-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- ------- Forwarded message follows ------- Date sent: Wed, 01 Mar 2000 09:40:10 -0600 To: [EMAIL PROTECTED] From: "John C. Goodman" <[EMAIL PROTECTED]> Subject: NCPA Policy Digest 3-1-00 National Center For Policy Analysis DAILY POLICY DIGEST Wednesday, March 1, 2000 * * * * * * * * * * * * * * * * * * * * * * * * Make A Difference! Join The NCPA! * * https://secure.lexi.net/ncpa/contrib.html * * * * * * * * * * * * * * * * * * * * * * * * IN TODAY'S DIGEST o INTERNET SALES AREN'T TAX EXEMPT, says Bruce Bartlett, but states can't require out-of-state businesses to collect sales taxes....NCPA o THE CONSUMER PRICE INDEX OVERSTATES PRICE INCREASES by 0.8 percentage points, concludes a new report....GENERAL ACCOUNTING OFFICE/NEW YORK TIMES o SOME STATES SPEND MILLIONS FOR DEFENDANTS in death penalty cases, while others use court-appointed lawyers....NEW YORK TIMES o LATIN AMERICAN POLITICIANS AND INTELLECTUALS are lambasted for economic "idiocy" in a controversial book....WALL STREET JOURNAL o ABOUT 1.15 MILLION SENIORS LOSE SOCIAL SECURITY BENEFITS to the earnings test, which may be repealed....INVESTOR'S BUSINESS DAILY o A MAJORITY OF DOCTORS WILL LIE to get patients' coverage for needed care, according to recent studies....CLINICAL PSYCHIATRY NEWS o THE ROBBER BARONS PUSHED DOWN THE PRICE OF OIL from 58 cents a barrel to 8 cents....NATIONAL REVIEW IN TODAY'S NEWS INTERNET PURCHASES AREN'T EXEMPT FROM SALES TAX The current temporary ban on imposing new taxes on the Internet has nothing whatsoever to do with whether state sales taxes are due on Internet purchases. It applies only to new taxes on the Internet itself, such as on Internet Service Providers. The constraint on taxing Internet purchases is largely a practical one, compounded by a Supreme Court ruling. Passage of the Internet Tax Freedom Act in 1998 did not change taxation of Internet purchases. The rule for such purposes is the same as it has been for decades on out-of-state and mail- order sales. o In theory, use taxes apply to all such purchases; however, states find it very difficult to collect use taxes because they are not withheld by the seller. o Consumers must voluntarily remit most use taxes; but since the chances of being caught are virtually nonexistent, few people pay them. o A study by the Federation of Tax Administrators found compliance with state use taxes to be very low even before Internet sales took off. Furthermore, state laws already exempt most of what is sold over the Internet. State sales taxes generally apply only to tangible goods, whereas virtually all services are exempt, as well as such things commonly purchased over the Internet as airline tickets and stock trades. The Supreme Court ruled in Quill Corp. vs. North Dakota in 1992 that states could not compel a seller to withhold sales taxes unless the business had a physical presence in that state. Thus some Internet sellers with operations in many states, such as Barnes & Noble, have set up their Internet sales operations as legally separate companies. Since BarnesandNoble.com has no physical presence outside of where its computers and warehouses are located, no sales taxes need be charged on most of its sales. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, March 1, 2000. For text http://www.ncpa.org/oped/bartlett/bartlett00.html For more on State Taxes http://www.ncpa.org/pi/taxes/tax51.html INDEX STILL OVERSTATES INFLATION More than three years ago, a group of prominent economists estimated that the Consumer Price Index probably overstates inflation by about 1.1 percentage points a year. Although adjustments have been made in the index since then in an attempt to rectify the problem, they now say it continues to overstate inflation by 0.8 percentage points. Their estimate is contained in a report prepared by the General Accounting Office at the behest of Sen. Daniel Patrick Moynihan (D-N.Y.), for release today. o Even modest reductions in any upward bias could result in smaller wage increases for some workers and smaller Social Security cost-of-living increases. o Moynihan claims that reducing the cost-of-living increases by eight-tenths of a percentage point would eliminate more than half of Social Security's projected shortfall over the next 75 years. o One reason the index overstates inflation is that it is unable to fully capture decisions by consumers to switch from one variety or type of product to another when prices rise. o Also, popular new products -- such as computers and cell phones -- aren't being incorporated into the index soon enough to capture subsequent declines in their prices. Finally, there is the problem of accounting for improvements in the quality of products, the economists reported. Source: Richard W. Stevenson, "Economists Readjust Estimates of Overstatement of Inflation," New York Times, March 1, 2000. For text http://www.nytimes.com/00/03/01/news/financial/econ-report.html For more on Consumer Price Index http://www.ncpa.org/pd/economy/econ8.html DEFENDING THE POOR IN CAPITAL CRIME CASES Are poor defendants sent to death row in murder cases being adequately defended in court? That question is at the heart of an intensifying debate throughout the U.S. Some criminologists and legal observers maintain that in too many cases the quality of legal representation being furnished poor people is below par. o Some states, such as New York and New Jersey, spend millions of dollars on their capital defender system to provide teams of lawyers and investigators to defendants in death penalty trials -- while others, such as Alabama, have no statewide public defender apparatus and rely instead on court-appointed counsel. o Since executions were reinstated in the late 1970s, 85 death row inmates have been found innocent nationwide. o The right of a defendant to counsel was guaranteed in the 1963 Supreme Court decision in Gideon v. Wainright. o Defense lawyers in Alabama say they are paid so little in court-appointed cases that they often spend 50 hours or less preparing for a capital trial -- even though experts say adequate preparation should take 500 to 1,000 hours. Critics say capital cases are often entrusted to young or inexperienced lawyers. And lawyers sometimes fail to do the most fundamental tasks, like investigating the case and their client's background and presenting closing arguments, they charge. Source: Sara Rimer, "Questions of Death Row Justice for Poor People in Alabama," New York Times, March 1, 2000. For text http://www.nytimes.com/yr/mo/day/news/national/ala-death-penalty.html For more on Capital Punishment http://www.ncpa.org/pi/crime/crime33b.html#E BOOK LAMPOONS LATIN AMERICA'S ECONOMIC "IDIOTS" Three former leftists have written a biting satire called "Guide to the Perfect Latin American Idiot" which ridicules anyone and everyone who ever rejected genuine free markets and democratic liberalism in favor of various guises of mercantilism, corporatism and authoritarianism. Authors Plinio Apuleyo Mendoza, Carlos Alberto Montaner and Alvaro Vargas Llosa point to such political and economic disasters as Peron's Argentina, Allende's Chile, Alan Garcia's Peru and Castro's Cuba. Those leaders are lambasted for spouting statist and anti-imperialist clichés which helped lead their countries into backwardness and political decline. Here are a few nuggets from the book which is causing a furor throughout the continent: o They summarize a certain way of thinking among Latin American intellectuals as: "We're poor; it's their fault." o "From which Paleo-Christian handbook did the Latin American idiot learn that earning profits from invested capital is something ethically reprehensible and economically injurious?" o Of the supposed exploitation of Latin Americans by evil multinational firms: "General Motors, a company that was without a doubt to defile our honor and deprive us of our soul, hates us so much that it employs 100,000 Mexicans, Colombians, Chileans, Venezuelans and Brazilians." o On foreign debt: "The banks only gave us what we asked for, not what the gun-toting imperialists made our governments accept." The English translation of the book is being published by Madison Books. Source: Edward Schumacher, "Bookshelf: A Long Tradition of Ridiculous Ideas," Wall Street Journal, March 1, 2000. For more on Culture & Political Systems http://www.ncpa.org/pi/internat/intdex3.html BEGINNING OF THE END FOR SOCIAL SECURITY EARNINGS TEST Political observers say legislation to repeal the Social Security earnings test for those who retire at 65 or older appears headed for passage. For nearly 50 years, Democrats in Congress have opposed changing the earnings test because they feared it would benefit the rich. But now their opposition to the current Republican initiative is dwindling and President Clinton has said he would sign the measure when it reaches his desk. "On the one hand we are continually told that workers have a right to Social Security whenever there is a proposal to modify cost-of-living adjustments," says Bruce Bartlett of the National Center for Policy Analysis. "But on the other hand, we take away benefits from many seniors simply because they have chosen to work past the normal retirement age." o The earnings limits was instituted during the Great Depression to encourage seniors to give up their jobs so that younger workers could find employment. o But in today's tight labor market, the cry is for more workers -- not fewer -- and removing the caps would allow seniors to continue to earn and contribute their labor. o The move would repeal the current requirement that retirees between 65 and 70 lose $1 in benefits for every $3 they earn in salaries or wages over $17,000. o But it would not change a similar earnings test for those who retire between 62 and 65. Under current law, about 1.15 million seniors lose Social Security benefits because they work. Roughly a third of those are found in just three states -- California, New York and Florida. Source: Peter Cleary, "GOP's Next Big Move to Cut Taxes: Killing Social Security Earnings Test," Investor's Business Daily, March 1, 2000. For new NCPA backgrounder on the Earnings Penalty http://www.ncpa.org/bg/bg152/bg152.html For more on Special Taxes on Seniors http://www.ncpa.org/pi/taxes/tax33.html#2 IN OTHER NEWS PHYSICIANS LIE TO GET PROCEDURES COVERED Several studies have shown that physicians are willing to either exaggerate a patient's condition or fabricate a diagnosis if it means a plan will pay for a procedure, especially if it's a clearly necessary procedure such as heart surgery. In one study, researchers asked 169 internists whether they would advise a colleague to lie to a patient's insurance company to ensure the patient was covered for a particular service. o Of those surveyed, 58 percent said they would sanction deception to get coronary bypass surgery approved. o This was followed by arterial revascularization (56 percent), intravenous pain medication and nutrition (48 percent), mammography (35 percent), and psychiatric referral (32 percent). o Only 2.5 percent said they would sanction deception in the case of cosmetic rhinoplasty, and 27 percent did not support deception under any of the scenarios presented. The fact that physicians will sanction lying or exaggerating to get a needed procedure covered by a managed care plan means there's something seriously wrong with the health care system, experts say. The news findings are similar to those of two other recently released studies. o The first one, by the American Medical Association's Institute for Ethics, showed that 28 percent of 724 physicians surveyed had exaggerated the severity of patients' conditions to avoid early discharge from the hospital, and 23 percent had changed billing diagnoses to help patients secure coverage. o A second study, released in July by the Henry J. Kaiser Family Foundation, showed that 48 percent of 1,053 doctors surveyed had exaggerated their patients' conditions for coverage purposes in the last 2 years. Source: Joyce Frieden, "Physicians Willing to Lie to Get Procedures Covered," Clinical Psychiatry News, January 2000. For text (requires free registration) http://www.medscape.com/IMNG/ClinPsychNews/2000/v28.n01/cpn2801.40.01.html For more on Managed Care http://www.ncpa.org/pi/health/hedex5.html THE NEW GILDED AGE AND RETURN OF THE BARONS The current period of U.S. economic growth parallels the "Gilded Age" in a number of ways, says Richard Lowry of National Review. The Gilded Age is the period roughly from 1870 to 1912, when America saw runaway economic growth. One parallel is that prominent businessmen, such as Bill Gates of Microsoft, are being cast as modern-day "robber barons." We should be so lucky, since thanks to the alleged robber-barons, new technologies led to declining prices and productivity-driven growth. o Average railroad freight rates dove from 20 cents a ton per mile in 1865 to as low as 1.75 cents in 1900. o By the time John D. Rockefeller Sr.'s Standard Oil had captured 90 percent of the oil market, it had, through efficiencies, pushed down the price per barrel from 58 cents to 8 cents. o And Andrew Carnegie drove the price of steel rails from $160 a ton in 1875 to $17 a ton in 1898. The low prices helped energize the entire economy, and economic growth helped lower inflation. Source: Richard Lowry, "TR and His Fan," National Review, February 7, 2000. For more on Economic Growth http://www.ncpa.org/pd/economy/econ4.html ________________________________________________________________ National Center for Policy Analysis "Making ideas change the world" http://www.ncpa.org This message is sent by us only to Policy Digest subscribers. If someone forwarded this message to you and you like what you see, please subscribe to this list. 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