Earlier this week, President Biden’s nominee Anna Gomez was confirmed to the Federal Communications Commission (FCC). This ended a long period of an even party split. For the last few years, the FCC has served taxpayers and consumers in a bipartisan fashion by advancing noncontroversial policies. With the new Democratic majority, the Commission should avoid the temptation to pursue radical agenda items at the behest of progressive activists. Half a decade has passed since the rollback of so called “net neutrality” rules. In that time broadband prices have come down, speeds and coverage have gone up, and none of the predicted horrors have come to pass. There is simply no need to resurrect unnecessary net neutrality rules. The FCC should focus on its mission of closing the digital divide with an all-of-the-above approach, not picking winners and losers. Government owned networks (GONs) across the country have been losing money for local taxpayers. With a massive infusion of federal taxpayer
dollars, there is more risk of money being wasted on these dubious projects. Congress can further help this FCC continue to pursue necessary and uncontroversial items by renewing its spectrum auction authority.

Vivek’s Weird Death Tax Support

Presidential politics are in full swing. The early days of the campaign are always entertaining, as many candidates introduce themselves to the American public with some unique ideas for their would-be presidencies. However, some of these proposals are not entirely new ideas, with some also being quite destructive in nature. Such is the nature of one idea floated by Vivek Ramaswamy. In a conversation with radio host Michael Smerconish, Ramaswamy somewhat stood behind the idea that America should implement a 59 percent estate tax – otherwise known as a “death tax” – at minimum. His only qualm with the idea was seemingly that it was “unimplementable in the current system” and that there would be “consequences” politically. As too many American small business owners and farmers know, the consequences of the death tax are more than just political.

The question originated because of a quote in Ramaswamy’s 2022 book, Nation of Victims. In the book, Ramaswamy writes that, “Piketty and Saez are proposing a dry, yet elegant answer to the question, one that both tells us who the worst off are and helps us prevent Wilt Chamberlain’s talentless grandchildren from ruling the world… Piketty and Saez’s equations spit out the answer that the optimal inheritance tax in the United States is 59 percent… I’d take the figure Piketty and Saez arrive at as a minimum. We shouldn’t allow people to become billionaires just by having rich parents.” There’s a lot to unpack with this section of the book. First, “Piketty and Saez” refer to Thomas Piketty and Emmanuel Saez, two progressive economists. They are widely known for their economic model that suggests the most effective method of curing income inequality is high taxation and indicts free market capitalism as the cause. The seemingly random sideswipe at basketball legend Wilt Chamberlain is actu
ally a nod to libertarian philosopher, Robert Nozick. Nozick argues in his 1974 book Anarchy, State, and Utopia that all transactions in a truly voluntary free market are just. He uses Wilt Chamberlain to illustrate this point. If thousands are willing to freely give their money to watch Wilt Chamberlain play basketball, then Chamberlain’s comparably outsized wealth is in no way unjust, because he hadn’t forced anyone to do anything. Fans freely parted with their money and – in exchange – got to see him play.

Many politicians speak about wealth and net worth as if it were liquid cash. When politicians like Ramaswamy see someone with a net worth of $5 billion, they imagine someone with a Scrooge McDuck-style swimming pool filled with five-billion-dollar bills. However, that’s not how wealth works at all. Net worth reflects all of a person’s assets. That could include the value of any businesses they own, land they have, property, vehicles, equipment, or anything else they own that has a monetary value, also known as capital. A 59 percent tax on inheritance takes this misunderstanding of economics and turns it into a dangerous political weapon. It is especially unfortunate as Ramaswamy should understand this better than any candidate. His $950 million net worth comes largely from his ownership stake in his biotech firm Roivant Sciences. No one can pay off 59 percent of land or a business. When someone inherits a family farm worth about 10 million dollars in real estate, under Ramaswamy’s proposal,
those inheritors, likely seeking to continue to operate the business, would be on the hook for $5,900,000 to the federal government. However, they didn’t inherit cash. They just inherited land that might be worth a lot if it were sold. In this case, the would-be farmer has to sell their land to avoid the heartache, go into debt, or sell much of what they own to pay off what’s owed through no fault of their own. This same example would apply to small manufacturing and retail businesses as well, many of which employ dozens if not hundreds of people. Businesses facing the estate tax are taxed on equipment and other property that provide employment and therefore the policy eliminates otherwise stable jobs. As if the estate tax weren’t destructive enough, there are myriad ripple effects from when a small business is liquidated purely because the owner suffered a tragedy. The death tax forces companies to either fold or be acquired. Both reduce alternatives for consumers in the economy and blunt
competition among firms in markets, aiding companies with different ownership structures such as publicly-traded corporations. This is already the sad reality for many Americans with a current estate tax rate between 18 and 40 percent. Raising it to a 59 percent minimum would only exacerbate and intensify that pain. That pain should be the true reason why a politician should disown such a proposal, not because their previous endorsement of it is no longer politically convenient.

Republican politicians of all stripes have done excellent work to pare down the existing estate tax, trying to ensure Americans dealing with the losses of loved ones don’t have to also deal with the federal government reaching for their cut and destroying what they’ve worked so hard to build. It would be a shame for one misguided proposal to build momentum for this backwards policy and undo that work.


“Back to School” Should Also Mean “Back to Cybersecurity”

As students from kindergarteners to graduate students return to their campuses, cybersecurity remains a critical concern for all educational institutions. Learning has increasingly migrated online in recent years, multiplying the security risks schools must guard against. According to Recorded Future’s Allan Liska, cybercriminals have targeted schools at a higher rate in 2023 than in the year previous. Liska stated in July that year-to-date cyberattacks against schools had reached 120, while only 188 such incidents occurred in 2022. For example, CNN reports that the University of Michigan just went “without full internet access for two days after staff shut the school’s connections down in response to a ‘significant [cyber]security concern.’” Last year, the Los Angeles Unified School District (LAUSD) fell victim to a high-profile cybercrime, as did the New York City Department of Education this year.

Hackers who successfully breach educational databases gain access to incredibly sensitive student information. Aaron Rose of Check Point Software Technologies notes that “Student records could be anything from Social Security numbers, medical data, to anything and everything about them.” The Los Angeles Times (LAT) reports that the LASUD breach implicated an “unspecified number” of state-issued identification numbers and Social Security numbers. Moreover, LAT says that criminals listed 2,000 “student assessment records” on the dark web. Breaches generally stem from a human error, from which hackers attain their technological endgames. “Constantly training and re-skilling and retraining, you know, people keeping in front of mind that,” Rose says. “We have some of the best technologies to prevent against them. However, the weakest link is always going to be the human being.”

Officials should consider rock-hard cybersecurity as a paramount policy objective in every relevant area. For, in addition to education, the digital world’s criminal inhabitants threaten organizations in most other sectors of society and government. Nonetheless, many policy makers routinely marginalize cybersecurity concerns that conflict with other priorities, as some bills in Congress would weaken cybersecurity. To enshrine in law a myopic view of economic fairness, many such proposals attempt to excise many essential pro-privacy features that tech companies now offer.
BLOGS:


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** Tuesday: Summer Reading: Back to School Edition ([link removed])
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** Wednesday: The European Union’s Eleven Greatest Blunders ([link removed])

Thursday: Biden Administration Introduces Foolish New Tariffs on Tin-Mill Steel ([link removed])

Friday: TPA Congratulates FCC Commissioner Anna Gomez and Urges Spending and Regulatory Restraint ([link removed])
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MEDIA:

September 1, 2023: The Washington Examiner(Washington, D.C.) ran TPA’s op-ed, “FDA needs to let go of its risk-averse regulatory model.”

September 4, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about changing overtime rules for salaried workers.

September 4, 2023: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Baltimore's summer curfew enforcement ends with mixed reviews and questionable success.”

September 5, 2023: Inside Sources ran TPA’s op-ed, “Cigarettes Are Cool Again, Thanks to Regulators.”

September 6, 2023: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the economy, deficit, and oil prices.

September 7, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about Mayor Sheila Dixon running for mayor.

September 7, 2023: Filter.org ran TPA’s op-ed, “FDA Decries Vape Misinformation of Its Own Making.”

Have a great weekend!

Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

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