Marco Island Nullification Resolution

A few days ago the Marco Island City Council, an assembly of the brightest constitutional scholars in the nation, decided to pass a resolution that would nullify any action that would, in effect, dilute the Second Amendment rights of its citizens to bear arms.  Prior to that action, Lee County Sheriff, Mike Scott, had indicated that he would not enforce any law that would restrict gun rights as he believes it would be against the Second Amendment.  There apparently are plans at an upcoming meeting of the Collier County Commissioners to vote on the same resolution as the one the Marco Island Council passed.

It seems that in the history of the United States nullification efforts have never been successful and have often led to dire consequences.  One of the first acts of nullification, Shay’s Rebellion, occurred in 1786 and 1787 protesting taxes levied by the State of Massachusetts.  Although this act of nullification was, in fact, against the State of Massachusetts rather than the federal government (the federal government had no standing army available to suppress it at the time), it resulted in the suppression of the rebellion by the state militia and the eventual execution of 18 individuals involved in the rebellion.

In 1832 the State of South Carolina declared that the tariffs imposed by the federal government in 1828 were unconstitutional and would not be enforced.  Only a compromise on the tariff issue engineered by Henry Clay avoided federal troops being sent to South Carolina by President Andrew Jackson.  The compromise, however, only had the effect of postponing the Civil War by three decades (effectively “kicking the can down the road”).

The issue that precipitated the Civil War was the ultimate attempt at nullification: secession.  Over 600,000 lives were lost over this attempt to nullify federal authority.  One would think that this would have settled the issue.

In the 1950’s Arkansas attempted to nullify federal desegregation law.  The result was that President Eisenhower sent federal troops to Little Rock to force the admission of black students into public schools, despite Governor Orville Faubus’ attempts to block their entry into the schools.

In the 1960’s we again saw federal troops being dispatched, this time to Alabama, to enforce federal desegregation laws.

In 2012 we witnessed Texas Governor Rick Perry, in his presidential campaign, bringing up the idea of Texas seceding again from the Union. Fortunately, no one took his idea (or his campaign) seriously, so no additional federal troops had to be sent to Texas (there are already a lot of them there).

The bottom line is that it has been pretty much settled that the federal courts are supposed to rule on the constitutionality of our laws, and not the elected state legislatures, sheriffs, city councils, county commissioners, etc., who all take an oath of office to uphold the law and not render their own interpretations as to the validity of each law.  The consequences of doing otherwise appear to be pretty dire in the history of our nation.  Hopefully, we will not experience federal troops marching down I-75 or over the Jolly Bridge in the near future in order to restore the rule of federal law.

Perhaps a more apt term for nullification is subversion?


A Simple Solution to Avoid the Fiscal Cliff

Following his election victory, President Obama is adamant that the tax rates need to be raised on the wealthiest Americans.  The Republicans, on the other hand, insist that raising rates will result in the loss of 700,000 jobs.  I am proposing a compromise solution that seems so simple that I am surprised that no one has suggested it.  I have, in fact, sent it to President Obama, our Senator Nelson, John Boehner, Bob Corker, Paul Ryan, and the Naples Daily News but so far have received no response or acknowledgement (other than the standard replies you get when you write to your congressman).  I am thus compelled to publish it on my own web blog.

First of all, I don’t necessary believe the Republican argument that increasing the marginal tax rate on the wealthiest taxpayers to 39.6% will either cause our economy to collapse or that it will lead to the number of job loss that is commonly cited.  I also feel, however, that the Democrats have not been creative enough in countering this argument with a proposal of their own.

The compromise solution that I am proposing is to raise the marginal tax rate on income over $250,000 ($200,000 for single taxpayers) back to the 39.6% rate prior to the Bush tax cuts as President Obama advocates (and the polls indicate that the majority of voters accept), but with one important exception: self-employed income.  I would suggest actually decreasing not only the top marginal rate on this type of income, but also decreasing rates on self-employed income across the board.

The idea is to implement a separate tax schedule for Business Income on the personal Federal Tax Form 1040 (Schedule C or C-EZ).  Business income (which is basically sole proprietor and other self-employed income) is currently taxed at the same rate as wages and salaries and all other income (except for dividends and capital gain income).  Why not introduce a separate tax schedule for this type of income with lower rates.  This would surely help open up the acceptability of increasing the top marginal tax rate on wages and salaries and other income to the suggested 39.6%.

In addition to income derived from sole proprietor businesses, business income on line 12 of the 1040 also includes consulting income, babysitting income, and any other income received by many individuals as “independent contractors.”  Individuals receiving this type of income also pay almost 15% (temporarily reduced to almost 13%) of their income as self-employed Social Security Tax, so they are paying some of the highest taxes of anyone. (I would even go so far as to suggest making the first $1,000 of self-employed income exempt of the burdensome Social Security tax).

Self-employed and sole proprietor income should be embraced and encouraged as individuals who earn it are, in fact, working in the spirit of entrepreneurship and they do, on many occasions, employ other individuals.  High levels of wages and salaries (including bonuses sometimes in the millions of dollars) and other income such as pension distributions, on the other hand, do not seem to be redistributed into the economy quite as quickly and don’t necessarily lead to job creation.  The primary argument against raising taxes on the highest earners should not hold water if the rates on business income filed on a personal return is reduced.

A further argument in favor of this approach is that most everyone (President Obama, Mitt Romney, and Paul Ryan included) seem to agree that the corporate tax rate (currently 35%) should be reduced to somewhere in the twenties.  To me it wouldn’t make sense to substantially reduce the corporate rate without making a similar reduction to self-employed and small business income.

One of the objections to my proposal could be that it complicates an already complex tax code.  I would argue that we already have a separate tax schedule for qualified dividends and capital gains, so it shouldn’t be that hard to either implement the separate tax calculation on this type of income or figure it when completing a 1040.  Perhaps the tax calculation could be integrated into Schedule C or C-EZ and added on at the end of the 1040.  In any event, most self-employed individuals already have access to either computerized tax programs or paid tax preparers.

I do not know the potential impact on revenues for such a solution but it should have less impact than renewing all of the Bush tax cuts.  The revenue lost on reducing the tax rate on self-employed income could, perhaps, be made up by the closing of other loopholes as suggested by the Republicans.

Please, let’s get a lot more creative to solve this tax impasse!  To just dig in with current positions on both sides of the aisle just causes us to lurch from one crisis to another with no real solution other than “kicking the can down the road.”  The solution I have proposed seems to me to be a reasonable compromise that would actually help the economy.

Building the Collier County Economy

The following is a letter to the editor that I submitted to the Naples Daily News on Sunday, January 25.

I read with interest Sunday’s Guest Commentary, “Building economy that won’t rely on population growth”, by Tammie Nemecek.  While I applaud the efforts of the Economic Development Council and the 37 community groups and organizations, I wonder if enough attention is being given to the medical industry in our county.  As I perused the list of Project Innovation endorsers provided in the commentary, I was struck by the fact that our local hospitals and other medical providers were not listed.

I am concerned that we may be attempting to create some new industries from scratch in Collier County that already exist in many other communities throughout the United States and the world such as computer software, communications, etc., while there exists a real need for top-notch medical services and technology in our area.  We are blessed with a large population of retirees who live here either year-round or part of the year, but the medical infrastructure to support those individuals seems only to exist elsewhere.  I have one friend who recently had a brain implant to help control his Parkinson’s disease, performed at the Mayo Clinic in Jacksonville.  I have another friend who had a heart valve replacement, performed at the Cleveland Clinic in Cleveland.  One of our major hospitals in Naples offers only a limited cardiac care program and is not licensed to perform open-heart surgery.  This facility also out-sources some of its routine laboratory work to facilities in other parts of the state rather than doing all of it locally.  It is indicative of our failure to aggressively support the establishment of a world-class facility that the Cleveland Clinic threw in the towel and pulled out of our area a couple of years ago.  The current migration of family practitioners in Collier County to “concierge” service also reflects our inability to attract and retain primary care physicians and further limits access to exceptional health care for many individuals.

I grew up in small town in Minnesota that was 40 miles from Rochester, Minnesota, home to the Mayo Clinic.  We often referred to that clinic as “the mecca”, as it attracted patients from all over the world.  By contrast, I have heard the joke as to where to go around here to get the best medical care.  Answer: Southwest Regional Airport.

We are blessed with possibly the best climate in which to undergo medical treatment and subsequent rehabilitation.  We also have potentially the optimum clientele who are in need of such services.  Rather than attempt to compete in some of the industries where world-wide competition already exists and where Collier County may not bring any new natural resources to the table, I believe we should be looking to put our best foot forward in this vital sector where we can truly leverage our local strengths and needs.

Blame Us

I sent the following letter to the Naples Daily News (Florida) and it was published on April 12, 2008, except for the last sentence:

I am amazed at the misdirection of blame for the primary mess that has befallen Florida.

For example, The Naples Daily News published an editorial a few weeks ago implying that the Democratic National Committee is to blame for the disenfranchisement of Florida primary voters; and many articles and letters to the editors are of the same opinion.

I have another view of who caused the problem. We, the voters and citizens of Florida, are to blame. Through our elected senators and representatives (Republican and Democrat) who passed this bill, and our elected governor (Republican) who signed the bill, we moved the Florida primary from March where it rightfully belonged to January 29, 2008. Both the Republican and Democratic National Committees which, by law had the power to set the rules, had already established that a primary election on January 29 would lead to the disqualification of delegates. In the case of the Republican primary, it didn’t really matter because John McCain won the nomination by a wide margin. In the case of the Democratic primary, the action by our elected legislators and governor has resulted in the disenfranchisement of Florida voters.

The media has reported that some Florida legislators were “livid” and were “fulminating” about the DNC’s position. The media has given the true culprits a pass. They are, in fact, we the voters and our elected officials.

We should all take responsibility for the fact that we again blew it as we did in 2000.  We should do this by rightfully pointing the blame at those legislators who supported this bill and the governor who signed it into law.

Evolution and Why it Matters in the 2008 Presidential Race

There has been much discussion lately regarding the religion of a particular candidate for president.  Also, many groups are using the issues of abortion and gay marriage as litmus tests to determine if a particular candidate is, in their view, qualified to be president.

I don’t believe religion, abortion, or gay marriage really matter as long as a person is not too aggressive in imposing his or her beliefs on others.  Those particular issues are all based on a particular set of values and beliefs.  It is very difficult to discern which set of values and beliefs is “correct”, “true”, or “valid” simply because they are values and beliefs.  A good person, in my opinion, can be a Mormon, a Catholic, a Protestant, an Evangelist, a Jew, a Muslim, etc.  Likewise, a person of good character can be pro-choice or anti-abortion, or a good person can be for or against gay marriage.

 A person of good character can also either accept or reject the theory of evolution.  The difference, however, is that evolution theory has been substantiated by over 100 years of scientific knowledge and thought.  There are certainly some holes still left in the theory and if an individual ignores the bulk of the evidence and wishes to give more weight to his or her beliefs regarding evolution, I have no problem with that … unless the individual is the President of the United States.  The office of the President requires a person who can weigh the evidence and facts of each situation and make rational decisions as to the best course of action.  I don’t feel that someone who does not accept the theory of evolution fits that description.

The office of the President sometimes requires that the person who occupies it be able to make quick, rational decisions under extreme pressure.  Can somebody in that office who does not even accept the evidence in favor of evolution make good decisions in complex situations such as the Cuban missile crisis?  I would question that.

I ordinarily don’t like litmus tests to determine if a candidate is worthy of my vote for President, but when a candidate professes to reject the theory of evolution, I think that is where I will draw the line.

State of Denial, Bush at War, Part III

by Bob Woodward, 2006

This book definitely does not have as much impact as All the President’s Men, which was instrumental in driving Richard Nixon out of office.  It does, however, shed a great deal of light on what has happened over the last couple of years when we were supposedly “making progress” in Iraq.

I was especially struck by the portrait presented of Don Rumsfeld.  History may eventually determine that Rumsfeld was right in most of his ideas: streamlining the military to provide a quicker and more accurate response, making the Iraqis stand up and take responsibility, fewer rather than more troops.  Unfortunately, his terrible management style and inability to work as a team member were key ingredients leading to failure.  George Bush, unfortunately, was not competent enough to recognize the impacts early enough to make a timely correction.

Having been in the business world for many years, I recognize some of the characteristics of these types of managers.  They are the ones who are always right and seem to be unfazed by the results of their poor decisions.  The difference is that a business can lose money or even fold and that is too bad.  In the case of a nation, it is a disaster. four stars

Collier County Cat Problem: A More Innovative Solution

Recently the Collier County Commision discussed a proposal to limit cats to three per household.

I am a bit disappointed that the Collier County Commissioners have not given some thought to more innovative and creative ways to help alleviate the cat problem in Collier County.  I am reasonably sure they could arrive at an acceptable alternative solution if they would adopt an approach similar to one the federal government is using to solve another issue.

I would call the program “CatCare Part D.”  The program would offer subsidized cat care to cat owners.  The program’s features and cost would vary from basic neutering and shots to more tailored services such as daily feeding and litter cleaning.  Since the cost of providing these services would be subsidized by the County Government, many cat clinics and pet stores would, no doubt, be eager to provide these programs (I am a bit surprised they have not already organized to lobby for this solution).  The County could even install a hot line to help cat owners choose among the hundreds of programs that would become available once the County begins subsidizing the providers. The cost to the County could perhaps be recovered through the institution of a new CatCare impact fee.

If cat owners were reluctant to sign up because of the perceived complexity of all these programs, a penalty could naturally be imposed for those who sign up late.

I envision this program to be a great solution because it offers so many choices to cat owners rather than imposing a limit on ownership.  President Bush has stated that having multiple choices is a good thing.  It also allows the best aspects of market-based, subsidized partnerships between private enterprise and government to flourish.

How about it County Commissioners?  Isn’t it time to get a lot more creative on this issue?

Medicare Part D Issues

My wife and I are 59 years of age and currently do not qualify for Medicare coverage. I have, however, read much about the current law providing Medicare Part D coverage and wished to express my thoughts on that program and its current flaws..

Much has been written about the problems that the program faced when it was introduced in January of this year. Most of those problems were the result of poor execution and do not relate to the fundamental flaws in the legislation itself. Those flaws, as I see it, are the following:

1. The law provided that providers can determine which drugs their programs cover and which they do not. Senior citizens must then pick and choose which program to sign up for based on whether the drugs they are currently using are covered by the plan they choose.

Problems: This provision makes choosing a program a confusing nightmare as the senior citizen is not able to compare programs on an “apples-to-apples” basis. When a person decides to purchase a car, all of the cars on the market have turn signals, brakes, and even heaters and air-conditioners these days. When a person is choosing a Medicare Part D plan, the choice may be which parts of the car will be best to have or not have. Not only does this make for a confusing array of choices for a senior citizen, this provision of the law presupposes that the drugs a person are currently taking will be constant over time. As a person’s condition changes and new drugs are introduced to the marketplace, that person’s prescriptions can and do change, thus making the previous choice of a program obsolete in a relatively short period of time. This supposition is inherently ridiculous and illogical. Another problem is that it allows a provider to cherry-pick the drugs that it will cover, allowing providers to cut various deals with the drug companies to focus on the specific products it has chosen to provide. I suspect that this is one of the reasons for the high cost of Medicare Part D for the taxpayer while the actual benefits provided to our senior citizens are less than what they should be.

Solution: The law should be rewritten to require providers to cover all FDA approved commonly prescribed medicine. Senior citizens would then be comfortable that any plan they choose would provide the drug benefits they need now and in the future. Shopping for the programs would be less confusing as the programs offered all would provide drugs that are included on the same required list. Lastly, true competition could exist and costs could come down as companies would be required to compete on a level playing field.

2. The law included a component that prevented the government from negotiating directly with any of the drug companies.

Problem: The problem with this approach is obvious in that Medicare Part D is destined to become one of the biggest customers of prescription drugs on the face of this earth. The entire program is paid for by taxpayers. To not allow the government to participate in negotiations on price is a serious departure from marketplace supply and demand theory because it excludes the largest customer from participating on the demand side. The lack of this ability to negotiate is a primary reason for the huge cost of this program.

Solution: Allow the government to participate in pricing negotiations with the drug companies. This will quickly bring down the cost of the entire program. Each provider would then incur the same low cost as any other provider and they will compete based on their efficiency in administering their programs versus their ability to cut deals on specific drugs with the drug companies.

In summary, I would suggest that the current year of 2006 be used as a test year for the current program and that back-up legislation be introduced soon so that a totally restructured program that fixes the current law’s flaws can be implemented on January 1 of 2007 if the current Medicare Part D is deemed a failure. Based on how the current law is structured, that outcome is inevitable.