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Google v. Oracle

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The briefs have started to come in [see here], and the Supreme Court will soon hear oral argument (date TBD), in the Google v. Oracle** case.

**Connoisseurs of case captions will appreciate the nice "two-heavyweights-going-mano a mano," "Ali v. Frazier" quality of this one; no et als, no d/b/as, no on behalf ofs … just the two titans facing off. It has some of the flavor of my favorite captions of all, cases (one or two of which the Court usually hears every year) involving competing State boundary claims or water rights or some-such, whose captions always sound like college football or basketball games: Nebraska v. Oklahoma, Michigan v. Wisconsin, etc.

It is, perhaps, the most important copyright case the Court has heard in over a decade, and interest in the case runs high, to put it mildly. Twenty-six amicus briefs supporting Google's position, submitted by an exceptionally broad range of individuals, commercial entities, and non-profits—from Microsoft and IBM to Mozilla and Reddit and the Internet Society to the National Association for the Blind and the American Antitrust Association to a raft of law professors and computer scientists—were filed last week (plus two in support of neither party).*** That already puts the case at the high end of the distribution of the number of amicus briefs submitted per case (the average, in the Supreme Court, is around 10 or 11; see here), and we still have yet to hear from amici on Oracle's side, who have until Feb. 19th to file their own briefs.

***Jonathan Band has provided a helpful summary of these briefs here.  [Disclosure: Band represents one of the amici (the Computer and Communications Industry Association), and I have signed on to one of the law professors' briefs supporting Google's position in the case.]

The case involves a claim by Oracle that Google, in developing its Android operating system, infringed Oracle's copyright in the Java programming platform. A little technical background is indispensable for understanding Oracle's claim and why it is so important.

A program written in the Java language contains two different kinds of code: "declaring code" and "implementing code." Declaring code (sometimes called a Java "declaration") invokes (or "calls") other programs from within a pre-existing library of Java programs, in order to accomplish some basic task—finding the larger of two integers, say, or summing a string of figures. The pre-written programs that are "called" from the library constitute the "implementation code."

Oracle gives this example in one of its briefs:

The URLConnection program, for example, has the following declaring code:

public URLConnection openConnection()

    throws java.io.IOException

An app programmer who wanted to connect her application to BankofAmerica.com without writing her own code can call on Oracle's pre-written code by typing:

new URL('http://www.bankofamerica.com').open Connection()

Then, when the program runs, the Java platform recognizes the declaring code and invokes the corresponding "implementing code" to connect to www.BankofAmerica.com.

The availability of a library of pre-written implementation code for thousands of tasks—pre-written and pre-tested subroutines, in effect—is one of the things that has made Java such a popular language in which to code applications, enabling Java programmers to accomplish a wide variety of tasks without having to re-invent the wheel and devise their own implementing code for these basic functions from scratch.

Oracle's library of implementation code programs (sometimes also denoted as "methods") contains over 30,000 such programs, containing many millions of lines of code, and is one of its most valuable IP assets. Oracle owns the copyright in these programs—nobody disputes that—and it actively issues licenses for their use. Anyone may obtain a royalty-free "open source" license to this entire collection of Java subroutines. Because open source licenses require users to make any alterations they make to the pre-existing code available to the public, many commercial entites are unwilling to enter into them, and Oracle accommodates them by also issuing commercial royalty-bearing licenses, at a negotiated price.

When Google began work on the Android operating system in the mid-2000s, it entered into negotiations with Oracle to obtain a commercial license for this implementing code—Oracle's entire "Java Platform"—but those negotiations broke down. Instead of abandoning its decision to use the Java language for the Android operating system, Google chose to have its own engineers re-write those implementing programs (or, in some cases, to acquire code from third-party sources). [This new, non-Oracle implementing code, incidentally, makes up around 97% of the code for the Android operating system.]

So that's the first important thing to understand about this case: Oracle has no copyright claim—and it has asserted no copyright claim—based on its immense and valuable collection of implementation programs, because Google did not end up copying any of that code.

What, then, is Oracle's claim based upon?  Google did indeed copy something: it copied Oracle's hierarchical system for organizing these 30,000+ implementation programs. A little more technical background: Oracle organizes its collection of implementation programs/methods into a hierarchy consisting of about 3,000 "classes" of code performing different but related functions, which are then grouped together into around 150 different "packages" (aka "Application Program Interfaces," or "APIs") of related higher-level functions. It is, as Google describes it in its opening brief [here], the equivalent of an ordinary filing system: each package is a file cabinet, each class is a drawer within one of the cabinets, and each individual program containing a "method" is a folder within the drawer within the cabinet.

Google copied this hierarchical system for organizing Java methods because the corresponding declarations/calls must replicate this hierarchical system precisely if the calls are to operate correctly and find the proper "method" to run. For instance, "max" is a method/implementation program that finds the larger of two integers; a Java program seeking to invoke and run the "max" program would have a declaration that looks like this:  java.lang.Math.max(5, 10). This indicates that the code for "max" is to be found within the Math "class" within the java.lang "package."

The structure and text of the declarations, in other words, are tightly constrained by the hierarchical structure of the methods, classes, and packages; indeed, they are entirely determined by that hierarchy. As the district court put it, "the rules of Java dictate the precise form of certain necessary lines of code called declarations, whose precise and necessary form explains why Android and Java must be identical when it comes to those particular lines of [declaring] code."

And Java programmers have already learned thousands upon thousands of declarations that are based on the Oracle organizing scheme. That is, in fact, a major component of what a Java programmer learns in order to become a Java programmer. Google's use of Oracle's hierarchical system for organizing the library of methods meant that Android programmers would be able to use the declarations with which they were already intimately familiar, without requiring those programmers to learn thousands of new declarations/calls to perform common tasks.

Thus, within the Android operating system, the declaration described above—java.lang.Math.max(5, 10)—does what it always does in a Java program: it finds the larger of two integers by running an implementation program (called "max") that is located in the class Math in the java.lang package.

As Google puts it in its opening brief:

Google understood that developers would want to use their existing Java language skills to create Android applications, including their knowledge of familiar declarations and shorthand commands to trigger common operations. For those commands to work on the Android platform, Google had to replicate the syntax and structure of the Java API declarations exactly; any change to those declarations would have prevented developers from reusing the same commands, thereby forcing them to learn new commands for each routine task. Google accordingly used the same declarations for certain methods in 37 Java API libraries that were determined by Google to be "key to mobile devices." For every one of those methods, however, Google wrote its own implementing code, tailoring the code to accommodate the unique challenges of the smartphone environment.

That's the heart of this dispute: whether copying the hierarchical structure of the library of implementation programs—not the implementation code in those programs, but the system by which those programs are organized—and the declarations that reflect that hierarchical structure (e.g., java.lang.Math.max(5, 10)) infringe Oracle's copyright in that structure and those declarations.

Google argues that it does not. I agree, and so did the district court, which held, correctly, that the structure of the libraries, and the corresponding text of the declarations which reflect that structure, are not protected by copyright at all. Without diving too deep into the copyright weeds, the short version of the court's reasoning is simple and straightforward. The Copyright Act, a hopeless muddle about many things, is transparently clear on point: copyright protection is not available for systems or processes or organizing methods or the like. Section 102(b) says this explicitly, and reads in full:

"In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work." (emphasis added)

This is one of the truly fundamental principles underlying our entire intellectual property regime: No matter how original or creative your system may be, or how much time and effort you put into developing it—and Oracle spends a great deal of time in its pleadings showing how original and creative and useful and valuable its hierarchical organizing system for Java methods is, and how much time and effort it expended on its development—copyright law does not allow you to prevent others from reproducing and using that system.  

Incidentally, a posting [here]at the Federalist Society by David Hogberg gets this case horribly wrong. The inadvertent tip-off is right there in the headline:

"Here's How The Supreme Court Can Stop Google From Stealing People's Ideas."

The Supreme Court can do no such thing, because copyright law does not prohibit "stealing" ideas; copying someone else's idea isn't "stealing" at all, because ideas can never receive copyright protection, no matter how brilliant or original it may be.

This vital principle establishes, among other important things, the line separating the world of copyright from the world of patent. You can get IP protection for a "system" or a "process" or a "method of operation," but only by obtaining a patent on it, which will require you to meet very different, and far more stringent, requirements to obtain protection than does copyright, and which will last for a far, far shorter period of time.

Copyright aficionados will recognize this principle as having been derived from the seminal Baker v. Selden (101 US 99, 1879) case, a delicious case of 19th century commercial intrigue. Selden had come up with a new and innovative method of double-entry bookkeeping—one that, I'm told by those who understand bookkeeping better than I do, has been incorporated into much standard bookkeeping practice. He published a book describing the system, along with several blank data-entry forms that were to be used when implementing his new system. Baker, a stationery publisher, published books containing blank bookkeeping forms, and he included Selden's forms; Selden sued, asserting that Baker had infringed his copyright in the book.

The Court held for Baker. It started with a "proposition so evident that it requires hardly any argument to support it": that Selden, though he possessed a valid copyright in his book, obtained no exclusive rights therefrom in the bookkeeping system itself. Exclusive rights of that kind, the Court declared, "are the province of letters-patent, not of copyright," and any such claim "must be subjected to the examination of the Patent Office before an exclusive right therein can be obtained." Because Selden's system had not been patented, it was "open and free to the use of the public."

And because using the system required using the special forms that Selden had devised—the Court called the forms "necessary incidents" to the use of the system itself—the forms were, like the system itself, "open and free to the use of the public." To hold otherwise—to give Selden a copyright monopoly over the forms—would effectively give him a monopoly over the use of the system. Patent-like protection, in other words, without having to satisfy the requirements of the Patent Act.

In short, Oracle's system for organizing its library of Java "methods" has no copyright protection whatsoever, and Google was allowed—at least as far as copyright law is concerned—to copy it. Only a patent would serve to protect it from replication—and Oracle, like Mr. Selden, didn't get a patent. As the district court put it:

That a system or method of operation has thousands of commands arranged in a creative taxonomy does not change its character as a method of operation. Yes, it is creative. Yes, it is original. But it is nevertheless a command structure, a system or method of operation — a long hierarchy of over six thousand commands to carry out pre-assigned functions. For that reason, it cannot receive copyright protection — patent protection perhaps — but not copyright protection.

[A great deal of ] code had been written in Java before Android arrived. These programs necessarily used the java.package.Class.method() command format. These programs called on all or some of the specific 37 packages at issue and necessarily used the command structure of names at issue. Such code was owned by the developers themselves, not by Oracle. In order for at least some of this code to run on Android, Google was required to provide the same java.package.Class.method() command system using the same names with the same "taxonomy" and with the same functional specifications. Google replicated what was necessary to achieve a degree of interoperability—but no more, taking care, as said before, to provide its own implementations…. Google was and remains free to group its methods in the same way as in Java, that is, to organize its Android methods under the same class and package scheme as in Java.

"Necessary to achieve a degree of interoperability." That language helps explain why the case is so important, and why interest in it is so high. If Oracle prevails here, the ability of software developers to design interoperable programs—programs which borrow enough of the command structure and organization of other, pre-existing programs—will be deeply compromised, and that could well have rather profound and unfortunate consequences throughout the technology industries.

The Federal Circuit, in reversing the district court and holding that Oracle did possess an enforceable copyright in its system for organizing the Java methods library, has perpetrated a deep and substantial misunderstanding of U.S. copyright law.*** One hopes that the Supreme Court will take this opportunity to correct that unfortunate state of affairs and put copyright law back on course.

***That the case ended up going from the Northern District of California to the Federal Circuit—the appellate court primarily responsible for hearing patent appeals—rather than the Ninth Circuit was due to the fact that Oracle had originally asserted a patent claim in addition to its copyright claim. The patent claim, however, was subsequently dismissed, though not before it had given the Federal Circuit jurisdiction over the appeal. The judges on the Federal Circuit have little experience with the Copyright Act, and it showed.

In fact, the Federal Circuit reversed two separate decisions in Google's favor in this case. On the first appeal, it reversed the district court by holding that Oracle's organization of its Java libraries was a copyrightable work of authorship, and remanded the case back to the district court for trial. The district court then held a full jury trial on the question of whether Google had infringed that copyright; the jury found no infringement because Google's use of the hierarchical structure constituted a "fair use." Once again, on appeal, the Federal Circuit reversed. That decision, too, for reasons I won't go into here [see here and here if you're interested], has little to recommend it.

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19 hours ago
South Burlington, Vermont
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you can’t choose to be trad

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As I understand it there’s been something of a boom in people pursuing the “trad” mindset, whatever that means – a knowing pursuit of more traditional ways of thinking and ways of being, as opposed to an embrace of the various pathologies of modernity. There’s trad impulses in the dating world, faux trad diets like Paleo, a revival of (semi-ironic?) Catholicism among upwardly-striving educated progressives, something called the “Bronze Era Pervert,” and many other instantiations of a desire to go back to a time that none of the people involved are old enough to remember.

Now there’s always an element of trad thinking in conservatism, of course, and the urge to go back is perennial. And even in the sense of a chosen, explicit return to past ways of thinking, there’s a lineage. In my earliest blogging days (say 2008/2009) I used to engage with a group that was, at the time, calling themselves “postmodern conservatives”: people who knew that choosing a traditional mindset was exactly that, a choice, but who knowingly chose it anyway. That is, like today’s trads, they were not dissuaded in their pursuit of traditional values by their knowledge that they were actively pursuing it. I don’t know whatever happened to that tendency; perhaps the political convulsions of the Tea Party and the Obama era made such philosophical distinctions seem decadent, or perhaps they simply found they had too few friends on the right to make a real movement. Or perhaps they just all got married and had babies and were too busy with family to write blog posts anymore, which would be the closest thing to them winning.

But now I hear a lot about a trad movement on the left. For some, this is a directly reactionary tendency which seeks to create a socially conservative, economically leftist alternative. Thankfully, this seems pretty fringe. But there’s a bigger, vaguer traditionalist impulse on the left these days, one that is as likely to see lunch pail unionism and blue collar aesthetics as the source of True Meaning as the church. It’s an impulse that the left has lost its way in a thicket of theories that deconstruct everything and build nothing. It’s an affinity for a simpler vision of coalition politics where we work together across differences rather than constantly emphasizing difference. It’s a rejection of internet microcelebrity and an embrace of community, which sounds lovely, as long as I don’t think about it too much.

The basic psychology seems pretty obvious. Modern life, and in particular the mental landscape of modern life, is enervating, confusing, and seemingly pointless. To be a mind today is to constantly find yourself rubbing against other minds. For many people, it is impossible to think without simultaneously thinking about what other people would think about what you’re thinking. And this is exhausting and deeply unsatisfying. As long as your self-conception is tied up in your perception of other people’s conception of you, you will never be free to occupy a personality with confidence; you’re always at the mercy of the next person’s dim opinion of you and your whole deal. (This, specifically, is what Sartre meant when he said hell is other people, not just that other people suck but that being forced to live with the weight of other people’s perceptions of yourself sucks.) We are what the Unabomber calls “oversocialized;” we are too aware of other people and their opinions, which results in an implicit set of personal ethics that is impossible for any actual person to live up to. We now live with what I’ve called the Great Conditioning, the systems of digital reward that dole out incentives and punishments ceaselessly throughout the day. (An avid Twitter user is receiving behaviorist conditioning literally every moment of their waking lives.) It is not quite an irony that this happens at the same time as a cottage industry of “self care” memes has emerged, telling people that they are the only person who matters and that they should do whatever they like; people post those memes about how the don’t care what anyone thinks and then receive “likes” for them, demonstrating that they are very desperately invested in being liked for not caring about being liked.

In contrast you have this appealing dream of a life lived without all of that. The traditional Catholic mindset might look immensely appealing to a young person who has never know what it’s like to not be conditioned by other people. Rather than the authority of the crowd, whose dictates are fickle and inarticulate, there is the authority of God, whose demands are written down on paper, carry the stamp of heavenly approval, and are helpfully interpreted for you by a clerical order. The call of marriage, kids, and family life lies for some (at least in part) in the belief that pursuing those things will allow you to live reflexively – that is, reflexively for the good of your family unit, without the roiling complexity of never really desiring without thinking about how you might be perceived for having those desires. This isn’t an argument, for goodness sakes, against family. Be fruitful and multiply. It’s simply an observation that for some people, particularly younger people, the appeal of the simple life is not so simple. No doubt they will go on to happy family lives. But in the meantime their vision of family is freighted with precisely the kind of intellectualized weight that they wish to throw off of their shoulders.

Here’s the problem: you cannot choose to be premodern. If you are choosing, you are inherently postmodern. The traditional mindset people want to occupy is one that cannot conceive of being able to choose a mindset. Gorillas can think many things, but they do not think, “what does it mean to be a gorilla?” And whatever the appeal of having the mindset of a Babylonian shepherd might be, it is difficult to imagine that a Babylonian shepherd’s mindset could be deliberately aped, as the mind will always know it is aping something. No matter how trad you act, you will never not know that it is an act. We cannot choose a way to live without deliberation; it’s an act of the self-will trying to get ahead on a treadmill of self-knowledge. It’s baked into the very postmodern mindset we all find so defeating.

Perhaps things were never really that way, that direct and unencumbered; perhaps our vague impressions of traditional life are a distortion or oversimplification, and people have always lived in the maelstrom of thoughts that cannot stop thinking about other people’s thoughts. And we couldn’t set a particular time or place where the ceaslessly self-referential postmodern mindset was born. (No matter what Harold Bloom says.) But even if we were sure that there was once such a thing as the premodern mindset, and we knew what it entailed, and we knew when things changed, we would not be able to turn off the parts of our brain that became activated when we started to ask not just “who am I?” but also “who do others think I am, and which of us is right?”

Indeed, it seems to me that the very thing that attracts many of these people to traditional ways of life is precisely that they were not consciously adopted or followed, but rather were simply lived as a simple expression of the times in which people existed. For years I’ve made the point that guys trying to embrace traditional masculinity are bound to fail, precisely because traditional masculinity can’t be chosen; it is a byproduct of not choosing, a way of living that adherents find attractive because it seems to avoid the constant need for self-definition of the modern age. (Actual traditionally masculine men did not write blogs about what it meant to be a traditional man.) And so too with an embrace of a pre-modern political, social, or religious morality. If you are aware enough to set out to pursue the traditional mindset, you cannot possibly achieve it; you are already trapped in the funhouse mirrors of too much awareness.

You might have the self-control to stop yourself from tweeting, “at Wednesday mass rn.” But if you have the urge, you’ve already lost; you are already thinking with the kind of dual consciousness that you are trying to escape. This is not an argument for not going to church. But it is an argument for acknowledging before you begin that going to church is not going to make your way of thinking congruent with that of a 17th century Italian Catholic.

To be honest, I suspect that for a lot of people who really suffer from these kind of meta-theatrical problems of how to think and live, the real problem is just the internet. They’re too online. The human mind was not meant to be constantly rubbing up against other human minds. It’s all a big, creepy science experiment, all of this operant conditioning; we did not evolve for this. And rather than suddenly discovering conservative Anglicism, I suspect some people would be more fulfilled if they just found the courage to delete their Twitter. But for many people, I fear, to not be seen is to feel like nothing at all.

People should pursue the ways of living and thinking that they believe will make them happy. If it soothes you to go to mass, my goodness, go to mass. Families are good and babies are good and, sometimes, traditional moral codes are too, depending. The thing is, they’re all good for themselves, as ends, not means. And the harshest thing to do to yourself is to try to think your way out of thinking.

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3 days ago
South Burlington, Vermont
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Testimony before the House Antitrust Subcommittee

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My name is David Heinemeier Hansson, and I’m the CTO and co-founder of Basecamp, a small internet company from Chicago that sells project-management and team-collaboration software.

When we launched our main service back in 2004, the internet provided a largely free, fair, and open marketplace. We could reach customers and provide them with our software without having to ask any technology company for permission or pay them for the privilege.

Today, this is practically no longer true. The internet has been colonized by a handful of big tech companies that wield their monopoly power without restraint. This power allow them to bully, extort, or, should they please, even destroy our business – unless we accept their often onerous, exploitive, and ever-changing terms and conditions.

These big tech companies control if customers are able to find us online, whether customers can access our software using their mobile devices, and define the questionable ethics of what a competitive marketing campaign must look like.

A small company like ours simply has no real agency to reject or resist the rules set by big tech. And neither do consumers. The promise that the internet was going to cut out the middleman has been broken.

We’re all left to accept that these companies can and do alter the deal, any deal, however they please. And whenever they do, our only recourse is to pray that they do not alter it any further.

Let’s start with Google. Their monopoly in internet search is near total, and their multi-billion dollar bribes to browser makers like Apple ensure no fair competition will ever have a change to emerge.

Google uses this monopoly to extort businesses like ours to pay for the privilege that consumers who search for our trademarked brand name can find us. Because if we don’t, they will sell our brand name as misdirection to our competitors. Google feigns interest in recognizing trademark law, by banning the use of trademarked terms in the ad copy, but puts the onus of enforcement on the victims and does nothing to stop repeat offenders. Unless, of course, the trademarked terms are those belonging to Google itself. Then enforcement is swift and automatic. You will not find any competitor ads for Google’s own important properties.

Google would never have been able to capture a monopoly in search by acting like this from the start. Misdirecting consumers, blanketing search results with ads, and shaking down small businesses. In the absence of meaningful regulation, they’ll continue to extract absurd monopoly rents, while bribing browser makers to ensure nothing changes.

Apple too enjoys the spoils of monopoly pricing power. With the App Store, they own one of the only two mobile application stores that matter (the other belongs to Google!). This cozy duopoly has allowed Apple to keep fees on payment processing for application makers like us exorbitantly high. Whereas a competitive market like that for credit-card processing is only able to sustain around a 2% fee for merchants, Apple, along with Google, has been able to charge an outrageous 30% for years on end.

Apple may claim that they do more than payment processing for this fee, such as hosting applications and providing discovery, but the company undercuts this argument by giving these services away for free to application makers who do not charge for their apps.

But worse still is the draconian restrictions and merciless retribution that Apple brings to bear on application makers who dare to decline using Apple payment services. Even a mere link to an external webpage, that explains how to sign up for a service that doesn’t use Apple’s payment system, can get your application rejected.

Every application maker using the Apple’s App Store live in fear that their next update is denied or even that their application removed. All it takes is being assigned the wrong review clerk who chooses to interpret the often vague and confusing rules different than the last. Then you’ll be stuck in an appeals process that would make Kafka blush.

Finally, Facebook’s industrial-scale vacuuming of the everyone’s personal data has created an ad-targeting machine so devastatingly effective, that the company, together with – guess who! – Google, is currently capturing virtually all growth in internet advertisement. I quote a report in my written testimony that put that capture, between Facebook and Google, at 99% in 2016. Not even Putin would dare brag of an approval rating that high!

Facebook is able to maintain this iron grip on the collection of personal data by continuing to buy any promising competitor. The acquisitions of Instagram and WhatsApp should never have been approved by regulators, and need to be urgently undone.

This creates a marketplace where companies that wish not to partake in the wholesale violation of consumer privacy is at a grave disadvantage. If you chose not to take advantage of this terrifying and devastatingly effective ad machine, your competitors surely will.

This has been but a brief taste of what it’s like to live as a small tech company in a digital world owned and operated by big tech. And I didn’t even touch on the misery that is to attempt direct, head-on competition with any of these conglomerates. But at some point, all businesses will be competing against big tech, simply because big tech is bent on expanding until it does absolutely everything! The aforementioned companies already do payment processing, credit card issueing, music distribution, TV producing, advertising networks, map making, navigation services, alarm systems, cameras, computers, medical devices, and about a billion other things.

Help us, congress. You’re our only hope.

This testimony was delivered before the House Antitrust Subcommitee’s hearing on Online Platforms and Market Power in Part 5: Competitors in the Digital Economy on January 17th, 2020.

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3 days ago
South Burlington, Vermont
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Not Your Father’s Income Tax

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            During my first forays into neoliberalism, I sometimes heard self-proclaimed neoliberals succinctly describe the ideology as “markets plus redistribution.”  Neoliberalism built its foundation on this logic – free-market capitalism is the best mechanism for generating wealth in our world, but it is not the best at allocating said wealth in an optimal manner.  For a more just distribution of these capitalistic gains, we must use some sort of redistributive policy.  While the “markets” part of the equation is clear-cut and simple, the “redistribution” piece has proven much more pernicious.

            Over years of trial and error, the United States has given redistribution policy its best shot, coming up with six main solutions for redistributive welfare: Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Nutrition Assistance Programs (SNAP), Social Security, Earned Income Tax Credit (EITC), and Housing Assistance.  Despite these efforts, welfare programs such as these constitute a whopping $1 trillion chunk (~23%) of the federal budget, yet the American welfare system seems to beget worse outcomes compared to other developed countries.  One in every 8 Americans lives below the poverty line, and plenty more live just above it.  However, we do have a novel solution – a negative income tax.

            Oren Cass framed this policy well in an article making the case for a negative income tax (NIT) in the National Review (he uses the term “wage subsidies,” the two terms are largely interchangeable).  Cass says, “If we really want to ‘pay for jobs’ — and we should — then we should do it directly. As most workers recall with dismay from their first payday, a nasty little line item called ‘FICA’ deducts payroll taxes from every check. What if another line, titled ‘Federal Work Bonus,’ showed that the government had put an additional $3 into your check for every hour worked? That would be a wage subsidy.”

            An NIT would do just that: for every worker making below a set level of income (say, 50% of the median income in a given area), the federal government would pitch in to ensure that every American worker receives at least a basic level of subsistence – essentially, a UBI for every working American.  Since benefits would come in the form of cash, recipients would have the complete freedom to make purchasing decisions as they see fit, gaining maximum utility from their benefits with no deadweight loss.  Moreover, by offering one-time cash bonuses for workers who advance in pay grade, the policy would incentivize recipients to pursue more productive, higher-paying work (as is not the current case with some forms of welfare).

            The more tax policy-astute reader may recognize that we already have a similar mechanism in place: the earned-income tax credit.  Under this system, lower-income Americans receive a tax refund based on filing status and the number of qualifying children claimed on their tax filings, with the average family receiving over $3,000 in 2018.  Although this is a good start, the EITC does not go far enough for a few reasons.  First, households must wait until tax season to receive their credit in a lump sum.  Of course, this is almost no good since households pay their annual expenses over many weeks and months.  Second, the EITC is inflexible in terms of geography and family status.  A low-income family in New York City receives the same EITC as a low-income family in rural Kansas, even though what constitutes a basic level of income differs drastically.  In terms of family status, EITC places too much emphasis on families with children.  A childless worker toiling full time at the federal minimum wage would be ineligible for any amount of EITC.  Lastly, there is an issue of psychological framing with the EITC.  Receiving a maximum EITC benefit, two parents working full time at the federal minimum wage would actually be coming away with over $10 an hour rather than $7.25, but the EITC process is too convoluted to fully recognize that surplus.

            An NIT could ameliorate all of these shortcomings.  Workers would receive additional income with every paycheck they receive (and experience the associated psychological benefit), rather than one lump sum during tax season.  Cutoff income levels could be indexed to a geographic location using data that the federal government already has on hand, ensuring that families in urban and rural areas receive the same utility.  The focus would also shift to subsidizing low-wage labor – not childbearing – so while there could be additional benefits for workers with children, childless workers would benefit more than they do under the EITC.

So, if NIT is so great, why haven’t we implemented it yet?  Ever since the 1980s, Reaganite conservatives have successfully stigmatized welfare and their recipients as lazy losers who are incapable of making consumption decisions, personified by Reagan’s fictional Cadillac-driving “Welfare Queen.”  This has had tangible long-term effects on both public opinion and policy.  On the public opinion front, welfare has received dwindling support, with this 2009 poll showing support for poverty assistance at a meager 20%.  Consequentially, on the policy front, our welfare programs have become more paternalistic to reflect this sentiment.  TANF, one of America’s hallmark welfare programs, used to primarily provide cash to needy families, with over 60% of the budget going towards cold, hard cash provisions in 1998.  In 2014, less than one-quarter of TANF spending constituted cash benefits.  The rest of the budget was used to pay out “benefits in kind” such as childcare and counseling that does not give families the freedom to spend money for themselves, reflecting decreased trust in the ability of low-income people to make their own purchasing decisions (indeed, the states most guilty of holding out on cash benefits tend to be red states).  All this has occurred despite the unprecedented proliferation of evidence in the past two decades that extols the benefits of just giving cash to low-income people.

            Of course, there is the crucial question of how we pay for this.  As the goal of the NIT is to encourage labor, increased income taxes on higher earners is not preferable.  Instead, neoliberal, Pigouvian taxes such as a land-value tax and carbon tax could be two options.  The most sensible option would likely be to eliminate many other forms of welfare that would become obsolete in the place of giving low-income people cash, and use that aid to fund NIT.  Cass estimates the price tag of such a policy to be $200 billion annually, and so surely there is ample room in our $1 trillion welfare budget for this program.

            While NIT will sufficiently replace certain programs such as TANF and EITC, it is not a substitute for others.  For example, NIT is not a substitute for the minimum wage; rather, the two should be used in conjunction to prevent employers from shifting too much of their payroll burden onto the federal government.  The NIT is no cure-all, but America should seize the opportunity to jump onto the “just give people cash” train and reflect new welfare evidence in our welfare policy.  With Senators Mitt Romney and Michael Bennet recently proposing to expand a child tax credit, it seems like there is no time like the present.

The post Not Your Father’s Income Tax appeared first on Exponents.

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9 days ago
South Burlington, Vermont
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The Basecamp Guide to Internal Communication

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10 days ago
This is great.
South Burlington, Vermont
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Wanting peace is now disgraceful? WWJD?

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Wanting peace is now disgraceful? WWJD? 

Representative Jim Banks of Indiana seems to think that PTSD is something that only soldiers experience. He tweeted,
She has good reason to feel that as she said when she responded to Banks:
“War doesn’t have a reset button, I learned this lesson at the age of Eight. Lives will be lost, many innocent lives will be lost and the future of generations will be impacted. Let’s call for peace.”
Omar, the first refugee to serve in Congress, fled civil war torn Somalia with her family when she was 8 years old. She lived in a refugee camp for 3 years.  But any decent person would agree with her sentiments. This congressman is obviously not a decent person.

That is indicative of the bloodthirsty war cries that are coming out of he supposedly isolationist GOP this week. It makes me feel ill too, mostly that so many people said that Trump wasn't a president who would use the military for personal political advantage. Please. He's a vicious, vengeful conman who will do whatever it takes for him to survive.

The only thing that's holding him back right now is personal cowardice and the mistaken belief that Tucker Carlson represents the thinking in his base.


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11 days ago
South Burlington, Vermont
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