A Selection of Stuff You’d Rather Not Read About

Four articles that made an impression this week, from least to most depressing, that didn’t even mention Jerusalem, Puerto Rico, healthcare or starving polar bears.

One hundred and eighty-seven people are facing felony charges for participating in a demonstration in Washington D.C. that turned violent. The demonstration was on the day Trump was inaugurated. A trial is now underway. The depressing aspect of this story is that none of the six defendants are accused of doing anything aside from being there:

What jurors haven’t heard, and prosecutors don’t intend to offer, is evidence that any of the six individuals currently on trial … actually engaged in any property damage or violence. Under the government’s theory of the case, in which anyone arrested in the group is part of a conspiracy and is responsible for any actions taken by others, the lack of individualized wrongdoing doesn’t matter.

Maybe the jury will have the sense to acquit everyone and convince the government to stop these prosecutions.

Elsewhere in Washington, Republicans from the House and Senate are trying to reconcile the terrible tax bills they’ve recently passed. Could any of them read this article from The New York Times and say they were proud of their efforts so far?

… for the first time since the United States adopted an income tax, a higher rate would be applied to employee wages and salaries than to income earned by proprietors, partnerships and closely held corporations….

“We’ve never had a tax system where wage earners were substantially penalized” relative to other types of income earners, said … a former Treasury Department official….

Indeed, economists and tax experts across the political spectrum warn that the proposed system would invite tax avoidance. The more the tax code distinguishes among types of earnings, personal characteristics or economic activities, the greater the incentive to label income artificially, restructure or switch categories in a hunt for lower rates….

“The more you look at any of the major rules, the more ambiguities, glitches, clearly unintended consequences and tax planning opportunities you see,” said Michael L. Schler, a lawyer in the tax department of Cravath, Swaine & Moore. He has written a 50-page summary of the more glaring problems …

From Georgia Southern University, a professor named Jared Yates Sexton, who grew up in the South, writes about the fascism that runs in his family.

Eventually I left for college and found my own people who didn’t express such fascist and ignorant beliefs. I visited for the occasional holiday, kept in decent enough touch, but I felt confident knowing that people like my family would never be in charge of the country they understood so poorly….

They hoard weapons, supplies, and daydream about the day the government will fall and they’ll be free to remake the country as they see fit.

I cannot say they are fascists, but I can definitely say they hold fascist ideas. This is why they hardly blink when Donald Trump quickly erodes the normal order of the government, why they’re not concerned when he undermines the Freedom of the Press or cozies up to authoritarian leaders. They love it when he tells policemen to be rough on suspects. They want someone who plays nuclear chicken with a despot while the lives of hundreds of million innocent people lie in the balance.

Finally, speaking of nuclear chicken, Jeffrey Lewis, a “scholar at the Middlebury Institute of International Studies”, shares some really scary thoughts in The Washington Post. He imagines how a confrontation between North and South Korea might escalate, helped along by a morning tweet from the president, into nuclear war.

And so, facing what he believed was a massive American military invasion, Kim gave the order. The thread of history winds along on twists of fate, like Archduke Ferdinand’s driver missing a turn…

The U.S. Missile Defense Agency would later say this was a sign that the system had worked well, downing about a third of the missiles — although experts would argue that the low intercept rate resulted from problems that the Los Angeles Times had reported in 2017…. It seemed more likely, the experts said, that five of the missiles had simply broken up as they reentered the earth’s atmosphere.

The remaining seven nuclear warheads landed in the United States. These missiles were no more accurate than the others — but with 200-kiloton warheads, 10 times the power of the bomb that destroyed Hiroshima, close was enough to count in most cases.

I told you so.

My Country, ‘Tis of Thee

I was thinking about writing a post based on recent statements by Sen. Orrin Hatch (Republican, Utah) and Sen. Charles Grassley (Republican, Iowa), but an actual writer beat me to it.

From Paul Waldman of The Washington Post:

With Republicans well on their way to passing a dramatic overhaul of the tax code, they have presented to the public a sweeping, comprehensive vision not just of what taxes should look like, but of what government is there for, what our obligations are to one another, and even how each of us should think about our value as human beings. This is a moment of uncommon clarity.

…. Let’s start with Iowa’s Chuck Grassley, who made this comment on the estate tax:

“I think not having the estate tax recognizes the people that are investing,” Grassley said, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Right now, the first $5.5 million of any estate is not subject to the tax. Because of that, fewer than one in 500 estates owes any tax at all. So Grassley is saying that 99.8 percent of Americans lead contemptible lives of waste and folly, while only that remaining sliver of the extra-wealthy have shown the virtue that should win their heirs the ability not to pay taxes on the fortunes bequeathed to them. The Senate bill would double the tax’s exemption, while the House bill would eliminate the tax entirely; depending on how the final version turns out, Eric Trump may finally be free of the fear that he’ll have to pay taxes on his inheritance.

Now let’s turn to Utah’s Orrin Hatch, who explained why, despite his support of a bill offering trillions of dollars in tax breaks to the wealthy and corporations, we absolutely must start slashing the social safety net immediately:

“I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger, and expect the federal government to do everything.”

… There isn’t much political advantage in saying that if you die with less than $5.5 million in assets, like nearly all Americans do, that means you were lazy and self-indulgent, while only the wealthy have proven their moral worth by the size of their bank accounts. So when someone says something like that, you can be pretty sure he’s expressing his actual beliefs….

Those are value judgments, rooted in how Republicans tend to view the worth of different people. They operate on the presumption that the economic system is fair, and the results of that system provide a measure of different people’s virtue. If you’re rich — even if you got rich by choosing the right parents — they presume that you deserve to be taxed as lightly as possible, while if you’re in need of the kinds of help we offer low-income people, then it reflects a moral failing. If we give you any help at all, it should be as grudging as possible, accompanied by stern lectures and even rituals of humiliation like drug tests.

Their tax bill, and their upcoming assault on the safety net, will weave these principles more deeply into our laws. And these principles are their real rationale; ignore all the practical claims they make about the explosion of economic growth these tax cuts will supposedly produce, and how the benefits will trickle down to everyone, and how it will all pay for itself. Those arguments are transparently bogus. A recent survey of 38 prominent economists found that only one said the tax bill would significantly increase growth…

Confronted with this comprehensive debunking of their practical claims, Republicans are undeterred and undaunted. That’s because they’re driven by a moral imperative, one that says that no matter what effect cutting taxes on the wealthy and corporations might have on the economy, it’s just the right thing to do. It rewards the virtuous, and you can tell who the virtuous are by how much money they have. If you’re asking why they wrote the bill the way they did, that’s just about all you need to know.

Meanwhile, our law-and-order president (sexual predator D. Trump) has endorsed former judge Roy Moore, who will probably join Grassley and Hatch in the Senate later this month:

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My country, ’tis of thee,
Sweet land of liberty,
Of thee I sing….

If They Wanted Real Tax Reform

The big story in Washington this week is the Senate Republicans scrambling to pass a major tax bill that nobody but their donors and other members of the plutocracy likes. Assuming something like it eventually becomes law, it will give a temporary tax cut to most members of the middle class and raise taxes for others, while giving a permanent tax cut to rich people and corporations. It will also add more than a trillion dollars to the deficit while requiring billions of dollars to be cut from programs like Medicare. (There is a nice summary of the giant con here.)

Republicans and even some journalists are calling it “tax reform”, even though it will make our system of taxation worse than it already is.

Wondering what real reform would look like, I read a book called A Fine Mess: A Global Quest for a Simpler, Fairer and More Efficient Tax System. It’s by a journalist named T. R. Reid. After a lot of research and conversations with tax experts around the world, he reached the same conclusion most experts have. The simplest, fairest and most efficient system of taxation is based on the “Broad Base, Low Rate” (BBLR) model.

The BBLR idea is that countries should tax as much as possible while keeping rates as low as possible. So, in the case of income tax, it’s best to tax all kinds of income at the same low rate. That means getting rid of deductions, exemptions and credits, many of which benefit people with the highest incomes, while categorizing things like health insurance benefits from your employer as personal income. That’s the “broad base” part. Once you’ve broadened the base and made more income subject to taxation, you can then lower everyone’s rates (that, obviously, is the “low rate” part).

The BBLR approach has a number of benefits. Filing and auditing tax returns is far simpler. Since rates are low and everyone’s income is treated the same, fewer people are tempted to avoid or evade taxes. Also, decisions about things like buying a house or building a factory tend to be made on the merits, not on the basis of tax considerations.

Reid also thinks the U.S. should institute a Value Added Tax (VAT). It’s a kind of sales tax, but one that is applied at every step of the manufacturing or distribution process, i.e. whenever money changes hands. We are the only rich country in the world that doesn’t have a VAT. Since it’s a tax on consumption, not income or savings, a VAT apparently has beneficial effects on a nation’s economy. It’s also difficult to evade. That’s why everyone else has one.

Another change Reid recommends is to reduce taxes on corporations. The U.S. has a high corporate tax rate, which results in corporations devoting a lot of effort to reducing or even eliminating their taxes. He thinks it would be better if all of the income people receive from corporations, especially dividends and capital gains, were subject to the same tax rate as other income (today, supposedly in order to foster investment, that income is taxed at a lower rate, which again mainly helps the wealthy). In fact, in a very interesting article in The Washington Post earlier this month, Reid advocated eliminating the corporate tax altogether, since it doesn’t do what it’s supposed to do.

What surprised me most about A Fine Mess, however, was that some of the ideas Reid endorses are included in the Republican tax bill. (Seriously, it doesn’t happen very often that there is overlap between “Republican policy” and “good idea”.) For instance, the Republicans have talked about getting rid of the deductions for medical expenses, state and local taxes and interest on mortgages. They would try to offset the disappearance of those deductions by increasing the standard deduction and lowering everyone’s rates. The result would be that more income would be taxed, but at a lower rate (that’s BBLR). Another result, not so beneficial, would be that millions of average taxpayers, for example, those who have major medical expenses or live in states with high taxes or who have big mortgages, would get a tax increase, even if their tax rates were lowered.

Unfortunately, the Republicans want to combine their few good ideas with many bad ones. For example, they want to get rid of the estate tax, which only affects the truly wealthy, and give more favorable treatment to certain kinds of business income (it’s been said that the Republican tax plan could have been written by Trump’s accountant). They also want to reduce taxes on the rich so much that they’ll have to cut social programs like Medicare, while adding more than a trillion dollars to the deficit.

Reid points out that Congress tends to produce a major tax bill every 32 years. The last one was in 1986. Congress worked on it for two years. The bill had bipartisan support and actually deserved being called “tax reform”. This year, the Republicans are trying to pass their bill in a matter of weeks, without hearings and without input from the Democrats. That indicates how screwed up our government is and how far away we are from getting actual reform.

The “Skinny” Repeal of the ACA Is Back

Republicans in the Senate want to cut taxes so much for rich people and corporations that the federal deficit would go way up. That means they need to reduce government spending or find new revenue to offset the cuts. Their latest idea is to bring back the “skinny” repeal of the Affordable Care Act. The repeal would be “skinny”, because the only thing being repealed would be the “individual mandate”, the requirement that people have health insurance or pay a fine.

But why would getting rid of the individual mandate help offset tax cuts? The reason is that millions of low-income people would no longer buy health insurance, so the government would no longer need to give money to help them afford it. Right now, the government spends millions of dollars on health insurance subsidies for people who couldn’t otherwise get it. If those people don’t have health insurance anymore, the subsidies won’t be paid.

Unfortunately, there are serious problems with this approach. From The Washington Post:

 

Repealing the mandate would undermine … key parts of the Affordable Care Act. The health care law banned insurance companies from discriminating against people with pre-existing health conditions. But in order to prevent people from waiting to buy insurance until they got sick, the law … imposed financial penalties [the individual mandate] for individuals who did not maintain health insurance coverage.

 

Health experts say eliminating the mandate would destabilize the individual insurances markets set up by the Affordable Care Act, as they would be full of people with high health care costs but have far fewer of the healthy people that insurance companies bank on. In response, insurance companies would likely either massively raise premiums or pull out of the marketplaces entirely.

 

A powerful group of stakeholders, including the major health insurance and hospital insurance lobbies and two influential doctors’ groups, wrote a letter to leaders from both parties arguing that they should retain the individual mandate.

 

“There will be serious consequences if Congress simply repeals the mandate while leaving the insurance reforms in place: millions more will be uninsured or face higher premiums, challenging their ability to access the care they need,” the groups wrote.

The Congressional Budget Office (CBO), among others, analyzed “skinny” repeal earlier this year. Their conclusions led three Republican senators to vote against it on the night of July 27th (it was in all the papers). Maybe the same three will defeat it again if it’s part of the Republican tax bill, but there might be more pressure on them to accept it this time.

Meanwhile, Republicans in the House of Representatives have their own version of the tax legislation. Today, the CBO had something to say on that. From Yahoo Finance:

 

If the House GOP tax plan passes, it is projected to cut revenue significantly, likely increasing the deficit by $1.456 trillion from 2018 to 2027, according to the Joint Committee on Taxation and Congressional Budget Office.

 

… the CBO explained that without any more money to offset the fall in revenue, the Office of Management and Budget (OMB) would be required to issue a “sequestration order” to reduce spending in 2018 by $136 billion.

 

The effects of this sequestration order would trigger automatic cuts to various programs, including Medicare. According to the CBO, this could be as much as 4% for Medicare, which amounts to $25 billion in 2018. Furthermore, all non-exempt programs would be eliminated, which include some farming subsidies, border security, and student loan help.

So, in order to give the wealthy and corporations an enormous tax cut, Republicans will either raise insurance premiums for millions of average Americans or apply major spending cuts to programs like Medicare (or do both). This is in addition to increasing taxes on millions of people who itemize their deductions because they have big medical bills or live in states or cities with high taxes. All of this will happen while they increase the deficit by $1,456,000,000,000, give or take several billion. 

On the plus side, the president, his family, the billionaires in the Cabinet and lots of other plutocrats, including many CEO’s, will have a lot more money in their very deep pockets, a few dollars of which will trickle down to the rest of us. Inequality will increase, people will die too sooner, but that’s all right, because I’ve got mine, Jack!

This, That and the Other Thing

There are few places as forlorn as a resort town on a chilly, cloudy, damp, out of season weekday afternoon. Thus, Virginia Beach, Virginia, last week:

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But let’s move on.

Paul Waldman writes about “The GOP’s Baffling Decision to Raise Taxes on Millions of Americans” at The Week.

If there’s one thing we thought we could count on in this crazy world, it’s that Republicans will never, ever, ever support a tax increase. It wasn’t always this way — Ronald Reagan, who to hear some people tell it practically walked the Earth without sin, actually raised taxes multiple times — but today there may be no more foundational belief to the GOP than the principle that taxes must come down, everywhere and always.

Nevertheless, “the GOP is right now rallying around a bill that will raise taxes on tens of millions of Americans.” It certainly is strange. One part of the explanation, however, is that Republicans aren’t very good at this governing thing. Another part is that they’re so eager to cut taxes for rich people and corporations, they’re willing to antagonize millions of voters and lie about what they’re doing.

As a partial antidote to the above, consider reading all about “The Relentless Honesty of Ludwig Wittgenstein”. Ian Ground presents an excellent overview of Wittgenstein’s philosophy, both early and late, at The Times Literary Supplement.

That Was the Year That Was

The title of Michelle Goldberg’s overview of the past year in The New York Times is “The Anniversary of the Apocalypse”. I thought “apocalypse” was too much, but Merriam-Webster says it means “a great disaster”. That’s fair. In what follows, I’ve removed all descriptions of particular offenses:

In the terror-struck and vertiginous days after [the] election a year ago, as I tried to make sense of America’s new reality, I called people who lived, or had lived, under authoritarianism to ask what to expect. I wasn’t looking for concrete predictions — one of the disorienting things about that moment was that no one, no matter how learned, had any idea what was happening — but for insights into how the texture of life changes when an autocratic demagogue is in charge.

A secular Turkish journalist told me, her voice sad and weary, that while people might at first pour into the streets to oppose [him], eventually the protests would probably die out as a sense of stunned emergency gave way to the slog of sustained opposition. The Russian dissident writer Masha Gessen warned that there’s no way, with a leader who lays siege to the fabric of reality, to fully hold on to a sense of what’s normal. “You drift, and you get warped,” she told me.

They were both right. The country has changed in the past year, and many of us have grown numb after unrelenting shocks. What now passes for ordinary would have once been inconceivable….

… this nightmare year has upended assumptions about the durability of the rules, formal and informal, governing our politics. There’s a metaphysical whiplash in how quickly alarm turns into acceptance and then into forgetfulness….

Hannah Arendt once wrote of the role vulgarity played in undermining liberalism in pre-totalitarian societies: “The temporary alliance between the elite and the mob rested largely on this genuine delight with which the former watched the latter destroy respectability”…. In this administration, crassness has become a weapon, annihilating social codes that once restrained political behavior, signaling that old standards no longer apply.

Lately, the pace of shocks has picked up, even if our capacity to process them has not….In another administration this [take your pick] would have been a major scandal. In this one it barely registers.

How can America ever return from this level of systematic derangement and corruption? I wish there was someone I could ask, but we know more about how countries slide into autocracy than how they might climb out of it. It’s been a year, and sometimes I’m still poleaxed by grief at the destruction of our civic inheritance.

In moments of optimism I think that this is just a hideous interregnum….

Hey, all we have to do is win more elections, like we did tonight in Virginia and New Jersey. Or we could get the opposition to develop a sense of shame. One of those should be manageable.