The View from Right Field

Why Are Our Taxes So Messed Up? My Guess Is Spelled C-O-N-G-R-E-S-S

My previous post was about the amount of taxes rich people pay.  Based on leaks of confidential tax info (so much for secrecy of tax returns), the ProPublica website disclosed the absolutely shocking information (shocking to people who don’t pay attention) that rich people don’t pay any more taxes than the law requires.  And if the law lets them take deductions, claim credits, etc., they do it and, thereby, pay less taxes.  ProPublica was shocked.  I’m not.  I think it says more about the tax code – and the people who pass it – than it does about the amount of taxes people pay.

Which brings me to an example of the simplicity and ease¹ of our tax code: the deductions and credits for families and child care.  Before 2021, there were two basic credits: (i) a refundable tax credit of $2,000 for each child, which began to phase out when modified adjusted gross income exceeded $400,000 for a married couple; and (ii) a refundable child care credit of $3,000 per child, up to a maximum of $6,000 for two or more children, with a phaseout beginning at $125,000 for a married couple.

Are You Surprised Rich People Try to Pay as Little Tax as Possible?

The media has reported the shocking news that: (i) if you’re not vaccinated, you’re more likely to get Covid-19 than if you are vaccinated: and (ii) rich people don’t pay more taxes that they have to under the law.  Let me address the second.¹

The ProPublica website has published information about how much taxes people like Jeff Bezos, Michael Bloomberg, Warren Buffet,² etc., pay, information they got from IRS data that was leaked to them.  According to ProPublica, the information included more than fifteen years of tax data on thousands of people.  ProPublica says that it does not know where the information came from or who sent it to them, but they published it anyway.  Even though this information is supposed to be confidential and secret, not that many people seem upset about the disclosure.  The information is too much fun to care about confidentiality

What About That Covid-19 Lab Leak Theory?

Nothing has been proven yet with respect to the origins of Covid-19.  The theory that Covid-19 might have leaked from a lab in Wuhan, China, is only one possibility.  Much more research and investigation need to be done.  We don’t know yet.

Except, we do know.  We know that, instead of the lab leak theory being so absolutely false that Facebook wouldn’t even let it be mentioned and would take down posts that talked about it, it’s now a possibility.¹  It’s definitely not for sure.  But it is, apparently, something that could have happened.  Which means we know what we need to do.

“One Little, Two Little, Three Little Babies.” China Changes Its Policy Again.

Six years after abandoning its one-child policy for a two-child policy, China has now gone to a three-child policy.  The one-child policy, which began to be strictly enforced in 1980, was put in place to limit population growth in the world’s most populous country.  The problem was that it worked too well, and in 2015 China went to a two-child policy because its population was aging and its workforce was shrinking.

But the birth rate hasn’t rebounded.  Economic growth around the world has reduced the number of babies that women have, and China has been no exception.  As its middle class has grown, its birth rate has fallen.

We Defended Berlin. Will We Help Defend Taiwan?

Several years ago, we were on a tour of Morocco.  One of the couples in our group was of Chinese ancestry.  The wife said she had been born in Taiwan and had come to the United States when she was young.  I asked the husband when he had come to the United States.  I was embarrassed when he said that he had been born in the United States and that his ancestors had come to the United States in the 1800s, to help build the transcontinental railroad.  In other words, his ancestors may have come to the United States before mine.

One of the other people in the group asked them if they thought China, i.e., the People’s Republic of China, would invade Taiwan.  The wife said Beijing could take Taiwan anytime it wanted to.  The husband, however, who was a retired major general in the Army, merely mentioned the Taiwan Relations Act of 1979 and did not say much else.

Something Big Is Happening In Belarus and Russia and We Need to Respond

On Sunday, Belarus forced a Ryanair plane flying from Greece to Lithuania to land in Minsk so Belarus could take a Belarusian dissident off the plane and arrest him.  Which is just outrageous.  There is no justification for this.

EU nations have told their airlines to avoid flying through Belarusian airspace, which seems pretty obvious.  But now, Russia is now banning European airlines from entering Russian airspace if they do not fly to Russia via Belarusian airspace.  At least two flights to Moscow, one AirFrance and one Austrian airlines, have already been cancelled.

Why Plessy v. Ferguson – and What Might Have Been

Earlier this month was the 125th anniversary of the decision in Plessy v. Ferguson.  The New York Times had an op-ed by Peter Canellos on the only justice to dissent in Plessy: Justice John Marshall Harlan.¹

In his article, Mr. Canellos said this of the Supreme Court’s decision in Plessy:

“The Supreme Court decision in Plessy v. Ferguson … is duly remembered as one of the great abominations in legal history.  By endorsing the notorious separate-but-equal doctrine, it consigned most African Americans to a state of rank oppression.  In the space of no more than 5,000 words, it violated the plain language of the Constitution, engaged in expansive racist dissembling and defied the outcome of the Civil War.”

Offloading Obligations Onto Future Generations – In Germany and the United States

A recent decision of the constitutional court in Germany has a lesson for the United States.  In Germany, the constitution works differently.  The constitution, actually, it’s called the Basic Law, and it dates back to 1949 and the founding of West Germany, allows for the federal constitutional court to get involved on issues and in ways that are different from what happens in the United States.

In late April, the constitutional court issued an important decision on Germany’s climate change law.  The Financial Times reported:

Liz Cheney, Donald Trump, 2020, and the Republican Party

Liz Cheney was ousted as head of the House Republican Conference last week, mostly (entirely-?) because she wouldn’t sign up for former President Trump’s claim that the 2020 election was stolen.  The decision to remove her was taken by a voice vote.  Which was either because almost everybody agreed or because, if one wants to be cynical (which I often find is the best way to look at things, especially politics), people didn’t want to go on the record. 

In any case, here are a few comments on Donald Trump, the 2020 election, and the future of the Republican Party:

Arsenal of Democracy Then. Vaccine Maker of the World Now.

Demand for vaccines is dropping around the United States.  States are telling the federal government they don’t need their full share.  If we don’t have more vaccines than we need now, we will soon.  So here is an idea of what to do with the extra doses we will have: Send them around the world to the people and countries that need them.

Instead of making a show of supporting a waiver of patent rights in vaccines, something that will take months to negotiate with other countries and months more before companies can start manufacturing vaccines they have never made before, why don’t we make them for the world ourselves?  We can allow American companies to export vaccines.  And for poor countries, we can buy them from American manufacturers and give them to those who can’t afford them.¹

Inflation – Or Not

Both the Federal Reserve and the Biden administration, Jerome Powell and Janet Yellin, among others, respectively, want more inflation.  The Fed has changed its inflation target from a top of 2% to an average, over a period of time, of 2%.  Also, the Fed has indicated that, instead of reacting in advance of inflation exceeding 2%, it will now wait to act until after inflation has exceeded its 2% target.

For 40 years, inflation has not been a big deal.¹  The question is whether that will continue to be true in the future.  It may be that inflation is gone.  Or it may be, now that we have forgotten how bad inflation can be, that we won’t be careful about keeping inflation under control in the future, and that it will come back – good and hard.

Waiving IP for Vaccines – Or Actually Doing Good

The Biden administration has, perhaps not surprisingly, agreed to support a temporary waiver of intellectual property rights for Covid-19 vaccines.  It sounds good on the surface, but I can’t help but wonder if the better solution might be to just pay Pfizer-BioNTech and Moderna to make as many doses as they can as quickly as they can.  They know how to make these vaccines.  They have the best idea on how to ramp up production.  Instead of giving away IP to people and companies who may or may not know how to make these vaccines, why not just buy more doses from the people who do know how to make them. 

The United States could volunteer to pay the costs.¹  The total cost would probably disappear in the rounding with all of the programs the Biden administration is already proposing.  And giving away vaccines would be a great foreign policy move.  Russia can’t afford to do it, and China doesn’t have vaccines that work as well as these.  But we do can it.  We can help the world.  And that’s something you do when you can.

The Sad Sale of the Thompson Center

Monday was a sad, but all-too-predictable, day in Illinois: The state officially announced the Thompson Center in downtown Chicago is for sale.  The building was designed by Helmut Jahn, and it opened in 1985.  While the building had issues when it opened, they were resolved.  The building is a gem of post-modern design, and it could have been a destination in downtown Chicago for architecture buffs and regular people – if it had not been owned by the State of Illinois. 

Instead of a go-to place in the center of Chicago, the Thompson Center has, under the State of Illinois, become a bit of a dump.  But it didn’t have to happen.  It isn’t the fault of the building or the design. 

Communist. Fascist. Racist. What’s Next?

From what I read in the newspaper and hear on the radio, apparently I am a racist because I am not in favor of changing the name of Lake Shore Drive to Jean Baptiste Point DuSable Drive.¹  The fact that “Lake Shore Drive” is a classic Chicago street name, known pretty much around the world, right up there with “State Street, that great street,” and “Michigan Drive, the Magnificent Mile,” doesn’t matter.  Jean Baptiste Point DuSable was a Black Haitian and not wanting to name Lake Shore Drive after him is racist.²  It’s sort of like Humpty Dumpty:

“‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’
‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’
‘The question is,’ said Humpty Dumpty, ‘which is to be master – that's all.’”

“How Do You Solve a Problem Like Korea” (to tune of “Maria” from “The Sound of Music”)

Except, of course, I am referring just to North Korea, not all of Korea; and except that, while North Korea is a problem, it is not Maria.  There was a solution for Maria: sending her to be governess at Captain von Trapp’s house.  As for North Korea, consider the situation.

1.  North Korea is an economic disaster. Earlier this month, Kim Jong Un compared the country’s worsening economic situation to the 1990s famine that resulted in hundreds of thousands of deaths. Floods last summer and US sanctions contributed to the problems, as has North Korea’s closing of its borders with the world, including even China, because of Covid-19.  But mostly, it’s the system, both economic and dictatorial.  Several weeks ago, there was a picture of people from the Russian embassy using a handcar to leave the country.

Spending Lots; Doing a Little Good

Nancy Pelosi famously¹ said of Obamacare that you had to pass it to see what was in it.  It appears that was true of Joe Biden’s first big Covid relief bill, too.  In January, I said this about President Biden’s proposed plan in a post entitled “Covid-19 Relief Ought to Be More Than Just Throwing Money Around Randomly”:

“A properly-targeted pandemic relief program wouldn’t waste money by giving it to people who don’t need help.  If we target the help where it is needed, there will be more money for the people who actually need help.  It’s not a matter of cutting costs; it’s a matter of having enough money to help those who really need it.”

Retaking Congress – Or Not

Karl Rove wrote in Thursday’s Wall Street Journal about how the left may be damaging the Democrats’ chances of keeping control of Congress in November, 2022.  While Mr. Rove made some good points about how the “left-wing loonies” could hurt the Democrats, he doesn’t mention what the “right-wing crazies” could do to the Republicans. 

After all, Democrats control the Senate because of Donald Trump.  Instead of going to Georgia and urging Republicans and independents to vote for Republicans David Perdue and Kelly Loeffler, so the Democrats wouldn’t control the Senate, former President Trump spent his time in Georgia doing his normal “it’s all about me” thing, complaining about how the election was stolen from him and the Republican governor and secretary of state in Georgia didn’t care.  Not surprisingly, turnout in Republican areas in the special senate run-off election went down; why vote, if the election will get stolen and your vote won’t count.  And so, Mitch McConnell is Senate Minority Leader, instead of Senate Majority Leader.  If President Trump had cared more about the cause than himself, that might not have happened.

Cutting Carbon Now

New York is shutting down the Indian Point nuclear power plant, which in the past has supplied upwards of 25% of the electricity for New York City and Westchester County.  So where is the electricity going to come from, especially since New York Governor Andrew Cuomo has blocked the construction of pipelines that would bring natural gas to New York City?  Governor Cuomo has proposed building 9,000 megawatts of offshore wind power and a 250-mile transmission line from upstate New York to bring in renewable energy, but they aren’t ready yet - obviously.  Also, given the opposition there will be to such proposals, who knows when they will be built, if ever.  After all, the Biden administration has already withdrawn proposals for offshore wind power developments off certain parts of Long Island because ….  Well, there are always good reasons for not building such things in one’s own backyard.  (Here.)

But, don’t worry about power blackouts in New York because, even if there is a shortage of natural gas, gas-powered plants can switch to oil.  Huh?  We’re trying to cut carbon emissions, so the solution is to: (i) shut down an existing nuclear plant, which supplies, by definition, at least once it is built, carbon-free power; (ii) block natural gas pipelines because natural gas emits carbon and we want to be carbon-zero; and (iii) use oil, the most carbon-intensive of all three, as the back-up power source until we can get wind farms and transmission lines for renewable energy built.

Models, Calculators, and Certainty

Last weekend, The Wall Street Journal had an interview with Steven Koonin, who was chief scientist for the Energy Department under Barack Obama.  In the course of the interview, Dr. Koonin said some things about models and how they are used that resonated with me (probably because I have some of the same concerns.

Dr. Koonin said, of younger scientists today: “They have grown up with the models.  They don’t have the kind of mathematical or physical intuition you get when you have to do things by pencil and paper.”

Why Shouldn’t We Take Care of Ourselves Instead of the World?

[See Note below]

With Russia massing tens of thousands of troops on Ukraine’s border and China increasing its aggressive behavior against Taiwan, maybe now is a good time to consider what the purpose of U.S. foreign policy should be and what our national interests are in connection with either or both of those situations.  Actually, the real question is what our national interests are in general. 

We hear talk about supporting a rules-based international order.  But is that really what we should be doing?  Is it our goal to support other countries or do we need to worry about ourselves?  Some would say that we have lots of problems in the United States; there are lots of things we need to do for our people.  The Biden administration is proposing spending trillions of dollars on important domestic priorities.  Given all of this, do we really have the money – or the time or energy – to deal with Ukraine or Taiwan – or the Uighurs or Alexei Navalny?