Higher taxes on the rich will mean they have less money to invest in job-creationEarlier this month, U.S. President Barack Obama stood in front of a joint session of Congress to push for the passage of his proposed American Jobs Act. The bill is essentially another stimulus program that will cost taxpayers $447-billion. Surprisingly, however, there initially seemed to be some support among Republican lawmakers — who have built a reputation of saying no to everything the President proposes.

That was before Obama announced how he planned on paying for the second round of stimulus. In a press conference Monday, Obama proposed $1.5-trillion in tax increases, mostly on corporations and the wealthy, who he believes are not paying their “fair share.” But the plan is riddled with problems.

While it may feel good to blame rich people for everything that’s wrong with America, it’s simply not true that they don’t pay their fair share of taxes. According to numbers compiled by Mercatus Center economist Veronique de Rugy, the top 5% of income earners pay a majority, 60%, of the income tax, while earning only 35% of the wealth. In comparison, half the population pays a mere 2.7% of the total tax base.

It’s clear from these numbers that the rich pay more than their “fair share,” while half the population gets a free ride on the backs of those who actually keep the economy moving. Surely President Obama is aware of these statistics, but populists have always needed a scapegoat — whether it be immigrants, communists or the wealthy — in order to push their agenda. So while raising taxes during a recession might be bad policy, Obama is betting that it will be good politics.

A group of bar owners are sticking it to the man by banning the law makers who imposed a smoking ban on them.A group of Michigan bar owners are fed up with the government telling them what they can and cannot do on their own property, so they’ve decided to introduce a ban of their own — by barring state legislators from their establishments.

In May of 2010, Michigan followed the lead of many other jurisdictions around the world and banned smoking in bars and restaurants. As happened elsewhere, most smokers rolled over and allowed the state to treat them like second class citizens by forcing them to gather in huddled masses outside pubs, in order to keep warm on cold winter nights.

But some smokers decided to stay home, instead of going to an establishment that no longer provides the service they are looking for. Bars and restaurants saw their business drop by 20% in the first three months after the ban was put in place and most of that business hasn’t returned. Likewise, sales of alcohol, food and lottery tickets are down across the board, which is not welcome news for local businesses that are trying to survive in one of the hardest-hit areas of the United States.

After all the political bickering over the past few months, a deal to raise the U.S. debt ceiling was passed into law yesterday. Even though Republicans and Democrats were able to ram the deal through both houses of Congress, condemnation of the agreement was swift and has come from both sides of the isle, which is usually a good indication that the bargain is fairly centrist. The only problem is that the centre of the American political spectrum, representing the status quo, exists in a fantasy land somewhere between Narnia and Middle Earth.

Liberals and Democrats are certainly not pleased. In an editorial, The New York Times called it “a terrible deal.” Democratic Congressman Emanuel Cleaver said it was a “Satan sandwich.” The common complaint from the left is that the deal does nothing to raise revenues and forces significant cuts in spending. This argument is not completely without merit. Grover Norquist — president of Americans for Tax Reform — has been wildly successful in getting Republicans to sign a pledge not to increase taxes under any circumstances.

While this is generally a good thing, it means that the GOP has been steadfast in not including half the balance sheet in the negotiations over balancing the budget. By maintaining the Bush tax cuts, the Republicans are responsible for a huge portion of this deficit. They are also responsible for the massive increases in spending under the Bush administration, which they seem to be trying hard to forget.

Republicans and Democrats failed to reach a deal on raising the country’s debt ceiling over the weekend, stoking fears on international markets that America’s credit worthiness could fall into serious disrepair.

The credit rating agency Standard & Poor’s recently warned the U.S. that comprehensive reforms to cut spending and raise the debt limit are needed in order to prevent a downgrade in the country’s AAA rating. Proposals coming out of Congress, however, seem to be splitting down partisan lines and President Obama has not been successful at brokering a deal.

House Speaker John Boehner is expected to propose a plan that would raise the debt ceiling by $1-trillion dollars now and another $1.6-trillion once Congress successfully enacts an equal amount of spending reductions. Senate Majority Leader Harry Reid, on the other hand, is proposing a package that would reduce spending and increase the debt limit all at once, in order to postpone future negotiations until after the 2012 election.

San Francisco wants to ban the sale of live animals, unless they're for human consumption. So this puppy in a bowl might still be legal.

The least welcome person is San Francisco these days may be a circumcised child taking a walk with his dog, in search of a Happy Meal, or a bottle of Coke.

Last year, the city banned Happy Meals and other fast food combinations that are marketed to children. It also replaced soda in the vending machines at City Hall with soy milk and other hippie healthy beverages. It’s currently trying to get a measure on the ballot that would make circumcisions a misdemeanour. That proposal is being challenged in court as outside the purview of a municipal government and a threat to religious freedom. Now the city is looking at a ban on selling pets — everything from goldfish and hamsters to cats and dogs.

Many in the city are not taking the proposal seriously. City Supervisor Sean Elsbernd told the San Francisco Chronicle it is “another Animal Welfare idea that will end up in the dustbin of history and go absolutely nowhere.” But the idea seems to have staying power, as the city has been debating the ban for quite some time. And given the city’s history of trying to ban everything, it would be foolish to underestimate the San Francisco nanny state.

In our latest op-ed, Anthony Randazzo and I analyze a number of options for how the U.S. government could go about the process of reforming Fannie Mae and Freddie Mac:

In my first op-ed written for the Reason Foundation, Anthony Randazzo and I discuss why both liberals and conservatives should be in favour of eliminating the mortgage interest deduction:

The Governator's political career may be dead, but he's still fighting for his legacy. (Warner Bros.)

Arnold Schwarzenegger stepped down as California’s governor Monday and handed the reins to Democrat Jerry Brown. Schwarzenegger originally came to power in a 2003 special election on a platform of fiscal responsibility, but will be remembered for drastically increasing the size of government by initiating massive spending programs and championing a variety of progressive causes.

After introducing tough new environmental regulations, increasing infrastructure spending, and failing to reform a political system that makes it easy to raise spending and hard to increase taxes, Schwarzenegger leaves California in a dismal economic situation. The state now boasts the worst credit rating in the country, with a $28-billion budget deficit — up from just over $10-billion when he took office. During his tenure, California increased its debt level from $34- to $88-billion, which more than doubled the annual cost of servicing the debt. California is also faced with an estimated $500-billion shortfall in funding its pension obligations for public employees.

So what are people saying about the legacy of the movie star turned governor? Unsurprisingly, he seems to be getting mixed reviews.

Last summer, my father and brother drove across the continent from Calgary, AB to Boston, MA. They described many of the beautiful areas they passed through, from the vast fields of Saskatchewan, stretching as far as the eye can see, to the sprawling metropolis of Boston. There were also some not so nice areas, like the drive through Cleveland, OH. They recounted their story of driving on a decrepit freeway with crumbling fences on the side of the road. It is no wonder this city is often referred to as the "mistake on the lake."

This story did not surprise me, as one of my first tasks when interning at Reason magazine last summer was to transcribe a two-and-a-half hour session of Nick Gillespie and Drew Carey appearing before the Cleveland City Council. They came with a fairly simple message of "better government, smaller government, smarter government." Yet many of the politicians refused see that the best way to help the city prosper once again is to reduce regulations and red tape in order to encourage businesses to come back to the city. An edited version of my transcription is now available on Reason.com:

Ever since America got rid of those pansy Englishmen by throwing their tea in the harbor and officially switching to coffee, the country has striven for a government of the people, by the people, and for the people. Apparently, however, the government doesn't actually talk to the people.

Reason is one of the few media outlets that has been providing extensive coverage of the trial of John Stagliano, who was—until the case was thrown out late this afternoon—facing obscenity charges for producing and distributing porn videos. And what better way to improve our coverage than to put us lowly interns in a room and have us call the offices of every Senator in the land and ask them for their opinion on some of the issues involved in the trial?

We began this journey early yesterday morning, as we arrived in the office bleary-eyed and full of naive optimism. But it didn't take us long to figure out what game these wily press secretaries were playing. In case you've ever considered a career in messing around with journalists and ensuring the public never finds out who your politician is screwing, here a few general pointers.