Category Archives: Government

State Liquor Monopoly

The Commonwealth Foundation highlights concerning activity at the Pennsylvania Liquor Control Board:

The violations include: accepting gifts from vendors who had ongoing contracts with the PLCB, using a position in government for personal benefit, and failing to disclose gifts on annual financial interest statements.

…Many of these violations occurred on the taxpayer’s dime with officials attending functions and accepting gifts during work hours.  Not only that, but taxpayers were actually billed for some of the expenses related to these social functions.  How many of you get to bill your employer for non-work related golf outings?

A corporate welfare failure

Even subsidized companies don’t stay in business forever. Fisker Automotive, a company that borrowed $192 million through the Advanced Technology Vehicles Manufacturing Program, lost $35,000 on each vehicle sold. The company went bankrupt, and so far only $50 million has been recovered. From Cato’s blog:

The car was a flop from the beginning. It was recalled, and it received poor performance ratings. Fisker lost an estimated $35,000 on each vehicle sold. A year after issuing the loan, DOE halted Fisker’s borrowing authority after the company had already borrowed $192 million. Fisker filed for bankruptcy shortly thereafter. Only $50 million of the $192 million has been recovered for taxpayers.

How much does the government spend on corporate welfare?

Michigan’s Capital Confidential reprinted commentary by Anita Folsom that includes an interesting claim:

From 2000-2012, the U.S. spent $3,000 a second every second of that 12-year period on government subsidies — most of which, like Solyndra, were a huge waste.

That comes out to $94.6 billion/year, and fits nicely with analysis by Chris Edwards and Tad DeHaven. They estimated that the 2002 federal budget included $92.6 billion for corporate welfare. Tad DeHave did a similar analysis again in 2012 and estimated that corporate welfare spending was $97.6 billion.

Subsidies are expensive.

Police In Kansas Profit Off Of Drug War

According to a report from Watchdog, a statute in Kansas allows police departments to profit from the war on drugs. The law allows for those arrested for possession of narcotics to be assessed the cost of a tax stamp which could be upwards of $1000. 75 percent of that fine goes to the investigating agency. For some Police Departments this has meant hundreds of thousands of dollars- all for pursuing often victimless crimes.

“Drug tax stamp cash can’t be spent directly on salaries or other general department operations, but it has helped the OPPD purchase everything from building security upgrades and currency-counting machines to portable radios and surveillance equipment, among other items.”

School Lunch Regulations Cause $1 Billion In Wasted Food A Year

School lunches have never been at the pinnacle of fine dining, but with recent federal regulations as part of the “Healthy, Hunger-Free Kids Act, those meals have not only gotten worse but are also more wasteful. The regulations mandate a host of requirements on portion size, calories and colors of fruits that can be served and stipulate that to count for federal reimbursement the student must take items they may not even want. The end result is massive quantities of wasted food. Far from allowing common sense regulations and more market competition these rules are kept in place “for the children.”

“According to a 2013 study by Brigham Young University based on Utah schools, the extra produce costs school districts $5.4 million a day, with $3.8 million of that being tossed in the trash. Other studies find “significant waste,” including 40 percent of all the lunches served in four Boston schools. Nationally, the annual cost of wasted food is more than $1 billion.”

Last Week In Regulation

According to the Competitive Enterprise Institute, last week 59 new regulations were added to the Federal Register which places the current page count at 20,727. Of those new regulations, two will impose more than half a billion dollars in compliance costs.

“A new regulation requiring all new cars to have rearview cameras installed by 2018 garnered national attention last week, not least because it will add $132 to $142 to the cost of low-end cars; consumers on the lower end of the socio-economic spectrum are not happy. The National Highway Traffic Safety Administration estimates compliance costs of $546 million to $620 million.”

California Pursues Two Decade Old Debt

How long will the government pursue money it thinks belongs to it? Ask Gilbert Hyatt, who in 1970 invented a microprocessor computer chip which helped to spark the proliferation of computer technology. In 1990 he was awarded a patent for the processor and made a large profit as a result. Since then, California’s Franchise Tax Board has pursued him for $7.4 million in back taxes, which today has reached almost $55 million in fines and penalties. Hyatt was not even living in California when he received the money originally, but since he was before he received the patent, the state thinks they deserve a share.

“On Friday, Hyatt, now 76, filed a federal lawsuit accusing the state of violating his constitutional rights in pursuit of a sum that now tops $55 million as interest and penalties have accrued. He’s asking for an injunction forbidding the state from pursing its claim any further. After all these years and legal expenses, he just wants California to leave him alone already”

Wasted food, wasted taxes?

The Independent Institute points out waste caused by federal school lunch regulations.

The Los Angeles Unified School District, second largest in the nation, serves 650,000 meals a day. Students throw out at least $100,000 of food a day according to district officials, approximately $18 million a year… The federal rules also forbid taking the wasted food off campus.

NHTSA’s Rearview Camera Mandate

Cato blogger Peter Van Doren points out a curious statistic regarding rear-view cameras.

…NHTSA concluded that the cost per life saved from installation of the cameras ranged from about 1.5 times, to more than 3 times the 6.1 million dollar value of a statistical life used by the Department of Transportation to evaluate the cost effectiveness of its regulations.  NHTSA waited until the possibility of intervention by the courts forced it to issue the rule.

Eleven Jobs That Require Licenses

Occupational licensing laws are one of the chief problems facing potential job seekers in many states. Jobs from Florists to fortune tellers must seek approval from the state to practice their trade. Never mind the thousands of dollars these licenses can cost, sometimes their enforcement is completely arbitrary. Buzzfeed has put together a list of eleven jobs that require licenses.

“Today, one out of every three Americans needs a license from the government before they can legally work. Back in the 1950s, it was only one out of every 20 workers. So licensing has gone way beyond doctors and lawyers and into some pretty strange territory.”