privacy in information voluntarily given to a third party, such as phone numbers dialed or information facilitating bank transactions. However, the Third and Eleventh Circuits distinguished historic CSLI from other information processed by third party companies by asserting that consumers are unlikely to be “aware that their cell phone providers collect and store historical location information.” Thus, if consumers are unaware that they have shared the information, they cannot have done so voluntarily.
Interestingly, cases that do not find that historic CSLI violates a reasonable expectation of privacy tend to simply emphasize that the information is obtained from a third party. The Fifth Circuit, for instance, held that the “specific and articulate facts” standard does not violate the Fourth amendment as used to obtain historic CSLI. In doing so, it found that “cell site information is clearly a business record” under Smith and Miller, and it may therefore be obtained using a lower standard than that required for a warrant. It further rejects that cell phone users do not understand that service providers use and retain information that can identify their location. In essence, the split created by the Fifth and Eleventh Circuits is based entirely on different applications of the same case law.
Although many privacy advocates are likely to hail the Eleventh Circuit opinion, there are a surprising number of articles that support the conclusion that historic CSLI does not require a warrant under existing Supreme Court precedent. Arguments as to what the Fourth Amendment should protect aside, I agree that current jurisprudence does not support the conclusion that historic CSLI constitutes a search under the Fourth Amendment. First, the data is almost unarguably derived from information voluntarily given to a third party under Smith and Miller. The assertion that consumers do not realize the information is gathered ignores not only the technological know-how that is prevalent in most generations, but the large number of procedural crime shows that reference its use in criminal investigations. Second, CSLI does not provide pinpoint location information. The Third and Eleventh Circuits seem to accept that when CSLI locates a person to within 100-meters, it tells law enforcement exactly what building a person was in. One hundred meters is nearly the length of a football field. For the majority of people in the country who largely live in towns or cities, that amount of detail only shows what neighborhood a person was in. Finally, despite the recent Supreme Court dicta expressing concern about GPS data violating privacy by showing things like whether a person goes to strip clubs or attends church, this kind of information is already available to the government under the lower subpoena standard by obtaining credit card and bank transaction records. Banking transactions certainly provide a more complete picture of a person’s activities and preferences than what scattered information could be gathered by pulling historic location information generated at the times that they made or received phone calls.
Even though Supreme Court precedent does not directly support the Eleventh Circuit’s analysis, it seems likely that the Supreme Court will also find a way to conclude that section 2703 is unconstitutional as applied to historic CSLI. The Court has recently trended toward increasing privacy protections when it comes to technology, as evidenced by Riley, Wurie, and the concurring opinions in Jones. No matter the ultimate conclusion, given the far-reaching implications for criminal investigations, the standard required for investigators to receive historic cell site location information needs to be addressed by the Supreme Court in the near future.
By: Samantha Lewis
Immigration officials expect a surge of approximately 70,000 unaccompanied children to cross the border into the United States this year. The notorious method of entry is through the Rio Grande Valley area. The illegal immigrants’ primary home countries include Honduras, El Salvador, and Guatemala. On June 2, 2014, President Barack Obama described this surge as an “urgent humanitarian situation,” and requested Congress to provide an extra $1.4 billion in federal funding to house, feed, and transport the children to shelters or reunite them with relatives already living in the United States. As of July 9, Obama increased this monetary request to $3.7 billion. As these children, some as young as four and five years old, are apprehended and wait to be processed, border patrol has been forced to hold them in warehouses near the physical border behind chicken-wire fences. The conditions at these warehouses are extremely severe. Half of Obama’s requested funding would be allocated to the Department of Health and Human Services to provide care, including additional beds. The rest would be split between several departments, including $1.6 billion to the Department of Homeland Security and Justice to boost enforcement at the border and increase the capacity of the judicial system that is currently processing these minors.
Despite relatively positive reports from the Department of Health and Human Services, the environments at these holding facilities are becoming breeding grounds for diseases. At least a half dozen anonymous sources, including nurses and healthcare providers at one of the camps allege that the government is concealing a very serious health threat. One child was recently hospitalized after being diagnosed with H1N1, also known as swine flu. Further, border patrol agents have witnessed children with tuberculosis, HIV, chicken pox, and scabies. These diseases have spread to both neighboring immigrants and United States border patrol agents. Furthermore, some of the children are MS-13 gang members who are involved in violent cartel and criminal activity. Additionally, some of the older illegal immigrants that are being housed with the children have warrants for murders or prior convictions and relationships to violent drug cartels. According to the Department of Homeland Security, the surge is becoming so extreme that officials have instructed agents to release immigrants at bus stations with vague instructions referencing a future court date.
This crisis has sparked intense debate in Washington over the Administration’s current policies related to border enforcement and immigration as a whole. Many of the recent migrants appear to have taken the journey to the United States with the notion that they would receive “permits” to remain in the United States once across the border. According to Ted Cruz, “The parents think, ‘If I send my child [to the U.S.], my child will have amnesty.’” Cecilia Muñoz, White House director of domestic policy, told reporters that smugglers of the illegal immigrants have been spreading this misinformation to accelerate business. Furthermore, a leaked border agency memo based on interviews with 230 women and children apprehended in the Rio Grande Valley concluded that they had crossed the border with the sole expectation of being allowed to stay.
Under a 2002 human trafficking law signed by former President George W. Bush, and reauthorized again in 2008, unaccompanied children from Mexico that are apprehended on the border are immediately deported, but unaccompanied children from El Salvador, Honduras, and Guatemala must undergo a deportation process since the law ensures that the United States will not send children back to a dangerous situation. As a result, these children cannot simply be referred to the court for deportation, but rather, be transferred to social services prior to trial. And from social services, most of the undocumented children will be reunited with family already in the United States, and thus, evade potential deportation.
Aside from the obvious humanitarian crisis, the influx of these illegal immigrants presents a significant burden to the average American taxpayer. But, most of the effects may not be immediately visible. However, numerous small towns that directly border Mexico are witnessing an immediate, detrimental impact. Crime is increasing rapidly in these towns, specifically drug-related and violent crimes. Further, there has been a sudden increase of illegals invading and raiding homes. Yet, these small town Americans are receiving no financial assistance from the federal government. As a result, these small towns are footing the bill on autopsies of dead illegal aliens, paperwork, death certificates, and resistance to this increased crime, thus forcing these local governments into enormous amounts of debt. According to Lt. Gov. David Dewhurst of Texas, “The federal government has abdicated its responsibility to secure the border and protect this country from the consequences of illegal immigration.”
Overall, if the current administration does not take further steps towards more stringent immigration reform, this current influx will only continue to expand and present an enormous burden to the already strained border patrol and to the American taxpayer. In my opinion, the United States should work with the represented countries to develop a collaborative solution to suppress traffickers that spread misinformation, coordinate a proper, more efficient deportation process, and increase patrols along the route to the border.
By: Steve Welker
Some in the nation’s capital are exercising their right to protest over the city’s budget plan which includes a “yoga” tax on fitness and wellness services of 5.75%. The proposed budget predicts revenue increases of $5 million from the yoga tax which would be used to partially offset $225 million in cuts. The plan also proposes various other new taxes on services such as carpet cleaning and car washes. While health enthusiasts cry foul, I ask why they were not taxed in the first place.
Let’s get one thing absolutely clear: targeted tax hikes on specific industries or services (as well as exemptions) make bad tax policy. But are they politically viable? Absolutely. States and cities are constantly looking at targeted taxes on various products and services to fund projects or make up for tax cuts elsewhere. These taxes often come in the form of sin taxes on alcohol and tobacco, such as the recently passed extension on Cleveland’s sin taxes earmarked to fund stadium improvements for their professional sports teams. Even the federal government likes to get in the sin tax game from time to time. Taxes are easier to swallow than outright bans, and their chance of success is higher. Just ask NYC about their short-lived big, sugary soda ban. However, sin taxes are never as simple as advertised, especially after running through the gauntlet of legislative compromise, and they can lead to arbitrary and discriminatory differences in the way products are taxed.
Targeted tax cuts make equally bad tax policy. Legislatures often push through gimmicky “tax holidays” such as Virginia’s tax-free week on school supplies in August. These holidays typically receive bipartisan support, as most tax breaks do, for “boosting” the economy or helping lower income households buy necessities. However, studies demonstrate the “boost” is virtually non-existent. Indeed, consumers, well-aware of the holiday and already planning on shopping will time their shopping around the holiday resulting in no boost in sales but substantial reduction in revenue. Additionally, most of the benefit is reaped by higher income households, who get larger tax savings with more expensive purchases. This disproportionate benefit holds whether you employ a one week tax holiday, or permanently carve out exemptions for other necessities such as groceries, which are exempt by varying degrees in forty five states and D.C. By limiting or exempting taxes on groceries, the public essentially discounts expensive, non-staple foods from Whole Foods. In both cases, substantial complexity in parsing and defining what is covered and what is not makes the laws onerous and difficult to administer.
Traditionally, policy analysts will insist that for sales taxes – indeed, for all taxes – simpler is better. This typically translates to an optimal tax featuring a broad base and a low rate. Because taxes distort behavior, it is generally preferable to tax in a way that neither encourages nor discourages one behavior from another. However, this sound tax policy advice yields to political concerns by legislative bodies which all too often obfuscate tax changes out of an understandable fear of political retribution for raising taxes.
The argument for not taxing gyms is easy to understand. A yoga tax would increase the cost of the service. Increasing the cost of gyms discourages gym memberships resulting in declining public health. With rapidly increasing obesity rates, the argument goes, we should not discourage gym membership by taxing it. This argument relies, of course, on the assumption that gym membership impacts public health in the first place. However, there is no data or scientific study to link gym membership with public health. This is not surprising; we’ve known (and joked) for a while that a substantial majority of people who have gym memberships do not use them. But even if it could be demonstrated that public health would suffer as a result of a yoga tax, would that be enough to truly justify exempting fitness and wellness centers from taxation?
It is all about perspective. The yoga tax is better judged from where it puts us relative to the optimum sales tax on goods and services, broad and low, as opposed to merely viewing the taxed services in a vacuum. In other words, why were such services not taxed in the first place? Fitness centers are not being unfairly targeted now, they were unfairly exempted to begin with. If we could create a sales tax base from scratch, our best solution would be to throw everything in, leave nothing out. That way, the rate could be lowered to the point where the price changes were so minimal, nobody’s behavior would be changed. And we would all keep buying (and not using) our gym memberships like we always have.
By: Chelsea Morin
On Thursday, June 26, the Supreme Court ruled unanimously on a constitutional matter that had never before seen the steps of the Supreme Court. In National Labor Relations Board v. Noel Canning, the Court found that President Obama had overstepped his executive power in 2012 when he made three appointments to the National Labor Relations Board (NLRB) without Senate approval.
Obama attempted to make these appointments through the so-called “Recess Appointments Clause” under Article II, Section 2, Clause 3 of the Constitution, which states “[t]he President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” When the President took action, the Senate was in the midst of conducting “pro forma sessions” during which it would convene every three days or so in order to meet its constitutional obligation. While the President claimed that the Senate had agreed to gavel in pro forma only as a tactic to prevent him from filling in the NLRB seats, the Supreme Court refused to accept this argument, holding that pro forma sessions do not count as periods of recess. The Court highlighted the deference given to the Senate, because “under its own rules, it retains the capacity to transact Senate business,” regardless of the functionality of the session.
In the beginning of the Canning opinion, the Court made it clear that the Recess Appointments Clause is only a “subsidiary, not a primary method for appointing officers of the United States.” The general mode of appointments is found in the Appointments Clause of Article II, Section 2, Clause 2, which makes the intended separation of powers between the executive and legislative branches clear, only allowing Presidential nominations “by and with the Advice and Consent of the Senate.”The most important point that the Court emphasized was that if presidents were allowed to utilize the Recess Appointments Clause in minor “intra-session” breaks, it would be inconsistent with the checks and balance system that the Framers intentionally put in place.
So, what constitutes “the Recess” for purposes of this Clause? While the decision was unanimous, on this point, the Court’s reasoning was divided 5-4. Justice Breyer led liberal thinkers, accompanied by renowned swing-voter, Justice Kennedy, while Justice Scalia wrote a heated concurring opinion joined by his fellow conservative Justices.
The liberal majority interpreted the Clause more broadly due to its silence on what length of time qualifies as “the Recess.” Breyer made it clear that he thought the Framers omitted a formula for determining recess qualifications because “they did not foresee the need for one” due to the lengthy breaks between Senate intra-sessions and reduction of those between Senate inter-sessions. The Court determined that a recess of 10 days qualifies under the text for two reasons: first, because history shows there has not been a recess appointment for a break less than 10 days; secondly, it is presumptively too short to require the consent of the House.
Conservatives were disgruntled by the majority’s opinion, as evidenced by Scalia’s statement that “[t]he Court’s decision transforms the recess-appointment power from a tool carefully designed to fill a narrow and specific need into a weapon to be wielded by future Presidents against future Senates.” Maybe he’s on to something. The Conservative Justices took a formalistic approach in their concurring opinion, asserting that “recess” should mean a time when the Senate is unavailable to participate in the appointments process, during inter-session recesses. The Court of Appeals utilized the same line of reasoning in its decision, stating that the Clause served only as a substitute or a stop-gap “when intersession recesses were regularly six to nine months and senators did not have the luxury of catching the next flight to Washington.”
It seems as though the latter reasoning is more in tune with what the Framers had in mind when constructing the second Appointments Clause. According to Federalist No. 67, the Recess Appointments Clause initially served as “nothing more than a supplement to the [Appointments Clause] for the purpose of establishing an auxiliary method of appointment, in cases to which the general method was inadequate.” Because the power of appointments is a joint power, shared by the President and the Senate, this illustrates that Framers could not have intended the auxiliary clause to serve as a back-door to allow an administration to make appointments and avoid the additional check on powers, the backbone of our Nation’s political system. Ultimately, the true purpose behind this auxiliary method of appointments was to avoid government paralysis. So, it seems as though Justice Scalia’s statement was right, that “the recess appointments will remain a powerful weapon in the President’s arsenal,” which is, indeed, an anachronism.
What impact will this ruling have on the current inner-workings of the Senate? The short answer: not much. Last November, Senate Democrats changed procedural rules to make it more difficult for Senate Republicans to block Obama’s appointees. Democrats exercised a “nuclear option” which stripped the Republican minority of the ability to use filibusters to block presidential nominees who had fewer than 60 votes, allowing the majority to more easily confirm presidential nominations. Nonetheless, Senate Minority Leader Mitch McConnell, along with 44 Senate Republicans filed an amicus curiae brief for Noel Canning, pushing for the decision that was released last Thursday. Republicans, therefore, are pleased with the NLRB decision. House Speaker John Boehner declared that it was a “psychological boost” while McConnell victoriously announced that it was a “clear rebuke to the President’s brazen power grab.” While this ruling will have a minimal effect on the current Senate, according to Politico, “[t]he Supreme Court’s decision to rein in the recess appointment power could become more significant if Democrats lose control of the Senate in this fall’s elections” because “it would restore Republicans’ ability to block confirmation of Obama nominees.”
Although the Court deemed that the President’s NLRB appointments were unconstitutional, the Court ultimately limited the Senate’s check on executive power when it held that a 10 day intra-session qualifies as “the Recess” for purposes of the Recess Appointments Clause. The decision blurred the lines between the executive and legislative branches, maneuvering around the Framers’ original structure that ensured for separation of powers.
By: Mahira N. Khan
There is an industry, market driven, that is in high demand and extremely profitable. The U.S. Department of Homeland Security estimates that this industry employs over 20 million people worldwide, with about 18,000 in the U.S. alone. The industry makes annual profits estimated at $150 billion. This industry is also illegal under federal and international law. Comprised of the most serious and gravest crimes, this industry includes forced labor, marriage, organ extraction, sexual slavery are and many more. This is the human trafficking industry.
Human trafficking is the illegal buying, selling, and smuggling of people, usually women and children, to profit from their forced labor and/or sexual servitude; it is also known as trafficking in persons (TIP). Under U.S. federal law, “severe forms of [TIP]” includes sex trafficking and labor trafficking. Sex trafficking is the recruitment, harboring, transportation, provision, or obtaining of a person for commercial sex acts, where the sex acts are induced by force, fraud, or coercion, or where the person induced to perform the act is not 18 years of age. Labor trafficking is the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion for the purposes of subjection to involuntary servitude, peonage, debt bondage, or slavery.
While every state in the U.S. has criminalized sex trafficking and most have criminalized labor trafficking, incidents have still been reported in all 50 states. In recent years, state legislatures have focused on passing measures to tackle this problem by doing everything from providing funding to law enforcement authorities to requiring states to identify minors in foster care who have been victims. Why aren’t these measures enough? According to law enforcement experts, the most urgent problem in prosecuting and abolishing TIP is the continued practice of arresting the victims rather than their customers or pimps.
A series of five acts, also known as the “safe harbor laws” were passed in May 2014 by the U.S. House of Representatives, shortly after the U.S. received news of the missing schoolgirls in Nigeria, which put TIP in the spotlight. These laws, among other things, will provide greater punishments for the traffickers, grant immunity from prostitution charges for minors under 18, create procedures for expunging prostitution convictions, and grant restitution to victims. The proposed legislation reflects bipartisan efforts to combat a problem that has no received widespread attention.
The first act, The Justice for Victims of Trafficking Act of 2013, features an amended criminal code to impose additional and increased penalties for TIP crimes. It also eliminates the possibility for persons involved in child exploitations crimes to establish an affirmative defense. These perpetrators would be required to show clear and convincing evidence that they believed the child was an adult. Additionally, it proposes the creation of a “Domestic Trafficking Victims’ Fund,” which would be used to fund victims’ support programs. The funds are deficit neutral and derived from fines on persons convicted of child pornography, human trafficking, child prostitution, sexual exploitation, and human smuggling proposes.
The Preventing Sex Trafficking and Improving Opportunities for Youth in Foster Care Act now requires states to take steps to identify, prevent, and address sex trafficking of youth in foster care while improving their lives by ensuring they have normal opportunities and experiences and the tools to become successful adults proposes. Additionally, the Act would ensure development of policies and procedures through the foster care and adoption system for identifying and screening children believed to have been trafficking victim and ensure states do more to quickly move kids out of foster care and into loving families.
The Stop Exploitation Through Trafficking Act of 2013 amends previous TIP acts and would require that within three years, each state have legislation that (1) treat minors who engaged or attempted to engage in a commercial sex act as a victim of a severe form of TIP, (2) discourages the charging or prosecution of a minor for prostitution or a sex trafficking offense, and (3) encourages the diversion of such an individual to child protection services.
The Stop Advertising Victims of Exploitation Act of 2014 (also known as “SAVE Act of 2014) proposes to amend federal criminal code so that advertising commercial sex acts involving a minor or an individual engaged in such acts though force, fraud, or coercion is prohibited. The Act adds advertising to the types of conduct constituting sex trafficking, requires a person to have knowingly benefited financial or otherwise from the sale of such advertising to be punished under this Act, and puts the advertiser of trafficked children under age fourteen in prison for a minimum of fifteen years to life.
The International Megan’s Law to Prevent Demands for Child Sex Trafficking is another Act. Named after Megan Kanka, a seven-year-old from Hamilton, New Jersey who was killed by a repeat sex offender living nearby her house, the bill would request foreign governments to notify the U.S. of impending international travel of a child-sex offender entering the country. In return, the U.S. would also notify the country to which the offender intends to travel (referred to as “reciprocal notice”). It will also discourage and eradicate “child sex tourism” by monitoring the activities of the offenders while in the country
These Acts introduce many new provisions that may prove successful. Key provisions include an emphasis on rehabilitation and immunity for the victims, increasing penalties for even engaging in advertising, and requesting foreign cooperation. Individual states are also making an effort to eradicate the problem through independent state laws. Shutting down online sexual service advertisements is still being considered, but it has been problematic to find a solution that does not conflict with First Amendment rights.
TIP essentially thrives due to two reasons: low-risk communities and high-demand. Low-risk occurs when communities are unaware of the problem, when government and community organizations are not prepared to respond, when laws or ineffective or dormant, and when safety nets for victims do not exist. The introduction of these bills has the country hopeful that these issues might no longer be a problem in the future, especially with the increased media attention TIP receives. However, the high-demand of this business is still an issue. The TIP industry thrives off demand; when individuals are willing to buy commercial sex and cheap labor, they create a market and make it profitable for traffickers.
These laws seek to target the traffickers, but what about those who help the industry flourish in the first place? An ideal solution to help further address and eliminate TIP would be to impose increased and harsher penalties for those who request and pay for the products of TIP. While laws exist to target those who solicit the services of trafficked victims, reclassifying solicitation of trafficked persons to be just as grave of an offense as trafficking itself would be a key step to overthrowing the TIP industry.
By: Sonia Shaikh
The law of increasing poverty is the foundation for several bills introduced by the Democratic Party. Incited by Marx’s warning that certain events will form the decline of the middle class, producing a minority of large capitalists and a great proletarian majority, the party has strived to reduce the risk of centralized capitalization and the bankruptcy of small capitalists. Such endeavors include the introduction of a minimum wage, stronger antitrust laws, and active taxation. Unfortunately, this idea of the “the rich getting richer and the poor getting poorer” inherently forms America’s capitalistic infrastructure. Without, there wouldn’t be upward social mobility, nor would America retain its title as a global superpower. These virtues of free enterprise seem much too high a cost to pay, especially in addition any potential breach of true equality. As Winston Churchill wisely recognized, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
Perhaps one of the most controversial and innately contradictory bills addressing such an issue is H.R. 3903, popularly known as “The Buffett Rule”. Although it was officially introduced to Congress in 2012 and stopped via filibuster, President Obama released a budget proposal for 2015 implementing the rule’s fundamentals. American investor Warren Buffet inspired the Buffet Rule, specifically during his public statement in 2011 where he supported increased income taxes on the wealthy. It is founded on the principle of “fair taxation” and the idea that households making over a million should not be allowed to pay a smaller share of taxes than their middle-class counterparts. The Buffett Rule would limit the degree to which advantage could be taken of loopholes and tax rates, requiring those with an income of over $1 million to pay at least 30% of their income, with the exception of charitable contributions.
The implementation of this rule has an immense expected payoff. The Joint Committee on Taxation estimates the rule will raise almost $50 billion in 10 years. These numbers have produced great support for the proposition, including the favor of New York Times columnist and Nobel Prize winning economist, Paul Krugman. He claims arguments defending low taxes on the rich fall back on two main fallacious arguments. First, that low taxes on capital gains are a time honored principle, and secondly , low taxes are necessary for economic growth and job creation.
An overwhelming amount of evidence indicates the second argument is prone to fault. This is evidenced by the massive job creation and prosperity following tax increases during the Clinton Administration. Unfortunately, it is the first argument that seems to have more weight in dissuading the American public from giving approval. After all, does the Buffett Rule actually abide by the U.S. Constitution?
In the Declaration of Independence, the American people are promised “life, liberty, and the pursuit of happiness.” Although it is obvious the rule would injure the economic state of the wealthy, it is important to note it might also infringe on the benefits the less wealthy currently enjoy, thereby inhibiting primary government promises to the American people.
With the hypothetical billions raised from its ratification, the theory of the Buffett rule appears promising. However, just what are the hidden costs? Inevitably, the Buffet Rule would result in an increasingly complex tax code, which would need continuous revision. It is uncertain whether any modifications it might undergo along the way would also affect the less wealthy, taking away the very deductions the class currently enjoys. Additionally, the results on the market and economy that appear so favorable on paper have a predicted impact of increasing the deficit by 793.3 billion over a mere decade.
Lastly, the Buffett Rule dose not account for other proposals under Congressional consideration that might have an even better predicted outcome. Such proposals include increase in retirement age, amending social security, and minimum wage – just to name a few. The Buffett Rule’s theory of “fair tax” is noble in theory, but prone to several imperfections. Given such conflicting information, we can’t help but wonder if the idea of “fair tax,” an oxymoron in itself, can exist at all.