Tax reform results are easier to see at the state level because there are suitable nearby comparisons. In contrast, federal tax reforms lack parallel contemporaneous comparisons.  As a result much federal tax “analysis” is wasted arguing over partisan conceits and counterfactuals.

Tax reform can alter far-reaching economic incentives.  Reductions in state income tax rates for business can attract new employers to enter the state and induce existing employers to make long term investments, thus creating jobs.  Texas is renowned for choosing no business or personal income taxes, and the choice seems associated with robust Texas job creation, while the national economy and high tax states created relatively few jobs.  Officials in Georgia, Kansas, North Carolina, and Ohio have cited the highly productive results of the Texas tax model.

Nationwide, 61% of business income flows through small businesses and that income is taxed by the feds at individual rates as high as 39.6% – a heavy burden to anyone.  Thus, businesses react to changes in both business and individual taxation.  In 2011, six states – Florida, Nevada, Sout Dakota, Texas, Washington State and Wyoming – levied no personal income tax but thirteen states – California, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Virginia and Wisconsin – seized more than $1,000 per capita and Connecticut and New York gorged themselves on more than $1,800 per capita.  High levels of personal income tax can have a chilling effect on business investment.  With that in mind, North Carolina is considering ways to reduce its $1,027 per capita in personal income tax.  North Carolina is planning to cap the mortgage interest and property tax deductions and impose a single lower income tax rate.  As well, North Carolina plans a slightly lower sales tax, but will applying the rates to a broader base, including some services.

We are nearing the season for haggling out the next federal budget, squabbling over government overspending; and striking ostrich poses over the $17 trillion in U.S. debt.  Federal tax reform proposals are inevitable.  A few will be genuine attempts to kick start employment and curb new debt.  Many more will focus on bribing constituencies who demand frequent entitlement upgrades.  Expect proposals from the left that punish high earners and from the right that demand all earners start paying at least some taxes.  Favor tax proposals that incent businesses to invest – because that creates jobs – while leaving us all enough earnings to properly care for our families.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

Some health care providers were able to land juicy deals (e.g. the pharmaceutical industry which avoided the negotiated prices for drugs that it endures under Medicaid).  In contrast, the medical device industry was slapped with a 2.3% excise tax (on sales, irrespective of profit or loss).   Managed healthcare firm profits are capped and physicians remain crushed by Medicare and Medicaid paperwork and laughable reimbursement rates.  Clearly some lobbied more effectively than others.

The patient connection to the healthcare system has been reengineered and everyone must participate — you have no choice.  If you don’t buy health insurance, the IRS will fine you and the fine will increase in size each year.

Congress chose to favor the elderly (with continued Medicare) and the sick (with a ban on insurance that excludes pre-existing conditions).  Congress chose to force young and well patients to pay higher premiums than their care costs so that the excess funds could help pay for old and sick patients.  If young and well patients decided to roll the dice and skip insurance, the ACA system will run a higher deficit – so Congress invented a fine for being uninsured.

Congress chose mandatory treatment coverage far more extensive than typical in today’s policies, increasing the cost of coverage.  Some low and middle income families will find health insurance unaffordable so Congress created liberal subsidies for this voter bloc.  And, ever eager to burnish its populist street creds, Congress imposed a new  3.8% “Obamacare” surtax on investment income.  Shortfalls in government funding will come from those who actually pay income taxes, a minority of Americans.

The $2.7 trillion health care system needed renovations that vigorously curb costs – the major impediment to people obtaining the right health services in the right venue.  The ACA does almost nothing in that regard.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

Advertising agencies believe they can infuse their client’s brands with valuable traits such as reliability, sizzle, quality, value, and efficacy in socially redeeming roles.  When consumers act based on the perception of positive brand attributes, increased revenue streams can pay off handsomely.  Curiously, some consumers treat a brand as a statement about themselves – for example their own level of taste or their social position.

Havas Media  is a French advertising agency that just completed a study on consumer attitudes and advert effectiveness that is far deeper than the pretentious twaddle served up in most advertising circles.  The study concludes that “consumers reward brands that listen to them, provide good quality, innovative products at fair prices; make their lives happier, easier and healthier; and support the environment, the economy and the community”   In short, consumer actions are partly about how the brand pays off personally and partly about how the brand interacts with the community.

Some brands are unimportant.  For example, US consumers would not care if 92% of the brands they encounter disappeared.  In contrast consumers are deeply attached to some brands e.g. IKEA, Google, Nestle, Danone and others.  The Havas study reveals that “the more the brand contributes to improve the wellbeing of individuals, communities and the environment, the more meaningful it becomes.” and that “meaningfulness” dictates consumers attachment to the brand.  Attachment results in willingness to pay more for products produced in a socially responsible way – 53% of consumers will do so.   Still 64% of consumers think most companies are trying to be “responsible” only to improve their image.

The study will not revolutionize advertising, but it may change the emphasis in how $462 is spent to influence your buying.  Expect more emphasis on brands’ societal involvement.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

NSA and FBI chose a terrorist-oriented “boil the ocean” approach when in April 2013 they convinced a FISA court judge to order Verizon Wireless to deliver all “call data” every day. That means the feds, under a court order, can now study the domestic and international communications behavior of about 100 million consumers (since Verizon customers sometimes call non-Verizon subscribers).

When the feds rake that data and find interesting patterns they can obtain court orders for wiretaps, revealing conversations in real time.

This court order affects a huge percentage of ordinary Americans and the vast majority of us are law-abiding. No one in the know has been forthcoming about why the order was sought, and the FISA court ordered silence on the details.  Indeed we became aware of this court order only because a British newspaper published it.

But key questions remain. What is so important as to warrant wholesale surveillance of the American public by the feds and how long should we wait for a convincing explanation?

It had better be convincing because peoples’ trust of the federal government is in short supply.

Indeed, the supply is depleted by the IRS’ targeting of political foes, the DOJ’s evasions on “Fast and Furious,” the preposterous explanation of why Americans died in Benghazi, the unstated reasons why DOJ mounted a 30-phone dragnet against AP reporters, and DOJ’s partisan allegation that a Fox reporter is a co-conspirator because he reported on an issue embarrassing to the DOJ.

Spokespersons defending these abominations loose credence with the public.

This national surveillance offends us because it probes our private lawful affairs. It needs a truthful explanation from someone the public believes is not dumping another load of falsified “talking points.”

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research.  For more information about the Institute, visit www.theamericanconsumer.org. 

This weekend we started downloading a map app – high tech consumers in action, but progress ground to a halt because we were uncomfortable with the app’s demand for an email identity to associate with the app.  There is no good reason for the app to need that and even less reason for us to waste a well-behaved email identity.  If we give it up, it will be henceforth tracked and thoroughly spammed.

We created an email account for our dog under an amusing pseudonym.

Spam won’t bother him since he doesn’t check for email, never clicks on dodgy commercial offers, and he hasn’t mentioned a Nigerian lottery prize that he wants to deposit in our bank account.  Neither he nor we will use his email identity to send email that could trick you or to comment as paid troll on political sites.

It’s easy to create an account that can’t be traced back to a real person — hackers do it all the time.

Some expert users have worse Internet experience than our dog.  They suffered hackers draining their online bank accounts, watched vicious attacks on others launched from their email or social media accounts, and had their personal data and online accounts deleted.

For program operations purposes, governments are just beginning to fight back against those who fake identities for criminal reasons.

A system called eSignature is spreading in use among government departments who need to assure the identities of parties they deal with are genuine.

For example when you want to share a tax return with a financial institution, the IRS requires you to use eSignature.  It lets you authorize sending your tax return to a financial institution and to assure the receiving institution that it’s indeed your tax return.  That cuts back on issuance of fraudulent loans in other people’s name.

There are prudent steps that casual Internet consumers can take to protect themselves.  The top 7 are lucidly discussed by Linda Bernstein in a Forbes article.

Much of your responsibility centers on keeping up vanilla virus protection and a firewall, plus selecting and regularly changing a strong, non-obvious password – one for each important account.

So-called security questions and answers are in effect passwords and should be maintained too.  Our dog knows the rest – no clicking on dodgy links and don’t even sniff at anything that sounds too good to be true.

If you really want to dive deeper into identity verification, be warned that the pool is bottomless.

For example, eventually all passwords may be replaced by 2-factor security (a password, plus a forced retrieval of one-time passcode from a separate device/system such as a cellphone or an immediately generated email).

Both offline verification and various depths of encryption will play an increasing role in the future.  Otherwise, consider getting a security dog.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

The ruling cited NYC’s law that says rental properties can’t be rented for less than 30 days at a time. Enacted in 2011, the law was meant to target illegal hotel operators and leasing companies trying to skirt the cities hotel regulations. But there’s also been a movement amongst hotel industry lobbyists to quash this burgeoning, disruptive trend. As you can imagine, the perceived loss of income to Airbnb users could be substantial. So much so that, according to Business Insider, many countries have seen calls from business interests to ban the service. And it appears that many cities and countries are playing ball with the lobbyists.

The positive economic impact to these cities, however, shouldn’t be overlooked. According to Crain’s New York, there are around 30,000 NYC residents on Airbnb, which generated $1 billion in local economic activity in 2013 alone. And according to Crain’s, 87% of the listings in NYC are outside of the main tourist corridors, meaning neighborhoods usually unseen by tourists are finally getting some of those tourism industry dollars. The savings realized by consumers on the cost of lodging is certainly factoring into the money spent in and around the city. Think of the economic impact such a service could be having around the country, and world, if left to flourish.

We’ve seen this same story of stifled innovation and disruptive technologies running into bureaucratic roadblocks before, and very recently. Uber, the car-service hailing smartphone app, has faced many of the same problems with the entrenched taxi industry using city laws to attempt to shut down their business. The battle rages on for Uber–especially in DC, where a new proposed law could end certain portions their service. It looks as though Airbnb might be in for much of the same scrutiny that Uber has faced.

Society needs these kinds of disruptive technologies. It’s good for consumers, as it widens choices, provides more convenience and often lowers prices for everyone. And although it may seem harmful to certain industries, it’s a necessary part of capitalism. Many thought the Internet itself would be harmful to business, but we’ve seen it change how companies and consumers do business, and they’re better off for it, creating an entirely new economy. These technologies make cities a better place for consumers to spend their money, something everyone should embrace. Cities should embrace these disruptive new technologies to make cities a better, more enticing place to live and do business.

Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research

The Department of Justice (DoJ) seized ex-federal prosecutor Dennis K. Burke’s communications with reporters at Fox News.  Burke gave Fox additional details on DoJ’s botched “Fast and Furious” gunrunning.  DoJ’s record seizure suggests there may be additional embarrassments that DoJ wants suppressed.

In another case, James Rosen, a Fox News reporter revealed that North Korea would respond to a UN condemnation for nuclear tests by doing another nuclear test.  Even without a leaker’s tip, that conclusion was obvious to any policymaker paying attention.  But since it was mentioned in a classified document, law enforcement used a subpoena to obtain Rosen’s emails and they now considered him a ”coconspirator” in the crime of leaking classified information.

Earlier in 2013, law enforcement seized records for 20 telephone lines used by AP reporters.  “Records” usually mean the date, time, calling number and called number, but not content from the call – it’s different from a “wiretap” where the conversation or data exchange is obtained.   The unstated, but likely leak was about the CIA disrupting a Yemen-based plot to bomb an airplane.  The DoJ stated it was not targeting the reporters.  Indicting a reporter is optional.  Unlike in the Rosen case, the intelligence leaked to AP was not trivial and could aid terrorists, but it did not involve Fox News.

The IRS conducted a campaign of harassment against conservative groups seeking legitimate and common classification of 501(c)(4), i.e. tax exempt non-profit.  That federally-funded campaign is pure political bias deserving a serious penalty.  Next, the IRS leaked confidential information from the aspiring conservative interest groups to the liberal-leaning ProPublica.  Presumably the IRS thought ProPublica would join in its strategy of hobbling conservative activists.

There is inconsistency, irrationality and bias evident in government seizures or misuse of private information.  We favor legitimate information seizures to nail real criminals but not seizures that are politically-driven, or used to cover up policy errors or embarrassments.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

The effort to increase the number of visas is tied to the fate of the immigration bill and the negotiations surrounding it have been taking place in Washington over the past few months.  The passage of immigration reform is a top issue for many varied interests, including those in the high-tech sector.  There’s a major lack of specialized workers in the science, technology, engineering and mathematics (STEM) fields, making it very difficult to achieve the productivity that many companies try to achieve.  A new group called FWD.us, led by Facebook founder Mark Zuckerberg and other tech leaders are lobbying on behalf of the bill.  They see the need in their own industry for major reform to bring new talent to the US workforce, and the loss of income and productivity because of it.

Having H1-B visa holders in the United States is good for the economy.  They earn more than their native-born counterparts, about $76,000 compared to $67,000, respectively, according to the Brookings Institution.  This increase in wages means that more money is being injected back into the economy, both through increased tax revenue and in spending power.  This increase in earnings power also shows that the jobs they’re filling are in-demand.  Companies wouldn’t go through the nightmare of dealing with bringing an immigrant to the US if they could hire a comparable US worker at a lower wage.

Immigration reform is an important step in ensuring that the US remains at the top of its game when it comes to high-tech manufacturing, innovation and job growth.

As the tech sector has been one of the driving forces powering our economy for many years, perhaps it’s time Congress listen.  An increase in high-skilled workers into the US is good for the economy all around—it’s good for businesses who get a fresh, educated workforce they can’t find otherwise, and it’s good for consumers because they get the products they desire—and it’s all produced in America.  A new study by the American Action Forum even suggests that immigration reform would reduce the federal debt by over $2.5 trillion, raising economic growth by almost a percentage point.  Economists, even conservative economists, are so confident that immigration reform would be a boon for the economy that 100 signed a letter to Congressional leaders imploring them for action.

Congress should work to come to an agreement on comprehensive immigration reform, as lingering any longer could have a seriously detrimental effect on the country’s economic fate.  If jobs are being created and no one is filling them, we have a serious problem, one that will hold back the American economy for years to come. Congress should increase the cap on the number of H1-B visas provided to companies as soon as possible so American tech companies can get back to work doing what they do best.

Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research

In April, Spanish police charged a man with a massive distributed denial of service (DDoS) attack on anti-spam watchdog, Spamhaus.  He enlisted help from hacker friends and they slowed big parts of the Internet.  Also in April, LivingSocial said it suffered a cyber attack that exposed names, e-mail names, birth dates, and encrypted passwords for 50 million customers.   Between December 2012 and now, an international crew hacked credit card transaction processers and set up a $45 million cash haul.  Hackers are doing massive damage.

The Internet’s current design leaves us exposed to hacker attack because it allows anyone to assert a false identity, help themselves to information that isn’t theirs, and damage other’s property.  It was designed for open exchange of memos and data among academic researchers at DARPA, not for secured communications.

Major stakeholders are resistant to Internet design changes because their investments were built around today’s flawed design.  For example, even a highly constructive change such as IPv6 (which allows for more Internet destinations) faced foot-dragging.  Design changes that enforce strong identity verification may take several decades, and we can’t just change a few lines of code to flush the hackers from the system.

While we allow hackers to profit and to face inconsequential punishment, they will continue attacking.  Sternly worded speeches on the evils of hacker theft and attacks are worse than useless — they may convince a gullible audience that politicians will handle the problem.  It’s not that easy.   Without redesign, halting attacks depends on the hacker’s identity and protector.

When domestic hackers are arrested, court progress can be delayed by a defense attorney working the motions and appeals processes.  Some even argue that violating “terms of service” agreements are not a crime.  Other gambits claim the perp is a modern day saint – exercising first amendment rights; or have fellow “hactivists” invent socially redeeming intentions for their crimes while relying on the media to downplay the theft and vandalism of other people’s property, or hoping the readers are unaware that there is no first amendment entitlement to vandalize private property.  When convicted, these perpetrators are released or briefly incarceration.

The bitter irony is that hacking victims bear the direct cost of the crime, usually the cost for the perp’s public defender, the cost of incarcerating the perp, and often the cost for post-release welfare payments to the perp.  Until law forces a mandatory sentence of bankruptcy-proof full restitution for court costs and victim damages, the gain from hacking will continue to outweigh the pain from being caught.

It is more difficult to bring offshore hackers to justice.  A foreign commercial hacker who is pursued by U.S. police may attract support from other hackers, nationalist activists or politicians.  A U.S. decision to press forward with arrest has implications for international relations, dragging in the Department of State, muddying up the choice of jurisdiction, and perhaps converting the perp into prisoner exchange fodder.  Attorney costs, incompatible codes of law, and high profile opportunities for political narcissism push “justice” beyond reach.

State-sponsored hackers such as the Iranians and Chinese are beyond the reach of U.S. courts so must be handled differently.  Avoiding media coverage, we need to determine how reliably we can defend against the sovereign hackers and how severe the damage done by the hacking might become.  If we cannot defend against it or cannot tolerate the potential damage, then we should demand an immediate end and threaten painful retaliation (e.g. hobble the sponsor country’s communications, or banking system, etc…).  The big stick is necessary.  Stuxnet was a successful example of a big stick, even though no country has admitted ownership of it.

Letting a hacking sponsor off the hook in return for his promise of future righteous behavior is out of the question — which politician would be crazy enough to rely on the word of a proven sneak capable of harming us lethally?

Taking slack out of the post-arrest treatment for hackers is a useful project.  But redesign of the Internet so that it enforces identity verification is far more productive.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

As we approach 2014, few of the financial details are emerging, but some background factors are becoming clear.  Total spending on health care grew at 3.5% during 2009-2011, much slower than the 5.9% annual increase over the prior ten years.  This slowdown is welcomed and the CBO quickly seized upon a $382 billion reduction in estimated 10-year federal spending on Medicare and Medicaid.  Causes for the spending slowdown are:

• Belt-tightening due to the 2009-2011 recession (1/3^rd of the  2.4% drop);
• Some employers restructured plans to shunt more cost onto employees (accounts for 1/5^th of the 2.4% drop);
• Fewer medical imaging devices and newfangled drug introductions; and,
• Unspecified other factors.

ACA does not always encourage health coverage.  Employers are expected to reduce scheduled work hours to levels that are exempt from the obligation to offer health coverage, or to discontinue offering health coverage and pay the federally mandated fine.  The employees who lose health benefits might independently buy health insurance, or not.  Just 8% of people will be eligible for federal subsidies.  Some will elect to pay a fine and remain uninsured – knowing they will not be refused care at a local emergency room.

The amount of premiums paid, the total of subsidies, payments for uninsured care, patient morbidity and average charges by providers will determine the premium and out of pocket costs that consumers face under ACA.  These amounts are not revealed publicly yet.  Perhaps politicians are waiting for “the right budget moment” or studying the implications of Oregon.

Many of the Americans receiving subsidies for health coverage will be placed in Medicaid.  Oregon randomly assigned Medicaid or “no coverage” (the control group) to a large number of patients.  After two years, Medicaid patients did slightly better on two measures – hypertension and diabetes but not at a level considered statistically significant. The Medicaid patients were somewhat less depressed, an outcome ascribed to the reduction in financial stress.  There are health interventions that can reduce chronic illness and improve health status, but Oregon’s Medicaid patients either did not find them or did not need them.  Overall, the Medicaid patients did not achieve improvement in physical health.

The Oregon study reveals that “peace of mind” was the main yield from its Medicaid spending spree.  This must be distressing to those who stridently demand Medicaid-like plans for all.  The Oregon study is a strong argument for changing from a fee-for-service model to a fee-for-results model.  Under a fee-for-results model, the lack of any net improvement in physical health would have tightly constrained payments to providers – without limiting the medical interventions needed by those with illness.  Perhaps it is not too late to insist on fee-for-results in federal health care spending – and it is definitely not be too late to do something about “no improvement” designs that cost us hideous amounts.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research