Should Denver Vote to Decriminalize Psychedelic Mushrooms?

In 2012, Colorado was one of the first states that made recreational marijuana legal. Now it looks as if Colorado is making headlines in the United States' drug policy. Next week, on May 7, the City of Denver is going to vote on the Psilocybin Mushroom Initiative (Initiated Ordinance 301). Essentially, the ballot initiative is to determine whether psilocybin mushrooms, more colloquially known as psychedelic mushrooms, should be decriminalized to the lowest law enforcement priority possible. This is in contrast to current law that states that possession of psilocybin is considered a felony.

Much like with marijuana use, the word "psychedelic" invokes images of the hippy counterculture of the 1960s and the "Summer of Love." As such, there are those who are instinctively against the use of psychedelic mushrooms. Conversely, there are those who are instinctively for all drug legalization while simultaneously being against the War on Drugs. With regards to marijuana use, time, research, and evidence have proven the naysayers wrong. Looking at Colorado's marijuana laws at five years, it looks like marijuana legalization has done more good than harm. Although marijuana legalization seems to be beneficial in net, we should not automatically assume the same outcome would happen with psilocybin mushrooms. After all, different drugs have different effects and outcomes, which is in part why the Drug Enforcement Agency (DEA) schedules drugs. Psilocybin mushrooms are currently ranked by the DEA as a Schedule I drug, a scheduling that is inappropriately applied to marijuana. The question to answer here is whether psilocybin mushrooms get a similarly unjustifiable reputation like marijuana or not.

Psilocybin mushrooms, also known as psychedelic mushrooms, magic mushrooms, or shrooms, are fungi that produce auditory and visual hallucinations followed by perceived changes in time and space. Emotionally speaking, the experience varies, from depression to hilarity to relaxation. Environment helps set the tone for the trip. The feeling of psilocybin mushrooms is subjective, and is variable from user to user. The underlying question here is the level of harm that psilocybin mushrooms cause, both to the user and others.

Let's start by saying that there are real risks, much like with any other substance. There is a real chance of the hallucination becoming so real that it could cause the user to do something life-threatening. There is also the possibility of causing real psychological damage, especially if one is prone to psychotic conditions. It is why it is highly recommended that psilocybin mushrooms are taken in a safe, supervised setting.

That being said, research has found psilocybin mushrooms to reduce anxiety and depression, especially in cancer patients (Griffiths et al., 2016; Cahart-Harris et al., 2016; Grob et al., 2012).  There have been other studies showing psilocybin mushroom use is safer than other substances, including such licit substances as alcohol and tobacco (e.g., Morgan et al., 2013; Nutt, 2010). The 2017 Global Drug Survey states that magic mushrooms are the safest in terms of requiring the lowest rate of emergency medical treatment. A series of studies in the December 2016 issue of The Journal of Psychopharmacology show just how much potential there is to its benefits. Even more indicting and damning is that last year, researchers at Johns Hopkins found such minimal harm that they went as far as saying that psilocybin mushrooms should be at a much less stringent categorization of Schedule IV (Johnson et al., 2018), a classification that applies to prescription sleeping pills and other substances for low abuse potential.

While psychedelic mushrooms are in the initial research stages, they are promising enough where the FDA decided in 2018 to expedite its development and review of a psilocybin-based drug. What research is showing is that psilocybin is a relatively non-addictive and is not particularly toxic. It is also showing an ability to treat anxiety, depression, and other ailments (e.g., tobacco addiction). The research does not provide justification for criminal proceedings for possession or usage, certainly at the level of felony. Think of how time and money could be spent better than chasing psilocybin mushroom users. Given where the research is taking us, the citizens of Denver should vote "Yes" on the Psilocybin Mushroom Initiative come May 7th.

Warren's Student Debt Forgiveness and Free College Tuition Plan Would Worsen Higher Education

Senator Elizabeth Warren (D-MA) is getting ready for the 2020 presidential election and positioning herself as a populist who is out there to help hard-working Americans. This was made clear when she proposed the wealth tax earlier this year. Now, Warren is building on the tax plan with the college plan she announced last week. Her plan can be divided into two main sections: student debt forgiveness and free college tuition. We will scrutinize the two sections separately.

Student Debt Forgiveness

Part one of Warren's plan is to cancel up to $50,000 in student debt for the 42 million Americans with student debt. The plan starts to phase out if a household makes over $100,000, and offers no debt cancellation for those making above $250,000. Warren's argument is that because student debt delays certain life events (e.g., starting a business, buying a home), the government should step in to forgive the debt. Essentially, Warren wants to remove a major financial burden so people can better live the American Dream. I like the fact that Warren puts a cap on the forgiveness, and I like the fact that she has come up with a detailed plan instead of some pie-in-the-sky thinking like certain peers of hers.

That being said, Warren's plan runs into problems (please read my analysis on student debt forgiveness from seven years ago). College graduates on average make an average of $1 million more than those with high school degrees (Georgetown University). As of 2018, 32.5 percent of Americans have a Bachelor's degree or higher (Census). As the libertarian Reason Magazine and the conservative American Enterprise Institute argue, Warren's plan would be a subsidy to those who are better off that is paid by those without a college education. 

[Other factors I considered seven years ago were the fairness to those who managed to pay their student loans (myself included), the fact that those indebted were forced to take out the loans, why student loans should get preference over other loans, or how it would affect lending to future students.]

But I want to consider something else here today: the dropout rate. Why does this come into play? Because only about 49.1 percent of full-time, first-time college students graduate from a four-year institution within six years. That figure is a lower 39.8 percent for two-year institutions. This is significant for two reasons. One is that college completion is a major determinant in whether going to college ends up being a good investment. The first reason leads into the second reason, which is that there are many people who drop out of college with nothing to show for it except debt and foregone time that could have been used developing workforce experience. 

The reality about dropouts is further illustrated by student loan demographics. According to the Federal Reserve, the average debt is $32,000, whereas the median is $17,000. In layman's terms, this means that half of those in debt have $17,000 or less. This statistical distribution means that those owing a ton of money is less common than perceived (see below). There are those who have a large amount of debt, but those large amounts tend to be caused by graduate school loans. The issue I take with Warren's plan is that it does nothing to address the dropout rate, a phenomenon that makes it more difficult for people to pay back many of the smaller loan balances. 

Free College Tuition

The second component of Warren's plan is to eliminate the cost of tuition and fees at every two-year and four-year public institution. Free college tuition is in part to make sure that indebtedness is never a problem again, and in part to provide the American people with what she perceives as a public good and a right. There are multiple problems of trying to provide "free" college tuition, a topic that I covered in 2015. 

One of my bigger gripes about free tuition being presented as a solution is that it drives up the cost of college. In addition to my 2013 analysis about artificially low interest rates for student loans, there is a Federal Reserve Bank of New York research paper (Lucca et al., 2015) and a National Bureau of Economic Research paper (Gordon and Heldund, 2016) amply illustrating how federal subsidies are the primary culprit in the skyrocketing college tuition costs since the 1980s (also see Warshawsky and Marchand, 2017). And for added measure, here is another National Bureau of Economic Research paper (Murphy et al., 2018) showing how ending free college in the United Kingdom actually allowed for more students to attend college. My questions to Senator Warren are the following: "How is doing more of the same going to make college cheaper?" "How does subsidizing incentivize students to make smarter choices about what to study in college or even if they should go to college?" "How do these subsidies create better schooling, especially considering so many are dropping out already?"

Conclusion

None of this gets into the effects of a wealth tax (see my January 2019 analysis here), how this would not be a one-time occurrence, or how public schooling would cost the taxpayer more than what her wealth tax would earn in revenue. What I will end with is this: I will give Warren the benefit of the doubt by saying that she is not proposing this plan as political pandering, but rather because she legitimately wants to fix higher education. Even so, Warren's plan is not about fixing the system so much as it is about expanding federal government control in higher education. Her plan does not address the moral hazard of forgiving student debt, nor does it make the case of how higher education is going to improve as a result of throwing more money at the problem. Yes, there are problems with higher education affordability, but Warren's plan does not do any favors for tertiary educational attainment.


4-24-2019 Update: Centrist think-tank Brookings Institution shows just how regressive the loan forgiveness proposal is.

4-26-2019 Update: The American Enterprise Institute points out how the U.S. already has a loan forgiveness program, one that is arguably more generous than Warren's proposal.

4-30-2019 Update: The libertarian Cato Institute lays out five reasons why Warren's plan is problematic. 1) It's unfair. 2) There is no student loan crisis. 3) Misdiagnosis of the problem. 4) We don't need that many people with a college degree. 5) There is no indication that student debtors would use their economically more productive.  

Why We Should Get Rid of Solitary Confinement

This past Friday, the New York state assembly picked up enough votes to pass the Humane Alternatives to Long-Term (HALT) Solitary Bill. As is alluded by the bill name, the bill addresses the issue of solitary confinement. Solitary confinement is a type of imprisonment in which a prisoner lives in a single cell and has little to no outside contact, as well as additional security measures and strict contraband measures. According to Yale Law School, a minimum of 61,000 prisoners are in solitary confinement at any given time. Proponents claim it is a valid security measure, whereas opponents claim that it is a harmful measure with few to no desirable effects. Which version is correct?

First, a bit on the history of solitary confinement. Solitary confinement was used in the 1700s by the Quakers (of all people) to encourage repentance and rehabilitation. This practice caught on in the colonial era, and was abandoned in the early 20th century because it was deemed unethical and lacking efficacy. The "tough on crime" mentality combined with the opinion "nothing regarding rehabilitation works" allowed for solitary confinement to make a comeback.

Does solitary confinement help with prison violence rates? The main argument used in favor of solitary confinement is for safer security in prison, both for the prisoners and for the prison staff. A 2016 report from the National Institute for Justice (Frost and Monteiro, 2016) concluded that "there is little evidence that administrative segregation has had effects on overall levels of violence within individual institutions or across correctional systems (p. 3; also see Labrecque, 2015; Briggs et al., 2006)." The NIJ report continued by saying that "it is virtually impossible to find empirical evidence supporting its utility or efficacy (p. 4)." As a matter of fact, there is some evidence suggesting that solitary confinement increases recidivism and violence (Gordon, 2014).

Does solitary confinement cause harm? While there is some skepticism on the harm of solitary confinement (Morgan et al., 2016), the short answer to this question is a resounding "yes" (Frost and Monteiro, 2016, p. 3; also see Morgan, 2017). Solitary confinement causes heightened anxiety, irrational anger, greater confusion, and greater sensitivity to external stimuli as a result of sensory deprivation (e.g., Shalev, 2008; Smith, 2006; Grassian, 2006; Haney 2003). Suicide rates are much higher among those in solitary confinement (Kaba et al., 2014; Patterson and Hughes, 2008; Way et al., 2005). Those who are mentally ill or members of the LGBT community are more susceptible to greater harm while in solitary confinement.

Conclusion: Canada's top court ruled last month that solitary confinement over 15 days is cruel and unusual because based on the evidence, it is. Not only does solitary confinement cause harm without the intended benefits, but it costs about an extra $20,000 per prisoner per year as regular imprisonment. I hope that countries continue to limit or even eliminate solitary confinement, much like we should remove any other relics institutionalized during the "Tough on Crime" era of the 1980s.

For more on alternatives to solitary confinement, visit the websites for the Vera Institute, American Civil Rights Union, and the American Bar Association. 

How Is Myanmar's Economy Shaping Up for 2019?

Myanmar is mainly in the news for its internal ethnic conflict and humanitarian abuses. Much less frequently covered is its economic outlook, which might be in part because its economy is the 70th largest in the world. Whatever the reason, I would like to give it some coverage here, especially in light of the IMF's Article IV Consultation on Myanmar that was released last week.

While one could think of economic health and civil liberties as separate, the fact of the matter is there is some linkage. Yes, there has been some progress on refugee repatriation, although freedom of movement of returnees has been limited. This stalled progress decreases positive foreign sentiment, which has an impact on foreign investment in Myanmar (IMF, p. 4). Not only has manufacturing declined since mid-2018, but so have tourist receipts and consumer goods (IMF, p. 5). In spite of some of the shorter-term issues, the IMF is still optimistic about longer-term outlook because of demographics and its commerce with China, India, and Japan (IMF, p. 6).

The World Bank had similar mixed outlook per its December 2018 Myanmar Economic Monitor. The World Bank has concerns with declining foreign direct investment along with global risks being entangled with domestic risks. Nevertheless, services sector liberalization and the loosening on foreign bank lending provides World Bank with a more optimistic medium-term outlook. Even so, Myanmar is dealing with an agricultural sector with stunted infrastructure (which is significant because nearly 70 percent of Burmese work in that sector), and its garment industry might lose the European Union's generalized scheme of benefits (GSB) preference, which would be significant since its productivity in the garment sector was reducing its deficit. Growth in the tourism and transportation sectors have also slowed for Myanmar.

As some additional notes, the Asian Development Bank is anticipating 6.6 percent GDP growth for Myanmar, which is higher than its Southeast Asian peers. Oil and gas reserves at Myanmar's offshore banks are now approved for commercial activity. Myanmar also launched its updated Companies Law in August 2018, which had not been updated for nearly a century. This Law will allow for easier foreign capital flow.

If we're looking strictly at GDP growth, things look good for Myanmar. However, an economy is more than its GDP. With a developing economy that could be easily shaken by global events, I am concerned about such potential issues as Brexit. It makes prognosticating an overall direction more difficult. If Myanmar can get past its internal conflict and improve growth in key sectors, I think that Myanmar can expect an increasingly healthy economy.

Geoengineering as a Possible Solution to Climate Change...Maybe, Not Quite Yet

The call to limit the effects of climate change have gained more traction over time. Last October, the United Nations released a report saying that if we do not do something in 12 years, we will not be able to minimize the effects of climate change. The good news is that something could still be done. The bad news, per the UN report, is that we need to do something on the more drastic end of the spectrum in order to avoid catastrophe. Granted, a study in Earth System Dynamics (Aengenheyster et al., 2018) provides some skepticism on the "point of no return," saying that it could be anywhere between 2035 and 2042. Even so, it doesn't seem like kicking the can down the road seems like a viable option.

One solution that has been presented as an option is climate engineering, commonly referred to as geoengineering. Geoengineering is the systemic, large-scale intervention of mitigating climate change. There are two main methods of geoengineering: greenhouse gas removal and solar radiation management (SRM). SRM has been the more popular of choices. One of the main advantages of SRM is that it comes at a low cost, especially when compared to other proposed climate change mitigation efforts. The idea behind SRM is to emit [sulfate] aerosols into the stratosphere, which should brighten ocean surfaces and clouds to reflect sunlight back into space. There are a number of criticisms of geoengineering, including termination shock, the politics of implementation, potential weaponization, and cannot be considered a complete solution since it does not remove the greenhouse gases from the atmosphere. The biggest criticism that exists is its control, and thus its predicability. Geoengineering has been considered taboo because it has the real potential to cause greater problems and greater disproportionality of the effects of the climate change.

However, a new study seemingly contradicts the fears of geoengineering. Harvard engineer Peter Irvine and his colleagues (Irvine et al., 2019) have potentially found a solution with geoengineering. Per this study, it is a matter of how much geoengineering we use. A huge quantity would cause major issues, but spraying the "proper dosage" could cut global warming in half. Not only would this geoengineering cut global warming in half, but it wouldn't cause negative effects for any region.

This study does come with a few caveats. One is that it would only halve the upcoming global warming. Although it's rare to have a policy that acts as a silver bullet, solving half of the problem is pretty good. It means we need to avoid the potential moral hazard and make sure we stay on the ball to solve the other half. The second caveat is that, as the authors of the study admit, these results are under a more idealized situation. Third, the scenario they use is one in which CO2 levels double. That might sound like a lot, except that CO₂ levels are expected to increase even more than by twofold. Finally, we have to recall that geoengineering is nowhere near ready for large-scale implementation. The effects of geoengineering has only been conducted by computer modeling.

What this study does provide is new possibility for geoengineering. While this study is not definitive enough to inform policy decisions (as the author of the study admits), it is strong enough where geoengineering merits further consideration. Why? While a medium-term solution, natural gas isn't going to bring carbon emissions down adequately. Wind and solar power do not possess the capacity or scale to help, and very well might not be able to do so ever. China, which is the #1 emitter of carbon, is not cutting its production of coal. Not enough nuclear power plants are being built to help offset carbon emission. If the point of return is approaching, then we cannot take geoengineering off the table quite yet, at least until we can better prove its ultimate viability.

Governor Pritzker's "Fair" Tax Is Not So Fair for the State of Illinois

I grew up in the state of Illinois. As much as I have fond memories of living in Illinois, I am not exactly fond of how Illinois is governed or how its finances are run. In 2017, I covered the state of Illinois' budgetary and fiscal standing. Let's just say that it was a mess then, and it hasn't improved since then. The recently elected governor of Illinois, Governor Jay Robert (J.B.) Pritzker, released his Fair Tax proposal last week. What does it entail?

Under current Illinois law, the income rates are the following: 4.95 percent for individual income and 7 percent for corporate income. The feature of the Illinois tax code is that it is a proportionate tax code. Illinois is currently one of eight states with a flat tax rate. The crux of Governor Pritzker's is to change the Illinois tax code to a progressive one (see individual income tax rates below, as well as a report arguing for graduated tax rate from the Illinois-based, Left-leaning Center for Tax and Budget Accountability). There are other features of the proposal, including a $100 nonrefundable child tax credit, raising the corporate income tax from 7 to 7.95 percent, and increasing the property tax credit from 5 to 6 percent. Pritzker claims not only that 97 percent of Illinoisans will pay less in income taxes, but that it will generate $3.4B annually (Reuters).

What Is Fair Taxation?

Before getting into the details of what Pritzker is proposing, I would like to briefly discuss fairness, particularly in the context of taxation. Truth be told, fairness is a subjective matter. The subjectivity of fairness can be illustrated by the three main types of taxation systems: regressive, proportional, and progressive.

A regressive tax is assessed on the percentage of the value of a good or service (e.g., sales tax, sin tax, property tax). It can be construed as fair because it charges everyone the same amount, regardless of earnings or income level. On the other hand, it could be construed as unfair since poorer people pay a higher percentage of their income than richer folks.

The second type of tax is a proportional tax, which is also referred to as a flat tax. This tax could arguably be fair since this tax charges everyone the same tax rate, regardless of income. This is most commonly implemented for income and wealth taxes, although it can be implemented for gross receipt taxes, occupational taxes, and per capita taxes.

The third type of tax is a progressive tax. Under a progressive system, the tax scheduling is done based on an individual's income. With the accelerated tax schedule, higher-income earners pay a higher percentage than lower-income earners. The purpose of such a system is to reflect an assumption of fairness that the upper-class is more capable of paying a higher tax burden.

Why is this subjective? Any one of these systems could be argued as "fair." There is no objective formula to determine what is fair. Fairness is based on values, morals, and political philosophy. The idea of fairness is so subjective that one could argue that fairness shouldn't matter because "life is not fair," and it has no bearing on the tax code. I wouldn't necessarily argue that, but rather it is to reaffirm the point that what might be fair to one person might not be fair to another.

Why Governor Pritzker's Plan Goes Awry

Now we can return to the details of the plan. One of Pritzker's goals is to shift tax burden from the lower- and middle-class to upper-class individuals. Pritzker would like to raise the proper tax revenue to mitigate Illinois' fiscal woes. While his intentions might be good, we are here to determine whether the results would be.

The first issue is that his figures are in dispute. The Illinois Policy Institute, an Illinois-based think tank focused on economic liberty and free markets, estimated that Pritzker's plan would only generate $1.4-$2.4B in new revenue, depending on whether you use static or dynamic scoring.

For argument's sake, let's give Pritzker the benefit of a doubt, and assume that his plan will generate $3.4B, which coincidentally is the projected budget gap for 2021. Even with $3.4B in generated tax revenue, his plan runs into problems, including the big problem that in his recent budget address. Last month, Pritzker proposed spending anywhere from an additional $14B to $19B in the 2020 Illinois state budget (a proposal, by the way, that credit rating agency Standard and Poor's said would weaken Illinois' credit trajectory). This additional spending includes paying down bills, funding a capital project, and investing in education. Setting aside the fact that this Fair Tax would be in effect in 2021 at the earliest, the last time I checked, $14B > $3.4B, which means that if both the Fair Tax and Pritzker's spending promises go through, the income tax rates would need to be even higher to close the gap. This brings me to my next point.....

Not Addressing Illinois' Spending Problem

In his Fair Tax proposal, Pritzker rightly points out there being a dire fiscal condition. You would think that Illinois had a tax revenue problem, but Illinois has collected more tax revenue per capita than the U.S. average (Tax Policy Center). But let's think about it for a second. Illinois has state-level debt of over $151B. If you look at the Mercatus Center's ranking of states' fiscal solvency, Illinois is at the bottom of the list. Illinois does not have enough cash to cover short-term liabilities. Its revenue is only 92 percent of its expenses. Looking at long-term solvency, it has a net asset ratio of 2.86, which means that for every dollar in assets it has, Illinois has nearly three dollars in liabilities. Illinois has a major issue with its pension and benefits system that continues to drive these fiscal indicators into the ground. If Pritzker throws in his additional spending to the mix, the situation in Illinois is only going to go from bad to the point where more than just the wealthiest will end up paying high tax rates.

Not Going to Solve the Issue with Fairness

It is not only Governor Pritzker that is making the argument of fairness. It is also coming from the Institute on Taxation and Economic Policy (ITEP), a national think-tank focused more on tax policy. Full disclosure: ITEP leans to the Left. Their argument for the currently unfair tax code in Illinois comes from their 2018 report measuring tax equality by state. In ITEP's report, it found Illinois being the eighth most unfair tax code amongst all the 50 states. Why? Because the bottom 20 percent pays 14.4 percent of their income in state taxes, whereas the top one percent pay 7.4 percent. That is a gap of 7.0 percent. There are two things to consider with ITEP's report.

One is that with Pritzker's plan, the richest will pay 7.95 percent, whereas the poorest will only pay 4.75 percent. This creates a difference of 3.2 percent (7.95-4.75=3.2). If the current gap is 7.0 percent, this bill would close less than half of the gap (3.2/7.0=46%). Closing the gap would be nice if your goal is for everyone to pay the same percentage of income in taxes. If your goal is to have the rich pay a higher percentage in taxes, then this wouldn't close it on a state level. However, this doesn't take into account federal taxation.

The second is what happens when you look at what is driving the gap. When looking at personal income tax, the top 1 percent pay 4.1 percent of their income in state income tax, whereas the bottom 20 percent only pay 1.5 percent. That is a difference of 273%! When you look at what is driving the gap, it is two types of taxes: consumption taxes and property taxes.

Consumption and property taxes are more regressive in nature, and it should be no surprise that these taxes are causing the disparity. Another way of closing the gap would be to lower the consumption and property tax rates. If you want to talk about unfair, how about Illinois having the seventh highest sales tax rate of 8.74%, or that Illinois has the ninth highest per capita property tax collection? Given the regressive nature of these taxes, is it fair to burden lower-class citizens with these high tax rates? Why doesn't Pritzker address these taxes in his proposal?

 

Tax Competitiveness and Migration

Taxes have two main functions. The first is that it collects revenue for the government. The second is that it alters and distorts people's behavior. We cannot look at a specific tax increase in isolation. It is a question of how it affects the economy and people's behavior. That is what the conservative Tax Foundation does in its thorough analysis of Pritzker's Fair Tax proposal (also see the Illinois Policy Institute's analysis here). In the Tax Foundation's State Business Tax Climate Index, Illinois currently ranks 36th. What would happen if Illinois were to implement this Fair Tax? Tax Foundation projects that Illinois would fall to 48th place on its ranking. This ranking would fall to such depths because if passed, Illinois would have among the highest state tax burden in this country.

Why should Illinois care about tax competitiveness? We live in an economy that is more capital-intensive than it was in the early- and mid-twentieth century. It is easier than ever for businesses to move. If the tax rates are too high, then companies will be incentivized to move elsewhere.

Looking at Illinois' historic trend, its individual income tax rate has been lower in the past (see below). Illinois is trending towards higher income tax rates.

Source: Illinois Department of Revenue

What are Illinois' neighbors doing? The exact opposite. Missouri lowered its income tax rate from 5.9 percent to 5.5 percent last year. Iowa reduced their rate from 8.98 percent to 6.5 percent in 2018. From 2013 to 2017, Indiana phased their income tax from 3.4 percent to 3.2 percent. Even in the two states that have higher income taxes and are not looking to lower them (Wisconsin and Iowa), the states at least have balanced budget amendments. If this proposal passes, Illinois would be surrounded by states that would have better overall state tax competitiveness.

Illinois already had high tax rates prior to this tax hike proposal. These high tax rates do not only have such businesses as General Mills, Butterball, and Food Warming Equipment Co. leave Illinois. It is also a huge amount of individuals moving out of Illinois. Looking at the North American Moving Services 2018 survey, Illinois ranks on the top of the list of states where people move out of. Illinois has been among the top of this survey's list since 2011. The United Van Lines survey had similar results, showing that the primary reason people left Illinois was for better jobs. And if you need more depressing data, look at the civilian labor force in Illinois decline over the past decade (Bureau of Labor Statistics).

Postscript

I am not even going to get into such features of the Fair Tax proposal as the marriage penalty or its atypical "recapture" provision. What I am going to conclude with is the following. The flat tax is one of the only redeemable aspects of Illinois' tax and budgetary policy. Right now, Illinois' individual income tax is on the lower end compared to other states. It is nowhere near California's income tax rate of 13 percent. If this proposal passes, Illinois loses what little advantage it previously had.

I do not have the power of clairvoyance, but I would take an educated enough of a guess as to what would happen. For one, job growth would be hampered further. Illinois' private-sector job growth is already sluggish (so sluggish that it is nearly half the growth rate of the rest of the country) because of tax and regulatory environment. I would also predict further capital flight and labor migration. And to top it all off, the Fair Tax would not help mitigate Illinois' dire fiscal state of affairs. Other states have graduated-rate income taxes, but the Illinois government has historically shown that it cannot keep its taxation or spending in check.

The way to enact this proposal is through a constitutional amendment, which thankfully, is not an easy process. After it passing three-fifths of both legislative chambers, the people of Illinois would then need to vote on it. That cannot happen any earlier than November 2020. I hope that the citizens of my former state are not blindsided by vague, yet ultimately harmful notions of fairness and vote for such foolishness.

Are One-Way Streets Better Than Two-Way Streets for Urban Planning?

A couple of weeks ago, I got back from my trip to Buenos Aires in Argentina. Looking at the title of today's piece, you are probably wondering what urban planning has to do with my vacation in Buenos Aires. At least when I wrote on the Argentinian economy last week, the connection was clearer. But there does happen to be a connection. When I was in Buenos Aires taking taxis, I noticed that there was a lot of traffic. How Buenos Aires did not make the 2018 Top 200 List for the INRIX Global Traffic Scorecard, I will never know because the traffic there was worse than I have experienced in most major U.S. cities. While traveling throughout the city, I also noticed something else: a lot of one-way streets. I began to wonder: is there a connection between one-way streets and traffic congestion? It then got me thinking of the pros and cons of one-way streets. I will address the cons and scrutinize those since they get more coverage in the one-way/two-way debate.

• Negative impact on local businesses and economies. The idea behind this argument is that there is more exposure for the store because cars in both directions see the building. To further that argument, traffic on two-way streets tends to be slower, which gives greater opportunity to notice local businesses. As for impact on the local economies, one would think that increased business revenue and property tax revenue would cover the costs. However, conversions to two-way streets have had mixed results for the local economy (Riggs and Appleyard, 2018; also see case studies here).
• More difficult navigation. There has to be a certain level of awareness to be able to navigate one-way streets, even with such navigation apps as GoogleMaps or Waze. You would think with such apps, overshooting your route wouldn't happen. What I noticed in Argentina (as well as in the United States with Uber and Lyft drivers) is that even with technology, you can miss a turn. 
• Less efficient traffic. This argument is an offshoot of the previous argument. The conventional argument for one-way streets is that directing traffic in one direction allows for more traffic to pass through, usually at a higher speed limit. Many transportation planners find that a higher vehicle moving capacity automatically translates into greater efficiency. However, a study from professors at Penn State and Berkeley (Gayah and Daganzo, 2012) found different results using a trip-serving capacity. Essentially, the time spent navigating the grid is offset by the moving capacity. For shorter trips, this study found that two-way streets were unequivocally preferable. since two-way streets provide more direct routes. As for longer trips, one-way streets did not possess a particular advantage over two-way streets. This does come with some skepticism since two-way street configurations require more left-hand turns, thereby slowing down traffic.
• Are one-way streets less safe? The intuition behind this theory is that one-way streets are more dangerous than two-way streets because the average speed on a one-way street is higher than a two-way street. This makes it particularly hazardous for pedestrians and cyclists. On the other hand, two-way streets have more conflicting maneuvers, most notably left-hand turns.

I am not an urban planner, and such a debate is quasi-public policy at best. From my layperson view, two-way streets seem to be the better of two options. I would nevertheless say that it depends on the layout of the city, amongst other factors, that would ultimately determine whether one-way streets would be more prudent for cities than two-way streets.