Public Policy and Governance – Page 32

It Isn’t Just Tax Rates…

If voters ever wrest America’s government away from the Keystone Kops who are currently hijacking it, we might see a return to thoughtful policy discussions.

By “thoughtful,” I mean good-faith debates over the best way to approach various governmental tasks, conducted by people who actually understand the role and operation of government–and want it to work.

In other words, people other than Matt Gaetz and Marjorie Taylor Green and their ilk.

As readers of this blog know, I spent 21 years teaching classes in Law and Public Policy. Those classes explored both government’s policy processes and the legal and constitutional framework that constrains those choices. Ever since 2016, and the election of a buffoon whose entire administration was blatantly and proudly ignorant of both, I’ve missed the exploration of genuine policy differences –and the approach taken by public servants like former Senator Richard Lugar, who often referred to policy differences as “something about which people of good will can disagree.”

I thought about the current absence of “good will” when I read this paper issued by the Brookings Institution.The paper addressed the thorny issue of taxes, and how the American tax system distinguishes between–and differentially taxes– sources of income.

As the paper begins,

In a famous conversation, the author F. Scott Fitzgerald is credited with saying that “the rich are very different than you and me,” to which Ernest Hemingway replied “Yes, they have more money.”

Our work highlights another key difference: the most affluent Americans not only have more income; they receive it—and pay taxes on it—in vastly different ways than the rest of us.

For policy makers concerned about long-term fiscal shortfalls and high levels of economic inequality, our work reinforces the notion that raising the tax burden on the wealthy requires a special focus on how those households gain wealth and skirt taxes. We highlight four ways to effectively raise taxes on the wealthiest Americans.

The research focuses on an issue that serious policymakers understand, but that all-too-often is missing from public conversations about taxes. Those conversations tend to feature politicians appealing to voters with unrealistic promises to reduce the “tax burden” or eliminate certain taxes. ( Worse, when most voters think about taxes, they focus primarily on tax rates–and a not-inconsiderable number of Americans fail to understand the way marginal rates work. They think the highest marginal rate is applied to the taxpayer’s entire reportable income.)

The Brookings report focuses upon a related element of the tax system: the different ways in which we tax income generated differently.

Most Americans receive almost all their income through wages and retirement income (pensions, 401(k)s, social security, and individual retirement accounts). The most recent available IRS data (2014) shows that wages and retirement income made up 94% of adjusted gross income (AGI) for households in the bottom 80% of the income distribution. Even for households in the 98th to 99th income percentile, wages and retirement income accounted for 71% of AGI.

At the very, very top, though, these sources are less important, accounting for just 15% and 7% of the income of the top 0.01% and the top 0.001% of households, respectively. These households receive most of their income from investments (interest, dividends, and especially realized capital gains) and businesses (including sole proprietorships, partnerships, and S corporations). These items constituted 82% of income for the top 0.01% and 88% for the top 0.001%, compared to just 7% for the bottom 80% of households.

These patterns are robust over time and data sources. And in practice, the tilt toward capital income at the top is even larger than these figures suggest because AGI does not include the massive unrealized capital gains and very sizable inheritances that accrue to many affluent households.

The researchers proceed to suggest changes to the tax code that would have the effect of reducing the disparities that have contributed to our current gilded age, and I encourage you to click through and see whether you agree or disagree with their particular policy recommendations.

My point in highlighting this study, however, isn’t to endorse–or rebut–particulars.

This research –and similar investigations of the economic realities of American governance–is a welcome reminder of the way lawmakers should conduct policy debates: examining the evidence (what are we doing now, and what are the outcomes of what we are doing?); highlighting problems that such examination discloses (here, the widening gap between the rich and the rest); and considering policies that might solve or ameliorate those problems.

Budgeting and taxation are complicated issues about which people of good will can differ. But instead of people of good will–and thanks primarily to gerrymandering,–we have elected profoundly ignorant (and arguably crazy) people who think they were sent to Washington to destroy the federal government.

I miss policy…

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Krugman Spells It Out

When Mitt Romney announced that he would not campaign for a second Senate term, the announcement did more than simply mark the political exit of one prominent Republican. It was yet another indicator of the metamorphosis of a once-rational political party.

As usual, Paul Krugman’s assessment of that metamorphosis was dead-on. In “The Road from Mitt Romney to MAGA,” Krugman described the decline of the GOP. As Krugman notes, Romney is clear-eyed about what has happened to his party and given his willingness to say what others are unwilling to admit, he is a comparative profile in courage. That said, according to Krugman, Romney–and Republicans like him–have also been part of the problem, enabling the party’s devolution.

It’s good to see Romney speaking up now, but the party he’s criticizing is in large part a monster that people like him helped create.

For the basic story of the Republican Party, going back to the 1970s, is this: Advocates of right-wing economic policies, which redistributed income from workers to the wealthy, sought to sell their agenda by exploiting social intolerance and animosity. They had considerable success with this strategy. But eventually the extremists they thought they were using ended up ruling the party.

When Romney ran for President, Democrats accused him of being a plutocrat whose policies would enrich the wealthy and hurt average Americans. Those Democrats were right. Krugman enumerates the policy positions Romney adopted during that campaign, and points out that they would indeed have hurt non-wealthy Americans.

In particular, Romney was a strenuous opponent of the Affordable Care Act, a.k.a. Obamacare, which was enacted in 2010 but didn’t take full effect until 2014 — an especially cynical position since Obamacare was very similar to the health reform Romney himself had enacted as governor of Massachusetts. If he had won in 2012, he would almost surely have found a way to block the A.C.A.’s rollout, which in turn would have meant blocking the large reduction in the number of Americans without health insurance after 2014.

The GOP accepted the basic premises of the New Deal through the presidency of Dwight Eisenhower. When Eisenhower was President, the top marginal tax rate was 91 percent and roughly a third of American workers were unionized. Krugman quotes from a letter sent by Eisenhower to his brother, in which he wrote:

“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again”; while there were a few conservatives who thought differently, “their number is negligible and they are stupid.”

Their number remains negligible, but thanks to two things: the systemic distortions that form much of the discussion on this blog, and the success of culture-war appeals to racism–they exercise disproportionate power.

Krugman writes that, in the 1970s, the Republican Party began to be dominated by people who did want to roll back the New Deal legacy. He reminds readers of efforts like George W. Bush’s proposed privatization of Social Security and Trump’s corporate tax cut and multiple promises to demolish the A.C.A.

Republicans offset the unpopularity of their economic policies by harnessing culture war policies —” hostility toward nonwhites, L.G.B.T.Q. Americans, immigrants and more.”

In 2004, for example, Bush made opposition to gay marriage a central theme of his campaign, only to declare after the election that he had a mandate for the aforementioned attempt to privatize Social Security…

But eventually the forces that economic conservatives were trying to use ended up using them. This wasn’t something that suddenly happened with the Trump nomination; people who think that the G.O.P. suddenly changed forget how prevalent crazy conspiracy theories and refusal to acknowledge the legitimacy of Democratic electoral victories already were in the 1990s. The current dominance of MAGA represents a culmination of a process that has been going on for decades.

And for the most part, Republican politicians who probably weren’t extremists themselves went along.

Krugman says we should give Romney credit for finally reaching his limit. But he reminds us that it took until very late in the game for Romney to get there — and that the “game” was one that he and people like him had basically started.

So here we are.

Even plutocrats like Romney who have massively benefitted from their culture war misdirections have begun deserting the ship; even the most privileged beneficiaries of corporatism have begun to recognize the damage that’s been done.

The question that keeps me up at night is whether the forces of hate and resentment unleashed in the pursuit of economic advantage will prove too powerful to control.

I guess we’ll know the answer to that question next November…..

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Where Do We Go From Here?

In a recent Substack letter, Robert Hubbell reduced America’s current situation to a pithy paragraph, noting that “Biden” and “Trump” “are surrogates and avatars for two different visions of America—authoritarian vs democratic, gun safety vs a heavily armed citizenry, reproductive liberty vs state-imposed religious regulation of women’s bodies, dignity vs discrimination against LGBTQ people, and environmental protection vs unregulated fossil fuels.”

In November of 2024, Americans will decide which of those visions to embrace. It really is that simple–and that stark.

Let me be brutally honest. Those voting for the Trump vision won’t be simply voting for an autocrat. They will be voting for a racist society–a throwback to a time that they “remembered” but that never existed–but it was a time when straight White Christian men occupied the top tiers of a society where Blacks, LGBTQ people, non-Christians and women faced obstacles based soley on their identities, and they desperately want that society back. (People who decry what they call “identity politics” somehow forget the way identity politics played out in the past.)

And what about those “Second Amendment” defenders voting for Trump? I still recall a conversation I had some forty years ago with a historian who was an official of my city’s (then sane) Republican County machine. His take? “The Second Amendment entitles you to carry a musket and a powder-horn.” His point should be clear to any intellectually honest individual: no matter what your interpretation of the Second Amendment–whether it was intended to protect a militia or a personal right–the Founders could never have imagined the invention of assault weapons or the other high-tech weapons of war that our current gun fanatics claim to own as a matter of right.

There are multiple definitions of “autocracy,” but individual rights vanish under any of them. One of the most significant improvements in governance introduced by America’s adoption–in our Constitution and Bill of Rights– of the Enlightenment’s vision of limited government. “Limited” government in that philosophical sense did not mean “small” government–the limit was on the power of government and its authority over the individual.

Government, in our non-autocratic version, was to be restrained from interfering with the fundamental right of individuals to self-government. Limited government meant respect for personal autonomy–the right of each individual citizen to decide what the Supreme Court (before its capture by a majority of theocrats) dubbed “intimate” matters: whether to procreate, whether (and with whom) to engage sexually, who to marry–in addition to decisions about what books to read, and what political or religious opinions to embrace or reject.

This country has made slow and irregular progress toward a system that honors that basic respect for the integrity of the individual’s conscience and right to make those “intimate” decisions, but we have made progress. In 2024, that progress will be on the ballot.

The rise of a large and fearful cohort of people who reject self-government in favor of autocracy couldn’t come at a worse time. America has persevered through wars and contentious political times before, but never under an existential threat of climate change. In a sane age, we would be coming together to focus our efforts and energies on combatting global warming–on preparing our cities for rising waters and strengthened storms and hurricanes, preparing our international politics for the likelihood that millions of people will become refugees from areas no longer able to sustain them.

Instead, thanks in no small part to our increasingly obsolete political structures, a large cohort of fearful, tribal Americans has elevated a clown show of posturing know-nothings and bigots to America’s Congress, and is evidently determined to nominate and re-elect a preposterous and mentally-ill ignoramus to the Presidency.

I don’t know how we get through to that cohort. I rather suspect we can’t. For whatever reason, their ability to recognize reality, to evaluate evidence and to act rationally and in their own long-term self-interest has been overwhelmed by their fears and tribal hatreds.

So here we are.

As Hubbell accurately pointed out, next year’s election won’t be between Biden and Trump. It will be between autocracy and democracy, between those of us who want to remove weapons of war from our city streets, who want to enable individuals to live their lives as they see fit, who see government as a useful communal mechanism through which citizens provide a functioning physical and social infrastructure–and those who yearn for overseers to relieve them of the burden of choosing their own beliefs and behaviors.

Between slow, steady progress and a terrifying regression.

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Time For The Grown-Ups To Step In

I frequently quote Jennifer Rubin, a columnist with whom I almost always agree, and today’s post will echo yet another of her observations. Earlier in October, she wrote

Once upon a time, we had two functional parties that respected the rule of law, the outcome of elections and the norms necessary to preserve democratic governance. In that world, the filibuster was rarely invoked, an incapacitated member could be replaced on committee, indicted or even “merely” disgraced members would resign voluntarily and blue slips and single-member holds on appointments were not abused.

Those days are long gone.

Since that column appeared in the Washington Post, the downsides of our governmental dysfunctions have gone from severe to frightening. Alabama’s ideological and intellectually-challenged Senator Tommy Tuberville has been holding up hundreds of military appointments for months, weakening America at a time when the war that has once again broken out in the Mideast and the danger posed by Russia in Ukraine are escalating and immediate challenges. Other Republicans have refused to allow votes on State Department or Justice Department nominees, hobbling America’s ability to mount effective responses to these and other emerging crises.

Worse, at a time when we desperately need a functioning government, the crazed, performative GOP buffoons in the House of Representatives have brought that chamber to a standstill. The lack of a Speaker not only threatens America’s ability to respond to international crises, it may well cause a government shutdown, and the widespread misery such a shutdown would cause.

This is what happens when–thanks to gerrymandering and other political games–the people elected to conduct the nation’s business are clearly uninterested in doing that business. The current GOP is a collection of unserious, performative culture warriors and theocrats; few of them show any evidence of even understanding the role or imperatives of governing.

As Rubin wrote in the linked column,

This is the nature of the MAGA Republican Party. It cares not one whit for governing and considers Democrats’ electoral victories of no consequence. (The latest game: Make baseless impeachment threats to hamper duly elected Democrats from fulfilling their duties, as they’re doing with President Biden and a newly elected Supreme Court judge in Wisconsin.) Pleading with individual Republicans to break ranks or offering trade after trade to accommodate those acting in bad faith is useless. Worse, it blurs responsibility for chaos, paralysis and gridlock….

The exploitation of Senate rules is part of a larger GOP undertaking: the subversion of democracy. In their must-read book, “Tyranny of the Minority,” Steven Levitsky and Daniel Ziblatt cogently explain that Republicans, unable to appeal to a broader share of the electorate beyond diminishing numbers of White, rural Christians, have found ways to exploit, abuse and, indeed, break majority governance.

The authors have no quarrel with legitimate protections for minority rights (e.g., the Bill of Rights, an independent judiciary, federalism, separation of powers). Rather, the problem is Republicans’ insistence on denying the key component of a democracy: the power of the people to elect the leaders of their choice to govern. Republicans have grown attached to tactics that perpetuate minority rule, including thwarting voting (e.g., filibustering voting rights legislation) and denying election results (e.g., signing onto a brief to disenfranchise millions of Americans, baselessly challenging Biden’s electors).

The situation Rubin describes is depressing enough in normal times, but in times of crisis, it becomes exceedingly dangerous.

What is ironic is the fact that it’s those “America First” “American Exceptionalism” MAGA posturers who are sullying America’s reputation and threatening to destroy America’s international dominance–not to mention the country’s ability to react to world events.

Rubin quotes Levitsky and Ziblatt for the observation that America’s excessively counter-majoritarian institutions operate to reinforce extremism, empower authoritarian minorities and threaten minority rule. Their prescription is to “double down on democracy”– we need to dismantle rules that provide undue minority protection, to re-empower majorities–and we need to force politicians to be “more responsive and accountable to majorities of Americans.”

All that will take time, and right now, time is definitely not on our side. The GOP has brought the United States government to the brink of collapse–and it couldn’t have happened at a worse time.

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How We Got Here

I was recently asked to “guest lecture”about political polarization to an undergraduate class.

I began by conceding that, from where I sit, it’s getting worse, not better. I noted that we now have businesses expressly catering to the Right-wing: social media platforms like Truth Social and Rumble, coffee sellers like Black Rifle, crypto start-ups like MAGA and Coin, and even investment funds–Strive is an anti-ESG fund created by Vivek Ramaswamy, the annoying presidential candidate, that has now exceeded a billion dollars in assets.

These are businesses specifically catering to people who want to ban books, shove gay people back in the closet, and return women and people of color to second-class citizenship. It pains me to say this, because I spent 35 years of my adult life as a very active Republican—I even won a Congressional Republican primary in 1980—but Republicans have devolved from a political party into a cult, and membership in that cult has become their core identity. As we saw during COVID, thousands of them were willing to forego vaccination and die in order to “own the libs.”

Before delving into some of the reasons for polarization, it’s important to distinguish between political polarization and other, far less stark differences between Americans. As one scholar recently noted, those political differences are between the Republicans who’ve gone full MAGA and most other Americans…Today’s Right is entirely focused on the interests and fears of white Christians, while the Democratic coalition is much more diverse.

Ezra Klein has observed that “Sorting has made Democrats more diverse and Republicans more homogeneous.”

Research tells us that MAGA Republicans are disproportionately White Christian Nationalists who believe that only White Christians can be “real Americans.” That’s not a belief consistent with moderation or negotiation—or the Constitution.

Some on the far Left of the Democratic Party are also rabid, but today’s Democrats and Independents are ideologically diverse—they range from ex-Republicans like me to the Bernie Sanders/AOC branch of the party (which is still not nearly as “Left” as the Left in Europe). It’s a very troubling situation, because we really need two adult, rational political parties engaged in good-faith policy debate, and instead, as the antics in the current Congress demonstrate, we’re now at a point where actual governance seems impossible.

Reasonable people in both parties look at the MAGA crazies in Congress and wonder how these people get elected. It’s a significant structural problem: Gerrymandering has moved the “real” election to the primaries in all but a very few Congressional districts—in safe districts, Republican incumbents move Right and Democratic ones move Left to protect against primary challenges, exacerbating the distance between Left and Right. It isn’t only gerrymandering; as the book “The Big Sort” demonstrated, Americans have been clustering–choosing to live in places where they’ll have like-minded neighbors—making cities Bluer and rural areas Redder, and diminishing the likelihood of regular intermingling with people who disagree with them.

Polarization is also promoted by propaganda outlets like Fox News, and by the collapse of local newspapers that reported on less ideological community issues.

We also can’t ignore the fact that a lot of people have lost touch with reality. Back in 2016, a Public Policy Polling survey found 12 million people in the US who believed that interstellar lizards in “people suits” rule our country. Around 66 million Americans believe aliens landed in Roswell, New Mexico, and around 22 million believe that the government faked the moon landing. Then there are the various QAnon conspiracy theories, the people who believe Bill Gates put chips in Covid vaccines…it goes on and on.

Research tells us that feelings of powerlessness and uncertainty trigger beliefs in conspiracies. People who feel powerless use those theories to regain a sense of control– to make sense of what otherwise seems senseless in the world they inhabit. Right now, thanks to the enormous gap between the rich and the rest of us, the increasing effects of climate change, and the speed of social and technological change, a lot of people are disoriented and fearful. They’re looking for explanations—and unfortunately, a lot of them are also looking for someone–some “other”or group of “others”– to blame.

We need to understand that these divisions aren’t about policy. They’ve become part of personal identity—for a certain subset of people, it’s all about who you are and who you and your group hate. And for too many of us other Americans, who aren’t all that polarized, politics has become just another kind of team sport—my guys versus your guys. Team loyalty.

I concluded by telling them “I hope your generation figures out how to bridge the gap my generation is leaving you, because I don’t have a clue.”

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