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So, net neutrality. Misguided policy, likely imposed illegally by the FCC, and subject to an ongoing court challenge. In short, it's a bad idea. But that hasn't stopped advocates from continuing to sing its praises while concocting horror stories of a world without it.

First, it was Susan Crawford. Writing on Wired.com, she posited that her inability to store her viola in the first class cabin of a U.S Airways flight while on a coach ticket somehow spelled doom for an internet without net neutrality. The solution of many who think like Crawford is to impose restrictive, 1930s monopoly telephone-style regulation on internet service provision and pricing (via reclassification of internet services under Title II). If we extended that logic into Crawford's airline example, this type of regulation would rewind the clock back to the days when government bureaucrats dictated flight routes and prices, creating massive inefficiencies and effectively locking millions of Americans out of the commercial flight market. The deregulation of air transportation is considered a huge success by people across the ideological spectrum, and yet Crawford and her ilk are encouraging a return to that anachronistic model for the internet.

Then came the New York Times' Eduardo Porter, who spun a tale of the horrors of Comcast's attempt to exempt its Xfinity app on Xbox 360 from usage limitations. Luckily, free market-oriented folks much smarter than I were quick to respond. Eli Dourado pointed out the raw economics involved: broadband networks are expensive to build and those costs must be allocated among consumers somehow. They don't just disappear because Netflix delivers content via the internet.

The incomparable Adam Thierer followed on Eli's post by pointing out that the bandwidth caps Porter, et al, so detest only exist because of net neutrality regulations:

"Consider bandwidth caps, which critics paint as some sort of nefarious, anti-consumer plot. In reality, they are just a tool to manage capacity; a tool that has been necessitated by Net neutrality regulation. When the law says you are not allowed to differentiate or specialize service offerings, you have to find other ways to manage capacity and make sure you can recoup fixed costs."

Adam concluded with a few ruminations on experimental pricing structures, the likes of which you'll surely see much more in the future.

Crawford and Porter seek a world of free-flowing Netflix, ever-rising internet speeds, ever-dropping consumer prices, and vigorous competition to win the favor of consumers. So do I! The question is how best to achieve it. They seem to believe the answer is in empowering Washington to regulate just about everything internet service providers can and can't do. I can't pretend to speak for Eli and Adam, but I vehemently disagree and I think the arc of history bears out my belief that restrictive federal regulation puts a damper on innovation and proliferation of telecommunications services.

NTU staff are still busy visiting the Hill offices of our 2011 Taxpayer Friend Award winners.  Not only do those legislators who scored an "A" on our Annual Rating of Congress receive a nice plaque commemorating their accomplishment, NTU also take the time to sit down with many of them to discuss their legislative priorities. One thing we were happy to hear (over and over) was TAX REFORM!  Making the tax code fairer and flatter for everyone would be a real stimulus to our economy.

Here are some pictures from our most recent visits:

NTU Executive VP Pete Sepp and Rep. Jeff Flake (R AZ-6). 

NTU VP of Gov't AFfairs Andrew Moylan, Sen. David Vitter (R-LA), and NTU President Duane Parde

NTU VP of Gov't Affairs Andrew Moylan, Sen. Rand Paul (R-KY), and NTU President Duane Parde

 NTU Prsident Duane Parde, Sen. Jim DeMint (R-SC), and NTU VP of Gov't Affairs Andrew Moylan

NTU VP of Gov't Affairs Andrew Moylan, Sen. Mike Lee (R-UT), and NTU President Duane Parde

NTU VP of Gov't Affairs Andrew Moylan and Rep. James Sensenbrenner (R WI-5)

NTU VP of Gov't Affairs Andrew Moylan and Rep. Ed Royce (R CA-40)

NTU VP of Gov't Affairs Andrew Moylan and Rep. Ted Poe (R TX-2)

NTU VP of Gov't Affairs Andrew Moylan and Rep. Tom McClintock (R CA-4)

NTU Executive VP Pete Sepp and Rep. Tim Huelskamp (R KS-1)

NTU Executive VP Pete Sepp and Rep. Dana Rohrabacher (R CA-46)

Last month, the clock struck midnight on the Maryland Legislature’s plan to pass a broad-based income and excise tax hike. However, because officials in Annapolis really want to confiscate more of their constituents’ money they reconvened for a special session this week.

Here are some quick facts on O’Malley’s job-killing plan;

• Despite the “doomsday” moniker, the current budget increases spending by $700 million compared to last year. The $500 million in “cuts” cited by Governor O’Malley are a decrease in proposed spending increases, not actual cuts in spending. If Maryland simply held spending level with last year there would be no need to raise taxes.
  
  The Tax Foundation produced a report on the budget fallacies being perpetuated by the Governor and his legislative allies. Spending has increased every year under O’Malley and shows little sign of abating.
  
  
• On the income tax side, the proposal would raise levies on single filers earning more than $100,000 and joint filers earning more than $150,000. According to the Tax Foundation study, for a couple earning $250,000 in Maryland this means they would pay almost $1,000 more per year in taxes. Additionally, by remaining in the state, the couple would pay higher taxes than in either the District of Columbia or neighboring Virginia.  
  
  Maryland taxpayers have been to this rodeo before. In 2008, after the first millionaire’s tax went into effect the state saw an exodus of high earners. The results of the current proposal will be no different.
  
  
• Finally, the raising excise tax rates on little cigars and smokeless tobacco will only punish poorer residents, who are more likely to use such products, and will fail to raise revenue. For proof of this phenomenon, in 2009, Washington, D.C. raised its cigarette tax from $2.00 to $2.50 per pack. The District projected the new tax would generate $45 million in revenue, about 20 percent above 2009 levels. Instead, revenues came in $12 million below projections and $4.2 million lower than before the tax was imposed.
  
  The proposal would also have a real negative effect on small businesses throughout the state. One store owner in Annapolis said; "It will kill the business, and in the end result, it would kill my business," Keller said. "(Our customers) say they'll just go somewhere else."

While Assembly leaders are trying to rush this tax hike through with minimal public input you can still reach out to your elected officials and urge them to oppose these ill-conceived tax increases.

Pete & Doug sat down with NTUF Senior Policy Analyst Demian Brady, author of a soon-to-be-released report on how much Congress proposed to save and spend in 2011. The results may surprise you!

11, 16, 735

Those numbers aren't some trick to help you fall asleep, those are the numbers that show the stark reality facing California and the fiscal peril posed by Prop 29.

11: As in 11 percent unemployment, far above the national average of 8.2 percent. City Journal eloquently laid out the decades long policy trends that have driven job creators out of the state.

A more familiar statistic signaling California’s problems is its unemployment rate, which is now the nation’s second-highest, right after Nevada’s. Of the eight American metropolitan areas where the joblessness rate exceeds 15 percent, seven are in California, and most of them have substantial minority and working-class populations.

However, unemployment is the system, not the ailment. California’s economic woes are due to punitively high tax rates and an anti-business regulatory system. Tax Foundation ranks the state 48^th in its Business Tax Climate Survey. Chief Executive, in their poll of Fortune 500 Company CEOs placed the state dead last. It is impossible to create jobs if the job creators face such disincentives for investment.

16: As in $16 billion. Governor Brown’s office released an update on the projected annual deficit numbers. Monday’s revision almost doubles the previous estimate of $9 billion. GOP legislators are spot on saying last year’s budget was a fraud from the moment it was signed. Governor Brown and his allies were counting on $4 billion in additional revenue through highly optimistic economic forecasts.

Additionally, the state spent $2 billion more than anticipated. Moreover, Governor Brown’s proposed budget would further increase spending. Of course, none of this has deterred the Governor from pitching his multi-billion dollar tax increase on the November ballot.

735: As in $735 million, the potential tax increase if Prop 29 is passed. None of the money will go towards paying down the $16 billion deficit. Instead it will go towards propping up a new unaccountable spending bureaucracy.

California cannot pay its current bills, much less the programs found in Prop 29. None of this touches on the over $2.5 billion in local bonding and tax increases found elsewhere on next month's ballot.

Today’s revenue numbers should be a call to action on spending reform and right-sizing government, not raising taxes.

And then there was one. 

With Ron Paul's decision to not contest any upcoming primaries, the way is now clear for Mitt Romney to become the Republican presidential nominee.  Last month, NTUF released its analysis of the spending proposals offered by the 2012 GOP presidential primary candidates.  Now with Romney the only active GOP candidate in the race, it provides an opportunity look at how Romney's spending platform compares with the leading candidates from the 2008 race at approximately the same point in time.

Yesterday, I am sure the sight of Philadelphia Phanatics occupying Nationals Park…again…made some locals want to hit the hard stuff.

Unfortunately, D.C. continues to ban Sunday sales at package stores, so those folks had to struggle through a 6-run ninth inning with nary a drop of liquid comfort. If baseball isn’t your thing, Washington City Paper compiled a list of 10 other reasons to support ending the blue law insanity.

The good news was that for a while it looked like District imbibers might finally be able to have the beverage of their choice, at home, on the day of their choice. Opening up Sunday sales carried the nice side benefit that it would increase revenue for the city government at a time when there are mounting concerns over possible budget cuts.

This posed a conundrum for Councilman Jim Graham (D-Ward 1);

A)     He could repeal onerous regulations, increase economic activity, and raise revenues for the District’s coffers. Or;

B)      He could raise taxes.

When you look at Councilman Graham’s history it should not be surprising he chose option b. Last year, he supported efforts to raise the sales tax rate for liquor stores. This year, short $3.2 million after opposing the Mayor’s proposal to extend bar hours, the Councilman decided on pushing an increase on the wholesalers excise tax rate.

Councilman Graham’s proposal manages to distill everything wrong with government thinking into one bad idea. Raising the wholesale liquor alcohol tax hurts consumers through higher prices, hurts the hospitality industry by driving customers to Virginia or Maryland (both of which would have lower tax rates), and hurts wait staff who will likely see their tips suffer.  

All is not lost. Instead of sitting at home, drinking away the sorrow of D.C.’s latest rejection of common-sense, free-market reform I would encourage you to join the facebook group End DC Blue Laws.  Like them, share them, and join the cause. As they say, it is time to end blue laws, not raise taxes.