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Washington Relearns to
Deregulate
5 BY MICK MULVANEY
Supreme Court’s Janus Decision
I
Is a Win for Government thought I’d start by talking about my friend,
Workers (and All Americans) Barney Frank. … Barney and I, we had
BY TREY KOVACS a good working relationship. And right
before he left, we went out to dinner, and
he was talking about what it’s really like in
Washington. And what he said was, “You
have to—just be aware of what the greatest
lie is in politics.” And Barney said the great-
est lie in politics is, “I hate to say ‘I told you
of Federal Regulations—for the few of us who even settlements provide little or no relief while
know how to find it. We also don’t need hundreds of lawyers walk away with a windfall. CEI is
regulatory agencies micromanaging the way we do changing the class action system. In the fall,
just about everything in this country. the Supreme Court will hear Frank v. Gaos,
We do need a little more confidence from just one of more than two dozen cases in the CEI
about everyone that our experiment in democratic portfolio that are the result of patient, pains-
capitalism can thrive without government intervention taking work to identify, bring, and win the key
at every turn. cases that change the law of the land.
This is what we believe at CEI. Whether it’s
lawmakers, executive branch officials, judges in the When the lights go down and our days under
courtroom, or simply our friends and family—we the big top end, a history of a regulatory revolution
argue, persuade, poke, and jab, but ultimately, we will be written. And CEI helped carry the story. We
bring others along to join us to support the miracle of argue for meaningful changes that will constrain the
free people pursuing their own lives in harmony with regulatory state and promote individual liberty now
others. and for future generations.
I’d like to highlight some of my colleagues’ work We can create a world where the focus of our
from the past year. lives becomes bigger than the politics of the day. It is
a world where law and regulation no longer get in
• For the first time in decades, the onslaught of the way of how your life unfolds.
new federal regulations is slowing down. This So please remember, it is okay to have fun at
doesn’t mean that our massive regulatory state work, to expect to win, and to celebrate what was
isn’t still a problem, but progress has been previously unthinkable. So please step right up, get
made. The administration has even gone so your tickets for the show. Join CEI in the great noble
far as to address what Wayne Crews calls challenge of our generation.
“regulatory dark matter”—all those murky
guidance documents, memoranda, and other
items that regulators like to use to go around
Congress.
• The EPA initiated at least 22 deregulatory
measures in its first year. Where was CEI?
Providing the analysis to roll back rule after
rule, which has threatened Americans’ access This article is adapted from remarks delivered at CEI’s
to affordable and reliable energy. I call 22 a 2018 Annual Dinner and Reception.
good start.
FREEDOM
THE GREATEST SHOW ON EARTH
June 28, 2018
National Review Senior Editor Jonah Goldberg, CEI President Kent Lassman presents the 2018
who served as Master of Ceremonies at the CEI Julian L. Simon Memorial Award to Peruvian
2018 Annual Dinner, welcomes guests (photo: economist Hernando de Soto (photo: Scott
Scott Henrichsen) Henrichsen)
A June 2018 Supreme Court deci- in order to charge you the tax rate of your last year, were doomed by high compli-
sion has changed how states can home address and send off payment to ance costs for small businesses and by
tax online shopping. In South Dakota your state’s tax authorities. The owner of general opposition to more sales taxes
v. Wayfair Inc., the court upheld a state the gas station calculates the tax based on online, but they may find a second wind
law that allows South Dakota officials to the station’s location, collects it from you, after the new ruling.
collect sales taxes from other states’ busi- and sends the taxes to his local authority. With this decision, the Supreme Court
nesses that sell to South Dakota residents. This approach preserves healthy tax underestimates the importance of prevent-
The court’s decision is a loss for consumers, competition among the states. New York ing states from regulating and taxing the
small online businesses, and the future of can only hike gas taxes so high before business owners of other states. Congress
e-commerce. everyone starts to drive across the border must now step in to consider plans for
The justices overruled the 1992 to New Jersey. Unfortunately, the Supreme reforming online sales taxes to reduce the
Supreme Court decision Quill Corporation Court’s decision does away with this damage of the ruling. Legislators should
v. North Dakota, which set the standard competitive system for people who buy act to clarify and reinforce the principles
for how states tax online purchases. Until and sell online. of physical presence and state tax
now, states could tax only businesses that Now that states can export their tax competition.
have a physical presence—like stores or policies and reach outside their borders to The Internet has presented enormous
warehouses—in their state. This decision tax businesses in other states, that ben- opportunities to people who dreamed of
is a huge departure from legal precedent eficial rivalry among states is diminished. starting their own business, and American
and threatens a devastating increase in tax That puts both the online buyer and the consumers have reaped the reward. There
compliance costs for online entrepreneurs, entrepreneur at a disadvantage. It is the is no doubt that online shopping has made
like sellers on Etsy and eBay. online equivalent of the gas station atten- it much easier and more convenient for
This ruling subjects small Internet- dant calculating your tax based on where busy parents and rural Americans to get
based businesses to “taxation without you live, not where you are pumping gas. items they need for their families more
representation.” The seller must now This means consumers can no longer vote quickly. Congress should get to work
calculate, collect, and remit sales taxes to with their wallets by taking their online protecting this progress for the sake of all
whichever state a buyer lives in, including purchases elsewhere. consumers and online entrepreneurs.
those in which the seller has no stores or With fewer political consequences,
employees and no voting power or politi- there is less incentive to keep tax rates
cal voice. Online businesses will now be reasonable. Jessica Melugin (jessica.melugin@cei.org)
responsible for adhering to this compli- States have spent years trying to is Associate Director of CEI’s Center for
ance burden and could be audited as a reverse the Quill ruling and persuade Technology and Innovation. A version of
result. Congress to pass supportive legisla- this article was originally published in The
tion. The problem is that online taxes are New York Times.
On June 22, the United States Supreme In 2016, the Obama administration On July 25, U.S. District Judge Ketanji
Court ruled that the government needs signed the Kigali Amendment to the Brown heard oral arguments in a
a warrant to access a person’s cell Montreal Protocol, an international lawsuit brought by several federal
phone location history. The court, in a agreement that would restrict the refrig- employee unions challenging the
5-4 decision, found that obtaining such erants currently used in most air condi- Trump administration’s rollback of a
information constitutes a search under tioning and refrigeration equipment. A practice that lets government workers
the Fourth Amendment and therefore relative few companies stand to make conduct union business while being
requires a warrant from a judge based a windfall by selling substitute refriger- paid by taxpayers. This practice,
on probable cause. The plaintiff, Timothy ants that cost considerably more than known as “official time,” constitutes
Carpenter, was convicted of committing the ones targeted under this measure. a taxpayer subsidy to government
several robberies after police obtained They have been lobbying aggressively unions, which are supposed to be
more than 100 days of his smartphone for the Kigali Amendment and have funded by member dues. In some
location data records. However, the managed to convince 13 Republican cases, government employees spend
court declined to decide on whether Senators that higher costs to stay cool 100 percent of their work hours on
law enforcement seeking a smaller time are what their constituents need. official time. The unions are chal-
window of records requires a warrant “The Kigali Amendment would lenging a May executive order by
and allowed for exceptions for emer- raise the cost of air conditioning and President Trump that limits the use
gency situations like “bomb threats, refrigeration, and a number of cor- of official time to 25 percent of an
active shootings, and child abductions.” porations that stand to benefit have employee’s work hours.
“Today’s Supreme Court decision joined forces with environmentalists in “Official time is a massive sub-
is a victory for Americans’ privacy, as lobbying for Kigali ratification,” said sidy to federal employee unions that
the court recognized that the govern- CEI Senior Fellow Ben Lieberman. “In takes public employees away from
ment conducts a search when it tracks particular, two major chemical compa- the serving the public,” said CEI
our cell phone location history,” said nies, Honeywell and Chemours, have Policy Analyst Trey Kovacs. “Union-
CEI Research Fellow and Regulatory patented costly substitutes and hope negotiated grievance processes are
Counsel Ryan Radia. “Although the to attain a captive market for them via too time consuming and allow poor
court’s opinion was narrowly crafted to Kigali. However, among the millions of performing federal employees and
address the particular facts in this case, businesses that use refrigeration and those who are convicted of miscon-
its decision underscores the court’s air conditioning, such as restaurants, duct to keep their job.”
willingness to apply rigorous scrutiny supermarkets, and convenience stores,
to governmental surveillance involving Kigali will drive up the cost of doing
new technologies.” business and hurt employment.”
...END NOTES
Anti-“Amazon Effect” Legislation Too Late for Actually, Passion Fruit Ale Sounds Delicious Too
Borders Bookstore California is home to many cutting-edge companies,
The San Francisco Board of Supervisors is reportedly and not just in the computer and technology business. Some
considering a measure to ban private companies from are innovating with beer—and cannabis. Last spring, San
providing their employees with a full-service office cafeteria. Francisco’s Black Hammer Brewing introduced Toke Back
The reason? To force them to eat lunch at area restaurants. Mountain, one of several beers that includes cannabidiol, a
Unsurprisingly, the proposal has the strong support of the non-psychoactive derivative also known as CBD. However,
city’s restaurant trade association, reports The San Francisco the federal Alcohol and Tobacco Tax and Trade Bureau
Examiner. Supervisor Aaron Peskin, who cosponsored the (TTB) recently ordered the brewery to cease and desist from
legislation, said it was intended to avoid the “Amazon effect brewing with cannabinoids. It’s not because of the federal
that impacts retail and restaurants across the county.” So his Title I classification of marijuana, but because the TTB allows
solution: “People will have to go out and eat lunch with the only certain ingredients to go into beer. That means that a
rest of us.” There was no comment on how the legislation long list of safe and healthy foods and ingredients are for-
might affect brown bag lunches.. bidden in beer unless they are explicitly allowed. As the San
Francisco Chronicle reported, “Rose hips are fine; rosewater
Lex Stulta de Piscibus (Stupid Fish Law) is not. Guava is OK, but not passion fruit.”
Seafood merchants in southern France are reportedly
furious over being fined for not displaying the Latin-based UK Government Says You’re Healthy … Enough
scientific names of the fish varieties they were selling. You’re not the customer unless you’re paying the bills.
Marseilles fishmongers were apparently violating European That simple truth applies to health care. However, the United
Union regulations that require terms like “Sparus aurata” Kingdom’s National Health Service (NHS) seems to have
and “Mullus barbatus” to be displayed alongside the more reinterpreted it to mean: You’re not really the patient unless
commonly used names. Fines ranged from €400 ($466) to you’re paying the bills. In order to control exploding health
€1,500 ($1,749). European regulators claim that the rule care costs, the NHS, famed provider of “free” medical treat-
is needed to better inform consumers of their food choices. ment for over 70 years, has decided that certain procedures
“They’re bureaucrats who have no idea about realities on are no longer worth performing. We’re not just talking about
the ground. No customer ever asks for a fish using its Latin cosmetic surgery or other elective procedures. According to
name,” one fishmonger told BFMTV news channel. Another the list of procedures being considered for elimination, British
quipped, “If the ghosts of Caesar or Nero turn up, they’ll be taxpayers who need treatment for carpal tunnel or hemor-
pleased. If they somehow come back to life at least they will rhoids may be out of luck.
know what the names mean.”