Taxes and 2016: Some Choices

Although this won’t surprise most of you, do read the in-depth feature in the New York Times about how the mega-wealthy avoid paying taxes.

With inequality at its highest levels in nearly a century and public debate rising over whether the government should respond to it through higher taxes on the wealthy, the very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. Some call it the “income defense industry,” consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means. …

…Operating largely out of public view — in tax court, through arcane legislative provisions, and in private negotiations with the Internal Revenue Service — the wealthy have used their influence to steadily whittle away at the government’s ability to tax them. The effect has been to create a kind of private tax system, catering to only several thousand Americans.

These several thousand Americans making use of the private tax system are mostly supporters of Republicans, and donors within this group are behind most of the money going into conservative Super-PACs. A very small number of them are Democratic Party donors, however.

In the heat of the presidential race, the influence of wealthy donors is being tested. At stake are the Obama administration’s limited 2013 tax increase on high earners — the first in two decades — and an I.R.S. initiative to ensure that, in effect, the higher rate sticks by cracking down on tax avoidance by the wealthy.

While Democrats like Bernie Sanders and Hillary Clinton have pledged to raise taxes on these voters, virtually every Republican has advanced policies that would vastly reduce their tax bills, sometimes to as little as 10 percent of their income.

At the same time, most Republican candidates favor eliminating the inheritance tax, a move that would allow the new rich, and the old, to bequeath their fortunes intact, solidifying the wealth gap far into the future. And several have proposed a substantial reduction — or even elimination — in the already deeply discounted tax rates on investment gains, a foundation of the most lucrative tax strategies.

The article goes on to say that the wealthy are not so much buying politicians as they are buying policy. The “income defense industry” has been able to lower their tax bills from roughly 27 percent to less than 17 percent over the past 25 or so years. The industry has also managed to hobble the IRS from going after them, even as the Obama Administration has made closing loopholes a priority.

Again, although there are Democrats who have gone along with this, for the most part it’s the Republican Party that supports it.

While you are at the New York Times, be sure to read “$250,000 a Year Is Not Middle Class” by Bryce Covert. Hillary Clinton has pledged not to raise taxes on the “middle class,” which she is defining as anyone who makes $250,000 or less. Covert argues that those who make $206,568 or more are in the top 5 percent of earners; they are not “middle class.” Further, this pledge will prevent a Clinton Administration from being able to fund programs that really would help the actual middle class, such as paid family leave.

Bernie Sanders and Martin O’Malley both support a policy program that would provide paid family leave as a kind of social insurance, and this would be funded by a 0.2 percent payroll tax increase across the board. I’m seeing Hillary supporters gleefully pounce on this, saying Bernie would raise middle-class taxes and Hillary won’t. But it isn’t quite that simple, as Sanders also has pledged to leave all other taxes on people making $250,000 or less alone. Covert writes,

Mr. Obama, who also made a pledge not to raise middle-class taxes, has seen how limiting it can be. Early last year, he made an effort to levy some taxes on 529 college savings accounts, given that 70 percent of account balances in those and similar accounts are owned by families who make more than $200,000. The revenue from the tax would have been plowed into college subsidies that would reach low- and middle-income Americans.

It was a doomed idea. Some families with closer to median income do use 529 accounts. So adding a tax would, technically, increase some middle-class people’s burden, thus violating Mr. Obama’s promise. Backlash erupted not just from Republicans, but fellow Democrats, and he dropped the idea less than a week after floating it.

IMO this plays into the Republican talking point book about taxes, which says that taxes are an oppressive and horrible drain on the pockets of America, while expecting Americans to spend even more money to pay for things that a tax-funded program could provide cheaply is not.  (See also: health care.) It’s why we can’t have nice things. And it’s a notion supported by the income defense industry.

Also, too: Goats

Republicans in Disarray

Jeff Greenfield speculates that a Trump nomination would cause the Republican establishment to run a third-party candidate.

With Trump as its standard-bearer, the GOP would suddenly be asked to rally around a candidate who has been called by his once and former primary foes “a cancer on conservatism,” “unhinged,” “a drunk driver … helping the enemy.” A prominent conservative national security expert, Max Boot, has flatly labeled him “a fascist.” And the rhetoric is even stronger in private conversations I’ve had recently with Republicans of moderate and conservative stripes.

This is not the usual rhetoric of intraparty battles, the kind of thing that gets resolved in handshakes under the convention banners. These are stake-in-the-ground positions, strongly suggesting that a Trump nomination would create a fissure within the party as deep and indivisible as any in American political history, driven both by ideology and by questions of personal character.

Indeed, it would be a fissure so deep that, if the operatives I talked with are right, Trump running as a Republican could well face a third-party run—from the Republicans themselves.

Greenfield goes on to describe other times when presidential nominees were abandoned by their parties and consider what the Republican establishment might do. The most likely scenario, IMO, is that the the establishment will try to ignore Trump and work their butts off for House and Senate candidates instead, stacking Congress so that a Democratic president could be kept in check. I don’t see them trying to run an alternative candidate.

 

This Is Murica

I didn’t even realize there was a mass shooting in Knoxville on Friday until I read about a young man who was shot in the head while shielding three young women. It’s so hard to keep up.

In the New Yorker, Elizabeth Kolbert writes about the siege of Miami. Or the drowning of Miami, as it were.

To cope with its recurrent flooding, Miami Beach has already spent something like a hundred million dollars. It is planning on spending several hundred million more. Such efforts are, in Wanless’s view, so much money down the drain. Sooner or later—and probably sooner—the city will have too much water to deal with. Even before that happens, Wanless believes, insurers will stop selling policies on the luxury condos that line Biscayne Bay. Banks will stop writing mortgages.

“If we don’t plan for this,” he told me, once we were in the car again, driving toward the Fontainebleau hotel, “these are the new Okies.” I tried to imagine Ma and Pa Joad heading north, their golf bags and espresso machine strapped to the Range Rover.

The situation is not helped by the fact that the state’s Republican government is in denial that this is happening. And the people whose property and neighborhoods are being flooded also are in denial, or just plain don’t understand what’s happening because no one is explaining it to them. Meanwhile, Republicans in Congress are working on ways to kill the Paris climate agreement.

The class acts at Red State are trying to make an issue of Hillary Clinton’s old lady kidneys. Just wait until your prostates enlarge, dudes.

Squawk Squawk Chickenhawk

Hearing those meatballs running for the Republican nomination brag about how tough they’d be on terrorism is surreal. It’s like hearing some pot-bellied drunk brag about how he could beat Floyd Mayweather Jr. if the World Boxing Association would let him in the ring.

Ted “Tailgunner” Cruz brags about “carpet bombing” ISIS, apparently without comprehending what “carpet bombing” means. Even Frank Bruni is snarky

Someone needs to explain carpets to Ted Cruz.

They’re continuous stretches of material, usually rectangular, sometimes round. They’re not staggered, interrupted, with stops, starts, holes and sharp jags so that they smother and blot out only the evil bits of floor but leave adjacent, innocent ones untouched.

When you call for carpet bombing, as Cruz did again on Tuesday night, you are not outlining a strategy of pinpoint targeting or of any discernment.

You are sounding big and bold and advocating something indiscriminate. That’s the nature of a carpet. You can’t pretend otherwise.

Unless you’re Cruz, who can pretend just about anything.

I’m pretty sure none of the A-list contenders has had any experience wearing a military uniform, except perhaps for Halloween.  (Toast! and Dr. Ben did register for the draft during the late Vietnam era but were not called.)  Gilmore (is he still running?) was in the Military Intelligence Corp. for a while. Miz Lindsey has a considerable military record serving as a lawyer but was never deployed into combat. Of course, combat experience is no predictor of whether a President will be an effective commander in chief. But you’d think a person who has never seen war would at least affect some humility and reticence about sending other people into one.

On the other hand, there’s Mike Huckabee, who never served, telling young people to get off their butts and secure their freedoms.

Charlies Pierce:

So sitting there, listening to a bunch of people who never served a day in combat talk about how they’re going to turn the Middle East into obsidian glass and how they will keep me safe, it was hard not to fall off my chair. Frankly, I wouldn’t hire any of these people to watch my car in a valet parking lot, let alone lead the country into what they never miss a chance to call, “the Third World War.” Chris Christie? Ted Cruz? Marco Rubio?

Trump?

You see where I’m going here.

When he was a “federal prosecutor,” Chris Christie made more ferocious war on his expense account than he did against the “people who want to kill us.” (His big trophy case, the Fort Dix Six, is one of those strange half-entrapment cases.) He also doesn’t seem to like the Senate very much. Marco Rubio, continuing his ongoing effort to fill out a grown-up person’s suit, postured and promised us (again) a 500-ship Navy to keep us safe from the people who drive their pick-up trucks across the ocean to attack us. He also puffed himself up and declined to talk about classified information on national television. (This assumes, of course, that he even knows any, given the fact that he seems to have developed a severe allergy to something in the  room where the Senate Intelligence Committee meets.) Ben Carson said something very weird about being a neurosurgeon in connection with carpet-bombing Syria. (I’m not kidding.) It’s a very good thing that we really are not electing a commander-in-chief for the whole country because none of these guys is up to the job.

There’s an old saying, if wishes were horses, beggars would ride. Well, if hot air were missiles, these guys would be fearsome. But it ain’t, and they aren’t.

Stuck on Stupid on Steroids

The wingnuts are gloating because they think the Planned Parenthood shooter is a trans woman. Seriously.

Um, guys, did you look at his photo?

This came about because the Dumbest Man on the Internet® found Robert Dear’s voter registration and saw that the “female” box had been checked instead of “male.” This couldn’t possibly have been a careless mistake, of course. Or else he’s the biggest trans fail ever.

A herd of rightie bloggers are celebrating their giant gotcha. Ted Cruz called Dear a “transgendered leftist activist.”

That’s not all. You’ll love what Carly Fiorina, who has irresponsibly hyped such over-the-top lies that even the people creating the hoax “baby parts” videos couldn’t back her up, said today:

On the charge that anti-abortion rhetoric contributed to the shooting, Fiorina said, “This is so typical of the left to immediately begin demonizing a messenger because they don’t agree with the message.”

these people have no shame.

The Passion of Marco

Marco Rubio hates his Senate job, he says. This is why he’s not doing it. He has missed nearly 60 votes while he’s been off running for president.

Now the Miami Sun-Sentinel is telling him to resign. The Sun-Sentinel is behind a subscription firewall, but here’s the editorial from Balloon Juice:

Rubio has missed more votes than any other senator this year. His seat is regularly empty for floor votes, committee meetings and intelligence briefings. He says he’s MIA from his J-O-B because he finds it frustrating and wants to be president, instead.

“I’m not missing votes because I’m on vacation,” he told CNN on Sunday. “I’m running for president so that the votes they take in the Senate are actually meaningful again.”

Sorry, senator, but Floridians sent you to Washington to do a job. We’ve got serious problems with clogged highways, eroding beaches, flat Social Security checks and people who want to shut down the government.

If you hate your job, senator, follow the honorable lead of House Speaker John Boehner and resign it.

Let us elect someone who wants to be there and earn an honest dollar for an honest day’s work. Don’t leave us without one of our two representatives in the Senate for the next 15 months or so.

You are paid $174,000 per year to represent us, to fight for us, to solve our problems. Plus you take a $10,000 federal subsidy — declined by some in the Senate — to participate in one of the Obamacare health plans, though you are a big critic of Obamacare.

You are ripping us off, senator.

That’ll turn up in a campaign ad sooner or later.

The most recent national poll of Republican primary voters has Dr. Dementia in first place and Trump  second, followed by Rubio. Jeb! is fourth, followed by the rest of the mutts in no important order. I have heard Jeb! is more worried by Rubio than by Dr. D or Mr. T, reasoning that the two outsider candidates will crash and burn sooner or later. Rubio is doing well in the betting market right now in the assumption that he’s in the best position to move into Number One when that happens.

However, neither Jeb! nor Rubio look that strong:

Mr. Rubio may be broadly acceptable, but his fund-raising tallies and overall campaign effort have been surprisingly limited. Mr. Kasich may be unacceptable to much of the party’s conservative wing, and his fund-raising isn’t impressive either. Mr. Bush has healthier fund-raising tallies — though apparently not healthy enough to forestall big cuts in his campaign operation — but very weak favorability ratings.

Jeb!’s campaign is arguing that Rubio is the GOP’s Obama — inexperienced senators who are running on charm and ethnic appeal rather than substance. But Brian Beutler argues that he’s really the GOP’s John Edwards, in the sense that he looks like a strong candidate but doesn’t really connect with voters as well as predicted.

Obama’s charisma was key to his appeal in 2008, but so too was the fact that he—as a young, African-American liberal who opposed the war in Iraq—reflected his party’s base better than Hillary Clinton, the anointed front-runner. By this more appropriate standard, the GOP’s Obama will be charismatic, yes—but old and white and nativist instead of young and ethnic and cosmopolitan. That’s Trump….

… Rubio is also making the most shallow appeal of any Republican in the field. The undisguised promise of his candidacy is that his youth and background will allow him to herald an orthodox Republican policy agenda as somehow distinct and visionary.

A Democrat would have to be caught eating live puppies to lose to this guy. Maybe not even then.

Sideshow Nation

Ben Carson is leading polls in Iowa and is second after Trump everywhere else. What’s the appeal?

Part of the appeal may be his gentle, even soporific, persona:

That smile and his soft voice makes people very comforted,” said Miriam Greenfield, a farmer in Jewell, Iowa.

“He is kind when he speaks, and he doesn’t have an agenda to set himself up as wonderful,” said Donna Christiansen, a retiree in Ames.

Retiree Donna Christiansen might want to notice this:

Yesterday in Ames, Iowa, in the course of suggesting raising the retirement age for Social Security and asking people to voluntarily give up their monthly checks, Ben Carson said

Ben Carson called for “groupthink” to combat the looming funding crisis in the country’s Social Security program at a campaign rally in Ames on Saturday.

“We have to start thinking, have groupthink in this country,” Carson said in response to a question from the crowd about unfunded entitlement liabilities.

“We need to maximize the potential of all our people if we’re going to be able to compete in the future. So we have to start thinking corporately as an entity.”

Carson also promises to abolish Medicare and Medicaid and replace them with savings accounts. And he’s ahead of Jeb! and Rubio in the polls.

Speaker Watch

The question of the day is, “Is he dumb enough to do it?” — he being Paul Ryan and it being running for Speaker of the House. Ryan allegedly is considering his options today.

As Paul Krugman points out in a column and blog post today, Ryan’s strength is that he’s the guy non-Republicans take seriously. But he needs to avoid the Speaker position to maintain that impression.

If Paul Ryan has any sense of self-preservation — and that is one thing he surely has — he will look for any way possible to avoid becoming Speaker. The hard right is already attacking him, essentially accusing him of not being sufficiently crazy, and they’re right. On policy substance he’s totally an Ayn Rand-loving, reward-the-rich and punish-the-poor guy, but so are lots of other Republicans; what they want is someone willing to go along with kamikaze tactics, and he isn’t. His fall from grace would be swift.

But if Ryan isn’t distinctive in his political positions, why does he loom so large within his party? The answer is that he’s more or less unique among extreme right-wingers in having the approbation of centrists, especially centrist pundits. That is, he’s a big man within the GOP because people outside seem to approve of him. And it’s important to ask why.

And the reason is …

Mr. Ryan has been very good at gaming the system, at producing glossy documents that look sophisticated if you don’t understand the issues, at creating the false impression that his plans have been vetted by budget experts. This has been enough to convince political writers who don’t know much about policy, but do know what they want to see, that he’s the real deal. (A number of reporters are deeply impressed by the fact that he uses PowerPoint.) He is to fiscal policy what Carly Fiorina was to corporate management: brilliant at self-promotion, hopeless at actually doing the job. But his act has been good enough for media work.

His position within the party, in turn, rests mainly on this outside perception. Mr. Ryan is certainly a hard-line, Ayn Rand-loving and progressive-tax-hating conservative, but no more so than many of his colleagues. If you look at what the people who see him as a savior are saying, they aren’t talking about his following within the party, which isn’t especially passionate. They’re talking, instead, about his perceived outside credibility, his status as someone who can stand up to smarty-pants liberals — someone who won’t, says MSNBC’s Joe Scarborough, be intimidated by “negative articles in The New York Times opinions page.” (Who knew we had such power?)

It helps that much of the punditocracy suffers from a pathological need to see Democrats and Republicans as equally crazy; this is what passes for “balance” these days.

Ryan is being maligned wholesale on the Crazy Fringe today, not because he’s a con but because he allegedly is soft on immigration. As near as I can tell, his actual voting record makes him an immigration hard-liner. He’s even called for building the damnfool fence and sending little Nicaraguan refugee children back to Central America. But the Whackjobs apparently need to hate him for something, and that’s what they’ve come up with.

The political establishment largely is ignoring this development and promoting Ryan as the man who can bring together the allegedly “centrist” faction of the Republican Party and the teabagger fringe. As Andrew Rosenthal writes, this is basically a “plea for attention from the increasingly irrelevant conservative establishment. ” Those who still take the Republican Party seriously are talking about needing unity in “moving public policy in a conservative direction.”

But, as Rosenthal says, “The Republicans moved way past conservatism long ago.” And going back to Krugman,

To understand Mr. Ryan’s role in our political-media ecosystem, you need to know two things. First, the modern Republican Party is a post-policy enterprise, which doesn’t do real solutions to real problems. Second, pundits and the news media really, really don’t want to face up to that awkward reality.

The Freedom Caucus wants Daniel Webster of Florida, the guy who beat Alan Grayson in 2010 and who has rarely met an excuse for a government shutdown he didn’t like. I’m betting that Ryan will stay on the sidelines and that Webster will end up with the Speaker’s job eventually, once the establishment has bullshitted itself into thinking maybe he’s not that bad. But anything could happen.