Category: Tax Policy

Saturday Soother – July 30, 2022

The Daily Escape:

Sunrise, Chatham, MA – July 2022 photo by Bob Amaral Photography

We are 100 days away from the midterms. That’s usually a blink of an eye in political time. But it can also be an eternity in politics under the right circumstances. And in this year of all years, nothing can be assumed. The Jan. 6 drip of negative information about Trump and his Republican henchmen, and the looming revolution that the judicial overturning of Roe has caused, might mean that anything is possible.

For more than a year, the news media have snowed us with their conventional wisdom about the mid-terms, insisting that the president’s Party will lose seats in Congress. But, Josh Marshall has thoughts about this (paywalled):

“New Georgia Senate poll out this morning from The Atlanta Journal-Constitution: Warnock 46%, Walker 43%….Meanwhile, three new congressional generic polls have come out over the last 24 hours, two of which give the Democrats a six point advantage and one of which gives a 4 point margin. One of those 6 point margins is actually a Republican Party poll.”

Given the Republican advantage in Red states, six points may not insure that the Dems hold Congress. But we clearly shouldn’t give up, because right now, the House isn’t a lost cause.

Positive polling momentum brings with it both the energy and hope that a political turnaround is possible, even in 3+ months. Momentum is a thing in sports. Players and coaches usually cite momentum as a reason for victory in close contests. Maybe we’re seeing Biden and the Democrats building some political momentum.

It’s also true that Republicans aren’t reading the national mood as well as they think they are.

Just hours after the Republicans worked with Dems to pass the Chips and Science Act (CHIPS) which includes $52 billion in subsidies for chipmakers building new foundries in the US, Senate Majority Leader Chuck Schumer announced a deal to revive big portions of the Build Back Better (BBB) bill.

Sen. Manchin (D-WVA) had walked away from negotiations with Schumer on a scaled-down BBB tax bill that could only pass via Reconciliation two weeks ago. Then Senate Minority Leader McConnell let his guard down, and allowed Republicans to vote for CHIPS, which was popular with Senate Republicans.

Apparently Schumer and Manchin waited until the CHIPS bill cleared the Senate before announcing agreement for an even more scaled-down BBB program now called the Inflation Reduction Act (IRA), which has both significant funding for climate and a minimum corporate tax. It too will need to be passed by reconciliation, since it will have zero Republican support.

Schumer’s move caused a McConnell meltdown. Under orders from Mitch, Republicans got revenge by voting against a procedural vote to advance a bill that would expand health care access for military veterans who became ill after being exposed to toxic burn pits in Iraq and Afghanistan.

It was a near-legendary playing of McConnell by Schumer and Manchin. And it infuriated McConnell so much he took the bill to give medical care to dying veterans exposed to toxic burn pits hostage. It was a bill that Republicans had helped to pass overwhelmingly just a few weeks ago (it needed a technical fix). Blind sided veteran groups erupted in anger and indignation.

The GOP revealed itself to be, at least for now, incapable of making decisions that promote the common good. Their decision to turn against veterans was a grave miscalculation that will hopefully rouse a few million of the recalcitrant, alienated, apolitical 100 million Americans who typically decide not to vote in elections, to get straight to the polls.

This family-sized combo of a revival of the Biden agenda and angry Republicans making terrible choices on popular legislation may help the Dems in November.

Maybe a cosmic ray beam hit Washington and gave Schumer the Machiavellian cunning of a Republican and McConnell the guileless ways of a Democrat.

Had enough for this week? Wrongo certainly has. Let’s try to grab a few minutes and not think about the state of the world, or why Republicans insist on speaking like neo-Nazis. It’s time for our Saturday Soother.

The drought in New England still has the upper hand. We have little need to cut our grass every week. We’re watering a few specimen plants, but since our water source is a well, we must be careful.

Time to grab a mug of cold brew (or iced tea) and find a seat under a tree. Now watch and listen to Yo-Yo Ma perform “In the Gale”, which was shot outdoors in late spring. It is from The Birdsong Project, a community dedicated to the protection of bird life.

This performance includes many wild birds accompanying the cello:

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Right-Wing Lobbying Group Designated a Church by IRS

The Daily Escape:

Sunrise, high tide, Sea Street beach, East Dennis, MA – July 2022 photo by Bob Amaral Photography

The fallout from the Trump years continues. On Monday, ProPublica reported that the IRS had decided that the Family Research Council (FRC), a Right-Wing political lobbying group, qualifies as a church for tax purposes:

“The Family Research Council’s multimillion-dollar headquarters sit on G Street in Washington, DC, just steps from the US Capitol and the White House, a spot ideally situated for its work as a right-wing policy think tank and political pressure group.”

The FRC is now a church, thanks to the IRS and its Commissioner, Charles Rettig. You can be forgiven for not remembering that Trump appointed Rettig to be Commissioner of the IRS in 2018. He got the job by writing a 2016 op-ed saying Trump didn’t have to release his tax returns, despite every major presidential candidate having done so since Nixon.

ProPublica noted that the FRC says on its website that it is a:

“…nonprofit research and educational organization dedicated to articulating and advancing a family-centered philosophy of public life. In addition to providing policy research and analysis….[the] FRC seeks to inform the news media, the academic community, business leaders, and the general public about family issues that affect the nation from a biblical worldview.”

Now that the IRS has blessed FRC as a church, it is no longer required to file a public tax return, (known as a Form 990), which reveals key salaries, the names of board members and related organizations, large payments and/or grants by the organization.

And unlike with charities, IRS investigators can’t initiate an audit on a church unless a high-level Treasury Department official has approved the investigation.

Right Wing Watch, an organization that monitors the activities and rhetoric of right-wing activists and organizations reported on the ties between FRC and Trump’s Jan. 6 effort to overturn the presidential election:

“The Family Research Council…was deeply involved in…Trump’s efforts to overturn the results of the 2020 election—a fact made all the more apparent by revelations during the June 23 public hearing of the House select committee investigating the conspiracy that led to the Jan. 6, 2021, insurrection at the US Capitol.”

You probably remember the head of the FRC, Tony Perkins (not the deceased actor) by some of his grandstanding in the culture wars:

  • In 2005, Perkins was against disconnecting life support for Terri Schiavo, a woman who had been in a “persistent vegetative state” for a number of years.
  • In 2008, Perkins called the passage of California Proposition 8 (which prohibited same sex marriage in the state) “more important than the presidential election”.
  • In 2018, Perkins said, regarding Trump’s adulterous past, he should be given a “Mulligan“, because Trump was “providing the leadership we need at this time…”

In 2010, The Southern Poverty Law Center (SPLC) designated the FRC as a hate group. From the SPLC:

“Part of FRC’s strategy is to pound home the false claim that LGBTQ people are more likely to sexually abuse children than heterosexual people. The American Psychological Association, among others, however, has concluded that “homosexual men are not more likely to sexually abuse children than heterosexual men are.”

Designating the FRC as a church for tax purposes is part of a disturbing trend. The WaPo reported in 2020 about the growing list of religious groups seeking church status from the IRS.

The potential cost of becoming a church is that the organization can no longer conduct political operations on behalf of politicians or lobby on legislation. In practice, that is simple to get around. The FRC now has its church arm alongside a separate lobbying arm called Family Research Council Action.

The arms separate their messaging on two websites, with the FRC hosting issues-based content supporting its Christian worldview while the Family Research Council Action explicitly endorses candidates. Both arms are registered at the same address and both share all five of the part-time employees the FRC lists on its tax form, including Tony Perkins.

These “churches” sure have figured out how to run a scam on the US government.

It’s past time for the IRS to end this charade and tax churches. Biden should fire IRS Commissioner Rettig, who was also the guy in charge when the IRS politically targeted Trump “enemies” James Comey and Andrew McCabe for invasive tax audits.

These people and their “churches” are simply Republicans with a talent for abusing the bible and raising obscene amounts of money. Thomas Jefferson said it best:

“In every country and in every age, the priest has been hostile to liberty. He is always in alliance with the despot, abetting his abuses in return for protection to his own.”

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China’s Torpedoing the Supply Chain

The Daily Escape:

Spring snow, Mt. Princeton, CO – April 2022 photo by Haji Mahmood

For the past two years, Covid has thrown the global supply chain into a tailspin. Even though the cargo industry’s ships, trains, trucks, and planes worked full-time, we still have shortages. Now, China’s zero Covid policy is increasing both the uncertainty and costs of efficiently operating the still-choked global supply chain.

From Bloomberg:

“We expect a bigger mess than last year,” said Jacques Vandermeiren, the chief executive officer of the Port of Antwerp, Europe’s second-busiest for container volume, in an interview. “It will have a negative impact, and a big negative impact, for the whole of 2022.”

Bloomberg says that China accounts for about 12% of global trade. It’s recent Covid lockdowns have idled factories and warehouses, slowed truck deliveries and exacerbated container logjams. And since US and European ports are already swamped, this new outage will leave them vulnerable to additional shocks.

China is home to six of the world’s 10 largest container ports. It’s the global economy’s most important manufacturing hub. While most countries have decided to learn to live with the Covid, Beijing has maintained its Zero Covid policy, where even small outbreaks can shut down large population centers and slow economic activity.

It’s taking an average of 111 days for goods to reach a warehouse in the US from the moment they’re ready to leave an Asian factory. That’s similar to the record of 113 set in January 2022 and more than double the time that the same trip took in 2019, according to Flexport Inc., a freight forwarder.

Julie Gerdeman, CEO of supply-chain risk analytics firm Everstream Analytics says:

“Once product export activities resume and a large volume of vessels make their way to the US West Coast ports, we expect waiting times to increase significantly…”

You’d think that after more than two years into this pandemic, America would have realized that single-sourcing much of our industrial production to a dictatorship is a bad idea. One with enormous consequences when something goes wrong.

But we haven’t. US Treasury Secretary Janet Yellen has advocated for what she calls “friend-shoring” meaning reducing our dependence on China and Russia. Brian Ehrig, a partner at the consulting firm Kearney is co-author of a report that found 78% of CEOs are either considering reshoring or have done it already. He says that relocating supply chains:

“…might cost more, but if you can make smaller quantities that you can then sell at closer to full price, you can actually completely change the game…”

Le Monde reminds us that capitalism has created hidden dependencies in Ukraine. It is the main producer of the wiring harnesses that hold together the many electrical cables in a car. They quote Christine Lagarde, president of the European Central Bank (ECB) in a speech in Washington, DC: (brackets by Wrongo)

“Ukraine produces one fifth of Europe’s [harness] output,”

These parts are low value added, but essential in the construction of cars, a perfect outsourcing target for capitalism. Globalization isn’t going to die; but maybe it can evolve. Much of that possible shift hinges on convincing consumers to accept higher prices for the certainty of supply.

For example, once the CDC finally gave us unambiguous advice about wearing masks, there was a huge rush to open mask production facilities in the US. But now they’ve all closed, because it’s cheaper to make masks in China.

Dictatorships can ensure that labor remains cheap. That’s great for capitalists, not so good for people who needed masks in 2020 when China decided to keep most of them for their population. Or, now, when China is still willing to shut down its economy to stop a Covid outbreak.

And, despite all the good will in the world, nobody will make masks in the US if it means their five-dollar boxes of masks go unsold because everyone is buying the one-dollar boxes. Instead, they will complain about how the company asking five dollars is a bloodsucker.

We’re told that capitalism works. That it just does. That just-in-time supply cuts costs for consumers. But does it?

Art installation by Steve Lambert – 2013, Times Square, NYC

It’s proven not to work during an emergency. But what are the chances of re-shoring ever happening? Business school really only teaches one thing: Short-term profits rule and everything else is irrelevant.

After all, America is a business, not a country.

What should be readily apparent is that despite the CEO poll above, our corporate masters are certainly not thinking about systemic change to supply chains. Nor will they, as long as the focus is reducing costs as low as possible for maximum shareholder gain.

The point is that unless business is incentivized otherwise, don’t expect the supply chain to get any better. That incentive must come from the government in the form of tax policy or subsidy.

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Saturday Soother – April 23, 2022

The Daily Escape:

North Landing River, near Virginia Beach, VA – April 2022 photo by Erik Moore

Our media ecosystem is overwhelming us. Some of the information is accurate, some is bogus, and much is intentionally misleading. And that’s a deliberate strategy. While it didn’t originate with Steve Bannon, he perfected it with his thought that:

“…the Democrats don’t matter….The real opposition is the media. And the way to deal with them is to flood the zone with shit.”

This is why the ongoing cultural war works so well for Republicans. There’s always some petty war going on between the Parties that’s stoked by the media. And it’s almost always about cultural issues since Republicans really don’t have a policy platform, and don’t want to go against large corporate America. When you go against corporations, you lose the money needed to get elected.

But we should see the big corporations as our common enemy. Time Magazine has an article about how overtime pay has disappeared:

“If it feels like you’re working longer hours for less money than your parents or grandparents did, it’s because you probably are. Adjusted for inflation, average hourly wages have actually fallen since the early 1970s, while average hours worked have steadily climbed. American workers are increasingly underpaid, overworked, and overwhelmed.”

One reason is the loss of overtime pay:

“If you’re under the age of 45, you may have no idea that overtime pay is even a thing. But…middle-class workers used to get a lot of it….That means that [for] every hour you work over 40 hours a week you work for free, contributing…a giant pool of free labor that modern employers have come to expect and exploit. Profits are up, real wages are down, and income inequality has soared to its highest level since the Gilded Age.”

Overtime pay was one of the great New Deal reforms. It was a core provision of the Fair Labor Standards Act (FLSA). The FLSA set the minimum wage at one-half the median wage and the overtime threshold at three times the minimum—an amount equal to 1.5 times the median wage.

But both the minimum wage and the overtime rules began to change in 1975, and rising income inequality since 1975 is responsible for a $50 trillion upward redistribution of wealth and income from the bottom 90% households to those in the top 1%. Here’s a chart showing the impact of losing overtime. Productivity goes up, but is completely decoupled from income:

Source: chartr

The Economic Policy Institute has a tool called “Company Wage Tracker” that allows you to select any big corporation and see what percentage of their employees make below a certain wage. For example, it shows that 51% of Walmart employees earn below $15/hr.

The NYT wrote about Mary Gundel, a manager at a Dollar General store in Tampa, FL who was fired for speaking out about the chain’s policies regarding overtime and short-staffing:

“The store used to have about 198 hours a week to allocate to a staff of about seven people….But by the end of last month, she had only about 130 hours to allocate….With not as many hours to give to her staff, Ms. Gundel often had to operate the store on her own for long stretches, typically working six days and up to 60 hours a week with no overtime pay.”

Ms. Gundel was working 60 hours a week and making $51,000 a year. That means she’s making only a little more than the minimum wage. Dollar General is one of the most profitable retail chains in the country.

Prices are going up everywhere across America, and corporations are making proportionately more income. This is what the Democrats should be focusing on, standing up for workers, doing what is right as opposed to groping for answers to the Republican’s culture war issues.

There’s plenty that’s wrong in America. But what’s wrong doesn’t see the light of day alongside all of the pissing contests about Critical Race Theory, or predator grooming or LGBTQ issues. These are ginned-up to make sure you won’t pay attention to what’s really going on.

Something seems to be brewing. We’re seeing halting attempts at unionization at Starbucks and Amazon. Those employees want a better life; they want to have a seat at the table about the future of the company.

We need to remember that without the “essential workers” the country grinds to a halt. We need to support those who try to organize. We need to wrest some economic power away from politicians and big businesses. And finally, some faceless people who are sick of being wronged are trying to do just that.

Enough for another week. It’s time to let go of the news. It’s time for our Saturday Soother. On the Fields of Wrong we’re preparing our vegetable garden, although it will be a few weeks before it’s warm enough for the plants to survive. We had an overnight temperature of 32° earlier this week.

Now, grab a seat by a large window and listen to violin soloist Soojin Han play Chopin’s “Nocturne No.20 in C# minor” in August 2019. She’s playing on a 1666 Stradivarius:

It sounds beautiful.

Chopin composed the piece in 1830, but it was published in 1875, 26 years after his death. It was featured in the movie “The Pianist” in 2002.

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Monday Wake Up Call – April 18, 2022

The Daily Escape:

Sunset, Sequoia Lake, CA – April 2022 photo by An Pham

Today is tax day, and Wrongo will get his in on time. But the question of how America deals with its taxing is rightly under scrutiny. Blog reader Ottho H. commented on Wrongo’s Sunday post about the IRS:

“To me it’s an enduring mystery, and a source of anger and disgust, why Congress starves the IRS…. Doubling the IRS budget (by, say, $12B per year) seems like the best and most “sure thing” ROI the gov’t can make….To the extent that the “starve or defund the IRS” movement is due to lobbies and Congressmen out to protect and further enrich the already rich, then at least that should be made more transparent to the public. This is a no-brainer cause that I can get behind.”

The IRS is chronically underfunded. Government data show that millionaires and billionaires are rarely audited, while lower-income families are disproportionately targeted (five times more likely) for enforcement actions. The agency is severely understaffed. It works with outdated technology, meaning that any paper returns must first be transcribed into a computer. It also means hundreds of billions of dollars in taxes go uncollected.

The answer to so many of the IRS’s woes: antiquated tech systems, congested phone lines, threadbare enforcement –  is more funding. It’s one of the few federal agencies that would generate a large and nearly immediate return on investment if it could spend more.

But many Republicans don’t want to fix it. Yesterday’s WaPo article quoted Sen. Rick Scott (R-FL):

“This additional money for the IRS to target all Americans is absolutely wrong…It will target our families, it’s going to target our small businesses, and it’s going to go after them to get them to pay more money.”

And Sen. Todd Young (R-IN) about how new IRS funding would be used:

“We know that most of this $80 billion will be used to enhance the ability of the IRS to target middle Americans…”

The Economist says that the IRS entered this tax season with a backlog of 24 million returns, 20 times worse than normal. At the end of this tax season, it will be nearly two years late in processing many of our returns:

“Spending [at] the agency has declined by nearly 20% since 2010. At the same time, the number of tax returns has increased by 20%. The backbone of the system, a nationwide taxpayer database, is built on top of a 1960s computer language rarely taught in schools.”

The IRS is in the process of hiring 10,000 workers to help clear the backlogs, but the biggest challenge is retaining their senior auditors. About a fifth of agency staff are eligible for retirement. Many have already left as a result of Covid, and they were exactly the kind of people needed to maintain the agency’s enforcement efforts.

The Economist says that the IRS audited 0.3% of corporate tax returns filed in 2018, down from 1.6% in 2010. The number this year may be even lower. They quote Charles Rettig, IRS Commissioner, as estimating that the government loses about $1 trillion in tax revenues annually because of cheating.

Even if new funding is appropriated, it will take time to re-build the agency. Money that is appropriated now for that purpose would be spent over the course of the next fiscal year (which ends on 9/30/2023) and the effects of those reforms probably wouldn’t start to show in the statistics until then.

It’s always been easier to destroy than it is to build. Credit the GOP for understanding this truth.

Time for the Republicans in Congress to wake up! No one likes paying taxes. Even for those who recognize that there’s a societal gain when we all pay them, filing our tax returns is a hassle. It’s time we had a better funded agency that could return the enforcement efforts back toward the richest corporations and wealthy individuals first.

To help our Congress Critters wake up, watch and listen to Mavis Staples perform “Love and Trust” from her album “Live in London”, recorded in 2018 at London’s Union Chapel. She’s joined by Jump Bluesman Rick Holmstrom on his Telecaster:

Sample Lyric:

The simplest things can be the hardest to do
Can’t find what you’re looking for even when it’s looking for you
The judge and criminal, the sinner and the priest
Got something in common, bring em all to their knees

[Chorus]
Do what you can, do what you must
Everybody’s trying to find the love and trust
I walk the line, I walk it for us
See me out here tryin’ to find some love and trust
(Love and trust)
(Love and trust)

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Manchin Hates Data and Poor Kids

The Daily Escape:

Early morning, -10°F, Pagosa Springs, CO – December 2021 photo by Ben Hazlett Photography

Evan Osnos reports in the New Yorker that it was Sen. Manchin who suggested to Biden that the physical infrastructure bill and the social infrastructure bills be split from each other:

“I’m saying we can get an infrastructure deal—a traditional infrastructure deal….Then we come back on human infrastructure and look at the needs.”

Osnos goes on to say that even after the bills were split, and after months of giving ground to Manchin on the social spending particulars, Manchin never budged from an unreconstructed conservative talking point: give Americans too much help, such as extended unemployment insurance, and they will become lazy and dependent. Manchin told reporters:

“I cannot accept our economy, or basically our society, moving towards an entitlement mentality.”

Manchin’s opposition to the Build Back Better (BBB) bill has ended the expanded Child Tax Credit (CTC) program. According to the Treasury Department, in West Virginia, it delivered payments to 305,000 children. And statewide, 93% of children are eligible for the credit, equaling the highest rate in the country.

ABC reported that Manchin questioned whether parents would misuse CTC payments to buy drugs. In private conversations, Manchin also said he believed paid family leave would be exploited by West Virginians to go hunting during deer season. Bloomberg says he’s wrong:

Looking at the chart, people overwhelmingly have used it for food, rent, utilities and to buy clothing and education. The poorer the family, the greater chance the CTC will be spent on necessities: a report from the Center on Budget and Policy Priorities found 91% of households making less than $35,000 per year used the money to pay for food, shelter, clothing and other necessities. They also found that Black and Hispanic families were more likely to use their credits on education-related costs, such as school supplies.

An October survey by the Census Bureau found that 25% of parents with young children also use the credits to pay for child care. Manchin is worried that there will be people gaming the system, and since perfection is unattainable, we shouldn’t be giving these kids and their parents anything.

His attitude is one that many Americans agree with. They think that since they aren’t going hungry, there’s no reason for anyone else to be hungry, either. It’s a vestige of the Protestant work ethic. They think that people like CTC recipients shouldn’t get free stuff, because it is taking something from them.

It’s an ugly, selfish way of looking at life.

America has successfully stigmatized being poor. How many in the bottom quartile of income are conditioned to believe they don’t deserve help? While corporations and the top 1% always lobby for financial assistance, and welcome it when it comes.

There are persistent rumors that Manchin will switch Parties. That shouldn’t be the Democrats’ objective, but to the extent there is a purity test to be a Democrat, it probably includes helping poor children and their struggling parents.

OTOH, the Build Back Better bill isn’t fully dead, nor is the voting rights bill. There’s a whole year left of appointing and legislating before the Republicans (possibly) retake Congress. Maybe we’ll want 50 Senators until then?

Remember that the Senate confirmed President Biden’s 40th federal judicial nominee a week ago, the most judges confirmed in a president’s first year in the last 40 years.

Democrats know that few of those judges would have been confirmed without Manchin voting for cloture to end debate on their nominations. If Manchin were to change Parties and stop voting with the Democrats on procedural issues, almost none of the remaining White House appointments would be filled.

It seems clear that IF some version of BBB does pass the Senate, it won’t include all of the progressive goals. Wrongo assumes that both immigration reform and the CTC may need to be dealt with separately.

What Democrats will then need to decide is whether they’re willing to hold their noses and vote for a bill that includes $500 billion in climate change investments, plus a critical childcare provision, more for health care, and a few other goodies.

Here’s another seasonal tune, “Christmas Wrapping” by The Waitresses from 1981. This year marks 40 years since this holiday classic was released. In the song, the lead singer hints that there is a guy she met at a ski shop that she regrets not having the time to date. Later, she realizes that she must go back to the store, and meets the guy she had wanted to connect with:

Be kind, not just at Christmas, but all the time.

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Saturday Soother – November 6, 2021

The Daily Escape:

Bear Canyon, Tucson AZ – October photo by Carla Mitchell

Way back in 2020 (remember 2020?), Democrats campaigned on raising taxes on the rich. It’s still something that polls show a majority of Americans want. But House Dems are now proposing to raise the state and local tax (SALT) deduction, rather than eliminate it. The SALT tax limitation was one of the few responsible measures in the GOP’s 2017 tax-cut bill since it raised revenue mostly from wealthy people.

Wrongo lives in a state where the federal limitation of $10k on SALT taxes leaves him paying additional federal taxes. But most Americans are not impacted by the current limit on SALT deductions. Increasing it would primarily benefit America’s high income earners plus some middle class urban and suburban homeowners.

The WaPo was unhappy with the Dems new proposal:

“House Democrats released Wednesday a new draft of their big social spending and climate bill — tucked inside of which was a massive new payoff to wealthy people. The Democrats’ bill is supposed to make the nation fairer and more competitive. This cynical, wasteful policy should have no place in it.”

A handful of Democrats from Blue states say they will oppose Biden’s major social spending bill if it fails to include SALT cap “relief.” Once again, the fault lines within the Democratic Party are visible. Pelosi is in a bind. Refuse the demands for repeal of the SALT cap, and Dems won’t have the votes to pass either Biden’s big bill or the infrastructure bill. And since they already have a problem finding new revenue to offset the costs of their programs, so this will make that job a little harder. More from WaPo:

“Under the House plan, the amount of state and local taxes people can deduct would rise from $10,000 to $72,500. This gives high-income people a $23,000 tax break. The Tax Foundation, a think tank, estimates that 70% of the tax change would flow to the people making $250,000 or more. The Committee for a Responsible Federal Budget reckons that the plan would cost $300 billion, which would make it the third-most costly item in the bill — far more than it would devote to major anti-poverty programs.”

No one who owes $72,500 in state and local taxes is middle-income, but the SALT deduction does help many in the middle class, at least in the Blue states. Since most Blue states are also high tax states, not having a limitation literally saves $ thousands in taxes for some in the middle class. It had been that way for decades until the GOP capped it in 2017 and gave that money to the rich by lowering their taxes.

Finally capping the SALT hurts the resale possibilities for some otherwise modest homes in high tax areas. They’re not going to appeal to a purchaser when the mortgage payment is about the same as the tax payment every month. When a new buyer can’t completely deduct all of their property tax and local income taxes, it can make even a modest home look like a bad financial decision.

Sens. Robert Menendez (D-NJ) and Bernie Sanders (I-VT) unveiled an alternative plan that would keep the SALT cap, but exempt people who make less than $400,000 per year. That seems like a good idea. The House can repeal the SALT cap for those earning under $400,000 bringing it in line with the rest of Biden’s tax plan. This would help some in the middle class, although passing the Biden tax reform is still necessary.

It’s Saturday, and therefore, time for us to put away our concerns about what happened in Virginia or whether Manchin is simply a time-waster. And let’s calm ourselves as we kick off the weekend. It’s time for our Saturday Soother.

Here in CT, it was 29° Friday morning, making it three mornings of frost in a row. Our snowblower is coming back from the repair shop, and most plants are beginning their winter dormancy. At the Mansion of Wrong, we’ve finished repairs to our bluestone walkway.

With a cold, clear weekend on tap, we all should bundle up and sit in a comfy chair by a window. Today, let’s start with a hot steaming cup of Toasted Coconut coffee ($18.99/12oz) from BD Provisions in New Milford CT.

And after another tough week, let’s watch and listen to Sting perform “If It’s Love” from his 2021 album “The Bridge.” This song will put you in a good mood. And the dancers are wonderful. Watch it!

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Sunday Cartoon Blogging – October 24, 2021

Last Friday, Wrongo and Ms. Right got their Covid booster shots. It’s a sample of one, but at our local drugstore here in a very conservative part of Connecticut, there was a line to get shots. Some were there for their first vaccinations, but most were waiting for a booster. There’s never a line around here for anything, except when the lobster food truck rolls into town.

But sadly, this isn’t the story for the rest of the country, particularly for cops and heath care workers. Some are saying that the vaccine mandates do little. But health workers who don’t really believe in science are leaving the job. And cops who don’t really care about public safety are leaving policing. Sounds like mandates are working just fine. On to cartoons.

Mandates are nothing new:

Most Republicans want boosters:

Texas got two new districts. Then the GOP redrew urban districts so that incumbent minority congresspeople are now running against each other:

One of our two political parties thinks that elections shouldn’t be the basis for choosing our representatives. That means democracy doesn’t matter to them anymore. They say it’s because there’s too much voter fraud, and no one can trust the result of any election now, anywhere.

So, the Dems think the next step is to change the Senate rules, modifying the filibuster. That would pave the way to pass the Protect the Vote Act. But there’s real danger that when the Republicans inevitably regain the majority, they will change that law to whatever the next Trump-like Republican leader wants voting rights to be. Could it be that Republicans are blocking the bill, not just to deny voting rights to minorities, but to lure the Democrats into changing the filibuster?

The economic ship sails on, and 40 years later, there’s zero thought to changing the message:

Biden compromises on the social spending bill. Still, it’s not certain to pass:

If only there was a solution to our supply chain problems:

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We’d Better Build Back

The Daily Escape:

Sunset, Herring Cove, Provincetown MA – October 18, 2021, photo by Karen Riddett

“Men must either govern or be governed.”   ̶  Elihu Root, 1912 Nobel Peace Prize Winner

Wrongo has never cared for Biden’s “Build Back Better” slogan. He prefers “We’d Better Build Back.” The focus should be on what could happen if we remain on the track favored by Sens. Manchin and McConnell, along with McConnell’s Republican colleagues.

We’d better build back from the wreckage of the Trump presidency. We’d better build back from the wreckage caused by Congressional inaction for the past 20+ years.

Wrongo is currently reading “Wildland, The Making of America’s Fury” by Evan Osnos, journalist at the New Yorker. Osnos says in the Prologue, (pg. 13) that September 11, 2001, and January 6, 2021, were two cataclysmic events in American history, and that the intervening 20 years was: (emphasis by Wrongo)

“…a period in which Americans lost their vision for the common good, the capacity to see the union as larger than the sum of its parts. A century and a half after the Civil War, America was again a cloven nation. It’s stability was foundering on fundamental tensions over the balance between individual freedom and the protection of others, over the reckoning with injustice, and over a basic test of any political society: Whose life matters?”

Umair Haque makes the importance of building back clear in a way that only someone living abroad can:

“America has the rich world’s lowest quality of life, by a long way — after all, Americans will die 5–10 years younger than Spaniards or Germans, but even that understates the issue. It is uniquely a dismal life: nowhere else do we see opioid epidemics, kids massacring one another at schools, having “active shooter drills…”

Haque points out that the fundamentals of a decent life: A living wage, universal access to healthcare, affordable education and housing, and a secure retirement are no longer within reach for the average American.

That’s why we’d better build back.

Step one is to deal with the threats to democracy. We will soon know if the Democrats can actually rouse themselves from their Republican-lite slumbers to pass the Freedom to Vote Act to help get this done.

Step two is to pass the Build Back Better Act, Biden’s social spending bill. It’s now clear that the bill will need to shrink in order to pass. And like the House and Senate, America doesn’t agree on which of its big-ticket items are most important, but shrinkage is on the agenda.

The bill has remained popular in the polls. One thing that’s clear from public surveys: People want to pay for the bill by taxing the rich.

A Vox and Data for Progress poll, conducted between October 8-12, found that 71% of voters support raising taxes on the wealthiest 2% of Americans to pay for the bill. Eighty-six percent of Democrats and 50% of Republicans back that idea. Other tax provisions that could be included in the bill, like tax increases on corporations and capital gains, were supported by more than 65%. Increasing corporate taxes is Wrongo’s preferred policy approach to raising revenues.

Vitally important to the job of building a better country is the proposed new spending on health care, long-term care, childcare, and clean-energy jobs. These ideas are supported by 63% of voters in the poll.

The wisdom of the framers has given us an unrepresentative Senate. That unrepresentative Senate has given us the filibuster, which can be changed, but apparently not by our current Democratic Senators.

And despite its popularity, Biden’s social spending bill won’t be passed in its present form until Joe Manchin and Krysten Sinema get what they want removed from it. A real question is whether we have moderate Democrats or just mediocre Democrats who are willing to kill democracy as we know it for some phony principle.

But you can bet it’s not just Manchin and Sinema. There are at least 8-10 other Democratic Senators with substantial bases of wealthy contributors who feel the same pressures and are perfectly happy to have the whole package scaled down, delayed, and possibly killed.

This brings us to step three. Elect better Senators, but how? We were taught in school that in a democratic republic, you get the politicians that the voters (or at least those people who are allowed to vote) want.

This means we need better voters.

How do we get them? It’s hard to know how to do that, except you know, PASS THE FREEDOM TO VOTE ACT!

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DOD Could Save $1 Trillion Without Changing US Security

The Daily Escape:

Sea Street Beach East Dennis MA – October 2021 photo by Ulla Wise

Rather than adding to the current vibe of general despair, a new report from the nonpartisan Congressional Budget Office (CBO) offers a number of interesting perspectives on how the US defense budget could sustain a $1 trillion cut over the course of 10 years.

The CBO report says that national defense programs could absorb a well-structured $1 trillion cut while still protecting the homeland and America’s allies from foreign adversaries.

From Responsible Statecraft:

“The new report outlines three different options for cutting the Pentagon budget by $1 trillion over the next decade — a 14 percent reduction. Doing so would still leave the department with $6.3 trillion in taxpayer dollars over the next ten years, in inflation-adjusted 2022 dollars.”

The report’s mandate was to look at how to adjust the size and focus of US military under smaller federal budgets. It created three broad options to illustrate the range of strategies that the United States could pursue under a budget that would be cut gradually by a total of $1 trillion, or 14%, between 2022 and 2031. They developed the options using their Interactive Force Structure Tool.

Here are the CBO’s three options for military force reduction:

  • Maintain the existing national security strategy but with fewer personnel.
  • Change the existing national security strategy to focus more on countering adversaries with international allies and coalitions.
  • Change the existing national security strategy to focus more on protecting America’s access to sea, land, and air and space.

In all three options, the CBO slashed full-time active forces, while leaving the less expensive reserves at their current levels. While acknowledging that “none of the plans are without risk,” they concluded that the Pentagon could reduce spending without sacrificing our security.

According to the report, in all three of CBO’s options, units would be staffed, trained, and equipped at the same levels as they are today, but there would be fewer units, or different combinations of units. The CBO chose to retain fully staffed units because, while personnel are expensive, partially staffed units would not be able to execute their missions. That would make the US more of a paper tiger than we are currently.

The CBO report also put the potential cut in historical perspective. While significant, a $1 trillion cut (14%) over a decade would be far smaller than the cuts America’s military spending in 1988 to 1997 (30%), and the 25% cut we had in 2010-2015. A 14% cut from fiscal years 2022 to 2031 would also still leave annual defense spending at more than it was at any point from 1948 through 2002.

Lindsay Koshgarian, program director at the Institute for Policy Studies (IPS) said:

“The US military budget is now higher than it was at the peak of the Vietnam War, the Korean War, or the Cold War….We are spending far too much on the Pentagon, and too little on everything else…”

A $1 trillion saving isn’t chump change. Those funds could be used to prevent future pandemics, address climate change, or reduce economic injustice. None of those are small matters. And they are all matters of political priorities.

No self-respecting Republican war hawk would have anything to do with cutting the military’s budget. And with the exception of a handful of left leaning Democrats, every other Democrat will shrink from the idea of reducing the military budget. It’s too risky politically.

We actually need Congress to solve three problems: Our revenue problem, our social spending/cost inflation problem, and our defense spending problem.

The CBO idea tackles the defense spending, but we need to consider taxes and revenue along with spending. We need to raise taxes on corporations and the wealthiest individuals while cutting that defense spending.

Turning to social spending, if you ask Americans what spending they want to cut, they will never say that we ought to ravage people’s retirement security. And 90+% of entitlement spending goes to the elderly, the disabled, or people who worked at least 1,000 hours in the past year. The big savings should come from reducing the growth in the cost of medical services.

Taking $1 trillion from Pentagon spending would be a great start, but we have other work to do.

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