Public Policy and Governance – Page 26

Our Selective “Anti-Tax” Legislators

In Indiana, Republicans always, always talk about reducing the “tax burden” on Hoosier citizens. They incessantly brag about their solicitude for taxpayers, and Indiana’s status as a “low tax” state.

Well…it turns out that their solicitude is pretty selective; it’s focused on the folks who are most likely to support them, either financially or with their votes. Businesses, corporations, rich folks…Struggling students, not so much.

In fact, not at all.

President Biden’s continuing effort to relieve millions of Americans from a real burden–student loan debt–has already benefitted 35,000 young Hoosiers. A provision of Biden’s American Rescue Plan also amended the Internal Revenue Code so that the discharge of that debt would not be taxable. (As you may or may not know–but your accountant will confirm–if you owe someone money, and that someone “forgives” the debt, the IRS considers the amount forgiven to be income, and you will be taxed on it.) Taxing student loan forgiveness would rather obviously go a long way toward reducing the relief being provided.

Indiana’s legislators–those solicitous “anti-tax” Republicans–looked at the situation and said “not so fast!”

The Indiana Department of Revenue explains.

The IRS excludes federal direct student loan forgiveness from federal income tax due to an exemption in the Internal Revenue Code. Although the computation of Indiana’s adjusted gross income (AGI) begins with federal AGI, Indiana is a static conformity state, meaning that Indiana’s tax code is linked to the Internal Revenue Code (IRC) as of a specific date. For a provision that impacts federal AGI, the effect on Indiana AGI depends on whether the Indiana General Assembly wholly or partially decouples from the federal provision during the legislative session.

When the American Rescue Plan Act (ARPA) expanded IRC section 108(f)(5), excluding student loan discharge under certain circumstances from federal gross income, the Indiana General Assembly passed a law decoupling Indiana from that provision in the IRC, and enacted a state provision requiring Hoosier taxpayers to add back the excluded amount to their Indiana AGI.

In 2022, this provision was clarified retroactively to provide that discharges resulting from total and permanent disability, death, or bankruptcy were not required to be added back. That law, IC 6-3-1-3.5(a)(30), still stands; therefore, federal discharge of some student loans between 2021 and 2025 must be added back to Indiana’s adjusted gross income. This includes the one-time student loan forgiveness under the Biden-Harris Administration’s Student Debt Relief Plan, even though the plan was not part of the ARPA.

Nice of them to say that if the loan was discharged because you died, were permanently disabled or bankrupt, they’d let you off the hook.

Indiana thus joins Mississippi, North Carolina and Wisconsin (last I looked, Arkansas was still considering the matter). Students elsewhere in the country are not being penalized.

Things are different for corporations. Indiana is one of only twelve states with corporate tax rates under 5%. That’s in contrast to states like Minnesota (9.8 percent), Illinois (9.5 percent) and Alaska (9.4 percent). The higher corporate rates in those states evidently made it unnecessary for them to tax students’ debt relief. (I’m sure it has nothing to do with the fact that corporations can afford lobbyists and students can’t.)

A statement issued by Representative Greg Porter at the time student loan repayments resumed (they’d been paused during the pandemic) elaborated on that point. Porter wrote:

More than 900,000 Hoosiers currently have some form of student loan debt, with the average Hoosier owing about $32,000. With repayments beginning soon, many Hoosiers will face financial stress, a stress the Republican supermajority has done nothing to ease for constituents.

“Indiana is one of the few states that taxes an individual’s student loan forgiveness or an employer paying off the student loan for an employee. Last session, my bill to make loan forgiveness dollars exempt from taxation never received a hearing. This is a shame, because Indiana Republicans never shy away from dispensing tens of millions of dollars in tax credits to large companies seeking move to Indiana but refuse to take action to make conditions better for Hoosiers living and working in our state.

The next time you hear Indiana politicians talk about their concern for us poor, struggling taxpayers, you might ask them just which taxpayers they want to relieve–and which ones are unworthy of their solicitude.

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Citing To Me

Sunday, I spoke to the Danville Unitarians about equality and the 14th Amendment (which has been getting some public interest lately, thanks to the question whether Section 3 disqualifies Trump). As I was preparing that talk, I looked back through some old posts, and came across one from April of 2016–before Trump and his distorting effect on the issues of governance and public policy that now form the bulk of posts here.

It’s probably tacky to repeat myself, but the post raised a fundamental question with which we continue to wrestle–namely, what does genuine liberty look like–so I’m repeating it here (and yes, sort of taking the day off…)

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In my classes, when I get to the 14th Amendment’s Equal Protection Clause, I generally begin with a discussion of what Americans mean by “equality,” and the perceived tension between equality and liberty.

Clearly, if we are talking about the operation of law and civil government, we are bound to understand the call for equality as limited to those areas in which government operates, and not surprisingly, there is a pretty substantial literature exploring what it means to be “equal before the law”– to have equal civil rights and liberties.

It isn’t simply us lawyer types, either; political philosophers have argued for years–okay, centuries!–that government efforts to nudge us in the direction of egalitarianism–that is, in the direction of material equality— diminish liberty and are ultimately immoral, because advocates of redistribution tend to ignore the issue (near and dear to more libertarian hearts) of merit or desert. Those who see it that way read the famous Marxist admonition: “from each according to his ability, to each according to his need” as support for expropriation — a system where productive and conscientious workers would be taken advantage of by the ineffectual and/or lazy.

Americans have a deeply-rooted cultural belief that people are poor because they are morally defective, and it didn’t start with the Tea Party. (Actually, it started with Calvin.) I once traced Indiana’s welfare system back to the 15th Century English Poor Laws- laws that prohibited people from giving “alms” to “sturdy beggars.”

So here we are, stuck, policy-wise.

We have a longstanding (and probably insurmountable) concern about the fairness of taking money from people who have (at least theoretically) earned it in order to help people who–for whatever reason–have much less. In more selfish eras (like now) that distaste for redistribution jaundices our approach to taxes for even the most traditional civic purposes. Paying more taxes than absolutely necessary (i.e., police, fire and maybe the sewer system) is seen as state-sponsored theft, or at the very least, a deprivation of liberty.

As I previously noted, it isn’t difficult to find people arguing that efforts to narrow the gap between rich and poor (redistributive taxes) are assaults on liberty. If there is one thing Americans appear to agree upon, it is the pre-eminence of liberty over other values. What we don’t see discussed very often, however, is what we mean by liberty–and the extent to which government is responsible for ensuring that citizens can enjoy it.

Liberty, at its most basic, is my ability to live a life of my own choosing, so long as I am not harming someone else–my right to live where I like, marry whom I love, choose or reject a church, vote for candidate A rather than B, raise my children as I see fit, opt to spend the weekend at a museum or in the garden….But there are a lot of people in my state (as elsewhere) who do not have liberty in any meaningful sense, that is, the ability to make even these minimal choices, because every waking moment is spent simply trying to survive.

Every person struggling to make ends meet is not a “sturdy beggar,” trying to pull a con. (If research is to be believed, relatively few are.) But rather than trying to change this stubborn cultural meme, or reminding ourselves of the multiple ways we all benefit when societies are more equal materially, let me ask a different question.

If a 10% increase in your taxes could be shown to allow every American to enjoy at least a minimal level of liberty/self-determination–would you pay it?

Or is the liberty you cherish limited to your own? If it’s the latter–I think that’s privilege you are valuing, not liberty.

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Picking On A Democrat

Well, at least I think he’s a Democrat. After all, he was Barack Obama’s nominee for the Supreme Court.

I’m talking, of course, about Merrick Garland, who has finally convinced me that what I originally took to be prudence and respect for the necessary independence of the Department of Justice is really wishy-washy timidity bordering on incompetence. His performance as Attorney General reminds me of a long-ago insight/admission; when I was Indianapolis’ Corporation Counsel, a local political wheeler-dealer asked me if I would be interested in running for a judgeship. I told him that my personality tended more toward advocacy (I know–regular readers will be shocked!) and that I lacked the judicial temperament needed for a judgeship.

Perhaps that’s Garland’s problem, in reverse. Had McConnell not breached his duty and had Garland been seated on the Court, perhaps he would have performed well in that more measured role. But he’s been a huge mistake as Attorney General. The insight that evidently escapes him is that you don’t have to be impermissibly partisan to exercise proper control over the Department of Justice.

As Charles Pierce recently wrote in Esquire, Garland needs to be thanked for his service and shown the door.

I have come to the sad conclusion that, like Brian Wilson, Attorney General Merrick Garland just wasn’t made for these times, and, like Tom Hagen, he’s just not a wartime consigliere. I hung in there longer than most people I know. But, this week, the case against him got overwhelming. The man needs to be thanked for his service and then shown the door.

He is not equipped to use all the tools god gave the Department of Justice to thwart the genuine threat to the Republic that is El Caudillo del Mar-A-Lago, and the dangerous political climate he has created. The former president* should have been charged federally with insurrection literally years ago. (Hell, during Thursday’s oral arguments in the Supreme Court concerning the former president*’s eligibility under the 14th Amendment, even Justice Brett Kavanaugh wondered why he hadn’t been so charged, and Kavanaugh used to work for Ken Starr, if we’re talking about using all the DOJ’s tools at your disposal.) The DOJ should have gone hammer-and-tongs after all the members of Congress who had the slightest connection with the insurrection. Somebody higher than the bear spray crowd should have been arrested and held until trial. Some of the expensive loafers should have been confiscated during the booking process rather than all those duckboots.

Pierce praised Jack Smith, but noted that the appointment of a special counsel shouldn’t have been necessary. And then he got to what was “the end” for him–and for me.

Appointing a Republican hack like Robert Hur to “investigate” the non-crimes of the president was bad enough, but then to allow Hur to pile on a political hit piece about the president’s memory, thereby normalizing one of the former president*’s attack lines on DOJ stationery, is not admirably fair-minded, it’s constitutionally suicidal. God save us from the fair-minded. They’ll kill the country and wonder how they did it.

Garland evidently shares a widespread misconception harbored by pundits and many Democrats about America’s current politics: the belief that sane folks and MAGA extremists would be able to “work things out” if the sane folks would just be really, really “fair and balanced” in their responses to MAGA’s conspiracy theories, dirty tricks and lies. MAGA folks are just scared, and if we’re nice to them when they’re bludgeoning our Constitution and dismantling our government– if we just meet them halfway (or a bit further)– they’ll calm down and rejoin the ranks of the reasonable.

This is, to be polite about it, hogwash. The core MAGA cult is unreachable. They inhabit a different reality, one in which they are literally at war not only with the rest of America, but with the most fundamental idea of America.

Allowing Hur to include what was obviously a political hit job in a purportedly “investigative” report has been condemned by a number of prosecutors. It’s yet more evidence of Garland’s passivity–his utterly inadequate conduct of a position that requires more spine (okay, more balls) than he evidently possesses.

At some point, someone needs to tell Garland and other “make nice” Democrats that they are playing pickle ball against people waging war with AK-47s.

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Please Share Widely

In November, Hoosiers will vote to fill an open seat for U.S. Senate. Despite primary challenges, the choice will almost certainly be between Marc Carmichael and Jim Banks.

I thought a comparison of their positions would be useful–and for rational voters, motivating. (Marc’s website has background on these issues.)

Abortion: Marc wants to codify Roe v. Wade.

Banks has an A+ rating from Pro-Life America, and a 100% lifetime rating from the National Right to Life Committee. His voting record on abortion/reproductive health can be accessed here.

Gun Violence: Marc wants to reduce America’s gun violence by passing a ban on military-style assault weapons and he supports a national Red Flag law.

Banks opposes both. He supports concealed carry and has voted against background checks for private sales. His voting record on gun issues can be accessed here.

Environment: Marc recognizes the threat posed by climate change and will work to safeguard the environment for our children and grandchildren.

Banks calls climate change a “liberal hoax,” and the Biden Administration’s environmental efforts “a war on energy.” The League of Conservation Voters gives him a 1% lifetime rating. His votes on the environment can be accessed here.

White Christian Nationalism/Racism. Marc condemns bigotries of all kinds, and emphasizes the importance of fighting racism, anti-Semitism, Islamophobia, and bigotries of all kinds.

Banks created the “anti-Woke” caucus in the House of Representatives and has introduced legislation to outlaw any remaining affirmative action in college admissions. He has been dubbed “Focus on the Family’s Man in Washington.” He opposes all DEI (Diversity, Equity and Inclusion) programs.

LGBTQ+ issues. Marc has called for an end to the demonizing of trans children and supports the civil liberties of LGBTQ+ Americans.

Banks has been vocal in his opposition to gay rights generally, and to trans children especially. In addition to his “Anti-Woke Caucus,” he has supported efforts to ban trans people from the military, prevent trans women from participating in women’s sports, and prevent medical personnel from treating children for gender dysphoria. He recently sponsored a bill that would prevent agencies placing children in foster homes from taking measures to see that gay and trans children would not be placed with foster parents who have religious objections to homosexuality, saying that refusal to place those children in such homes was discrimination against religion.

Public Education/Teachers and Librarians. Marc opposes the recent efforts to censor books and intimidate schoolteachers and librarians. He is particularly concerned about Rightwing efforts to dictate to schools and colleges what they can and cannot teach.

Banks has attacked both public and private schools; he vowed to investigate the National Association of Independent Schools, focusing on the group’s role in political advocacy and its tax-exempt status. He has threatened to “expose” what he calls widespread political indoctrination in the public schools, and claims that lawmakers have a “moral duty” to investigate the use of academic accreditation associations as “political tools by leftist ideologues.” When he was in the Indiana legislature, he voted to allow instruction in creationism and supported educational vouchers that sent tax dollars to private, overwhelmingly religious schools.

Wages and Collective Bargaining. Marc supports a living wage and the right of workers to bargain for it. He believes that the recent signs of union resurgence are good news, and he joins with the 67% of Americans who—according to Gallup–support organized labor in the US.

Banks gets a zero rating from the AFL-CIO. When he served in the Indiana legislature, he supported “Right to work” legislation (dubbed by labor as “Right to work for less.”) On vote after vote in Congress, he has voted against labor; a list of those votes can be seen here.

Healthcare. Marc supports Medicare for All, which would save an enormous amount of money (an estimated $600 billion per year, not including savings on prescription drugs) while providing everyone in America with access to high-quality health care coverage.

Banks voted against the most recent expansion of Medicaid and supports legislation that would ban vaccine mandates. He has voted to repeal the ACA, and against legislation that would prevent insurers from discriminating on the basis of pre-existing conditions. A review of all of his healthcare votes is here.

Immigration. Marc supports critically needed reform of America’s immigration laws, to allow us to address the chaos at the border, and he supports a path to citizenship for DACA children and other undocumented persons who meet certain requirements.

Banks supports finishing Trump’s wall on the southern border, eliminating federal funding for sanctuary cities, and the deportation of “criminal illegal aliens.” He opposes any legislation granting amnesty for any undocumented persons (presumably including children currently protected by DACA) and opposes any expansion of guest-worker programs.

Other: Marc wants to ensure a fair, impartial and ethical judiciary; Banks enthusiastically supported the rushed confirmation of Amy Coney Barrett and other deviations from longstanding norms.

Marc supports reforming the tax code to ensure that the rich pay their fair share, while Banks opposes any increase to the tax rate on profits earned from the sale of stocks, bonds, and real estate.

Marc also supports reclassification of marijuana to Schedule 3, and further research on its effects. Banks has voted repeatedly against efforts to fund research into the effects of marijuana. Banks’ votes on issues related to pot are here.

In November, Hoosiers will choose between a reasonable, thoughtful person who actually understands government, and an extreme MAGA culture warrior who will be generously funded by the usual suspects.

We have eight months to inform voters of the implications of that choice.

Valentine’s Day is tomorrow. The only valentine I want is the widest possible sharing of this information with Hoosier voters.

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The Stakes II

A couple of days ago, I considered the stakes of this year’s election choices, and speculated about whether and to what extent the abortion issue will drive both turnout and results. What I failed to explain ( thanks to the word limit I have self-imposed for these daily rants) is why the debate about reproductive choice is in reality about far more than a woman’s right to control her own reproduction, important as that is.

The deeply dishonest Dobbs decision struck at a fundamental premise of America’s Constitution, as we have come to rely upon it– the belief in limited government.

When politicians talk about “limited government,” they generally focus on the size of government, but the U.S. Constitution defines those limits in terms of authority, not size. What is to be limited is the power of government to prescribe certain decisions that should be left to the individual. In the original Bill of Rights, the federal government was forbidden to censor speech, prescribe religious or political beliefs, and take other actions that were invasions of fundamental rights–rights for which early Americans demanded recognition.

Over the years, those limitations on federal government power were imposed on state and local government units, and evolving cultural and social norms prompted a fuller understanding of what sorts of decisions individuals are entitled to make without government interference. I frequently cite what has been called the Libertarian Principle, because that principle undergirds America’s particular approach to government. The principle is simple: Individuals should be free to pursue their own ends–their own life goals–so long as they do not thereby harm the person or property of someone else, and so long as they are willing to accord an equal liberty to their fellow citizens.

The gender of your chosen mate, your adherence to a non-Christian religion (or your utter rejection of the notion of divinity), your choice to reproduce or not, and a number of other life choices are simply none of government’s business. (As Jefferson is often quoted, such decisions “neither break my leg nor pick my pocket.”)

The Libertarian Principle was central to the original Bill of Rights, and its application has extended as “facts on the ground”–scientific and cultural–have changed. Ever since 1965, when the Supreme Court handed down its decision in Griswold v. Connecticut– informing the Connecticut legislature that a couple’s decision to use contraceptives was none of government’s business–the belief that there are areas of our lives where government simply doesn’t belong has been absolutely central to Americans’ understanding of liberty.

When I was much younger, the importance of limiting government to areas where collective action was appropriate and/or necessary—keeping the state out of the decisions that individuals and families have the right to make for themselves– was a Republican article of faith. It was basic conservative doctrine. Ironically, the MAGA folks who inaccurately call themselves conservative today insist that government has the right—indeed, the duty– to invade that zone of privacy in order to impose rules reflecting their own particular beliefs and prejudices.

It’s critically important to understand that what is really at stake in what we shorthand as the “abortion issue” is that fundamental Constitutional premise. Forcing women to give birth, denying medical care to defenseless trans children or forbidding school children to read certain books are not “stand-alone” positions. They are part and parcel of an entire worldview that is autocratic and profoundly anti-American.

I used to point out that a government with the power to prohibit abortion is a government with the power to require abortion. (As an ACLU friend used to say, poison gas is a great weapon until the wind shifts.)

The issue at the heart of the Bill of Rights–as I interminably repeated to my students–isn’t what decision is made. The issue is who gets to make it. In the government system devised by our Founders, certain decisions are simply off-limits to government. I may disagree with your religious beliefs or political opinions; I may disapprove of your choice of marriage partner or your selection of reading material–but I cannot use the government to countermand your choices and require behaviors more to my liking.

It is that fundamental premise that is at stake in this year’s elections, which will pit the MAGA theocrats and autocrats against those of us who want to preserve America’s hard-won civil liberties and individual rights.

The abortion issue is about so much more than abortion, and I have to believe that, at least at some level, most Americans realize that.

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