Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Sunday, August 13, 2006

Long-Term Investments for Homeland Security

In a comment on an earlier post ("Where do we go from here?") Chris suggested that the real path to security is through longer term investments. He listed six ideas, of which three are consenus issues on this blog (more funding for education, health, and development of alternative energy sources); but I wanted to bring the other three to the fore because they are more controversial (I have quoted them verbatim but relabeled them with letters):

A. Drastically shorten all patent terms (stimulate competition and markets)
B. Subsidize the development of next generation infrastructure (fiber, true broadband, etc) ala the Federal highway system and rural electrification project
C. Tax more progressively - breaks to the top 0.01% aren't getting us anywhere.

These ideas might lead to good proposals for the Democrats to champion, and to that end I have a few questions for the Citizens about them. First, regarding proposal A, do the Citizens agree that shortening patent terms would stimulate competition? But might it also discourge innovation by reducing profitability? How do current patent terms compare with historical patent practice, and to what extent do patent protections apply internationally? (Does the recent collapse of the Doha round relate here?) Should the pharmaceutical industry be treated differently than others when it comes to generic versions of lifesaving drugs? Also, I understand that copyright terms seem to keep lengthening in the US--are copyrights and patents becoming harder to distinguish with the "information age" convergence of intellectual property and new technology? [my quick opinion: I am skeptical that shortening patent terms would be wise]

Second, regarding the "subsidization" of the next generation infrastructure... would this promote the common good, or merely wind up as tax breaks for already wealthy telecommunications companies? Would it require more regulation, and would that be a good or bad thing? Does "net neutrality" figure into this? What would be the best way for the government to encourage improved infrastructure (if it is the government's business at all) and where does this rank in priority with other public infrastructure investment opportunities (e.g. better roads)? [my quick opinion: I am inclined to let the market handle this for now]

Third, how "progressive" is our tax structure now, historically speaking and compared to other countries? There are a lot of anecdotes out there (e.g. confiscatory tax policies in Scandinavia) but does anyone have real data? We have discussed inequality of wealth before--is this something that could (or should) be addressed via tax structure? Is the corporate income tax messed up compared to the individual income tax? Would tax simplification be a way to make taxes more progressive, or would it inevitably make it regressive? What about the estate tax, or capital gains tax rates? Is there some better way of doing all this? [my quick opinion: I dislike use of the tax code for social engineering, and there are certainly a lot of loopholes or contingencies I would, therefore, remove--but I am not convinced that we ought to make the tax structure more progressive than it already is.]


Anonymous said...

OK, I found some stuff on taxes. Here is a NYT story about corporate taxes  that shows that the US in the low end of the range in terms of corporate taxes as a share of GDP. The high percentage of corporate taxes as a share of total taxation is probably due the exceptionally low level of other forms of taxation in the US.

Here is an MSNBC story that has a nice little chart on personal income tax burdens. Three things jumped out at me: 1) The US tax burden is the lowest of all industrialized countries 2) There is considerable variation in tax burdens for the so called "confiscatory" Scandinavians (and no Scandinavian country has as high a tax burden as France) 3) Getting married as having kids is worth A LOT of money (opposing gay marriage then has a serious punative financial dimension to its general bigotry)

Sorry but that tax stuff doesn't specifically address the progressivity issue. Here is a Washington Post article that talks about progressivity a bit.

I'm not sold on the patent sunsetting but I just don't know much about it. I could be convinced.

Spending on infrastructure projects is a long time Democratic priority (as is progressive taxation). 

// posted by Raised By Republicans

Anonymous said...

Your instincts are right about letting the market handle it. There's a good New York Times  story about Verizon spending a lot of its own money to lay high-bandwidth fire all around the country. A pretty massive undertaking.

As for your question about whether net neutrality figures in, it's a debate I'm involved in, and I'd say it really doesn't, at least not how you might think. If it's subsidies to corporations you're worried about, and I'd agree that's a huge problem, the Senate Democrats (Wyden especially) would actually be giving Google a subsidy by blocking the telecom firms from creating a new charge for their QoS packet prioritization.  

// posted by LookMaNoHands

Anonymous said...

Just a thouhgt on subsidizing infrastructure:

Don't we already do it? I mean if the government wants to build say a new road, they put out an RFP and wait for contractors to line up. Look at what is happening in Louisiana. Government investment always goes back to businesses. So in the end, it is always the market doing it. The government is just a big customer in the market.


// posted by USwest