The View from Right Field

Sanders’s and Warren’s Wealth Taxes Aren’t Going to Just Cost the Super-Rich

I had been planning on writing about Elizabeth Warren’s tax-a-mega-millionaire program (actually, an annual 2% tax on net worths above $50 million and an additional 1% on amounts above $1 billion), but Bernie Sanders has come along with a bigger (and better-?) tax of his own.  Senator Sanders’s plan needs a chart (as with Senator Warren’s tax, Senator Sanders’s tax is assessed annually):

1% tax on wealth above $32 million;
2% tax on wealth between $50 to $250 million;
3% tax from $250 to $500 million;
4% tax from $500 million to $1 billion;
5% tax from $1 to $2.5 billion;
6% tax from $2.5 to $5 billion;
7% tax from $5 to $10 billion; and
8% tax above $10 billion.

Climate Change: A Bonus Question

This is to follow up on Tuesday’s post, “Climate Change Is a Two-Part Question.”  In June, The Economist wrote about “Green New Democrats” and in particular about Joe Biden’s and Elizabeth Warren’s plans for climate change.  While neither of them has endorsed the “Green New Deal,” they both have big dollar/big concept environmental plans. 

After reading the article, however, my question is this: How can you seriously claim to have a plan for climate change and not address a carbon tax or some kind of a plan for carbon pricing?  I know that cap-and-trade couldn’t pass the Democratic Congress of 2009-10, that the Liberal/National Coalition (i.e., center right) in Australia won re-election twice after repealing Australia’s carbon tax (here and here), and that the "yellow vests" in France were protesting a gasoline tax increase that was part of a climate change program. 

Cutting Taxes and Raising Spending Is Amazing – Until It Isn’t

What the United States is doing is amazing.  We are both cutting taxes and raising spending while the economy is growing and the federal deficit is already $500 billion.  This will raise the deficit to more than $1 trillion a year (did I say, “while the economy is growing”?).  And it looks like we might get away with it.  It’s amazing.

Other countries couldn’t do this.¹  But when you are big enough and you can print your own money,² you can get away with things little countries can’t.  If other countries tried to do what we are doing, they would soon find that nobody would lend them money and that, if they tried to just print more money, people would refuse to accept their money to pay for things (see, for example, Zimbabwe and, now, Venezuela).

Obamacare’s Elusive 60th Vote

Democrats complained a lot about the way Republicans passed the tax bill.  Megan McArdle explained¹:

“Last week, as you may have noticed, Republicans passed a tax bill.  As you may also have noticed, Democrats were aghast.  Passing a bill like that on straight party lines!  Using a parliamentary maneuver to push through something that could never have survived a filibuster!  How could Republicans be so brazen, so immoral, so fiscally irresponsible?

Those of us who remembered saying many of the same things during the passage of Obamacare had to beg them to stop.  I mean, we could have been seriously hurt, laughing that hard.”

In addition to the things Ms. McArdle mentioned, there were complaints about how Senators Bob Corker and Mario Rubio agreed to vote for the bill at the last minute.  Democrats complained Senator Corker had abandoned his concerns about the deficit, and Senator Rubio was bought off by a last-minute change to the family tax credit.  Of course, in making those complaints, the Democrats forgot about the Cornhusker Kickback and the Louisiana Purchase that got Senators Ben Nelson (of Nebraska) and Mary Landrieu (of Louisiana) to vote for Obamacare.

The Risk of Government Just Goes On and On

Megan McArdle rips, fairly, on the tax bill for, inter alia, fiscal irresponsibility (is this the time to be increasing the deficit and the debt?) and the way the individual tax cuts are being passed and then being repealed in 2025 (or so).  It is my understanding that, to be able to pass the bill without a filibuster in the Senate, the bill has to, among other things, not increase the deficit ten years out.  Therefore, the bill provides for the individual cuts to expire before the end of the ten-year period – but with the expectation that they will be extended at that point.  Which is what happened to the George W. Bush tax cuts passed in 2001.  The Democrats extended them in 2010.

Still, this is lousy way to write a tax bill.  While it is perhaps likely the cuts will be extended, who knows.  Is it fair to expect people to plan for the future when they don’t know what tax rules are going to be?  It is hard enough with Congress changing the tax laws every couple years.  The tax bill adds even more to Congress’s normal, somewhat scatterbrained approach.

Is the GOP Tax Plan Worth the Effort?

It’s hard to know what to say about the Republican effort to pass “tax reform.”  It’s a rush.  It’s a mess.  And nobody knows how it is all going to fit together.  Plus the Republicans are doing it all by themselves without any input from the other side.  In other words, it sounds a lot like Obamacare.  Which means all of the Democratic complaints about process and procedure are just partisan hoo-ha, as opposed to serious, principled arguments.  Except for any such complaints coming from Democrats who have sincerely apologized for how they passed Obamacare and credibly promised to not do it again when they get back in power, the number of which is, as far as I can tell, about one less than the number of World Series the Chicago Cubs have won in the last 108 years.

So what is there to say about the Republican effort to pass “tax reform”?  The first thing is that tax reform does not always mean everyone’s taxes go down.  Real tax reform means moving to a better tax system. 

The People of Cook County Beat Toni Preckwinkle’s “Pop Tax”

Cook County, Illinois, was the largest governmental body in the country to pass a “pop tax,” aka soda tax.  (Cook County’s tax was not just on sugared pop¹, but diet pop, too – it was on “sweetened beverages” – but more on that later.)  Now Cook County is the largest governmental body in the country to repeal a pop tax.

The supporters of the tax said that its repeal was a victory for the American Beverage Association, but they miss the point of what really happened.  When I went to my local Jewel food store on Tuesday, August 1, the day before the tax became effective, the store was jammed.  As the checkout clerk said, Tuesdays are usually slow at Jewel.  It’s the day before the weekly ads come out.

Here’s One Tax Break for the Rich that Democrats Really Like

When Barack Obama was president, his default position on taxes was that the “rich” should pay more.  According to President Obama, the rich needed to pay their fair share.  He never said what percentage or amount equaled their fair share, but it was always more than they were paying at the time.  And definitely more than the Republicans thought was right.  Because the Republicans are all about tax cuts for the rich.

Well, with the new tax plan Donald Trump has presented, it looks like we have finally found both (i) a group of rich people that Democrats don’t think should pay more and (ii) a tax break for the rich that Democrats want to keep.  The rich that Democrats don’t think should pay more are, of course, those who live in their states and the tax break Democrats want to keep is the deduction for state and local taxes.

GOP Tax Bill Could Be the Real Deal: For Tax Accountants and Lawyers

Now that the Republican attempt to repeal/overhaul Obamacare has failed, thanks to, inter alia, Senators John McCain, Rand Paul, and Lisa Murkowski¹, Republicans in Congress are turning to tax reform.  There are lots of comments that can be made on tax reform and the way it should be done, especially with respect to what the purpose of the tax system is and how it should be organized.  But, for this post, let me just make one comment, based on what was in the newspaper this morning.

The Republicans want to lower the top corporate tax rate, to get it in line with corporate tax rates around the world.²  The rate being mentioned is 20%.  (Also, here.)  While the prior thought was to have a top personal tax rate of 35%, Donald Trump is apparently pushing for something closer to the current 39.6%.  Being a populist, he doesn’t want to help the rich (or at least appear to help them).

Raise Taxes on Rich People – But Not OUR Rich People

Perhaps the funniest reaction to Donald Trump’s new tax plan has been that of Democrats from states with high state and local taxes, objecting to President Trump’s proposal to abolish the deduction for these taxes.

President Obama talked all the time about rich people needing to pay higher taxes and about how they needed to pay their fair share.¹  By getting rid of the deduction for state and local taxes (especially income taxes), President Trump’s proposal would get rich people to pay more income taxes.  The problem for Democrats, however, seems to be that it would increase income taxes for the wrong types of rich people; i.e., it would increase the taxes of rich people who live in states that lean Democratic (or have totally fallen over that way) – because those are the states with high state and local taxes.