Dorf on Law

With bilked investors hopping mad at Bernie Madoff--due in court to plead guilty tomorrow--here I want to suggest an explanation (but let's be clear, not an excuse) for how Madoff ended up ripping off not only individual investors but charities. It's one thing, we might think, to operate a ponzi scheme that robs the rich of their riches. But surely it is beyond the pale to do what Madoff did--namely, to take money from charitable organizations and purport to invest it, only to have it disappear down the big ponzi hole. Worse indeed, but the logic of escalation made it all but inevitable. Let's suppose that Madoff began with individual investors. These are people with sizeable amounts to invest and some number of them also give to and/or help operate charities. They get the following idea: "I could do a lot of good for Charity X by investing with Madoff instead of leaving the money in the bank where it's earning 2%/year." So they approach Madoff with the ...

In my earlier post on the Summum case , I promised a FindLaw column and a follow-up post. Mea culpa. I was scooped on FindLaw by Marci Hamilton , so I wrote about the Wyeth case instead. But I have at least one further set of thoughts about Summum that I thought worth spelling out here. The thought concerns the question lurking just below the surface in Summum : Where is the sweet spot between sufficient government distance from speakers' messages that a public forum has been created for free speech purposes and sufficient endorsement of a religious speaker's message that there is an Establishment Clause violation? Justice Alito's majority opinion does not address the Establishment issue, which was not properly before the Court. However, what he says about government speech and the public forum doctrine--as a matter of free speech law alone--has some implications for Establishment. Justice Alito argues that government acceptance of a privately donated monument as a ...

In my latest FindLaw column , I use last week's Supreme Court decision in Wyeth v. Levine as an occasion to note and comment on an apparent inconsistency in the Justices' voting behavior: (With three arguable exceptions), the conservatives favor states' rights in 10th Amendment cases and oppose states' rights in preemption cases, while the liberals oppose states' rights in 10th Amendment cases while favoring states' rights in preemption cases. (The arguable exceptions are Justice Thomas, who favors states' rights in both categories of cases, and Justices Kennedy and Breyer, who don't have strong druthers in preemption cases.) I explore the possibility that what's really going on is that the Justices are using doctrines about federalism insincerely, as a means to advance their anti-regulatory (conservatives) or pro-regulatory (liberals) agenda. I conclude my column by defending the Court against the charge of deliberate manipulation. In my view,...

This past Friday, I posted some thoughts on the "upside-down benefit problem," which arises from the fact that tax deductions are more valuable to people as their incomes rise. Focusing on the deduction for charitable contributions, I created a hypothetical taxpayer named Zoe, with taxable income of $25,000, who would have only 15% of her contributions subsidized by the tax code. Anwar, on the other hand, declared $425,000 in taxable income and would thus receive a 35% subsidy. Some of the comments on my post offered interesting questions and suggestions about the issues raised by a plan from the Obama administration to partially fix this problem, and I thought I would offer some further thoughts inspired by those comments. First, some clarifications. The current system provides two ways (other than rate cuts) for Congress to reduce people's taxes. Tax credits are straight-up reductions in a person's tax due. If I receive a $500 tax credit for, say, child care...

President Obama's budget plan includes a dramatic change in the tax code that -- because it would change the way tax deductions are handled -- seems anything but dramatic. Even so, it is a partial version of an extremely good idea that should be extended still further. The idea is to make the tax benefit that one receives from deductions completely independent of the person's tax bracket. Asleep yet? Stay with me. This could be really big. Two people each give $100 to their favorite charities. Anwar has taxable income of $425,000, putting him in the 35% tax bracket, while Zoe has taxable income of $25,000, putting her in the 15% tax bracket. This means that the $100 deduction for charitable contributions reduces Anwar's taxes by $35, allowing him to give his favored charity $100 at a personal cost of only $65. Zoe only saves $15 and pays $85 to give $100 to her favored charity. (Actually, the chances are pretty good that Zoe does not even itemize her deductions, in...

In the "ice cream glove" sketch (above), Ali G pitches his idea for a device (the ice cream glove) that would solve the main problem with ice cream cones: they drip on your hands as they melt. To prove its revenue potential, Ali G multiplies the number of hits he gets when he googles "ice cream" by the number of hits he gets when he googles "gloves," by his projected unit price per glove, to get a figure on the order of a gazillion pounds. Now along comes Thomas Friedman with a disturbingly similar methodology for measuring the depth of our economic crisis. In his NY Times column yesterday, Friedman uses the "suggestions" that Google provides when you enter the beginnings of words as an index of the economic zeitgeist. This methodology may sound goofy at first but on close inspection it proves to be downright preposterous. First, we need to distinguish between Google's customized suggestions and its generic ones. If I type f-e-d into my ...

On FindLaw today, I will have a column that discusses the question of why we have anti-cruelty laws, one example of which is the pending Captive Primate Safety Act, approved by the House in the wake of the Connecticut incident in which a pet chimpanzee violently mauled his owner's friend and was subsequently killed by police. In the column, I propose that although a genuine concern for the interests of animals plays a role in motivating the passage of anti-cruelty legislation, the deeper purpose of the laws is to calm the conscience of those who believe that it is wrong to harm animals but nonetheless feel committed to actively subsidizing the largest and most grotesque treatment of animals by consuming meat, eggs, and dairy products. By having laws that appear to protect animals from cruelty, well-meaning people are able to imagine a comfortable and even pleasant life, along with a humane death, for the creatures who later appear on their dinner tables. I want to focus in this po...

The Obama administration announced its new budget framework last week. Opponents of that plan are focusing on, among other things, the tax increases that the plan would impose on upper-income taxpayers. In addition to allowing the Bush tax cuts to expire for the most advantaged taxpayers, President Obama proposes to phase out the value of tax deductions for couples with incomes above $250,000 and $200,000 for singles. The response from Obama's opponents is predictable: everyone knows that tax increases hurt the economy, so why increase them now? Of course, if one accepts the premise that tax increases hurt the economy, then there really is no good time to raise them; but that is ultimately the anti-taxers' point. "Don't raise taxes now" really means "Don't ever raise taxes." The premise, however, is wrong. There is no convincing evidence that tax increases (especially of the sort that Obama has proposed) harm the economy. Is this not heresy?! ...

The Court's decision in Summers v. Earth Island Institute was released this morning. To no one's great surprise, the decision was 5-4, reversing the Ninth Circuit's decision. In the case, a group of environmental nonprofits challenged the Forest Service's "salvage logging" rules (rules that greased the skids, so to speak, for timber sales following fires throughout the National Forest System). At issue was the quality and quantity of "injury" the plaintiffs needed to sustain Article III standing. What they'd argued is that their many members use the NFS's 155+ units, which is spread across 190 million acres, quite frequently. Because of the unpredictability of fire and future salvage logging contracts, they could not allege that any particular place would be affected by the rule. The majority holds that that is fatal for Article III purposes. This is, of course, a perennial dispute when it comes to challenging rules as such — an issue ...

The exclusionary rule, which sometimes prevents prosecutors from introducing illegally obtained evidence in criminal trials, increases crime rates by weakening deterrence, according to Paul H. Rubin, writing in WSJ.com on Saturday. Rubin cites his own 2003 paper (with Raymond Atkins), which found that the rule substantially increased rates of larceny, auto theft, burglary, robbery, and assault. As a result, he says, Justice Roberts understated the costs of the rule when he wrote recently, in Herring v. United States (which weakened the exclusionary rule), that the rule allows "guilty and possibly dangerous defendants" to go free. Rubin proposes, as an alternative to the exclusionary rule, "deterrence of police misconduct through a system of civil damages paid by the police department for improper searches." The potential for civil damages, he says, "would give police departments incentives to be cautious in performing searches, but might be less costly for...