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Barack Obama on the Courts as a "Refuge for Justice":
In an interview yesterday with CNN's Wolf Blitzer, Barack Obama spoke again on what kind of judge he would want appointed to the federal courts (he discusses the topic starting around the 9 minute mark). An excerpt:
What you're looking for is somebody who is going to apply the law where it's clear. Now there's gonna be those five percent of cases or one percent of cases where the law isn't clear. And the judge has to then bring in his or her own perspectives, his ethics, his or her moral bearings — and, in those circumstances, what I do want is a judge who is sympathetic enough to those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly. The courts become a refuge for justice. That's been its historic role. That was its role in Brown v. Board of Education.
  Unfortunately, Blitzer did not ask Obama an open-ended question of which Justices past or present he most admires, to get a better idea of what Obama has in mind. Instead, Blitzer asked Obama which Justices Obama likes among the Justices on the bench "right now." Obama responds that he thinks Justices Breyer and Ginsburg are "very sensible," and that even Justice Souter - who Obama notes is a Republican-nominated Justice --is "a sensible judge."

  UPDATE: In the comment thread, "Terrivus" offers an interesting perspective that (as far as I know) I haven't seen expressed elsewhere. I'm not sure if I agree with it, and parts of it seem clearly overstated. But it seems interesting enough to bring to the main text for discussion:
What's interesting is that Obama's very campaign is upending traditional notions of who has "access" to political power, and yet his approach to judicial nominations is premised on those traditional notions. Using the courts to protect "discrete and insular minorities" may have made much more sense in a time when it realistically wasn't as possible — from a structural point of view — for such groups to have adequate representation in the political process.

But advances in media and technology — as illustrated by Obama's own campaign, which was initiated within and is largely propelled by the netroots community — have largely removed these barriers today. Think of any group that would count as a "discrete and insular minority": blacks, Hispanics, gays, black Hispanic gays — anything. In the 1940s and 1950s, it was much easier for the political process to structurally cut those groups off. Today? Every one of these groups has the ability to come together, raise money, raise awareness, and attract followers and sympathizers in the public and among representatives. There is simply no "discrete and insular minority" that doesn't have the ability to access the political process these days in the same manner as all groups.

Now, does that mean that each of these minorities *gets their way* on every issue? No — they might often get outvoted. But getting outvoted after a thorough airing of issues is much different than not getting an airing at all. And after a couple more years of awareness and making arguments, those minorities may eventually change the public view enough to gain enough votes to put their favored policies in place. And that's democracy.

So I just find it odd that Obama's approach to judges rests on notions of the political process that his own campaign has proven are antiquated.
FantasiaWHT:
It's a start at the district &circuit levels, where a high percentage of the cases have clear law behind them, but how is that going to help him pick USSC justices where, virtually by definition, the law is not clear?
5.9.2008 12:17pm
Lawywer-Wearing-Yarmula (www):
Be afraid, very afraid.
5.9.2008 12:19pm
taney71:
Policy making on the judiciary is fine as long as the results are ok for Democrats. I see little difference between the Lochner era and the Roe era.
5.9.2008 12:35pm
hawkins:

I see little difference between the Lochner era and the Roe era.


I agree - both are great
5.9.2008 12:40pm
Kevin H (mail):
Beyer, Souter and Ginsberg. So Barack likes judges that agree that the government can take property away from citizens for whatever reason. Not surprising coming from a Socialist.
5.9.2008 12:41pm
OrinKerr:
Kevin H,

Do you really think that Obama is a socialist? Why do you think that?
5.9.2008 12:43pm
Gilbert (mail):
@Kevin H.

Funny how calling almost half of the Supreme Court "sensible" makes someone a socialist. Get real.
5.9.2008 12:52pm
therut:
Start with his brand of theology. What and enlightening time. The NYT a year or so ago came out and admitted they were biased left and noe Obama who wants to rule comes out and admits he wants biased justice. Sad.
5.9.2008 12:52pm
AntonK (mail):
No need to ask any open-ended question to reveal Obama's judicial preferences. His reference to Ginsberg as "very sensible," as discouraging as that remark is, tells you all you need to know about Obama and the courts.
5.9.2008 12:53pm
Opher Banarie (mail) (www):
Gilbert wrote:
Funny how calling almost half of the Supreme Court "sensible" makes someone a socialist. Get real.


Since when is three "almost half" of nine? I guess algebra isn't taught in law school.
5.9.2008 12:59pm
Thales (mail) (www):
"Kevin H,

Do you really think that Obama is a socialist? Why do you think that?"

I'll take a guess. He does not know what the word "socialist" means, or uses it as an overarching umbrella concept to describe views he disagrees with. Cf. "George Bush is a Nazi."
5.9.2008 1:03pm
calmom:
The 'vulnerable' and the 'powerless'. Like Kelo? Wolf should have asked him about specific cases. Obama likes to give vague answers that sound good but at bottom are meaningless.
5.9.2008 1:05pm
Jimmy Dean (mail) (www):
those who are vulnerable, those who are powerless,

But not the unborn . . . .
5.9.2008 1:08pm
wt (www):
The reluctance to compliment the Republican-nominated Justices is a little disheartening. Souter votes with Ginsburg more than Breyer does, and yet he's not "very sensible," he's just normally sensible, despite the fact that Bush 41 nominated him.

And no mention of Justice Stevens, possibly the Justice who is MOST like what Obama is looking for. Why? Because he was also a Republican nominee?

The overriding partisanship (even in the face of results he likes -- Souter, Stevens) in Obama's position is palpable.
5.9.2008 1:12pm
J. F. Thomas (mail):
Do you really think that Obama is a socialist? Why do you think that?"

Probably because he wants to "socialize" medicine. Which on this site means anything other than "pay your medical bills out of your own pocket."
5.9.2008 1:13pm
astrangerwithcandy (mail):
JFThomas is here. Let the flame wars begin
5.9.2008 1:16pm
SeaDrive:
I see how this game is played. You put words in Obama's mouth, the criticize him for them. And while we are at it, we can complain that he talks like a candidate for office and not a law professor. What fun? How jejune.


What I do want is a judge who is sympathetic enough to those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly.



Could it be that he means that you shouldn't have to have a law degree to avoid compromising your 4th Amendment rights at a traffic stop? Or that laws forbidding domestic surveillance actual forbid domestic surveillance?
5.9.2008 1:18pm
hawkins:

Could it be that he means that you shouldn't have to have a law degree to avoid compromising your 4th Amendment rights at a traffic stop?


I wish a law degree were all it took to avoid this.
5.9.2008 1:22pm
Terrivus:
The quality of these comments is atrocious, but nevertheless, I'm adding to them...

What's interesting is that Obama's very campaign is upending traditional notions of who has "access" to political power, and yet his approach to judicial nominations is premised on those traditional notions. Using the courts to protect "discrete and insular minorities" may have made much more sense in a time when it realistically wasn't as possible -- from a structural point of view -- for such groups to have adequate representation in the political process.

But advances in media and technology -- as illustrated by Obama's own campaign, which was initiated within and is largely propelled by the netroots community -- have largely removed these barriers today. Think of any group that would count as a "discrete and insular minority": blacks, Hispanics, gays, black Hispanic gays -- anything. In the 1940s and 1950s, it was much easier for the political process to structurally cut those groups off. Today? Every one of these groups has the ability to come together, raise money, raise awareness, and attract followers and sympathizers in the public and among representatives. There is simply no "discrete and insular minority" that doesn't have the ability to access the political process these days in the same manner as all groups.

Now, does that mean that each of these minorities *gets their way* on every issue? No -- they might often get outvoted. But getting outvoted after a thorough airing of issues is much different than not getting an airing at all. And after a couple more years of awareness and making arguments, those minorities may eventually change the public view enough to gain enough votes to put their favored policies in place. And that's democracy.

So I just find it odd that Obama's approach to judges rests on notions of the political process that his own campaign has proven are antiquated.
5.9.2008 1:23pm
alias:
His reference to Ginsb[u]rg as "very sensible," as discouraging as that remark is, tells you all you need to know about Obama and the courts.

I suppose that's all you need to know, if you're not very interested in Obama or the courts.
5.9.2008 1:31pm
luagha:
I believe that Obama is a socialist because he believes in forcing equality of outcome, and punishing the wealthy and middle class.

When he was questioned about the capital gains tax, even with the evidence put before him that lowering the capital gains tax improved the economy and resulted in more revenue from the capital gains tax, he still said that he wanted to raise it.

Why? The reason he gave was 'fairness.' That the top 50 hedge fund managers made $29 billion between them and that's just not 'fair' because secretaries don't have the same power to make that kind of money. You can get the full quote at http://mediamatters.org/items/200804220005 which is actually trying to defend him it seems.

First, aside from the fact that it's foolish, it's basically socialism. He wants equality of opportunity AND equality of outcome. And that's the basic socialist fallacy over and over again. If you legislate equality of outcome, people stop working hard to improve themselves because they won't benefit from working hard to improve themselves. They'll coast.

This is why socialist equality-of-outcome governments always fail - they look good at first because you steal from the rich and the middle class and spread it around. But once there's nothing left to steal and everyone is coasting, nothing gets done and you end up like Cuba.

The more you look at Obama's actual policies, the more clearly socialist they are. His associations with Wright and Ayers are just tidbits of further evidence.
5.9.2008 1:39pm
rarango (mail):
I think FantasiaWHT comment is most interesting. IANAL caveat applies, but if the law was clear would a case ever get to the supreme court?

At this point in the campaign, I suspect Senator Obama's remarks are addressed to a democratic constituency. Does anyone really think he would have identified Roberts, Alito, Scalia or Thomas? Come on, folks.
5.9.2008 1:42pm
Cornellian (mail):
even with the evidence put before him that lowering the capital gains tax improved the economy and resulted in more revenue from the capital gains tax

So if we lower the capital gains tax to zero, it will generate infinite tax revenue?
5.9.2008 1:45pm
alias:
luagha, is any policy that redistributes income socialist? Is McCain socialist because he doesn't favor a flat tax (or no tax) or the elimination of welfare altogether?

If not, and if being a "socialist" is a matter of degree, isn't it more accurate to say that Obama's just more into big government and wealth redistribution than you'd like?
5.9.2008 1:47pm
Guest101:
FantasiaWHT's comment is more on the right track than the rest, but I think Obama's quote provides a pretty clear answer to that. In the "five percent" of cases where the law is not clear (probably much more than 5% at the SCOTUS level), "what [Obama does] want is a judge who is sympathetic enough to those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly."

Terrivus,
There has always been a strand in the common law viewing the courts as defenders of the rights of the underprivileged; it is hardly a post-1960s innovation. The rule of lenity, for example, gives criminal defendants the benefit of ambiguously-worded criminal statutes. Similarly, in contract law, agreements are generally construed against the drafter. The law of torts likewise considers, among other things, what party is better able to bear the risk of loss. So Obama's sentiments are nothing new, and are certainly not outside the mainstream of common-law jurisprudence as it has existed for centuries.
5.9.2008 1:48pm
jps:
I suggest that Justice Stevens' decision in Marion County Bd of Elections last week kept him from being praised...
I wouldnt read a distinction between his "very sensible" for Ginsburg and Breyer and "sensible" for Souter. He likely wanted to separate the 2 groups to show he was saying he supports a Republican-nom.

If he were really a "socialist" or radical on the judiciary, he would not have supported Breyer, who is pretty much the left analogue to Kennedy.
Breyer, Souter, and Ginsburg as a trio is not some radical group of Justices. Alito, Roberts, Thomas, and Scalia are all more to the right than they are to the left.
5.9.2008 1:50pm
DC (mail):
What strikes me is how much more moderated Obama's comments were about this than McCain's. McCain called out several Repbulican-appointed judges, including Justices Kennedy and Stevens, as having "abused" their authority.

I'm not convinced McCain could tell you what the holding of Kelo really was --- let alone how he can reconcile expanding a federal "right" against compensated takings to curb state authority to take property (with compensation, of course) with his broad espousal of federalism. (The same tension exists in the FedSoc position, I'm afraid, and I suspect whoever wrote that speech for him suffers the same cognitive dissonance.) But he was willing to stand up and read a quite intemperate speech about it.

Property rights: I've recently been bothered by this question. If you want to see the government take property *without* compensation, why not look at states with high property taxes? As neighborhoods change over time, lots of people on fixed income get socked with hundreds of dollars per month in increased bills. For what? They get the same city and state services as before. And they own the houses --- often they or their parents built the houses. But the government charges an ever-increasing rent for the privilege of keeping that property, with the penalty for nonpayment being that you lose the property. How is that less disturbing than Kelo? (on the equities since no one wants to talk about the law of Kelo anyway)
5.9.2008 1:51pm
Guest101:
The last comment should have said something like, the rule of lenity gives criminal defendants the benefit of the doubt as against ambiguously-worded criminal statutes. Apologies for the hasty posting.
5.9.2008 1:51pm
gab:
Obama is a socialist?

We have a president in office for whom many of you voted (twice) who has increased the federal deficit by more than $4 trillion during his time in office. A president who spearheaded the effort to expand entitlements (the Medicare prescription drug benefit) by an extradordinary amount (and lied about the size.) And you call Obama a socialist?

That has to be a joke...
5.9.2008 1:51pm
Brian Mac:
Terrivus:

I think you're a little optimistic. It's true that things have moved on since the 50s, but power hierarchies are intrinsic to any society. There's a bunch of things which constrain minorities' ability/inclination to politically organize (mainly limited wealth, time, and trust in the political system), and so they still lack the political clout that their raw numbers suggest they should have.
5.9.2008 1:53pm
Guest101:

We have a president in office for whom many of you voted (twice) who has increased the federal deficit by more than $4 trillion during his time in office. A president who spearheaded the effort to expand entitlements (the Medicare prescription drug benefit) by an extradordinary amount (and lied about the size.)

Apparently runaway government spending is fine in GOP circles as long as you don't try to pay for it.
5.9.2008 1:54pm
Commenterlein (mail):
Luagha,

Socialism means by its very definition state ownership of the means of production. Go look it up.

The idea that any state that puts a strong emphasis on income redistribution has failed is plainly ridiculous - the last time I checked, Germany, Sweden, Austria, Denmark and lots of other more or less social-democratic countries were doing quite well.

Your claim that lowering the capital gains tax rate increases government revenue from the cap gains tax is empirically false. The decline in government revenue is much smaller than would be expected without a dynamic investment response, but a decline it is nonetheless.

Bottom line: It is never pretty when ideology trumps reality.
5.9.2008 1:56pm
The Unbeliever:
So if we lower the capital gains tax to zero, it will generate infinite tax revenue?

For crying out loud, does this facetious red herring have to be brought up EVERY time someone mentions the capital gains tax? Or have you never seen a bounded curve, like the Laffer Curve used to express the concept, which clearly shows revenue at 0 when tax rates are either zero or 100?

Getting back on topic: it's fair to call Obama a socialist if his primary motivator in economic affairs is to enforce equality via wealth redistribution. I don't care to argue the point either way, but his statements on the capital gains tax are rather damning in this regard.
5.9.2008 2:00pm
Justin (mail):
Terrivius's point is silly, imho. The idea that there has been progress amongst minorities - including blacks and hispanics, is true, and nobody is arguing. But to believe that they have equal and adequate political process is clearly belied by the continuing existence of things such as the drug war. Obama has become a signficant political candidate for the Presidency, yes. But it has only been by distancing himself completely from issues important to African Americans - and to the legitimate gripes that African Americans have had, historically, with the United States government (though Reverand Wright's comments clearly went beyond legitimate gripes). The idea that technology and media advances makes discrimination and nonrepresentation of insular minorities irrelevant presumes that the reason minorities are insular was simply a lack of voice. Instead, the issue is one of political representation, conflicting goals, and yes, racism.

The idea that progress is a reason to forego the protections of the 14th Amendment is incredibly silly - "attracting sympathizers" is no substitute for actually having a sufficient coalition of like-minded voters who are willing to adequately represent your interests politically.

Given the very moderate positions on the 14th Amendment and insular-minorities that the liberal wing of the SCOTUS has taken - affirmative action is only available, not required; a still very narrow view of de facto discrimination, etc. - Obama's support for that wing seems not the least bit curious.
5.9.2008 2:11pm
Richard Aubrey (mail):
It's certainly possible for various communities--usually minority in one sense or another--to air their situations today. Far more so than in the past.
The problem is that they may be asking for things which will not gain them any sympathizers, may indeed horrify many others, and so democracy won't get them what they want. Nor should it.
IMO, that's the reason for Obama suggesting the courts can go for the powerless while he benefits from the 21st century technology which can empower the powerless. It's not a contradiction or overlooking something. The courts will get the minorities that which they couldn't get by convincing their fellow citizens.
It's a two-track process.
5.9.2008 2:11pm
Timothy Sandefur (mail) (www):
I'm not sure that Terrivus is right about the problem of discrete and insular minorities having been largely solved by the advances of technology. The question isn't so much--or shouldn't so much be--whether political coalitions have an opportunity to be heard by the voters, but whether their constitutional rights are being protected sufficiently by the political process that they ought not to receive greater judicial protection. (Mind you, I'm talking about the Footnote Four theory, which I don't buy, but for purposes of this discussion, we'll assume its validity.)

And the fact is that the advances of technology have not made it more realistic to relegate some groups to the political process for protection of their rights. Rules that violate the rights of politically disfavored minorities are often imposed in the form of regulations that are written and imposed by administrative agencies whose members are not elected, but appointed or hired, and who in many cases can't even be fired without going through very difficult procedures. To require the people whose rights are violated by such rules to go through the political process for redress is unrealistic, even in the Internet Age.

I do think that changes in technology as well as social mores requires us to rethink the whole Footnote Four schema. But I don't think it's right to say that advances in technology have made discrete and insular minorities more capable of protecting themselves in the absence of judicial solicitude.
5.9.2008 2:13pm
Oren:
Apparently runaway government spending is fine in GOP circles as long as you don't try to pay for it.
Amen. I don't like either of the candidates for their refusal to put the US on track to being debt-free. We need to be running an absolute minimum surplus of $500 million annually. At that rate, we can get out of debt in approximately 25 years.

Instead, we get 100 years in Iraq (at about a billion weekly) or national healthcare (god-only-knows-probably-a-lot).
5.9.2008 2:15pm
J. F. Thomas (mail):
Getting back on topic: it's fair to call Obama a socialist if his primary motivator in economic affairs is to enforce equality via wealth redistribution.

Even if that is what Obama meant by "fairness", it still doesn't mean he is a socialist.

The issue of fairness when it comes to capital gains comes from the idea of why should money made from the sale of equities be taxed at a different rate from that money earned from wages. Why should a heart surgeon who makes $500,000 a year have to pay more in taxes than a commodities trader who makes the exact same amount from trading futurew?
5.9.2008 2:23pm
Andy Freeman (mail):
It's unclear why "Bush did it" is thought to be a defense of Obama by folks who don't like Bush.
5.9.2008 2:25pm
J. F. Thomas (mail):
For crying out loud, does this facetious red herring have to be brought up EVERY time someone mentions the capital gains tax?

Funny though, everyone who believes in the Laffer Curve and supply side economics thinks taxes are still too high. You seem to think that maximum revenues will occur when the tax rate, if not zero, is pretty damn close to it.
5.9.2008 2:28pm
J. F. Thomas (mail):
It's unclear why "Bush did it" is thought to be a defense of Obama by folks who don't like Bush.

It's more of a pot calling the kettle black. I find it particularly ironic when Bush supporters complain about Obama's lack of experience.
5.9.2008 2:30pm
Bpbatista (mail):
So, if I get in a legal dispute with someone on welfare, Obama wants the judge to screw me just because I have a job?

Where's the justice in that?
5.9.2008 2:32pm
A. Zarkov (mail):
"So if we lower the capital gains tax to zero, it will generate infinite tax revenue?"

You should know that the functional relationship (if it even exists) between tax revenue and tax is nonlinear. To understand anything you linearize around some operating point and look at small changes. Thus your snarly question really makes no sense in a policy making context.
5.9.2008 2:34pm
Bpbatista (mail):
DC: The reason McCain can call out activist judges by name is because a majority of voters agree with him about activist judges. Obama can't call out conservative judges by name because most voters do not agree with him. If he were to say John Roberts or Scalia are lousy judges, people might ask what's wrong with them and Obama would have to explain why limiting federal power and construing the Constitution as it is written and was intended is a bad thing.
5.9.2008 2:36pm
PC:
You should know that the functional relationship (if it even exists) between tax revenue and tax is nonlinear.


That's an understatement.
5.9.2008 2:41pm
Houston Lawyer:
The facts are that capital gains tax revenue has increased every time the capital gains tax rate has been lowered. When Obama says "fairness" what he really means is envy. His constituents are envious of those who are financially better off and want the government to take that money from them and redistribute it. Sounds an awful lot like socialism to me.
5.9.2008 2:43pm
Gerriet S (mail):
So, I'm not a lawyer, but...

Is it a dodge to say that 95% of cases are situations in which the law is clear? I'd think that's got to be true at lower court levels and maybe even some appeals. But doesn't the Supreme Court select cases at least partly on the basis of where the law needs clarification and tuning? Isn't that part of what makes the law clear for the rest?

The position is probably more valid to the extent that the appointments get farther away from the Supreme Court nominations--but isn't the Supreme Court what most average people are thinking about when we talk about court appointments?

I'd love to know how people with a legal background view that part of his statement.
5.9.2008 2:45pm
Terrivus:
Orin et al. -- just to clarify, my comment may have been overstated and overly optimistic, but recall that it's a blog comment, not a law journal note. I wrote it in two minutes off the top of my head. Don't take it as the end-all, be-all of thought on the subject. But I do think it is an interesting point that I hope generates thoughtful discussion (certainly more than the question of "whether Obama is a socialist," or whatever else has hijacked this comment thread). And I'm grateful to Orin for having highlighted it in the main post.
5.9.2008 2:49pm
PDXLawyer (mail):
I've always been unconvinced that the political process can be made to favor those whom the political process disfavors. Seems to me like a logical impossibility.

As to the "discrete and insular minority" argument, doesn't modern public choice theory indicate that such groups are generally advantaged rather than disadvantaged in the political process by being "discrete" and "insular"?
5.9.2008 2:51pm
frankcross (mail):
Gerriet, the consensus is that a small proportion of the Supreme Court cases are clear on the law. A big percentage of them are circuit splits which almost by definition are not clear on the law. There may be a few that are truly clear, but not many. In general, the USSC would have neither the need nor desire to take them if they were so clear. Even the unanimous decisions aren't necessarily so clear on the law. Sometimes, the Court takes cases specificially to change the state of the law, which may be apparently clear in the opposite direction.
5.9.2008 2:52pm
J. F. Thomas (mail):
DC: The reason McCain can call out activist judges by name is because a majority of voters agree with him about activist judges.

The reason McCain can call out activist judges is that the GOP has spent the last 15 years railing against them and a lot of voters think "activist" judges are bad without even knowing what the hell it means to be an activist judge.

As far as I can tell, an activist judge is any judge who's decisions you don't agree with.
5.9.2008 2:55pm
J. F. Thomas (mail):
When Obama says "fairness" what he really means is envy.

That doesn't address my point about the heart surgeon.
5.9.2008 2:59pm
hawkins:

Obama can't call out conservative judges by name because most voters do not agree with him. If he were to say John Roberts or Scalia are lousy judges, people might ask what's wrong with them and Obama would have to explain why limiting federal power and construing the Constitution as it is written and was intended is a bad thing.


This is wrong. A majority of people may generally oppose judicial activism and support "construing the Constitution as written." But when explained the practical ramifications of such a position - the majority's power to outlaw use of contraceptives, teaching kids foreign languages, etc - the vast majority of voters would oppose "construing the Constitution as written."
5.9.2008 2:59pm
DJR:
The 95% number is fair in the rhetorical way in which it was used; I don't know if the real number is 84% or 96%, but the percentage of cases where no new law needs to be created is very high. The arguments in those cases are how the facts should be applied to the law.

The Supreme Court only takes around 1% of the cases in which a petition for certiorari is filed, which doesn't mean that the law was clear in the other 99%, but does give some indication of the numbers we are talking about. Even in cases granted at the Supreme Court, somewhere between 40-50% are decided unanimously (2005 52%; 2006 38%) while substantially fewer are decided 5-4 (2005 11%; 2006 33%)*.

I think when people talk about Presidents' judicial appointments, they want to know about the Supreme Court, but also about the courts of appeals -- the courts that decide the 99% of cases where cert. isn't granted and 100% of the appellate cases where there is no petition for certiorari.


________
*[Note that 2005 &06 are somewhat at the extremes; there were many unanimous opinions before O'Connor left in 2005, and last Term the Court was criticized for the large number of 5-4 decisions]
5.9.2008 3:06pm
J. F. Thomas (mail):
But when explained the practical ramifications of such a position - the majority's power to outlaw use of contraceptives,

Yeah it's one thing to say Roe was a horrible "activist" decision, but when you point out that Griswold relied on very similar reasoning, suddenly those penumbras make a whole bunch of sense.
5.9.2008 3:07pm
hawkins:

As to the "discrete and insular minority" argument, doesn't modern public choice theory indicate that such groups are generally advantaged rather than disadvantaged in the political process by being "discrete" and "insular"?


Im not sure if my understanding is correct, but I believe they must be small and well-organized groups that have influence to begin with. In such instances, each individual member has more incentive to push for the favored legislation, because each member will derive greater individual benefit.
5.9.2008 3:07pm
Richard Aubrey (mail):
Cap gains taxes would strike more people as "fair" if they were indexed for inflation.
For example, if you bought a house at $100k in 1970 and sold it for $200k in 1990, how much money did you make? None.
But by the time you paid cap gains, you wouldn't have enough to purchase an equivalent house. So you lost.
5.9.2008 3:08pm
J. F. Thomas (mail):
For example, if you bought a house at $100k in 1970 and sold it for $200k in 1990, how much money did you make? None

Of course if it was your residence (and you hadn't sold another house within the last three years) you wouldn't owe any capital gains anyway.
5.9.2008 3:11pm
gab:
"...if you bought a house at $100k in 1970 and sold it for $200k in 1990, how much money did you make? None."

But of course, we all know that has been remedied, at least for primary residences, as now the tax rate on that gain would be 0%.
5.9.2008 3:12pm
Kevin H:
First, I will assert the opinion that the ruling in favor of New London against Kelo et al. was Socialist in nature. The governing philosophy of the founding fathers was that the right to property was the fundamental right which all other rights come from. From the right of property comes the right to life and liberty for they are the property of the sovereign self. The founding fathers also believed (and this is what makes them revolutionary) that only the individual was sovereign and the government's only power comes from sovereignty yielded by the individual. The Constitution states that citizens of the United States grant the federal government enumerated powers to protect the unalienable rights of the individual.

Therefore the individual's right to property should only be compromised if that individual violates the rights of others (a crime) or if that property is needed for public use ( and then only with just compensation).

Believing that the government can transfer property from one private entity to another private entity without mutual consent is not permissible.

Socialism does not hold individual property rights sacred and places the abstract "societial rights" greater than the rights of the individual. So if violating property rights can generate more tax revenue then individual rights be damned.

Second, is it fair to call Obama a socialist? I think so and here's why: Socialism means that the community confiscates some or all wealth from individuals for the benefit of the community. (Means of production is a form of wealth as is wages and salary). Is collecting tax dollars Socialism? Well, it depends. If you believe that government is "the community" or "society" and if you believe that government should act on behalf of the community and do so beyond its enumerated powers then that is Socialism.

The desire to raise taxes doesn't make you a socialist but how you propose to do so does. Taxing not based on the cost of government or community resources used to generate the wealth taxed is socialism because fairness is based on community opinion and not equality under law.

Does Obama believe the tenets of Socialism?

"Speaking before the National Press Club in April 2005, [Obama] defended the New Deal social welfare policies of Franklin D. Roosevelt"

Obama also believes in progressive taxes based on income. He believes in raising the capitial gains taxes because it would only affect the "rich."

Socialized Medicine, that's socialism if tax dollars are used. Non-socialized medicine doesn't mean playing for medical out-of-pocket in the same way non-socialized car insurance doesn't mean for paying all car-related expenses out of pocket.


Are there socialist in the GOP? A ton. Does that affect whether Obama is a socialist or not? No.

Thales,

I do know what "Socialist" means, I also know what the phrases "public use" and "private use" mean. I also know what the word "Nazi" means, I also know what the phrase "ad hominem" means.
5.9.2008 3:17pm
Perseus (mail):
Do you really think that Obama is a socialist? Why do you think that?


I would call Senator Obama a supporter of social democracy, which is an offshoot of socialism. The Wikipedia entry on social democracy notes that some consider it to be "a moderate type of socialism" and "the strongest current of socialism." So while I wouldn't call Senator Obama a socialist (though I do call him a demagogue), I do not regard the claim as outlandish.
5.9.2008 3:17pm
Mac (mail):
SeaDrive:

I see how this game is played. You put words in Obama's mouth, the criticize him for them. And while we are at it, we can complain that he talks like a candidate for office and not a law professor. What fun? How jejune.

Well, Obama, makes it awful easy to put words in his mouth as he is so extremely non-specific. His policies, if you will, are pretty much "fill in the blank" or "so vague as to be "you can think I will do whatever you want and I will not be specific enough to make you think anything else".

Timothy,

I heard him respond to a question on the energy crisis with, to paraphrase, "I'll unite people to solve the problem". Huh? Really? Well, that sure explains what his solutions are.
Timothy Sandefur wrote:

Rules that violate the rights of politically disfavored minorities are often imposed in the form of regulations that are written and imposed by administrative agencies whose members are not elected, but appointed or hired, and who in many cases can't even be fired without going through very difficult procedures.



Timothy,

This seems to be pretty universal regardless of race or status. Do you have any examples where a bureaucratic nightmare was suffered only or even particularly by minorities? Also, what minority is "politically disfavored"? I have racked my brain, but can't come up with one.


Oren wrote:


Amen. I don't like either of the candidates for their refusal to put the US on track to being debt-free.


Oren, I have my own issues with McCain, but not wanting to put the US on track to being debt-free is unfair to be applied to McCain. He has spent a significant portion of his career trying to fight pork, special interests and runaway spending. Believe me, we in Arizona could use some of that pork he is not bringing home. However, I still admire him for his stand. Be fair and give the devil his due.
5.9.2008 3:19pm
frankcross (mail):
DJR, "how the facts are applied to the law" is making new law, that's how the courts make new law.

If the cases were clear, they wouldn't go to the Court. Except for some criminal appeals. Nobody's going to bear the costs of a Supreme Court appeal in a clear loser
5.9.2008 3:21pm
davod (mail):
"If he were really a "socialist" or radical on the judiciary, he would not have supported Breyer, who is pretty much the left analogue to Kennedy.
Breyer, Souter, and Ginsburg as a trio is not some radical group of Justices."

Maybe Obama was being a politician by including more than one judge.
5.9.2008 3:25pm
Mac (mail):
Well, I have come up with a possible politically disfavored minority, although, I can't think of any particular administrative regulation that has disfavored them or made their lives more difficult than anyone elses. Mormans.

Cubans are a minority, but they have been on the whole very successful in this country so they don't seem to get the "poor, poor baby" treatment from the media or Democrats, especially as they tend to vote Republican. Come to think of it, so do Mormans.

Which makes me wonder, can you be a sympathetic minority if you don't vote Democrat?
5.9.2008 3:25pm
rarango (mail):
FrankCross: thanks for the lucid explanation for us nonlawyers. You ever considered teaching? oh wait...:)
5.9.2008 3:26pm
TruePath (mail) (www):
While I agree that Barack's campaign shows how far our country has come in terms of racial equality and should put to rest the idea that somehow racism outright prevents blacks from succeedding or that most whites are racist in the standard traditional fashion I wouldn't take this so far as saying that there is no need to protect minorities, particularly blacks in other circumstances.

Outright racial superiority beliefs are pretty much dead but this doesn't stop my fiance's mother from crossing across the street whenever she sees a black guy who isn't wearing a suit or otherwise very well dressed. I mean she isn't racist in the standard sense (if she bothered to vote I wouldn't be surprised if she voted for Obama) but this doesn't mean that people like her don't have stereotypes that could cause problems for minorities in local politics.
5.9.2008 3:28pm
J. F. Thomas (mail):
Well, I have come up with a possible politically disfavored minority,

Cubans? You're kidding right? What other immigrant group automatically gets a green card the second they set foot on U.S. soil. What other minority group dictates a foreign policy that is so contrary to American interests?

And Mormons have disproportionate political power because they dominate the politics completely in one state and have a big influence in at least two more (AZ and NV).
5.9.2008 3:31pm
Simon Dodd (mail) (www):
Obama says that he wants "somebody who is going to apply the law where it's clear," but who brings various things to the table for "those five percent of cases or one percent of cases where the law isn't clear." Without knowing his definition of "clear," however, it's difficult to know where he draws the line between cases where he thinks judges should apply the law and when they should make it up. I thought that the text of Title VII was utterly clear - far, far into the 95% of cases Obama alludes to where the law is clear. Yet in Ledbetter, the three Justices that Obama mentions all thought that text was in the 5% range. Did Obama think the law was "clear" in Bowles v. Russell, or was that a five-percenter case, in his view? Are there any examples he can give of a case where he thinks the law clearly demanded a result that was not fair to "those who are vulnerable, [or] those who are powerless," yet the sort of judges he had in mind would not have been able to help them because it fell into the 95% category?
5.9.2008 3:33pm
Waldo (mail):
It seems clear that if Obama is elected, he will nominate justices who share the philosophy of Ginsburg and Breyer, who were both confirmed by Democratic Senates. McCain, on the other hand, is likely to nominate justices like Kennedy, since it's unlikely that a nominee like Alito or Thomas will be confirmed if the Democrats hold the Senate.

Regarding Terrivus' post that increased technology has enabled minority groups to gain political power, I'm not that sure. It certainly has allowed people to divide themselves into more discrete categories by bringing together people who would never have an opportunity for personal contact. But I highly doubt that technology will help groups like the FLDS get what they want.

Lastly, given that Obama is running as a change candidate, I suspect that he sees the partisanship of the current political process as an obstacle, rather than an exercise in checks and balances. This seems evident in his campaign theme of a post-partisan Washington. It's entirely consistent, then, that he would favor an expanded role for the judiciary in promoting change as well.
5.9.2008 3:34pm
Mac (mail):

Outright racial superiority beliefs are pretty much dead but this doesn't stop my fiance's mother from crossing across the street whenever she sees a black guy who isn't wearing a suit or otherwise very well dressed. I mean she isn't racist in the standard sense (if she bothered to vote I wouldn't be surprised if she voted for Obama) but this doesn't mean that people like her don't have stereotypes that could cause problems for minorities in local politics.

TruePath,

Women watch all men. They don't have to be black. It is a sad fact of life in today's society. If there is a stereotype, it doesn't have to be of blacks, it is of men in general. And, yeah, if someone regardless of race looks like they belong to a gang, for instance, a woman will cross the street to avoid them and is not guilty of stereotyping but is intelligently trying to protect herself and survive.

If a black woman saw the same guy black, white or whatever, she would probably cross the street, too. Would you call it stereotyping if a black woman crossed the street when she saw a skin head approaching her? Or, is she just being smart?
5.9.2008 3:38pm
common sense (www):
I think the socialist label comes, at least in part, on some organization "grading" him to the left of an avowed socialist in the senate. Plenty of problems with that, from what the grading entailed to whether the socialist actually fits a socialist definition, but there is at least some basis.

As more and more people grow their wealth through stocks, capital gains hurts more and more people. Even the heart surgeon in the example above makes money from stocks, and capital gains taxes hurt him, even if it hurts the hedge fund manager more. More people in the middle class own stocks than ever before. Of course, I would be willing to see both taxes at the same rate, specifically 15% or so for all things taxed, but that doesn't seem to be on the table.

Obama, in his discussions of judges and justices, makes assumptions I don't agree with, such as justices allowing the national government to regulate things of national impact through the commerce clause as being a good thing. The commerce clause is a limit on the national government, and if we don't want that limit, we should amend the Constitution to remove it. I know that's typical FedSoc talk, but I still think its a pretty good concept for everyone to follow. And for what its worth, I don't think any justice has been clean in applying a philosophy, but that doesn't mean I can't advocate a philosophy I'd like them to follow.
5.9.2008 3:43pm
Mac (mail):
JF,

Perhaps you missed the outright bias of the media towards Romney and his religion. And, what you say is true about Utah, Nevada and Arizona, but that doesn't mean that they are not a minority and are not liked. One wag in our local paper, a liberal on everything else, actually proposed that there should be a law that prohibited Mormans from holding a larger percentage of political offices than their percentage of the population here in AZ. Obviously, he doesn't have a tremendous grasp of the Constitution. He also wanted to throw all Mormans in jail as child molesters. Skip probable cause, a complaint, witnesses, a trial. Just throw them in jail. He published this grand proposal as well. So, I would say they are certainly a "disfavored" minority even if they have political power in a few states.
5.9.2008 3:46pm
Oren:
Mac, while I appreciate McCain's hawkish attitude on earmarks, we have to admit the reality that we spend 60% on entitlements, 30% on the military and 10% on absolutely everything else (roughly speaking, I'm sure someone with more detailed knowledge can correct my numbers but I think I'm in the right ballpark). Attacking that 10% might be good on principle, but it's just not going to solve the problem. Creating new entitlements, as Obama proposes, is also not very helpful, to say the least.

Why should a heart surgeon who makes $500,000 a year have to pay more in taxes than a commodities trader who makes the exact same amount from trading futures?
This is a profound mystery of the universe.
5.9.2008 3:51pm
Oren:
Of course, I would be willing to see both taxes at the same rate, specifically 15% or so for all things taxed, but that doesn't seem to be on the table.
For the time being, how about we equalize them in a revenue neutral way?
5.9.2008 3:54pm
Terrivus:
I highly doubt that technology will help groups like the FLDS get what they want.

But "getting what you want" isn't the question. The question is "having the ability to make the arguments to get what you want." These are two very different issues. If you're not able to do the former, those are the breaks of democracy. If you're not able to do the latter, then maybe the courts need to step in.

And your point about FLDS brings us full circle to the problem raised by views like Sen. Obama's when it comes to judges. Which is: why isn't FLDS a "discrete and insular minority" for whom the courts should overturn majority will? It's discrete. It's a minority. Its views certainly aren't going to get much of a hearing in the national legislature. So should a court be permitted to overturn age-of-consent laws, even child rape laws, to accommodate their beliefs?

If you say no, why not? What makes them *not* a discrete and insular minority, but blacks or Hispanics are? Especially when the latter groups have *much more* organization and access to political power than an outcast group like FLDS? Do you base it on historical wrongs/history of oppression? If so, why not Jews or Catholics?
5.9.2008 3:54pm
Terrivus:
(The first line of my last post was supposed to be italicized, to indicate another commenter's statement... stupid technology.)
5.9.2008 3:55pm
J. F. Thomas (mail):
As more and more people grow their wealth through stocks, capital gains hurts more and more people.

This is highly deceptive since most people who own stocks do so through retirement vehicles. And when those stocks are sold at retirement, they are treated as ordinary income, not capital gains.

And while all of us would like to pay less in taxes, the simple fact is that we do not collect enough in taxes to cover our commitments. And there is a war on. At some point we are going to have to balance our books.
5.9.2008 3:56pm
davod (mail):
"Lastly, given that Obama is running as a change candidate, I suspect that he sees the partisanship of the current political process as an obstacle, rather than an exercise in checks and balances."

Obama's record is one of partisanship.
5.9.2008 3:58pm
Nunzio:
I'm not a big fan of Obama's "I'm a uniter not a divider" change type of guy schtick. I've heard that act before, twice, from W, whose campaign playbook Obama has borrowed from heavily.

If Obama promised that, as President, he would only support policies that 70% or more people agreed with, then that might be something.

But why is his Senate record, then, not one in which he votes only for those things commanding broad support and voting against things that doesn't command broad support. Why wasn't he at least a member of the gang of 14?

It can only mean that Obama will "respect" the views of those he disagrees with while doing what he thinks is best. But it's not "respecting" people by calling them God and gun nuts behind their backs. Rather divisive remark.

I look forward to the time when both Obama and McCain get grilled on their specific initiatives and not their campaign slogans. So far, with both candidates, it's been quite a joke.
5.9.2008 3:59pm
J. F. Thomas (mail):
Perhaps you missed the outright bias of the media towards Romney and his religion

While there might have been some bias against Romney because of his religion, it certainly has not been as hostile or as virulent as the full frontal assault on Obama's religion (or even his middle name and possible Muslim sympathies). Mormonism is infinitely wackier than anything that ever came out of Wright's mouth.
5.9.2008 4:00pm
Nunzio:
Mormonism is certainly wackier than anything coming from Wright's mouth, but not as mean-spirited.
5.9.2008 4:04pm
Mac (mail):
Oren:

I think it's more like 75% or greater on entitlements with Social Security leading the pack. However, if you listen to McCain, at least he is truly concerned about it and wants to do something about it. Whether he can or not is another story, not just for him but for anyone else who is like minded. However, we do know that Obama will give us many, many more entitlements and will exacerbate the situation tremendously.


Why should a heart surgeon who makes $500,000 a year have to pay more in taxes than a commodities trader who makes the exact same amount from trading futures?

I don't know, but I do know that if it is ever given to the government to decide what someone is "worth", heaven help us.

However, one difference between wages and earnings from stock equities, etc. is that the latter provides the capital for the former. If you don't know where the banks get their money from to loan to you or the heart surgeon for his education and his office and equipment or the companies get their money to reinvest and do research and development and to grow. then vote for Obama, but at least be aware of what that is going to do to the economy.

Also, re capital gains, 100 million people will be impacted by Obama's plan. When this was pointed out to him as he was saying he only wants to tax the rich, he just had a blank look and repeated that he only wanted to tax the rich. Go figure.

Don't forget, as Hillary was discussing the rich, she mentioned Warren Buffet and her husband, however, when it came to who she was going to tax, it was folks who make 200,000 a year and up. What do folks who make 200,000 a year possibly have in common with Buffet or her husband, pray tell?

I have heard Obama state that he is only going to tax the rich, but his definition of rich is even worse than Hillary's. He set the number at 75,000 per year. A lot of people out there are going to be surprised to learn that they are rich.

And, if the government is spending too much money and not balancing our budget, which they are, what makes anyone concerned about this think that giving the government more money is going to solve this problem? They will just spend more and our debt will go even higher.

At least McCain wants to cut spending. Obama has trillions of dollars in new programs.
5.9.2008 4:09pm
Cornellian (mail):
I have heard Obama state that he is only going to tax the rich, but his definition of rich is even worse than Hillary's. He set the number at 75,000 per year. A lot of people out there are going to be surprised to learn that they are rich.

What's your source for your assertion that Obama considers anyone making $75,000 to be "rich?"
5.9.2008 4:15pm
Brian G (mail) (www):
Professor Kerr,

Kevin H. isn't the only one who thinks Obama is a Socialist. Just listen to him (when he is actually saying something) and look at his record. He is the definition of a nanny-state, limited freedoms, government-knows-all Socialist.

Also, actually conversation between me and a liberal law school classmate I ran into. (I'll refer to him as "CM")

CM: Let me guess, you're voting for McCain.
Me: Yes.
CM: Why aren't you supporting Obama like everyone else who lives in the real world?
Me: Because he is a far-left, one-world Socialist who would bend over for Europe, sell Israel down the river, and would defer to the worthless U.N. on every crisis.
CM: You aren't supporting him because he is black, because Republicans can't stand blacks.
Me: That's not true, there are plenty of blacks I would vote for. Obama just isn't one of them.
CM: Yeah, name me one:
Me: OK, I'll name you several. Michael Steele, J.C. Watts, Clarence Thomas
CM: Clarence Thomas? He's Scalia's little monkey.

There ya go.
5.9.2008 4:16pm
Nunzio:
If Obama wanted to raise taxes so the budget was balanced and we could pay down the debt, that would be one thing. That's not what he's proposing. Do we need more programs and increased spending on present programs?

I think we should raise the taxes on book royalties of U.S. Senators to 97%, but it seems the only things McCain, Clinton, and Obama would agree on is that this would be bad.
5.9.2008 4:17pm
J. F. Thomas (mail):
Also, re capital gains, 100 million people will be impacted by Obama's plan.

This is simply not true. As I pointed out, many if not most of that 100 million owns most if not all of their stock through 401(K)s and IRAs. When you cash those in they are taxed as ordinary income, not capital gains. Even for those middle class people who do dabble in the stock market, the percentage of their income that comes from the sale of stocks is a small percentage of their total income and is not going to significantly affect their total tax bill.

As for the idea that equities produce wealth--true. But it is the investment in stocks, not the profits from them that creates wealth. Besides, Mortgage Backed Securities didn't create any wealth, the just created the illusion of wealth, which has now disappeared. If I sell stocks and spend it on drugs and hookers I am not providing capital for anything. Also, a carpenter or a sheet metal worker at Boeing produces capital too.
5.9.2008 4:21pm
Diggity Steve (mail):
most conservative commenters on this site are appallingly stupid. see, e.g., comments above.
5.9.2008 4:22pm
The Unbeliever:
However, if you listen to McCain, at least he is truly concerned about it and wants to do something about it.

Meh. So was Bush on Social Security, and we all saw how well that went over. Anyone else remember the SotU address where the Democrats clapped after he noted SS reform went nowhere?

Why should a heart surgeon who makes $500,000 a year have to pay more in taxes than a commodities trader who makes the exact same amount from trading futures?


As Mac pointed out above, "the latter provides the capital for the former"; thus the macroeconmic answer is there is a national interest in encouraging liquidity to flow in this direction. If the heart surgeon faces a choice of sitting on his money or investing in stocks, the return on stocks minus risk of loss minus taxes has to be greater than the risk of inflation or else he'll just stuff it all under his mattress.

Reducing the tax rate is a direct way to lower one variable on one side of the equation. Heaven help us if the government ever steps in to directly inflate the return or reduce the risk--but I wouldn't put it past some politicians to try.

(The microeconomic answer involves values JF Thomas doesn't believe in anyway, so I'll avoid derailing the thread further with that response.)
5.9.2008 4:24pm
Mac (mail):
Cornelian,


What's your source for your assertion that Obama considers anyone making

$75,000 to be "rich?"

I believe, It was when Chris Wallace interviewed Obama on FOX that I heard him say that.
5.9.2008 4:26pm
Trevor Morrison (mail):
Orin, in the comment thread attached to your post from about a month ago, on whether Obama would nominate the likes of Judge Reinhardt to the Supreme Court, you claimed that the "implicit point" in some statements you quoted from both Obama and Reinhardt was that "the judge should change the law so that the law becomes more compassionate and sensitive" (emphasis added by me). That seemed to me then to be a questionable reading of Obama's statement, but in any event I hope you'll now agree that Obama's most recent statement establishes that he does not, in fact, seek judges who will rely on compassion and sensitivity to change the law. Rather, it's only when the law is unclear -- i.e., where the law has no stable meaning to begin with -- that Obama thinks various additional considerations ought to come into play.

You may or may not agree with Obama's approach, and you may or may not agree with his assessment of when the law is unclear. But I hope you'll agree that, on his own terms, Obama is not saying judges should be using extratextual sources to change the law.

Going forward, it will be useful if appraisals of Obama's position are based on accurate statements of what his position entails.
5.9.2008 4:28pm
Waldo (mail):
Terrivus:


But "getting what you want" isn't the question. The question is "having the ability to make the arguments to get what you want." These are two very different issues. If you're not able to do the former, those are the breaks of democracy. If you're not able to do the latter, then maybe the courts need to step in.

I agree with you on the first issue, but on the latter, I think the courts should definitely step in. If you don't have the ability to make an argument, you don't have freedom of speech. But overall, yes, democratic processes are preferable to judicial ones.

davod:

Obama's record is one of partisanship.

Yes, indeed.
5.9.2008 4:36pm
Thorley Winston (mail) (www):
It's unclear why "Bush did it" is thought to be a defense of Obama by folks who don't like Bush.


Such a line of argument only works if (a) Bush is running as a candidate in the race and (b) the Democrat in question was actually better than Bush on the issue that's being raised.

In this case, Bush isn't running for a third term which makes comparisons to him a red herring. Moreover on the issue in question -- Medicare -- Senator McCain who is the Republican presidential nominee not only voted against adding a prescription drug benefit because of the cost but supports means-testing Medicare itself.

In contrast both of the Democrat contenders thought that the prescription drug benefit wasn't "generous enough" and oppose means-testing Medicare.

So what we have here are two Democrat candidates who are objectively worse than Bush on the issue of Medicare running against a Republican candidate who is objectively better than Bush on the issue.
5.9.2008 4:41pm
J. F. Thomas (mail):
the return on stocks minus risk of loss minus taxes has to be greater than the risk of inflation or else he'll just stuff it all under his mattress.

Which is certainly an argument for not taxing capital gains excessively but doesn't address the issue of why they should be taxed at a different rate than ordinary income. While you may place a greater value on the money invested in Boeing so they can buy the sheetmetal than the skilled labor involved in actually assembling the plane, I really can't see the policy argument that one is so much more valuable to society than the other that it deserves to be taxed at half the rate.
5.9.2008 4:42pm
David T (mail):
But it is the investment in stocks, not the profits from them that creates wealth

This is the single most ignorant statement regarding economics I have ever read or heard anywhere. Bravo sir.
5.9.2008 4:46pm
Mac (mail):
Cornellian,

Fair question and here you are. This is from the transcript of the Fox News Chris Wallace interview.




And so I'm happy to have that debate. If you look at my approach to taxation, what have I said? I've said I would cut taxes for people making $75,000 a year or less. I'd cut taxes for seniors who are making $50,000 a year or less. It is true that I would roll back the Bush tax cuts on the wealthiest Americans, back to the level they were under Bill Clinton, when I don't remember rich people feeling oppressed.

In terms of capital gains, I've suggested we might go back up to 20 because --

WALLACE: You have suggested 28.

OBAMA: Well, but what I've said is, I certainly would not raise it higher than it was under Ronald Reagan. But the fact is, is that I'm mindful that we've got to keep our capital gains tax to a point where we can actually get more revenue.

But that's not something that's going to affect the average person with a 401(k). When people start talking about how, well, there are millions of Americans who own stock, most of them own stock in 401(k)s that — where their taxes are deferred and they pay ordinary income taxes when they finally cash out.

And in terms of raising the payroll tax — raising the cap on the payroll tax, right now everybody who is making $102,000 or less pays 100 percent — a payroll tax on 100 percent of their income. There are about 3 to 4 percent of Americans who are above $102,000 in income every year.

So if you want to talk about who is middle class, me giving cuts to folks making, $60,000, $70,000 and potentially asking more from friends of mine like Warren Buffett, who I have no idea what he made last year, you know, that's a debate I'm happy to have with John McCain.

Because it's the people making $75,000, $50,000, $60,000 who are hurting. And when John McCain promises tax cuts to corporations that are not paid for, then what we are doing is loading up this nation with debt and if we're not paying for it now, our kids and our grandkids are going to have to pay for it and I think that's objectionable.


Call me crazy, but when he says he is going to cut taxes for the people who are hurting and defines them as 75,000 or less, 50,000 or less for seniors, I have to assume that everyone else is not hurting and will need to pay more.
5.9.2008 4:49pm
Mac (mail):
David T (mail):
But it is the investment in stocks, not the profits from them that creates wealth

This is the single most ignorant statement regarding economics I have ever read or heard anywhere. Bravo sir.


David,

Couldn't agree with you more.
5.9.2008 4:50pm
J. F. Thomas (mail):
This is the single most ignorant statement regarding economics I have ever read or heard anywhere.

Oh come on. If I buy a stock for $100, sell it for $150, take that $50 bill and light a cigar with it, where has the wealth been created?
5.9.2008 4:55pm
Mac (mail):
JF Thomas wrote

This is simply not true. As I pointed out, many if not most of that 100 million owns most if not all of their stock through 401(K)s and IRAs. When you cash those in they are taxed as ordinary income, not capital gains.


Except that Obama appears to want to increase the tax rate on ordinary income as well. (See above) The theory is that when you retire, you are making less money so your tax rate goes down and you pay less taxes on your gains in your IRA's and 401K's than when you were working so you benefit more from your savings. If he raises the tax rate, then 100 million people who are withdrawing money from these savings vehicles will be paying more taxes as well because he will have raised the tax rate. Ergo, he is increasing taxes on these people as well, not just on the rich.
5.9.2008 5:00pm
J. F. Thomas (mail):
Call me crazy, but when he says he is going to cut taxes for the people who are hurting and defines them as 75,000 or less, 50,000 or less for seniors, I have to assume that everyone else is not hurting and will need to pay more.

Okay. You're crazy. There is a big gap between those making $75,000 (those Obama intends to lower taxes on) and the wealthiest Americans. Or between "hurting" and being wealthy, which was what you claimed Obama said.
5.9.2008 5:02pm
Carlos (mail):
What a brilliant politician then Obama is if, he is saying that his philosophy is to side with the powerless and the needy.
5.9.2008 5:03pm
David T (mail):
This is the single most ignorant statement regarding economics I have ever read or heard anywhere.

Oh come on. If I buy a stock for $100, sell it for $150, take that $50 bill and light a cigar with it, where has the wealth been created?

OK. Im only going to explain this once, so try and keep up.
Without profits on investments there would be no investments.
It doesnt matter where the fifty dollars in profit goes, just that there is an incentive to counter the risk of the stock going down.
And here I was thinking this was all pretty basic.
5.9.2008 5:04pm
The Unbeliever:
but doesn't address the issue of why they should be taxed at a different rate than ordinary income

And now we're getting into the values that you don't belive in anyway, so I won't argue them. But sticking purely to economics, it's because the income tax rate is too high when used as the tax rate in the equation. So instead of having a single rate for both and lowering it, we have two tiers so the income tax rate can be kept high and the cap gains rate can be tweaked.

This is hardly the only case of tiering to accomplish policy objectives (property taxes, capital purchases, etc), it's just the one most visible to individual investors.

While you may place a greater value on the money invested in Boeing so they can buy the sheetmetal than the skilled labor involved in actually assembling the plane,

(Class warfare alert!)

I really can't see the policy argument that one is so much more valuable to society than the other that it deserves to be taxed at half the rate.

What? This makes no sense. We don't tax labor based on its value to society or to the laborer, we tax income. If it takes 20 workers or 1 worker to assemble that plane, the % of wages each laborer sends to the IRS doesn't change that number. Reducing income tax does not change the labor inputs to that plane, whereas taxing cap gains does decrease the capital input.

I'll say this as politely as possible: your economics in this area are very flawed. David T is exaggerating in his 3:46 post, but in my last post I had deleted an entire debunking of your concept of wealth (as it applies to MBS's) I was about to post, in the interest of keeping the comment short.
5.9.2008 5:04pm
Triangle_Man:
J.F. Thomas, WTF are you talking about? If you had $100 yesterday and $150 today, then you have additional wealth. If you take one of your $50 bills and light a cigar with it, then you might as well take the other two and wipe your rear with them because you have the economic sense of a toddler.
5.9.2008 5:07pm
frankcross (mail):
JF Thomas, there is ample evidence that there is differential benefit to society. While conservatives may reject the evidence, there is little association between ordinary income tax rates and economic growth. But liberals may reject the evidence that there is evidence of an association between capital gains tax rates and economic growth.

And it is fairly intuitive. While taxes may discourage regular labor income, the effect is pretty modest; high taxes don't make people quite work. But capital gains taxes obviously will discourage investments, which are risky to begin with.
5.9.2008 5:13pm
J. F. Thomas (mail):
Without profits on investments there would be no investments.

You know I am really getting sick of my statements being mischaracterized to make me look like I am really stupid.

The statement was made that capital gains should be taxed at a lower rate than ordinary income because investment in stocks created wealth by allowing companies to invest in capital (and create jobs and all those other good things).

I responded that it was the investment in stocks themselves, not the profits that created the wealth. Obviously I was talking about creating wealth for the economy as a whole and the stock issuing companies, not the person who sold the stock. I added a line about spending the profits on hookers and drugs as a non-productive use of profits from the sale of stocks.

You and Mac obviously lack reading comprehension skills. More likely, you just felt like insulting me so you ignored the obvious point of my post so you could basically call me an idiot.

You two are stupid and dishonest.

There.
5.9.2008 5:14pm
David T (mail):
I responded that it was the investment in stocks themselves, not the profits that created the wealth.

And I in turn responded to you:
Without profits on investments there would be no investments.
You admit that investment creates wealth, but deny that profits are needed as incentive for investment. I think thats a pretty fair characterization of your opinion.

I'm not sure how this is dishonest or a misrepresentation of what you were arguing. Please explain.
5.9.2008 5:22pm
J. F. Thomas (mail):
You admit that investment creates wealth, but deny that profits are needed as incentive for investment. I think thats a pretty fair characterization of your opinion.

Where did I say this or anything like it? In fact look at my 3:42 post.
5.9.2008 5:27pm
Richard Aubrey (mail):
Yeah, Gab, and JF. You're right on houses. Unless, say, it was a rental property I owned. There are a lot of those out there.
Or some other asset.
You fell for it. By pretending the issue was about homes, you were able to duck the inflation question.
You could have addressed it, but it was inconvenient.
Visualize transparency.
5.9.2008 5:28pm
Mac (mail):
JF Thomas,

Hope you feel better now.

I have searched quite a bit and can't find exactly who Obama considers rich. We know Hillary considers those who make $200,000 a year rich, even if they live in NYC, I presume, and seems to see no difference between them and Warren Buffet. However, Obama mentions his friend Warren Buffet a lot, but, other than the above quote from his Fox News interview, I can't find how much he thinks you have to make a year to be rich. So, I may be wrong, but I don't think I'm crazy to think that if you make more than $75,000 a year, he considers you rich. If Obama would fill in the blank all of this confusion would not be happening. But, as I stated above, he wants all of us, regardless of our point of view, to fill in the blank as we see fit. I am not willing to do that. I'd really like to know who he considers the rich to be, outside of Warren Buffet. At least Hillary is willing to define it.

I do know that the last time a Democrat was going to tax the rich was when Bill Clinton imposed taxes on SS recipients. My parents were shocked to find out that an annual income including their Social Security of $30,000.00 a year make them rich. They never knew. So, I have good reason to be suspicious.
5.9.2008 5:28pm
J. F. Thomas (mail):
Yeah, Gab, and JF. You're right on houses. Unless, say, it was a rental property I owned. There are a lot of those out there.

Well, I assumed that if you held a rental house for twenty years, you would have been generating revenue out of it. Plus, you would have been able to depreciate it, which of course of a capital loss, while you own the house--even while it is actually appreciating. Not to mention all the generous deductions and expenses you can claim for rental properties. Overall, the tax advantages of rental property are pretty sweet. The last thing a rental property owner should be griping about when he sells his property is capital gains tax. (Heck--you even get to take a capital loss if you sell for a loss, something a residence owner can't do.)
5.9.2008 5:43pm
Richard Aubrey (mail):
Hey, J.F. I gave you fair warning. And still you ducked the inflation issue by pretending to think the question was about rental properties.
Get a clue, would you? I tried.
5.9.2008 5:47pm
EIDE_Interface (mail):
JF Thomas - you obviously exist to be contrary to everything posted on this blog. Why don't you go elsewhere where you'll be much happier?
5.9.2008 5:48pm
Adam J:
Frank Cross - While taxes may discourage regular labor income, the effect is pretty modest; high taxes don't make people quite (sic) work. But capital gains taxes obviously will discourage investments, which are risky to begin with. I'd love to see your argument for why this is true.

The only possible reason why income tax might discourage working less than capital gains tax discourages investment is because workers need their money for necessities, when investors frequently don't. Do you really think alot of people don't invest because of capital gains tax? Inflation and the time value of money are very powerful incentives for people to invest- I'd love for you to show me the people who just sit on uninvested money (and not uninvested money in the bank- cause that's being invested anyways by the bank.)
5.9.2008 5:49pm
David T (mail):

I'm sorry J.F., but I am just not sure how else to construe your statements at 3:21
As for the idea that equities produce wealth--true. But it is the investment in stocks, not the profits from them that creates wealth. and If I sell stocks and spend it on drugs and hookers I am not providing capital for anything. Also, a carpenter or a sheet metal worker at Boeing produces capital too.. What exactly are you arguing here? You dismiss capital gains as failing to "create wealth" but don't acknowledge that capital gains are the one essential ingredient necessary for the idea that "equities produce wealth" to which you readily acquiesce. It is this disconnecting of profits and wealth that I attacked as ignorant.

As for your comments at 3:42-While you may place a greater value on the money invested in Boeing so they can buy the sheetmetal than the skilled labor involved in actually assembling the plane, I really can't see the policy argument that one is so much more valuable to society than the other that it deserves to be taxed at half the rate.
I have a few things to say about this. First of all, its not about "value", its about necessity. If a uniform tax for income and capital gains is enough to discourage investment, than it is simply not practicable.
To explain why a high cap gains tax discourages investment more than income tax discourages wealth, one must distinguish between the profits from investment and the "profits" from ones on labor. They are not very similar in one very important respect: Risk. An investor must not only be assured of potential (read possible) profits outweighing inflation, the profits must also potentially outweigh the risk of losing his investment in a way that money stashed under a mattress can't be lost. A laborer does not have this concern.
5.9.2008 5:49pm
The Unbeliever:
The statement was made that capital gains should be taxed at a lower rate than ordinary income because investment in stocks created wealth by allowing companies to invest in capital (and create jobs and all those other good things).

Not quite, and part of your problem is you keep inflating this to be about stocks. It could be raised via bonds, loans, whatever. To get back to your question about lowered cap gains taxes: you have to understand that the $500k/yr heart surgeon is not the only target of the tax rate, it applies to many other vehicles as well, which makes the implicit equating of cap gains with income tax a bad comparison.
I responded that it was the investment in stocks themselves, not the profits that created the wealth.

And that statement was wrong. Company X selling $100 worth of stock to investor Y does not create any wealth; it transfers it from Y to X, in exchange for a slice of future profits. Wealth is created when X takes that $100, combines it with labor and materials, and creates something worth $150 (assuming the other inputs cost less than $50).

The above might sound blindingly obvious, but when you mischaracterize a stock transaction as the source of wealth instead of production, you basically create an unsound foundation for the rest of your economic analysis. Capital is a necessary component to any business endeavor; the point of low cap gains tax isn't to help create wealth for an investor or the company, it's to provide an input to production. That is the key policy argument for the differing tiers, not providing "hookers and blow" money for investors to buy whatever they want.
5.9.2008 5:49pm
Adam J:
I really don't get the argument for capital gains tax being lower than income tax... Do we really think that dollars need more incentives to work than people?
5.9.2008 5:53pm
Meh (mail):
Guys, J.F. Thomas is not interested in a serious discussion; he demonstrated that yesterday in the comment thread re: the cross vandal and now he's shown it here. Some might call him a "troll," but whatever you call him, he's not someone you should waste your time trying to engage.
5.9.2008 5:55pm
ys:

Why should a heart surgeon who makes $500,000 a year have to pay more in taxes than a commodities trader who makes the exact same amount from trading futurew?

Bad example. Most of the income of the commodities trader would be short term gains, and hence taxed at 35% rate. Only a fraction of the heart surgeon's income would be taxed at this highest rate.


For example, if you bought a house at $100k in 1970 and sold it for $200k in 1990, how much money did you make? None

Of course if it was your residence (and you hadn't sold another house within the last three years) you wouldn't owe any capital gains anyway.

But for anything else that appreciated in a similar fashion, you would.
5.9.2008 5:56pm
David T (mail):
My 4:49 should have said "work" instead of "wealth" in the first sentence of the last paragraph. Sorry.
5.9.2008 5:57pm
Chimaxx (mail):
This is probably a winning issue for Obama.

Despite years of certain sorts of conservatives squawking "activist judge" every time a decision came down that they didn't like (cf: Kelo, where the judges' refusal to be activist got them labeled activist), most people are pretty satisfied with a more-or-less balanced Court like the one we have now, and to the extent they think it leans, more think that it is "too conservative" rather than "too liberal."
5.9.2008 6:01pm
NickM (mail) (www):
Obama called for "massive economic change" in his first run for office - at a time before the 1996 welfare reform and the Bush tax cuts. Gee, other than socialism, what would qualify as massive economic change? Going to a Moslem/medieval Catholic system (i.e., lending at interest is usury)? Adopting libertarianism (repeal a century of economic legislation)? Anything else?

Now which one is Obama most likely to adopt?

Obama's discussions of economic issues reveal either gross demagoguery or a complete lack of understanding of basic issues. On mortgage foreclosures, he talked about people being foreclosed upon because their lender went bankrupt (not a ground for foreclosure anywhere). On capital gains taxes, he raises as the example of what's wrong with the rate the tax treatment of hedge fund managers, when the legislative issue before Congress has been whether their earnings should be classified as capital gains or as ordinary income. [That's actually a very interesting economic policy issue, but the very fact that it's questionable whether these even should be considered capital gains makes them the worst possible reason to raise capital gains tax rates.]

Talking about when the law is clear is just silly. Except in the case of simple factual disputes (e.g., who is telling the truth), there are at least two sides in every lawsuit who do not agree that the law is clear.

Nick
5.9.2008 6:02pm
The Unbeliever:
I really don't get the argument for capital gains tax being lower than income tax... Do we really think that dollars need more incentives to work than people?


The short answer is, a dollar that doesn't "work" to earn will only be "hurt" by the rate of inflation. A person who does not work and earn will starve. Dollars can afford to sit and be unproductive, humans can't. [Insert various welfare jokes here.]

The long answer can be found in the 30 or so comments directly above your own.
5.9.2008 6:02pm
PC:
And that statement was wrong. Company X selling $100 worth of stock to investor Y does not create any wealth; it transfers it from Y to X, in exchange for a slice of future profits. Wealth is created when X takes that $100, combines it with labor and materials, and creates something worth $150 (assuming the other inputs cost less than $50).


Could you explain this in the context of credit default swaps (sorry to further derail)?
5.9.2008 6:20pm
Cornellian (mail):
Call me crazy, but when he says he is going to cut taxes for the people who are hurting and defines them as 75,000 or less, 50,000 or less for seniors, I have to assume that everyone else is not hurting and will need to pay more.

It is indeed important to clarify that this is your assumption, not something that Obama actually said. Lowering taxes for people earning less than $75,000 is perfectly consistent with not raising taxes for people earning more than that and certainly doesn't constitute calling people earning more than $75,000 "rich."
5.9.2008 6:51pm
Mac (mail):
Cornellian,

I agree re clarifying assumption from fact. It is always very important. However, please see my last post at 4:28 pm. I do think I have a point in making that assumption. At the very least, confusion on this issue is not my fault. IIt is Obama's.
5.9.2008 7:01pm
common sense (www):
Oren-
I'm curious as to whether 15% might be revenue neutral is we removed the overly complex deductions we now have, and everyone actually paid the 15%
5.9.2008 7:08pm
BobDoyle (mail):
Back when the capital gains rate was cut the Joint Committee on Taxation (JCT) said the capital gains tax cut would "cost" the Federal Treasury $5.4 billion in fiscal years 2003-2006. Also, the initial Capital Budget Office (CBO) forecast (January 2004) forecasted capital-gains revenue to be $42 billion in 2003, $46 billion in 2004, $52 billion in 2005, and $57 billion in 2006. The total: $197 billion. Add in the amount the JCT says the tax cuts would cost us and the projected total they projected the Treasury would have collected without the tax cuts was about $202.4 billion.

Well in what could now be considered the worst forecast in modern times we found that the capital gains tax collections were actually $51 billion in 2003, $72 billion in 2004, $97 billion in 2005, and $110 billion in 2006. For 2005 and 2006 actual collections were nearly double the amounts the JCL and CBO had predicted the Treasury would have collected in the absence of the capital gains tax rate cut.

Stated differently, the CBO predicted total capital-gain tax revenues of $197 billion from 2003 thru 2006, or $202.4 billion if we add the amount the JCL said the tax cuts would cost the Treasury. However, after the tax cuts the total capital-gain tax revenues actually collected totaled $340 billion, or $133 billion (two-thirds) more than the CBO predicted.

And yet, Obama and Dems want to raise taxes. Why don't their heads explode?
5.9.2008 7:33pm
Bored Lawyer:

The idea that there has been progress amongst minorities - including blacks and hispanics, is true, and nobody is arguing. But to believe that they have equal and adequate political process is clearly belied by the continuing existence of things such as the drug war.


What an ignorant statement. As has been pointed out before, it was minority politicians who, for example, pushed for increased penalties for selling crack. Drugs have a much greater impact on the minority communities than other communities. It is they who benefit more than others from the "drug war."
5.9.2008 7:34pm
LM (mail):
David T, Triangle_Man, J. F. Thomas and EIDE_Interface,

Please refresh your memories on the Comment Policy.

Thanks.
5.9.2008 7:36pm
Waldo (mail):
While Oren didn't intend this post to be about capital gains, I have to mention a couple of points:

1) When I was an undergrad in MA, the state income tax was 5% for "earned" income and 10% for "unearned" income (savings and capital gains). This made little sense then and doesn't today. The fix was to tax all income equally, regardless of source. Despite posts that claimed that people must work, but dollars don't have to be invested, I don't think taxing capital gains at a lower rate makes any more sense. If we want to lower government interference in the free market, taxes should be neutral when it comes to economic decisions.

2) Some posts have also said that a lower capital gains rate is justified by the risk of investing. But if you lower the cost of risk, economics predicts that you get more risk. And given the current financial situation, it would seem that risk has been underpriced. In short, capital gains taxes are one way of restraining the "irrational exuberance" that leads to bubbles.

FWIW, I generally favor lower tax rates and fewer tax breaks.
5.9.2008 7:40pm
LM (mail):
One issue I take with Terrivus' comment is that it apparently equates "discrete and insular minorities" with "those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly." Obama rejects that equivalence. For example, he said he considers his daughters privileged and not needing special consideration, while there are many white people he considers disadvantaged and vulnerable for such purposes.
5.9.2008 7:51pm
luagha:
So that now we've had our discussion on socialism and the capital gains tax, what could possibly be the reason for raising the capital gains tax at the current point in time?

It won't help the economy.
It won't get more revenue to the government.
It will damage the earning power of certain people like commodities traders; it will limit the ability of everyone who invests in stocks, it will reduce the wealth of both the government and the people.

What could possibly be the reason?
1. Stupidity. But Obama isn't supposed to be stupid.
2. Socialism. Obama is okay with there being a smaller pie as long as 1. wealthy people are punished and 2. government controls more of that pie - controls more of the means of production.

It's probably about time to bring up Obama's prior drug use, to which he has honestly admitted. He could very easily have suffered damage to critical decision-making faculties. He's still able to give a good speech and look good for the cameras, but he might be suffering in the critical thought department. Maybe he should go in for testing.
5.9.2008 7:55pm
calmom:
The 'vulnerable' and the 'powerless' are code words. To Obama, the vulnerable and the powerless are his supporters. Even when they have both houses of Congress and the White House, Obama will still believe that his supporters are 'powerless'.
5.9.2008 8:11pm
Mac (mail):

Some posts have also said that a lower capital gains rate is justified by the risk of investing. But if you lower the cost of risk, economics predicts that you get more risk. And given the current financial situation, it would seem that risk has been underpriced. In short, capital gains taxes are one way of restraining the "irrational exuberance" that leads to bubbles.


Waldo,

Can you point to a source for this idea or is this some professor's notion?

The risk is inherent in investing in the stock market and other savings vehicles be it bonds, real estate and so on. Raising the tax does not reduce the risk, it just discourages investment as it makes the reward not worth the risk if the government is going to tax the hell out of the reward. It is good for our country, the people and the government for people to invest. Encouraging that investment is a good thing. Discouraging it is a bad thing.

People also invest by starting businesses, developing property, building things and so on. All of this provides jobs which pay people and they pay taxes. If someone is crazy enough to do these things and work 80-100 plus hours a week and risk everything they have, they want a reward i.e. profit. If the government is going to tax the hell out of the profit, then people will just work for someone else and not take the risk. When that happens, the economy declines, unemployment rises and revenues to the government are decreased. This has been documented over and over again. If you want what is best for the folks, then do not raise the capital gains tax. If you want to soak the rich, be it Warren Buffet or the guy making 200,000 a year (Hillary) or the guy making, well we don't know who Obama considers rich. somewhere above 75,000 a year, fine. But you are going to cream the average guy.
5.9.2008 8:44pm
Mac (mail):
And, Waldo, you are going to reduce revenues to the Treasury.
5.9.2008 8:45pm
Rich Rostrom (mail):
Takings of the KELO variety are not socialist - transfer of wealth from one class to another. Neither are they capitalist (being coercive). They are gangsterist - the use of raw power to transfer wealth from one specific person to another.
5.9.2008 9:02pm
Mac (mail):

They are gangsterist - the use of raw power to transfer wealth from one specific person to another.

Rich Rostrom,

But only when the person on the receiving end can and likely will vote for the people doing the taking.
5.9.2008 9:12pm
Waldo (mail):
Mac:

My only source for the idea is Reagan's belief that all income should be treated equally, and my personal belief that government should mostly remain neutral in economic decisions. From my last post:

FWIW, I generally favor lower tax rates and fewer tax breaks.

I'm not arguing for raising taxes, but rather that taxes should be the same, regardless of how a person invests. Why should a person who starts a business and files Schedule C pay higher taxes than a person who incorporates and files Schedule D? Or why should the person who invests in the education to be a heart surgeon pay higher taxes on income than the person who invests in stocks? I'm completely in favor of reducing overall tax rates to make the rise in capital gains rates revenue neutral.

Raising the tax does not reduce the risk, it just discourages investment as it makes the reward not worth the risk if the government is going to tax the hell out of the reward.

No, raising the tax does not reduce the risk. But making the tax equal to that on other investments makes the cost of that risk the same as alternative investments, and, in my opinion, discourages speculation in one sector of the economy. Government shouldn't tax the hell out of profits, but when government taxes income unequally, it creates distortions in the market. On a blog where I suspect many would support a flat tax, I'm surprised to find so many people arguing for tax preferences for one type of investment over another.
5.9.2008 9:17pm
Mac (mail):
Waldo wrote,

2) Some posts have also said that a lower capital gains rate is justified by the risk of investing. But if you lower the cost of risk, economics predicts that you get more risk. And given the current financial situation, it would seem that risk has been underpriced. In short, capital gains taxes are one way of restraining the "irrational exuberance" that leads to bubbles.

Waldo,You have rendered me speechless over that one. Why do I have a feeling that this was an idea some professor of yours had?
5.9.2008 9:18pm
Waldo (mail):
Orin:

My apologies for the off-topic post.
5.9.2008 9:18pm
Waldo (mail):
Why do I have a feeling that this was an idea some professor of yours had?

I suppose it might be, but it also seems to be basic economics. If you reduce the cost of a good, demand increases. If you reduce the cost of investment in areas considered capital gains, you get more investment in those areas instead of others. That's a market distortion. More importantly, when you have more money invested in one segment of the economy due to a tax benefit, prices rise. More demand, higher price. Eventually, people realize that the underlying value of the assets doesn't justify the price and the bubble pops.

And finally, I'm not arguing that we should raise taxes to cure the business cycle. And I don't dispute that high tax rates reduce revenue. But I do think that tax code shouldn't favor one form of investment over another.
5.9.2008 9:38pm
frankcross (mail):
Adam, they invest but they tend to invest in less risky vehicles, bonds rather than stock, because the greater
rewards from riskier investments are diminished by taxes.

Also, and perhaps more important, they sit on investments. Because capital gains are not taxed until realized, people shun more efficient investments because of the tax burden of moving their money.

But if you don't like these answers, just look at the numbers, the research on the rates of capital gains taxation.
5.9.2008 10:11pm
Mac (mail):
Waldo,

I think frankcross answers you pretty well. Better than my poor efforts. However, now that you have more thoroughly explained your position, I understand it much better and agree to some extent. At least, I understand the reasoning behind your position and grant you that it has merit.

However, I think frankcross made a very good point and I think he is correct. I will have to come down on the side of frankcross. But, thanks for the explanation. At least I understand your reasoning. I don't agree with it, but I understand it and clarity is always a good thing.
5.9.2008 10:39pm
Waldo (mail):
Mac:

I'll concede that frankcross has made a distinction between different types of investments. I think we're at the point where we can agree to disagree. I understand your reasoning as well and appreciate the debate.
5.9.2008 11:09pm
Andy Freeman (mail):
> It's more of a pot calling the kettle black. I find it particularly ironic when Bush supporters complain about Obama's lack of experience.

Not really - it's an appeal to an authority that the appealer doesn't recognize.

Or it's "someone who I don't like did something that I think is stupid, so it's okay if my guy does it too."

In any event, it's not a particularly sound argument.

Perhaps someone will explain why making it is a good idea.
5.10.2008 1:48am
The General:
if discrete and insular minorities still "have no voice" (whatever that means) how did all of this anti-discrimination legislation get passed? certainly, they had a voice in that? And just because you're out-voted and out-spent and out-hustled politically, doesn't mean you don't have a voice. that's what being in the minority means!

It's important to protect minority rights, but they don't always trump the majority. In fact, most of the time they shouldn't.

(as an aside, liberals always claim to speak for the voiceless, but it appears that the voiceless have no actual say in that!)
5.10.2008 5:27am
Gaius Marius:
Obama is a socialist?

We have a president in office for whom many of you voted (twice) who has increased the federal deficit by more than $4 trillion during his time in office. A president who spearheaded the effort to expand entitlements (the Medicare prescription drug benefit) by an extradordinary amount (and lied about the size.) And you call Obama a socialist?

That has to be a joke...


Gab, you are dead wrong. It was Congress that spearheaded the above, aided and abetted by a President. What Barack Hussein Mohamad Obama is a dictatorship by nine(9) persons rubberstamping his policies just the way the Mullahs in Iran rubberstamp President Ahmadinejad's policies.
5.10.2008 8:06am
Let's be sensible, here (mail):
Oh. Come. On. Obama didn't just say Ginsburg; he said Ginsburg, Breyer, and Souter. His criteria was "sensible." He didn't say Stevens. And he didn't say "only liberals". Let's say he replaces a Stevens with a Cabranes or a Sotomayor or Cass Sunstein. Is that so bad? It could be far worse. Far, far worse. He certainly did not say "Douglas was the man!" Nor did he bring up Laurence Tribe. Or Harold Koh.

Now, I prefer right-wing judges, too. But this is far better than what Hillary would do. She'd put straight-up radical feminist Marxists on there, and it'd be gender-war forever.
5.10.2008 10:36am
Lily (mail):
Socialism? Perhaps we need a new word to discribe the policies that Obama and other like him espouse. Maybe Neo-Socialism? Where Government does not actually OWN industry, but has the absolute right to control and regulate every aspect of business, and then confiscate its profits. Under this 'ism', government would not technically be the owners of business and industry - but the defacto owners. And where government asserts that it has a stronger claim to your income than you.
5.10.2008 10:55am
Mac (mail):
I understand your reasoning as well and appreciate the debate.

Waldo,

Yes, me too. And it has the advantage of making us think and that does push off Alzheimer's for another year or so, I understand, so it is good for our health as well. Cheap and effective. Now, that is cool.

Lily,

Now, that is as excellent description. I particularly like the Neo-Socialism. I am still trying to figure out what a Neo-Con which is a term that seems to get thrown out to end whatever discussion is going on, so I appreciate that you have defined Neo-Socialism. No confusion there.
5.10.2008 2:06pm
Mary Katherine Day-Petrano (mail):
Was the following fantasy written by some Ivy-Leaguer with his/her head in a tower?

"Using the courts to protect 'discrete and insular minorities' may have made much more sense in a time when it realistically wasn't as possible — from a structural point of view — for such groups to have adequate representation in the political process.

But advances in media and technology — as illustrated by Obama's own campaign, which was initiated within and is largely propelled by the netroots community — have largely removed these barriers today. Think of any group that would count as a 'discrete and insular minority': blacks, Hispanics, gays, black Hispanic gays — anything. In the 1940s and 1950s, it was much easier for the political process to structurally cut those groups off. Today? Every one of these groups has the ability to come together, raise money, raise awareness, and attract followers and sympathizers in the public and among representatives. There is simply no "discrete and insular minority" that doesn't have the ability to access the political process these days in the same manner as all groups."

Clearly the writer does not bother to include disabled Americans in the mix of "discrete and insular minority," despite the clear and unequivocal language of 42 U.C.C. Sec. 12101(a)(7):

"individuals with disabilities are a discrete and insular minority who have been faced with restrictions and limitations, subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond the control of such individuals and resulting from stereotypic assumptions not truly indicative of the individual ability of such individuals to participate in, and contribute to, society"

There is simply no "discrete and insular minority" that doesn't have the ability to access the political process these days in the same manner as all groups?

What a load of crap!!

Disabled American assistive technology users in Florida, a key Presidential election State:

1. Do not have accessible voice-recognition electronic Internet formats to vote;
2. Cannot access Florida State Courts via paperless voice-recognition electronic Internet formats;
3. Cannot access most Florida State politicians via accessible voice-recognition electronic Internet formats;
4. Cannot communicate unimpeded with all Florida Bar members via accessible voice-recognition electronic Internet formats;
5. Cannot become a member of Florida's Registered Paralegal program via accessible voice-recognition electronic Internet formats'
6. Cannot become a licensed Florida attorney via accessible voice-recognition electronic Internet formats;
7. Cannot become a licensed real estate salesperson or broker via acccessible voice-recognition electronic Internet formats;
etc etc.

How backward "structurally" is Florida's gated entranceway to the Bar, Bench, and political process?

Anyone who is:
deaf;
blind;
autistic
is prevented from applying to the first-step on the political journey, because ...

The Florida Board of Bar Examiners STILL HAS NO TTY, SPEECH RELAY, OR E-MAIL!!!!!!!

So for the uninformed nutcase who said "advances in media and technology ... have largely removed these barriers today," I will be the first to invote you to Florida for a trip backwards in time where "discrete and insular minorities" disenfrachised from the political process abound.

Maybe THAT's why Florida is such a Republican Presidential electoral prize!
5.10.2008 2:28pm
Mary Katherine Day-Petrano (mail):
corr: "42 U.C.C. Sec. 12101(a)(7)" = 42 U.S.C. Sec. 12101(a)(7):
5.10.2008 2:33pm
BobDoyle (mail):
Lily:

Socialism? Perhaps we need a new word to discribe [sic] the policies that Obama and other like him espouse. Maybe Neo-Socialism? Where Government does not actually OWN industry, but has the absolute right to control and regulate every aspect of business, and then confiscate its profits. Under this 'ism', government would not technically be the owners of business and industry - but the defacto owners. And where government asserts that it has a stronger claim to your income than you.


We already have a term for what you describe, National Socialism, as practiced by the NAZIs before and up to WWII.
5.10.2008 3:10pm
Mac (mail):
Mary Katherine Day-Petrano,

Is voice recognition technology at the point of being that perfected? Perhaps I am just a ludite, but I didn't think it was quite there yet. I could be quite wrong.
Also, I can only speak to the issue of the deaf, but voice recognition technology would not do them much good. At least not the vast majority. However, and again I can only speak to the issue of the deaf, they do have a free service where they can call and see an interpreter who will call anyone for them and relay the information and request, including 911. I know because my sister-in-law is an interpreter for the deaf and works for this company. They will even call 911 for them, which makes a lot of sense.

How does Florida compare to the rest of the States? How many do have this capability? I don't think anyone ever accused the government of being in the forefront of anything.

Also, the deaf, blind or autistic are capable of getting around. Just because they don't have the voice recognition capability does not mean that they can not go in person just like everyone else, it seems to me. There are multiple programs to provide transportation to the disabled. And, their disability does not prevent them from using the phone, except for the deaf and that is not an issue as I have explained above.


And, how are these people going to go to work as a paralegal or a real estate broker etc., if they are homebound and/or cannot use the phone?

I am surprised the Fl State Bar does not have e-mail, but I presume, they do accept snail mail, which it appears is how most people would have to communicate to them in writing. I mean, it appears everyone must call or mail or go in person.

Does any state have electronic voting by the Internet? For anyone?

I am genuinely confused as to how this is a huge burden for the people you name.
5.10.2008 3:17pm
Mac (mail):

Mary Katherine Day-Petrano,


I got to thinking of my Bluetooth. The stupid woman in my ear only talks to me, she only has to learn my voice, she has all of the names in my directory and she still needs 10 tries to call the person I want. So, based on your complaint, I decided to do a little research into the voice recognition

Further exploration shows that this is a field whose success has been a long time coming and is only very recently showing signs of practicality.
This is from Webopedia, 9/07.


The field of computer science that deals with designing computer systems that can recognize spoken words. Note that voice recognition implies only that the computer can take dictation, not that it understands what is being said. Comprehending human languages falls under a different field of computer science called natural language processing.
A number of voice recognition systems are available on the market. The most powerful can recognize thousands of words. However, they generally require an extended training session during which the computer system becomes accustomed to a particular voice and accent. Such systems are said to be speaker dependent.

Many systems also require that the speaker speak slowly and distinctly and separate each word with a short pause. These systems are called discrete speech systems. Recently, great strides have been made in continuous speech systems -- voice recognition systems that allow you to speak naturally. There are now several continuous-speech systems available for personal computers.

Because of their limitations and high cost, voice recognition systems have traditionally been used only in a few specialized situations. For example, such systems are useful in instances when the user is unable to use a keyboard to enter data because his or her hands are occupied or disabled. Instead of typing commands, the user can simply speak into a headset. Increasingly, however, as the cost decreases and performance improves, speech recognition systems are entering the mainstream and are being used as an alternative to keyboards.


Now, given all that, exactly why is it so horrific that the State of Florida has not installed this? There are some new programs out, Mac has just released one, that is showing great promise, but I fail to see how the Fl. Bar or anyone else can be faulted for not implementing a technology that is just starting to be practical, somewhat.

Which leads me to wonder, were you making a big joke?
5.10.2008 4:25pm
Mac (mail):
I especially wonder if you were joking since you specifically mentioned the deaf as being discriminated against by not having voice recognition technology. I will assume you were joking as otherwise, that is a rather callous comment and you don't seem like a callous person.
5.10.2008 4:34pm
J. F. Thomas (mail):
You know it really cracks me up that I am called a troll for taking a not extremely radical position on capital gains taxes (that they should be taxed the same as ordinary income) and may have expressed my opinion a little bit clumsily yet others on this site can call Obama a Socialist (which of course he is not unless you redefine the the term Socialist to mean "traditional Democrat") or even a Nazi. Also, others can impute all kinds of fantastical policies to him created out of whole cloth (apparently he has announced plans to "control and regulate every aspect of business, and then confiscate its profits") yet apparently they are contributing to rational discourse on this site and not "trolling".
5.11.2008 12:24pm
RKV (mail):
Well Bob, National Socialism did have several other components to it other than "corporatism" [the practice whereby a state through licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority, as well as sometimes running them, either directly or indirectly]. That said, Obama and his ilk clearly have corporatism in mind.
5.12.2008 10:07am