Friday, February 17, 2017
Publishers Still Fighting to Bury Universities, Libraries in Fees for Making Fair Use of Academic Excerpts
On behalf of three national library associations, EFF today urged a federal appeals court for the second time to protect librarians’ and students’ rights to make fair use of excerpts from academic books and research.
Nearly a decade ago, three of the largest academic publishers in the world— backed by the Association of American Publishers (AAP) trade group— sued Georgia State University (GSU) for copyright infringement, insisting that GSU owed licensing fees for the use of excerpts of academic works in its electronic reserve system. Such systems are commonly used to help students save money; rather than forcing students to buy a whole book when they only need a short excerpt from it, professors will place the excerpts “on reserve” for students to access. GSU argued that posting excerpts in the e-reserve systems was a “fair use” of the material, thus not subject to licensing fees. GSU also changed its e-reserve policy to ensure its practices were consistent with a set of fair use best practices that were developed pursuant to a broad consensus among libraries and other stakeholders. The practices are widely used, and were even praised by the AAP itself.
But that was not enough to satisfy the publishers. Rather than declare victory, they’ve doggedly pursued their claims. It seems the publishers will not be content until universities and libraries agree to further decimate their budgets. As we explain in our brief, that outcome would undermine the fundamental purposes of copyright, not to mention both the public interest, and the interests of the authors of the works in question. The excerpts are from academic works whose authors are not looking to get rich on licensing fees. They are motivated, instead, by a desire to contribute to the greater store of knowledge, and by the benefits accrued to their professional reputation when other scholars read, and cite, their published work. They care about recognition, not royalties.
Moreover, the fair use analysis is supposed to consider whether the practice at issue will cause material harm to an actual or potential market. But there’s no real market for digital excerpts that the libraries’ practices could harm. Indeed, as GSU explained in their brief, “[m]any professors testified that they would not have used any excerpt if students were required to pay a licensing fee.” And even if such a market existed, most libraries likely couldn’t afford to be part of it. In light of rising costs and shrinking resources, “academic libraries simply do not have the budget to participate in any “new” licensing market" without diverting funds away from other areas—like those used to add new works to their collections.
Copyright is supposed to help foster the creation of new works. Requiring university libraries to devote even more of their budgets to licensing fees will have the opposite effect. We hope the court agrees.
The Customer Is Always TaxedPhiladelphia’s most famous son, Benjamin Franklin, popularized the expression that “nothing can be said to be certain, except death and taxes.” To that list you can add a third certainty: politicians will consistently misunderstand or misrepresent how taxes actually work. Look no further than Philadelphia Mayor Jim Kenney’s misguided soda tax for proof.
Like most politicians, Kenney looks at taxes the way a barfly looks at an ATM near closing time: he thinks he can simply draw money out of the economy whenever he wants without consequence. As any Economics 101 textbook would have explained, had he picked one up, the soda tax was destined to lead to higher soda prices. Instead of looking in the mirror, though, he blames the very merchants on whom he foisted the tax in the first place. “They are,” he said, “gouging their customers.” The implication? Mayor Kenney believes that “business,” not customers, should pay the tax.
Taxes in Reality
In pushing for more taxes, politicians either don’t understand or won’t admit that every tax ― no matter on whom it is levied ― is ultimately paid by people. Every tax on “business” gets passed on in the form of higher prices, lower wages, or lower investment return. Businesses don’t pay taxes to the government; they collect taxes for the government. One way or another, people pay.
The mayor needn’t look outside the Commonwealth for proof. Beginning in 2013, the legislature increased state gasoline taxes, which currently add 58 cents to the price of each gallon of gas sold in Pennsylvania. Proponents of the gas tax hikes argued that the taxes would be levied on oil companies and wholesalers, not consumers. It apparently never occurred to the legislature that the oil companies and wholesalers would pass the tax along to the people.
Of the $2.50 the average Pennsylvanian now pays for a gallon of gas, $1.40 goes to the oil companies. But that’s sales, not profit. Oil company profit margins are around 6 to 7 percent, meaning that oil companies actually pocket around 10 cents per gallon of gas, which is about what they made before the tax increases. The taxpayer, as usual, picks up the difference. On a gallon of gas, the Commonwealth makes almost six times what the oil companies do.
In October, Governor Wolf signed into law a 40 percent tax on vaping shops. Again, the levy was presented as a “tax on businesses.” Politicians did some third-grade math and decided that they would get something approaching 40 percent of the total sales of vaping products in the form of new tax revenues. Instead, they destroyed a burgeoning local industry and now stand to collect nearly nothing.
In the end, Kenney’s tax is nothing new. It is nothing smart either. Politicians love money, and they hate offending voters. They take every opportunity to tax “business,” and when businesses simply pass the taxes along to consumers, workers, and investors as they must, those same politicians cry foul.
But here’s the rub. There are only two possible explanations for any of this: politicians who claim that businesses will pay for new taxes are either too stupid to understand simple economics or they are lying. And it really doesn’t matter which of those things is true of Mayor Kenney. Either way, the citizens of Philadelphia deserve better.
Republished from the Huffington Post.
He is a member of the FEE Faculty Network.
This article was originally published on FEE.org. Read the original article.
Republicans Are Already Trying to Raise Taxes
Republicans in the House of Representatives are inadvertently setting a nasty political and economic trap for Donald Trump. Yes, it’s the Republicans, not the Democrats, who are ready to administer an unnecessary black eye to the new President. That’s not their intention, but it manifestly will be the result.
The vehicle for this unwitting GOP punch is a new exaction called the border adjustability tax. This levy will cost American consumers at least a trillion dollars over the next ten years. Knowing how Washington politicians calculate these things, you can bet the amount will end up being considerably more. Prices for everyday items, such as socks, shoes and household appliances, will go up. So will tech devices like the iPad, not to mention automobiles and trucks. Gasoline? Millions of Americans will pay an additional 30 cents or more per gallon at the pump. Lower-income and struggling middle-class Americans will get hit the hardest.
Few people are even aware of what the Republicans are getting ready to hit them with. There has been virtually no debate or public discussion about this new, horrible tax, yet in one of those strange fits of collective, self-destructive behavior, numerous GOP lawmakers are ready to enact it.
Here’s how, in essence, this sneaky, anti-consumer tax works. Importers will no longer be allowed to deduct an item as a business expense. To simplify things, let's say a store imports a pair of sneakers for $40 and then sells them for $50, making a $10 profit on which it would owe taxes. Under the Republican plan, however, the retailer wouldn't be able to deduct the $40 it paid for the sneakers. In fact, it would owe taxes on the entire $50! And who, ultimately, pays this tax? You, the consumer, in the form of higher prices or fewer choices of where you can shop. Retailers and their customers will be hit.
Many oil refiners import crude oil to turn into gasoline. This new tax will sharply raise their costs, which will spell pain when you fill up your tank. Worse, some could be forced out of business or have to sharply curtail operations, as drivers cut back on buying the suddenly more expensive fuel.
Companies like BMW, Toyota, Mercedes, Honda, Nissan and Hyundai have major manufacturing operations in the U.S. that employ tens of thousands of workers in good-paying jobs. These companies’ costs will soar because they import numerous parts for the vehicles their workers assemble.
The Loophole of All Loopholes
But wait, it gets worse. Another feature of this bizarre GOP scheme gives exporters a gargantuan tax break by, in effect, not taxing their export revenues. Let's say a corporation sells a piece of machinery to Iran for $5 million, which cost only $4 million to produce. That means $1 million in taxable profit. Under the new Republican scheme, however, that $5 million received from the mullahs wouldn’t be taxable. Instead of a $1 million profit, the corporation, for tax purposes, would have a $4 million loss. Loophole doesn't begin to describe this "tax break."
No wonder companies like Boeing, GE and other big exporters are orgasming over this GOP "reform."
Big breaks for big companies, higher prices for beleaguered consumers. Why are the Republicans doing this? They say the revenue raised will help finance a huge tax cut, such as getting rid of the death tax and the horrific alternative minimum tax, cutting the corporate tax rate from its disastrous 35% to a highly stimulative 20% or less and very meaningfully lightening the tax burden on individuals. These are all extremely exciting ideas and would do wonders for the economy.
But enacting a big, brand-new tax to finance cuts in old taxes is a dangerous business, especially in the way the Republicans are going about it. Democrats will gleefully remind voters why prices are going up, conveniently ignoring the tax cuts. Moreover, the GOP border adjustment tax is a but a small step away from a full-blown value added tax, which has financed the bloating of governments around the world. Democrats will someday be back in power, and they won't hesitate to either ramp up this GOP-created tax or go for the VAT. This would be hypocritical--rip apart the Republicans over this tax, and then go on to compound their felony. A VAT would crush future U.S. economic growth rates, just as it has in Europe and elsewhere.
Consider this astonishing fact: In the mid-1960s government spending in Europe as a proportion of their economies wasn't much different from our own. Growth rates matched or exceeded ours. Then Europe discovered the VAT. Spending ballooned and growth slowed to a crawl, consistently clocking in at significantly lower levels than Uncle Sam's.
Republicans also claim their new tax would help exports. In the real world it would do no such thing, as astute tax expert Dan Mitchell has explained (see this and this).
The GOP should drop this tax scheme. Why create unnecessary conflict and damage our new President? Republicans shouldn’t be constrained by the Congressional Budget Office's antiquated way of measuring the economic impact of changes in taxes. Drop the green eye shades, and go for big cuts that would turbo-charge the economy.
Republished from Forbes.
This article was originally published on FEE.org. Read the original article.
Thursday, February 16, 2017
Wednesday, February 15, 2017
Now more than ever, it is apparent that U.S. Customs and Border Protection (CBP) and its parent agency, the Department of Homeland Security (DHS), are embarking on a broad campaign to invade the digital lives of innocent individuals.
The new DHS secretary, John Kelly, told a congressional committee this week that the department may soon demand login information (usernames and passwords) for social media accounts from foreign visa applicants—at least those subject to the controversial executive order on terrorism and immigration—and those who don’t comply will be denied entry into the United States. This effort to access both public and private communications and associations is the latest move by a department that is overreaching its border security authority.
In December 2016, DHS began asking another subset of foreign visitors, those from Visa Waiver Countries, for their social media handles. DHS defended itself by stating that not only would compliance be voluntary, the government only wanted to access publicly viewable social media posts: “If an applicant chooses to answer this question, DHS will have timely visibility of the publicly available information on those platforms, consistent with the privacy settings the applicant has set on the platforms.”
As we wrote last fall in comments to DHS, even seeking the ability to view the public social media posts of international travelers implicates the universal human rights of free speech and privacy, and—importantly—the comparable constitutional rights of their American associates. Our objections are still salient given that DHS may soon mandate access to both public and private social media content and contacts of another group of foreigners visitors.
Moreover, as a practical matter, such vetting is unlikely to weed out terrorists as they would surely scrub their social media accounts prior to seeking entry into the U.S.
Such border security overreach doesn’t stop there.
There have been several reports recently of CBP agents demanding access to social media information and digital devices of both American citizens and legal permanent residents. Most disturbing are the invasive searches of Americans’ cell phones, where CBP has been accessing social media apps that may reveal private posts and relationships, as well as emails, texts messages, browsing history, contact lists, photos—whatever is accessible via the phone.
Such border searches of Americans’ digital devices and cloud content are unconstitutional absent individualized suspicion, specifically, a probable cause warrant. In light of the DHS secretary’s statements this week, we fear that DHS may soon take the next step down this invasive path and demand the login information for American travelers’ online accounts so that the government can peruse private, highly personal information without relying on access to a mobile device.
Sanders wants a single-payer socialized healthcare system in the United States, just as we have in Britain. Any objection to that is met with the claim that you are “leaving people to die.” The only alternatives on offer, you would think, are the U.S. system as it exists now, or the UK system.
Sanders did not once acknowledge that the UK structure, which is free at the point of use, inevitably means rationed care, with a lack of pre-screening. He also failed to acknowledge that lower health spending levels (indeed, even public spending on health is lower in the UK than the United States now) are not the same as efficiency—which is about outputs per input.
In the face of anecdote after anecdote about those saved by Obamacare and the virtues of a government-run health system, Cruz countered with some anecdotes from the UK showing the consequences of rationed care: a Scottish hospital turning away pregnant women, a woman in Wales waiting eight hours on the floor for an ambulance to arrive after a fall, and a hospital in Essex canceling life-saving cancer treatment because there were no free beds in intensive care.
He could also have talked about the Mid-Staffs scandal, or a recent documentary showing doctors deciding between saving a cancer patient or a pensioner bleeding to death.
Anecdotes are powerful in helping to persuade people, and there are good reasons to use them in debates. Yet they are always susceptible to the charge that all health systems have extreme failures. Perhaps more powerfully then, the inadequacies of the UK system show up systematically in the data about how well conditions are dealt with (data from my former colleague Kristian Niemietz’s reports here and here):
- In the United States, the age-adjusted breast cancer 5-year survival rate is 88.9 percent, compared with just 81.1 percent in the UK
- The United States leads the world on the equivalent stat for prostate cancer (97.2 per cent) vs. 83.2 percent in the UK
- Lung cancer: 18.7 percent in the United States vs. 9.6 percent in the UK; bowel cancer: 64.2 percent vs. 56.1 percent
- Just in case you think I am cherry picking: U.S. survival rates are also better for leukemia, ovarian cancer, stomach cancer, and liver cancer—all of those for which I can find comparisons
- The age- and sex-standardized 30-day mortality rate for ischaemic stroke is just 3.6 per cent in the United States vs. 9.2 per cent in the UK; for haemorrhagic stroke, the figures are 22 percent vs. 26.5 percent
Reprinted from Cato Institute.
The Minimum Wage: silver bullet or poisoned chalice?" and "Smoking out red herrings."
This article was originally published on FEE.org. Read the original article.
Tuesday, February 14, 2017
Appeals Court Should Find Warrant Violated Fourth Amendment Protections
Boston—An FBI search warrant used to hack into thousands of computers around the world was unconstitutional, the Electronic Frontier Foundation (EFF) told a federal appeals court today in a case about a controversial criminal investigation that resulted in the largest known government hacking campaign in domestic law enforcement history.
The Constitution requires law enforcement officers seeking a search warrant to show specific evidence of a possible crime, and tie that evidence to specific persons and places they want to search. These fundamental rules protect people from invasions of privacy and police fishing expeditions.
But the government violated those rules while investigating “Playpen,” a child pornography website operating as a Tor hidden service. During the investigation, the FBI secretly seized servers running the website and, in a controversial decision, continued to operate it for two weeks rather than shut it down, allowing thousands of images to be downloaded. While running the site, the bureau began to hack its visitors, sending malware that it called a “Network Investigative Technique” (NIT) to visitors’ computers. The malware was then used to identify users of the site. Ultimately, the FBI hacked into 8,000 devices located in 120 countries around the world. All of this hacking was done on the basis of a single warrant. The FBI charged hundreds of suspects who visited the website, several of whom are challenging the validity of the warrant.
In a filing today in one such case, U.S. v. Levin, EFF and the American Civil Liberties Union of Massachusetts urged the U.S. Court of Appeals for the First Circuit to rule that the warrant is invalid and the searches it authorized unconstitutional because the warrant lacked specifics about who was subject to search and what locations and specific devices should be searched. Because it was running the website, the government was already in possession of information about visitors and their computers. Rather than taking the necessary steps to obtain narrow search warrants using that specific information, the FBI instead sought a single, general warrant to authorize its massive hacking operation. The breadth of that warrant violated the Fourth Amendment.
“No one questions the need for the FBI to investigate serious crimes like child pornography. But even serious crimes can’t justify throwing out our basic constitutional principles. Here, on the basis of a single warrant, the FBI searched 8,000 computers located all over the world. If the FBI tried to get a single warrant to search 8,000 houses, such a request would unquestionably be denied. We can’t let unfamiliar technology and unsavory crimes lead to an erosion of everyone’s Fourth Amendment rights,” said EFF Senior Staff Attorney Mark Rumold.
EFF filed a brief in January in a similar case in the Eighth Circuit Court of Appeals, and will be filing briefs in Playpen cases in the Third and Tenth Circuits in March. Some trial courts have upheld the FBI’s actions in dangerous decisions that, if ultimately upheld, threaten to undermine individuals’ constitutional privacy protections over information on personal computers.
“These cases will be cited for the future expansion of law enforcement hacking in domestic criminal investigations, and the precedent is likely to impact the digital privacy rights of all Internet users for years to come,” said Andrew Crocker, EFF Staff Attorney. “Recent changes to federal rules for issuing warrants may allow the government to hack into thousands of devices at a time. These devices can belong not just to suspected criminals but also to victims of botnets and other hacking crimes. For that reason, courts need to send a very clear message that vague search warrants that lack the required specifics about who and what is to be searched won’t be upheld.”