MauledAgain

This morning, reader Morris directed my attention to a commentary that supports implementation of the mileage-based road fee, but that also suggests, and seemingly supports, the idea that the implementation will open the door to privatization. The author argues that privatization is “a concept supported by numerous studies showcasing the efficiency and performance improvements possible through transparent and well-structured public-private partnerships,” and adds, “The private sector has a proven track record of driving innovation in transportation safety. Extending this partnership to infrastructure allows for the implementation of cost-effective technologies, ultimately making our roads safer and more efficient.”

What I do not support is the privatization of government functions. I have explained my objections to public-private partnerships and privatization of public functions in posts such as Are Private Tolls More Efficient Than Public Tolls?, When Privatization Fails: Yet Another Example, How Privatization Works: It Fails the Taxpayers and Benefits the Private Sector, Privatization is Not the Answer to Toll Bridge Problems, When Potholes Meet Privatization, and Will Private Ownership of Public Necessities Work?

Why do I believe that public functions belong in the public sector. There are several principal reasons that I oppose putting public functions into the hands of those who control the private sector.

First, public-private partnerships don’t work out well, as I explained in posts such as Selling Off Government Revenue Streams: Good Idea or Bad?, Are Citizens About to be Railroaded on Toll Highway Sales?, Turnpike Cash Grab Heats Up, Selling Government Revenue Streams: A Bad Idea That Won't Go Away, Turnpike Lease: Bad Policy and Now a Bad Deal , How Do Toll Road Lessees Make a Profit?, The Pennsylvania Legislature Gets It Right, Killing the Revenue Idea That Won't Die, Are Private Tolls More Efficient Than Public Tolls?, and More on Private Toll Roads. These posts pointed out failures in places like San Diego, Orange County, and South Carolina. The failure list grows, and now includes arrangements that did not work for the Interstate 69 project in southern Indiana, and the Pocahontas Parkway in Virginia. From the searching that I undertook, it appears that the problem is a global one and not limited to the United States.

Second, when public functions are re-routed into the hands of private sector businesses, voters lose the ability to control, vote out, or do much of anything with respect to the private entities now running government functions. It is a regression from democracy to a blend of feudalism and authoritarianism.

Third, these arrangements contribute to the corruption of government. They are the product of legislative attempts to find funding without raising taxes while generating revenue for their private sector donors, with hopes that the outcry against tolls and similar charges will be directed against the private entity involved in the project. When things go wrong, legislators don’t react because they perceive themselves at risk of losing funding from the favored private entities and thus at risk of losing the next election, something on which they focus too much.

Aside from the long-term disadvantages of privatizing public functions, the arguments offered in support of that path are flawed. To argue that privatization is “a concept supported by numerous studies showcasing the efficiency and performance improvements possible through transparent and well-structured public-private partnerships,” totally ignores the repeated failures, perhaps because from the viewpoint of the companies and individuals collecting public funds not only find these partnerships to be a success for themselves but manage to persuade everyone else that the success of these private sector participants translates to success for everyone, which is the opposite of reality. The claim that “The private sector has a proven track record of driving innovation in transportation safety” is hilarious when one considers the track record of the private sector when it comes to safety. Aside from noting the Corvairs and Pintos of the world, it has been government that has compelled the implementation of safety features and insisted on recalls due to flawed manufacturing despite the sing-song of the anti-government crowd that chants “we don’t need no regulation.” Yes, you do.

The claim that “Extending this partnership to infrastructure allows for the implementation of cost-effective technologies, ultimately making our roads safer and more efficient” ignores the reality that even if the roads are made safer and more efficient, an questionable claim in and of itself, it makes voter control more difficult rather than more efficient, it funnels public money into the hands of private individuals and companies, and in the long run it increases the cost to the public of using highways, bridges, and tunnels to levels higher than they would be if there weren’t a need to generate profits for those private individuals and companies.

It is sad and alarming that, yet again, when a good idea in the public sector begins to gain traction, the wealthy who yearn for even more wealth, and their acolytes, turn their thoughts into how they can milk more money from the proposal. Enough with the outsourcing of government to privateers.

There are several reasons that I have written fewer television court show commentaries. Almost all of the episodes that have been broadcast during the past year have been reruns. Fewer television court shows are being broadcast. Almost all, if not all, of current episodes are airing on one of the many dozen streaming alternatives, which I do not care to chase down because it is prohibitive to subscribe to all of the streaming services that offer a television court show.

Today, reader Morris picked up an a Judge Judy episode from several years ago. It was an episode I had not seen. He shared with me several questions which I will answer as I describe the episode and the outcome.

The plaintiff was the mother of a child and the defendant was the father of the child. They were not married, and when they broke up they entered into an agreement to alternate claiming the child on their tax return. The plaintiff mother would claim the child in odd years and the defendant father would claim the child in even years. In 2017, the defendant father claimed the child. He explained that he did so because the child’s mother had been sentenced to jail in 2017 for a nine-month sentence though she ended up serving only three months. The defendant received a $6,000 refund on his 2017 federal income tax return though no evidence was submitted to show how much of the refund was attributable to his claiming of the child. The plaintiff sued the defendant for one-half of the $6,000. The defendant had previously paid the plaintiff $1,000, and he counterclaimed for return of that payment.

Judge Judy held that the defendant had violated the agreement. She held that he was required to pay the plaintiff $2,000, and dismissed his counterclaim.

I now answer the questions posed by reader Morris by analyzing the situation.

The agreement between the two parents controls. The agreement provides that the claim alternates yearly, without regard to number of days of residence with either party and without regard to the amount spent on support. So the conclusion that the father should not have claimed the child in 2017 is correct.

What wasn’t correct was the computation of damages. However, that was not the fault of Judge Judy. Here’s why.

First, a procedural issue. The plaintiff should have asked for an order requiring the defendant to amend his return, which would then permit the plaintiff to file an amended return claiming the child. The amount of the refund that the father should not have received (which could have been less than $6,000) would go back to the Treasury, and the plaintiff would get a reduced tax liability, an increased refund, or some combination (which cannot be determined because no evidence was submitted that disclosed whether she had received a refund or had to pay additional tax on her 2017 return).

Second, because the plaintiff did not seek that relief, it is unavailable for Judge Judy to order. It might be that the statute of limitations had run. On that we lack necessary information.

Third, the parties apparently did not provide sufficient evidence for Judge Judy to do the “what if” computations reflecting what the tax liabilities would have been had the plaintiff and not the defendant claimed the child. So she did “rough justice.” That was the best that could be done under the circumstances.

Fourth, there is insufficient evidence to determine if the reduction in the defendant’s refund would exceed or be less than the increase in the plaintiff’s refund. It is possible that collectively they saved taxes compared to what would have happened had the returns been properly filed in the first place.

Fifth, it is possible that both parties will be audited. We don’t have sufficient information. If, for example, the IRS does audit and determines that the father received too much of a refund, there would be more litigation as he would seek to recover from the plaintiff what he paid her.

The last question posed by reader Morris was “Do we have enough facts?” The answer is no. We are missing many facts. When precision matters, facts are important. When important facts are missing, precision disappears. Then guesswork, “rough justice,” and even injustice run rampant.