It will be good for America and the rest of the world if Sen. Elizabeth Warren persists all the way to the White House. Her campaign officially began today. Her speech gets going at 1:36:00 in the video.
The comedian Bill Maher on his program last night.
Heather Parton, also known as Digby, founder of the Hullabaloo blog, has compiled a list of planned Congressional investigations. They have a common thread. The list is organized by House committee.
Michael Cohen payments
Trump International Hotel lease
Census citizenship question
Prescription drug prices
Protecting Special Counsel Mueller
Way and Means:
Trump tax returns
Puerto Rico reimbursements
Energy and Commerce:
Environmental Protection Agency and climate change
Trump International Hotel lease
David Leonhardt of The New York Times points out that not taxing the rich is the radical idea:
Imagine for a moment that a presidential candidate made this speech:
My fellow Americans, I’m here today to tell you about my economic plan. Each year, I will require every middle-class family across this great country to write a check. We will then pool the money and distribute it to the richest Americans among us — the top 1 percent of earners, who, because of their talent, virtue and success, deserve even more money.
The exact size of the checks will depend on a family’s income, but a typical middle-class household will hand over $15,000 each year. This plan, I promise all of you, will create the greatest version of America that has ever existed.
You would consider that proposal pretty radical, wouldn’t you? Politically crazy. Destructive, even. Well, I’ve just described the actual changes in the American economy since the 1970s.
Economic output — known as G.D.P. — per person has almost doubled over this period. But the bulk of the bounty has flowed to the very rich. The middle class has received relative crumbs.
If middle-class pay had increased as fast as the economic growth, the average middle-class family would today earn about $15,000 a year more than it does, after taxes and benefits. Instead, that middle-class family effectively forfeits the money to the rich, year after year after year….
The extreme redistribution of income — upward — has multiple causes. Some of them, like technological change, stem mostly from private-sector forces. But government policy plays a crucial role. Tax rates on the wealthy have fallen sharply. Labor unions have been undermined. Big companies have been allowed to grow even bigger and more powerful. The United States has lost its lead as the most educated country in the world.
More often than not over the past 40 years, our government has helped the rich at the expense of everyone else. As a result, economic inequality has reached Gilded Age levels.
In the face of these trends, the radical response is to do nothing — or to make inequality even worse, as President Trump’s policies have. It’s radical because soaring inequality is starting to threaten the basic fabric of American life. Many people have grown frustrated and cynical. Average life expectancy, amazingly, has fallen over the past few years.
Over the sweep of history, the main reason that societies have declined, as the scholars Daron Acemoglu and James Robinson have written, is domination “by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.” The name of Acemoglu’s and Robinson’s book on this phenomenon is, “Why Nations Fail”.
It’s worth keeping all of this in mind when you hear critics (or journalists) describe the economic proposals of the Democratic presidential candidates as “radical.” They’re not radical, for the most part. The proposals are instead efforts to undo some of the extreme economic changes of recent decades and to ensure that most Americans workers — not just a narrow elite — fully benefit from economic growth.
The proposals also happen to be popular, broadly speaking. On social issues, like abortion and immigration, the country is deeply divided. But clear majorities support higher taxes on the wealthy, higher taxes on corporations, more education funding and expanded government health insurance. No wonder: Americans don’t resent success, but they do resent not receiving their fair share of economic growth.
The coming primary campaign will be a good time for the candidates to hash out which specific ideas make sense and which don’t. So far, the agenda looks pretty good. Elizabeth Warren has a plan to increase workers’ power within companies — and help them get larger pre-tax raises. Cory Booker and Kamala Harris want to lift the after-tax pay of the middle class and poor. Kirsten Gillibrand and others support reducing major living costs, like child care and education.
Perhaps most important, some Democrats have begun pushing for a wealth tax — to reverse the upward redistribution of the past 40 years. Warren has proposed an annual 2 or 3 percent tax on large fortunes. Bernie Sanders has proposed a big increase in the inheritance tax.
These wealth taxes are a classic example of policies that are less radical than their opponents claim. Do you know who already pays a wealth tax? Middle-class Americans. It’s called the property tax, as Noah Smith of Bloomberg Opinion has noted. Every year, homeowners pay a percentage of their house value in tax. A house, of course, is the biggest asset that most families own. If middle-class families can pay an annual tax on their main source of wealth, wealthy families can, too.
The United States as we have known it — optimistic, future-oriented and more powerful than any other nation — cannot survive the stagnation of mass living standards over many decades. I’m glad to see that some political leaders understand this and are trying to recapture a core feature of American life….
For these progressive taxes to be enacted, the Democrats will have to take the White House and the Senate in 2020 and hold onto the House. The Senate will be competitive, but the Republicans probably have the edge, given the particular states that will have Senate races.
Meanwhile, Republicans want to eliminate the estate tax, which they recently weakened. As of this year, it only applies to estates worth more than $5 million.
On a related note:
On Tuesday, a pair of baffled [Fox News] anchors referred to [talk about higher taxes on the rich] as a movement “against capitalism.” It is a dubious assertion, because by that definition the U.S. has only been a capitalist country since the 1980s, when Reagan knocked the top tax rate even lower and conservatives convinced enough legislators that “a rising tide lifts all boats” was a substitute for economic policy. But in their efforts to find an explanation for why so many people are turned off by unfettered, unregulated, and unaccountable capitalism, they turn to Charles Payne of Fox News Business. His explanation: Schools have brainwashed kids with lessons about “fairness.”
If you want to understand why our partial government shutdown is now the longest in history, all you have to do is read this one article in The New York Times. Its title is “In Business and Governing, Trump Seeks Victory in Chaos”.
Throughout his career, the supposed master of negotiation has followed the same pattern over and over again. Make demands, ignore advice, refuse to compromise and don’t worry about any damage done. All that matters is being “the winner”:
Three decades ago, [Trump] waged a public battle with the talk show host Merv Griffin to take control of what would become [Trump’s] third Atlantic City casino. Executives at [his] company warned that the casino would siphon revenue from the others. Analysts predicted the associated debt would crush him.
The naysayers would be proved right, but throughout the turmoil [Trump] fixated on just one outcome: declaring himself a winner and Mr. Griffin a loser.
As president, [he] has displayed a similar fixation in his standoff with Congress over leveraging a government shutdown to gain funding for a wall on the Mexican border. As he did during decades in business, [he] has insulted adversaries, undermined his aides, repeatedly changed course, extolled his primacy as a negotiator and induced chaos….
“He hasn’t changed at all,” said Jack O’Donnell, who ran a casino for [him] in the 1980s …
[The president] briefly seemed to follow a more conventional approach for a president seeking consensus: encouraging his party leaders in Congress to negotiate a deal. Senator Mitch McConnell of Kentucky, the Republican majority leader, shepherded a compromise in December that would have kept the government open and put off negotiations over a wall and other border security measures.
[Trump] was expected to sign off on the deal, but then came the suggestion from conservative critics that he had caved in to Democrats — that he was a loser. It was a perception [he] could not bear, and he quickly reversed course.
He also reverted to lifelong patterns in business …
His lack of public empathy for unpaid federal workers echoes his treatment of some construction workers, contractors and lawyers whom he refused to pay for their work on his real estate projects. The plight of the farmers and small-business owners wilting without the financial support pledged by his administration harks back to the multiple lenders and investors who financed [Trump’s] business ventures only to come up shortchanged.
And his ever-changing positions (I’ll own the shutdown; you own the shutdown; the wall could be steel; it must be concrete; then again, it could be steel) have left heads in both parties spinning…
“I think he was always a terrible negotiator,” said Tony Schwartz, co-author … of The Art of the Deal.
That book, published in 1987, was intended to be [Trump’s autobiography]. Mr. Schwartz said that he created the idea of [Trump] as a great deal maker as a literary device to give the book a unifying theme. He said he came to regret the contribution as he watched [Trump] seize on the label to sell himself as something he was not — a solver of complicated problems.
Rather, Mr. Schwartz said, [Trump’s] “virtue” in negotiating was his relentlessness and lack of concern for anything but claiming victory.
“If you don’t care what the collateral damage you create is, then you have a potential advantage,” he said. “He used a hammer, deceit, relentlessness and an absence of conscience as a formula for getting what he wanted”…
In recent weeks, … his acting chief of staff, Mick Mulvaney … pursued a rather standard tactic in ending the impasse over border security and a wall: He tried to find middle ground between the $1.3 billion to which Democrats had once agreed, and the president’s demand for $5.7 billion. But upon learning of Mr. Mulvaney’s efforts, [Trump] snarled in front of a crowded room that Mr. Mulvaney had [“fucked it all up”] …
During his years in business, [Trump] earned a reputation as someone whose word meant very little. When a commitment he made no longer made sense, he walked away, often blaming the other party with a fantastical line of reasoning.
To win financing from Deutsche Bank to build a Trump Hotel in Chicago, for example, [he] personally guaranteed $40 million of the debt. When he could not make his payments during the 2008 financial crisis, Deutsche Bank executives were open to granting him more time to repay the loan, a person briefed on negotiations later recalled.
But before a compromise could be reached, [Trump] flipped the script. He filed a lawsuit and argued that the bank had helped cause the worldwide financial meltdown that essentially rendered [him] unable to make his debt payments. At the time, Deutsche Bank called the lawsuit “classic Trump.”
The bank eventually settled…. [Trump] expressed his gratitude to the lawyer who fought on his behalf by not fully paying his bill….
From the time he built his first Manhattan apartment building, [Trump] left a string of unpaid tabs for the people who worked for him.
The undocumented Polish workers who did the demolition work for that first building, Trump Tower, eventually won a $1.375 million settlement. Since then, scores of lawyers, contractors, engineers and waiters have sued him for unpaid bills or pay. Typically, he responds by asserting that their work did not meet his standard.
That might sound familiar to furloughed federal workers. [Trump] recently retweeted an article, attributed to an anonymous senior official in his administration, arguing that 80 percent of federal workers do “nothing of external value” and that “furloughed employees should find other work, never return and not be paid.”
[Trump] has claimed [absurdly] that “maybe most” federal workers going without pay are “the biggest fan” of his use of the shutdown to fund a border wall. In ordering thousands back to work without pay, he has put the pain for the shutdown on them…
During his years in business, [Trump] rarely displayed an interest in details or expert opinions that might have informed whether his plans would actually work. That pattern has also emerged in the shutdown dispute.
Thirty years ago, his claimed defeat of Mr. Griffin turned out to be a Pyrrhic victory.
Within months of completing construction on his third casino, the Trump Taj Mahal, he could not pay interest to the bondholders who had financed the project. Having overpaid and overleveraged himself on other deals, banks forced him to turnover or sell almost everything.
His wealthy father helped bail him out. But [Trump] blamed everyone else. He fired nearly all his top executives and stopped paying contractors who had built the casino.
In describing the border wall, [he] has expressed unending confidence in its efficacy. Others, including Representative Will Hurd, a Republican whose Texas district includes part of the border with Mexico, have described it as a tall speed bump, nearly useless without technology to spot illegal crossings immediately and dispatch border agents to quickly respond.
Our president has taken 800,000 federal workers and thousands of contractors and private businesses hostage. The Democrats in Congress have done what they can to reopen the government. They have also told the president that they will negotiate border security once everyone is back at work and being paid. Either the president or Congressional Republicans (without the president’s involvement) can end the shutdown. But they have to be willing to see reason and give up their hostages first.
Newly-elected Alexandra Ocasio-Cortez (aka AOC) is the youngest person in Congress. She is becoming very well-known. Last week, she was asked about funding the Green New Deal, the plan to eliminate U.S. carbon emissions and move away from fossil fuels within ten years. This is what she said:
Once you get to the tippie-tops, on your $10 millionth dollar, sometimes you see tax rates as high as 60% or 70%. That doesn’t mean all $10 million dollars are taxed at an extremely high rate. But it means that as you climb up this ladder, you should be contributing more.
Right-wingers immediately screamed that a tax rate that high would be the equivalent of slavery. They didn’t bother to point out that she was referring to the “marginal” tax rate, the percentage at which income over a certain threshold is taxed. That’s very different from taking 60% or 70% of someone’s entire income.
The economist Paul Krugman explains why the 60% or 70% marginal rate is an excellent idea:
The right’s denunciation of AOC’s “insane” policy ideas serves as a very good reminder of who is actually insane.
The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance…. And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.
To be more specific, Diamond, in work with Emmanuel Saez — one of our leading experts on inequality — estimated the optimal top tax rateto be 73 percent. Some put it higher: Christina Romer, top macroeconomist and former head of President Obama’s Council of Economic Advisers, estimates it at more than 80 percent.[
Where do these numbers come from? Underlying the Diamond-Saez analysis are two propositions: Diminishing marginal utility and competitive markets.
Diminishing marginal utility [i.e. the value of something at the margin] is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it.
What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want.
So why not tax them at 100 percent? The answer is that this would eliminate any incentive to do whatever it is they do to earn that much money, which would hurt the economy. In other words, tax policy toward the rich should have nothing to do with the interests of the rich, per se, but should only be concerned with how incentive effects change the behavior of the rich, and how this affects the rest of the population.
But here’s where competitive markets come in. In a perfectly competitive economy, with no monopoly power or other distortions — which is the kind of economy conservatives want us to believe we have — everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it’s because each extra hour you work adds $1000 worth to the economy’s output.
In that case, however, why do we care how hard the rich work? If a rich man works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of everyone else doesn’t change, does it? Ah, but it does — because he pays taxes on that extra $1000. So the social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that extra effort — and conversely the cost of their working less is the reduction in the taxes they pay.
Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.
And that’s something we can estimate, given evidence on how responsive the pre-tax income of the wealthy actually is to tax rates. As I said, Diamond and Saez put the optimal rate at 73 percent, Romer at over 80 percent — which is consistent with what AOC said.
An aside: What if we take into account the reality that markets aren’t perfectly competitive, that there’s a lot of monopoly power out there? The answer is that this almost surely makes the case for even higher tax rates, since high-income people presumably get a lot of those monopoly rents.
So AOC, far from showing her craziness, is fully in line with serious economic research. (I hear that she’s been talking to some very good economists.) Her critics, on the other hand, do indeed have crazy policy ideas — and tax policy is at the heart of the crazy.
You see, Republicans almost universally advocate low taxes on the wealthy, based on the claim that tax cuts at the top will have huge beneficial effects on the economy. This claim rests on research by … well, nobody. There isn’t any body of serious work supporting G.O.P. tax ideas, because the evidence is overwhelmingly against those ideas.
Increasing marginal rates as income rises is called “progressive” taxation. It’s fair and practical. Republicans are against it, preferring a “flat” tax, where all income is taxed at the same rate. A flat tax let’s the rich keep more of their income. They say it’s fair and simple, but that’s not why they’re for it.
Rep. Rashida Tlaib, now famous for recently proclaiming “let’s impeach the motherfucker”, and political activist John Bonifaz present the case for the House of Representatives to immediately begin the impeachment process:
[The president] is a direct and serious threat to our country. On an almost daily basis, he attacks our Constitution, our democracy, the rule of law and the people who are in this country. His conduct has created a constitutional crisis that we must confront now.
The Framers of the Constitution designed a remedy to address such a constitutional crisis: impeachment. Through the impeachment clause, they sought to ensure that we would have the power, through our elected representatives in Congress, to protect the country by removing a lawless president from the Oval Office.
We already have overwhelming evidence that the president has committed impeachable offenses, including, just to name a few: obstructing justice; violating the emoluments clause; abusing the pardon power; directing or seeking to direct law enforcement to prosecute political adversaries for improper purposes; advocating illegal violence and undermining equal protection of the laws; ordering the cruel and unconstitutional imprisonment of children and their families at the southern border; and conspiring to illegally influence the 2016 election through a series of hush money payments.
Whether the president was directly involved in a conspiracy with the Russian government to interfere with the 2016 election remains the subject of Special Counsel Robert Mueller’s investigation. But we do not need to wait on the outcome of that criminal investigation before moving forward now with an inquiry in the U.S. House of Representatives on whether the president has committed impeachable “high crimes and misdemeanors” against the state: abuse of power and abuse of the public trust.
Those who say we must wait for Special Counsel Mueller to complete his criminal investigation before Congress can start any impeachment proceedings ignore this crucial distinction. There is no requirement whatsoever that a president be charged with or be convicted of a crime before Congress can impeach him. They also ignore the fact that many of the impeachable offenses committed by this president are beyond the scope of the special counsel’s investigation.
We are also now hearing the dangerous claim that initiating impeachment proceedings against this president is politically unwise and that, instead, the focus should now shift to holding the president accountable via the 2020 election. Such a claim places partisan gamesmanship over our country and our most vulnerable at this perilous moment in our nation’s history. Members of Congress have a sworn duty to preserve our Constitution. Leaving a lawless president in office for political points would be abandoning that duty.
This is not just about [the president]. This is about all of us. What should we be as a nation? Who should we be as a people? In the face of this constitutional crisis, we must rise. We must rise to defend our Constitution, to defend our democracy, and to defend that bedrock principle that no one is above the law, not even the President of the United States. Each passing day brings more pain for the people most directly hurt by this president, and these are days we simply cannot get back. The time for impeachment proceedings is now.