Chick-fil-A and Zoning Laws

The outrageous attempts by Chicago and Boston, among other locations, to prevent Chick-fil-A from opening stores in those locations, in blatant violation of the First Amendment, and solely because of the owners' theological beliefs - that homosexual behavior is sinful - point up a problem with the current structure of building and zoning laws.

While the use of these laws to prevent a business from opening because of the religious beliefs of its owners is obviously abusive, it is the existence of overly restrictive and arbitrary zoning and building laws which enable the abuse in the first place.  And these laws are used constantly in less obvious ways to stifle business and growth, increase the cost of development, and enable petty tyrants to impose their personal preferences.

Local land use laws (the building and zoning codes) are most often so restrictive that nothing can be built without obtaining some sort of exemption, special use or other discretionary exception.  And the process for obtaining those exceptions is so expensive and time consuming, and so completely without any objective standards, that the board making decisions on the exception can never be reversed or held to account for its decisions.  As a result, persons seeking to build, renovate or locate in a local jurisdiction essentially require permission from the municipality to do so.  And there is virtually no appeal from an arbitrary decision. 

Sometimes these arbitrary decisions are relatively harmless, such as a zoning board requiring a brick exterior as a condition for some variance even though the Code has no brick requirement.  Sometimes the results are far more serious than an increase in costs, however.  Our law firm has represented numerous churches and religious organizations around the country which have been denied permission to locate in a municipality under circumstances which indicate that the reason was racial or religious prejudice, or simply antipathy toward religion itself.

In Chicago, as a practical matter, any special permission, and therefore any development, requires the approval of the alderman for the ward in which the property is located.  And there is no appeal.  Thus a single individual can prevent a project for any reason or no reason, including some pretty reprehensible ones.

The solution is for building and zoning laws to be simplified, and made less restrictive, so that most projects can be built without seeking an exception or exemption as long as the rules are followed.  Where there is a need to have an exemption or special permit, the exemption should be granted based on clear, objective standards that avoid discretion on the part of the municipality.  And finally, there should be a clear path to appeal any arbitrary or incorrect decision by the municipality, or in the case of a municipality that engages in selective enforcement of its standards.  This is what the rule of law requires.

And, of course, the land use laws should explicitly prohibit any content related discrimination.  So the political or theological opinions of the owners, or espoused by the organization, would not be relevant, and churches are treated the same was as any other assembly, or similar, use.

Five Big Issues – Tax Reform

Mitt Romney, who will almost certainly be the Republican nominee for President, needs to develop a message that shows his vision for America.  He will not be able to rely on being a better manager than the current occupant of the White House.  I would suggest a five point plan for restoring America: (1) Tax Reform, (2) Health Care Reform, (3) Spending and Entitlement Reform, (4) Regulatory Reform, and (5) Energy Policy Reform.  I hope to discuss each one in turn.

Americans overwhelmingly want their tax system to be fair.  This means, for most, a system, which is the same for everybody.  That is, it should not be rigged in favor of high-income earners who can hire accountants and tax lawyers to find ways not to pay taxes.  Similarly, most agree that having half the population pay no income taxes at all to support government programs is not healthy.  The claim that every worker pays Social Security and Medicare taxes, while true, does not address this issue because both programs are designed so that, if there are no changes, these same lower income workers will receive back far more in benefits than they will pay in payroll taxes.  Thus, any money they pay in payroll taxes will come back to them and none will go to support the rest of government.  These individuals have no incentive to oppose additional government spending and tax increases because they only benefit from bigger government at no cost to themselves.  This is not healthy for them because it fosters a culture of dependency, or for the broader nation.

Gov. Romney should propose a flat tax applicable to all income, including capital gains and dividends, and the elimination of all personal deductions except the charitable deduction (at every income level) and, for people conducting businesses as individuals and not through a corporation, partnership or other business organization, the same deductions to which the business organization would be entitled.  More on the charitable deduction below, but the business deductions are necessary to equalize treatment between taxpayers who do business as individuals and those who use a business organization.  The standard deduction would be replaced by an individual, refundable credit equal to the flat tax on an income equal to the highest average income of people who today pay no income tax.  I would index the credit to overall per capita personal income so that as the economy grows, and high-income individuals earn more, the credit becomes larger. 

Under this system, people who pay no income taxes today would still pay no income taxes, but if the flat rate increased, or they earned more income, any refund they received would become smaller.  Eventually, they would start paying taxes.  The economic incentives would thus be similar to people who are paying taxes, even if lower income individuals are receiving a net benefit from the government.   

I suspect that higher income individuals will end up paying more (and higher effective rates) than today, but have a lower marginal rate, which is the rate that most affects incentives to work, save and invest.  Overall, the distribution of taxes through society will still end up with high-income earners paying the lion’s share of income taxes.   

This is simple to describe, easy to understand, obviously fair and economically beneficial.  It also has other benefits.  First, simply eliminating “many” deductions, but not virtually all, will not, in the long run, be a lasting reform.  As long as a substantial number of special deductions are there, there will be lobbyists waiting to ask for just one more for their special interest.  The only way to do reform, and keep reform, is to establish the principle of no special provisions for anyone.  Let economic incentives, not tax breaks, drive economic decisions.  Second, the cost of compliance will go down, and voluntary compliance will go way up because people will perceive the system as fairer, correct tax treatment will be easier to determine, and compliance will be easier and less expensive.  Third, it will provide equal treatment among taxpayers no matter the source of their income, and to married and unmarried individuals and couples, and those married individuals who file separately.   

But why keep the charitable deduction?  Some conservatives and libertarians would prefer the government, and particularly the federal government, stay out of doing charity altogether.  That is unlikely to be a majority opinion.  There are strong political interests in favor of the charitable deduction, and most Americans think that supporting education, the arts, religious organizations, help for the poor, and so on are worthy causes and should get some government support.  If we can eliminate, or substantially reduce, direct government support for many of these causes, and instead spur private support through the charitable deduction, it will be far preferable as public policy.

The charitable deduction is far better than direct government support for charitable causes for a number of reasons.  First, a dollar given to a charitable cause only costs the government that dollar multiplied by the flat tax rate, while direct support costs the government 100% of that dollar.  That is, if the flat tax rate is 20%, each dollar of charitable giving only costs 20 cents while direct government support costs $1.00.  Thus, charitable giving is highly leveraged.  Second, taxpayers can decide where their charitable dollars are going rather than having someone else decide.  This will be popular, and will avoid the problems of taxpayers objecting to certain charitable programs by government which they do not like. Let those who like pictures of Christ dipped into urine support that kind of “art” but leave the rest of us out of it.  Similarly, lobbyists will have less to do because the charitable dollars will be allocated by individual dollars not be special earmarks and other budget provisions. Third, private charities can administer their charitable programs far more efficiently and effectively than the government, thus providing more bang for the buck.  Fourth, because every government program becomes, in some sense, an entitlement, it is far more difficult for government programs to cut off undeserving recipients than it is for a private charity.

For those who object to higher taxes on capital gains and dividends because they will reduce needed investment, there need to be two other wrinkles in the system.  First, capital gains should be considered income only to the extent they are actually based upon an increase in the value of an asset sold.  That is, to the extent a sales price higher than the purchase price is due, in part, to inflation, no capital gains tax should be due.  This will encourage long term investing while still keeping a fair and simple system.  In addition, to keep equal treatment among business entities, dividends paid should be deductible to the corporation.  Thus, there will be no double tax on dividends, dividends will be encouraged, and there will be equal treatment of equity capital and debt which will encourage equity investing.

This system is simple, understandable, fair, and can be designed to provide the same revenue as is being provided under the current system while reducing the marginal rate for high-income taxpayers and the effective rate for low-income taxpayers.  That sounds like a win, win, win to me.

Is the current split in Christianity a Bigger deal than the Reformation?

See the article from Bob Munday making the point that there are now two religions calling themselves Christian, and we have to choose which one we will be part of.

I think I agree with him.  At the very least, the issues at stake are at least as important as the Greek/Latin split and the Reformation, if not more so.

God's Economic Justice Interlude

Hans Cornfelder, Editor of Presbyweb, published a Viewpoint article which made reference to many, though by no means all, of the Scriptures I plan on addressing in this series.

I would add this observation about the First Century Jerusalem Church.  Among those churches described in the New Testament, only the Jerusalem Church is described as "holding all things in common."  And it only for the Jerusalem Church for which Paul needs to collect money. 

Lastly, in this season of Thanksgiving and Advent, I would quote from our Calvinist predecessor William Bradford's diary Of Plymouth Plantation:

"[Thy Plymouth colony initially held all land and crops in common.  Harvests were poor and there was great hunger among the colonists.]  All this while no supply was heard of, neither knew they when they might expect any.  So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery.  At length, after much debate of things, the Governor . . . gave way that they should set corn every man for his own particular, and in that regard trust to themselves . . . And so assigned to every family a parcel of land . . . This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means . . . The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression."

"The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God.  For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.  For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense.  The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice.  The aged and graver men to be ranked and equalized in labours and victuals, clothes, etc., with the meaner and younger sort, thought it some indignity and disrespect unto them.  And for men's wives to be commanded to do service for other men, as dressing their meat . . . etc., they deemed it a kind of slavery . . . Upon the point all being to have alike, and all to do alike, they thought themselves in the like condition, and one as good as another; and so, if it did not cut off those relations that God hath set amongst men, yet it did at least much diminish and take off the mutual respects that should be preserved amongst them.  And would have been worse if they had been men of another condition.  Let none object this is men's corruption, and nothing to the course itself.  I answer seeing all men have this corruption in them, God in His wisdom saw another course fitting for them."

How Progressives Think I

The Progressive mind has always been a curiosity to me.  I ran across a story in the Chicago Tribune which seems to me to demonstrate two aspects of Progressive thinking.

The story involves the Niles North High School subcontracting out school lunches to a private concern with the result that Niles North students get several good, healthy choices for lunch at a very reasonable price ($2.25/meal).  For the enviro-Left, the food is even "sustainable, local and organic." Lower income students get their basic lunch for free.  Although less healthy choices remain available, students have gradually shifted preferences to the healthier choices.  For those who want them, and can pay for them, additional, higher margin, options are available which helps the private contractor make a profit even while providing free and low-cost basic options.  Students, parents, administrators, the contractor and taxpayers are all better off and like the plan.

The new regime takes the place of public employees providing uniform, lower quality and student disliked food at (higher) taxpayer expense.  The change sounds great, right?  Well apparently not to the Progressive mind.  Chef Ann Cooper of Berkeley, California and Boulder, Colorado was quoted as saying:

"I don't want to criticise it, but I worry that when you have some kids who can afford your more expensive lunches and you have other kids who can't you are creating a stigma around the free lunches and increasing the chasm between the haves and the have-nots."

This quote demonstrates two characteristics of Progressive thinking.  First is the fetish for uniformity of results.  It doesn't matter that lower income students are getting better choices at little or no cost to them.  They don't like the fact that some, who can afford it, have more options.  That is, they are offended not by poverty, but by wealth, or at least that those with wealth get to spend it on themselves.  And this fetish is generalized to their fascination with income inequality.  To the conservative, why should it matter if Bill Gates keeps a sizable chunk of the next $1B he creates as long as this wealth benefits the economy as a whole?  The idea should not be to weaken the incentives on the rich to save, invest, work, create and profit by higher taxes and restrictive regulation, but to improve the lot and opportunities of the poor.  This is done not by redistribution of wealth but by letting people do what they do best in a free economy, create new wealth.

Second, the Progressive thinks she knows better than others what people should want, regardless of what they actually do want.  Everybody in Niles likes the plan, but some Chef from Berkeley thinks she knows better what these folks in Niles should want.  The Progressive thinks he has a unique, and superior, moral sense of right and wrong, derived from his own head, and the head of other right-thinking types, and not from any objective authority or tradition.

These two peculiar traits of Progressive thinking explain many of the irrational positions that Progressives take.  Future posts in this series will explore others.

God's Economic Justice I

I am the Lord your God, who brought you out of Egypt, out of the Land of Slavery. . . . You shall not steal. . . . You shall not covet your neighbor's wife.  You shall not set your desire on your neighbor's house or land, his manservant or maidservant, his ox or donkey, or anything that belongs to your neighbor.  Deut. 5:5-21 (with ommissions)

Initially let me define what I mean by socialism. The classic definition of socialism is where the government owns the means of production. But ownership consists of, at least, two primary bundles of rights. The right to control what happens to one's property, and the right to the economic benefits generated by one's property. If the government seizes these bundles of rights, through, for example, intrusive regulation, high taxes or "crony capitalism", there is, to the degree of the seizure, socialism. Mere nominal title to the assets is unimportant if the government controls how the property is used, managed or disposed of, and controls how much, if anything, the nominal owner of the property is to receive of the profits generated by the property.

Our Lord is often pictured by the religious Left as a proto-socialist revolutionary figure who would support "spreading the wealth" by coercive government action.  And there is, of course, no doubt that He often talked of giving to the poor as a matter of private charity.  But is God in favor of socialism, of spreading the wealth by government coercion?  This post is the first of a series that will explore this question each focusing on a different passage of Scripture.

Not one, but two, of the Ten Commandments address the issue of private property.  The commandment against stealing, of course, makes no sense in the absence of private property.  It is essentially a command that private property rights should be respected.  Similarly, the Tenth Commandment, against coveting something that belongs to one's neighbor, is meaningless without private property.  But it goes further than the Eighth Commandment against stealing by saying that we should not even desire what belongs to another.

There are practical reasons for seeking not to be jealous of what one's neighbor has.  First, the desire, which cannot be satisfied except by theft, might lead one to break the Eighth Commandment.  But second, and I think more importantly, desiring what one cannot lawfully have leads to unhappiness and distracts from more productive activities.  Rather than thinking about how you might like having something belonging to another, it is better to direct one's energy into creating something for yourself.

In these days of Occupy Wall Street, "spreading the wealth" and the collapse of the social welfare states of Europe, we would do well to avoid class warfare which is, at base, founded on a breach of the Tenth Commandment.

Paul Ryan speaks on divisive politics and American Exceptionalism

Paul Ryan made a great speech at the Heritage Foundation today.  Simply outstanding and I could not have said it better myself.  So I won't try.