Sugar, Sugar

Is Congress really considering a tax on sugary sodas as part of the funding mechanism for national healthcare?  Ezra Klein says yes!  The Wall Street Journal, however, which has a big piece about soda taxes in today's paper, doesn't muster up a ton of evidence.  Here it is:

Senior staff members for some Democratic senators at the center of the effort to craft health-care legislation are weighing the idea behind closed doors, Senate aides said.

That's it?  Color me unimpressed so far.

In any case, this whole thing is ridiculous.  The issue here is highly caloric sweeteners, not soda per se.  In other words, high fructose corn syrup, which is what virtually everyone uses to sweeten their drinks these days.  So why on earth would we tax Pepsi at a penny an ounce at the same time that we massively subsidize HFCS?  And even if we got rid of the subsidies, which would be a fine idea in any case, why tax soda?  If this is the direction we want to go, why not just tax sugar and HFCS directly, regardless of what it goes into?

Saberi Released

The LA Times reports on the conviction and subsequent release of freelance reporter Roxana Saberi from an Iranian prison:

A copy of a classified Iranian government report about the U.S. war in Iraq in the possession of journalist Roxana Saberi was a key piece of evidence that led to her conviction on espionage charges, one of the Iranian American journalist's lawyers disclosed Monday.

But a letter from President Mahmoud Ahmadinejad calling for a careful review of the case helped secure her swift release Monday, another of her lawyers said, in an appellate court ruling that surprised Iran watchers and removed a stumbling block in the effort to improve U.S.-Iranian relations.

Iranian intelligence and security officials had argued fiercely for her imprisonment up to the last moment of her lengthy appeals court hearing Sunday, the second attorney said.

Iranian politics is opaque enough that it's probably hopeless to figure out for sure what happened here.  Wheels within wheels.  Still, Ahmadinejad must have had some reason for intervening.  Was it related in some convoluted way to the political jockeying in preparation for next month's election?  It's hard to see how.  Was it meant as a modest olive branch for Barack Obama?  Maybe.  Was it just because Ahmadinejad likes the spotlight and likes to present himself to the world as a compassionate man?  Did it, in fact, have nothing at all to do with Ahmadinejad?  More than likely, your guess is as good as anybody's.

Well, does it?  I, for one, would like to know.  Conservatives, though, apparently don't.  Go figure.  This is yet another reason not to be a conservative these days.

During the election campaign, Obama would occasionally express interest in choosing Supreme Court justices with real-world experience and "empathy" for the struggles of the little guy. At the time, most observers assumed that he would probably wind up with a very conventional nominee anyway, because anyone outside the cloistered worlds of the appeals courts or the academy would have a tough time surviving the post-Bork confirmation process. However, looking at the GOP's hilariously inept attacks on Obama's criteria for choosing judges, I'm starting to think that he should go ahead and pick his model jurist after all.

As Dahlia Lithwick explains in Slate, Republicans seem to have decided that their best offense is to declare empathy a dangerous quality in a judge. It's hard to see how you endear yourself to the American people by taking a principled stand against the consideration of any injustices that they may be facing. And it's even more difficult to see this strategy working when the messengers are as imperfect as Michael Steele (Sample argument: "I'll give you empathy. Empathize right on your behind!") and John Yoo, who is at least extremely sincere in his lack of humanity. (One of the more memorable moments in Yoo's book is the part where he arrives at Guantanamo Bay for the first time and muses that it would make "great beachfront property.") But Steele hasn't given up. In fact, he's found a posterboy for the travesties of justice that occur when you turn an empathist loose on the bench -- the beauty pageant bench, that is.

Unchecking the Box

Matt Yglesias writes about the way a Clinton-era initiative to streamline and update tax rules (commonly called "check the box" for reasons that aren't very interesting) ended up becoming a gigantic loophole that allows American corporations to avoid paying taxes on profits earned overseas:

What happened is that the Clinton administration promulgated a rule that was designed to simplify the classification of different kinds of subsidiaries. Within months of the rule coming out, the career civil servants in the Treasury Department noted that there was potentially a huge tax loophole here.

....As soon as it was noted, an effort was put in place to change it. But a ferocious lobbying battle opened up, with the apologists for tax havens arguing that, basically, it was [other countries'] ox that was getting gored here so Americans shouldn’t care. Over the years, however, that turns out to be wrong. The availability of this loophole is a significant incentive for companies to invest in their overseas subsidiaries and take advantage of the tax shell game. It’s a loophole that nobody ever intended to create, and that should be done away with forthwith.

Whether this is really a big incentive to invest overseas is probably debatable, but it's nonetheless true that it was only an unanticipated side effect of check-the-box that allowed companies to use it to avoid taxes on overseas earnings.  So good for Obama for trying to partially get rid of it.

Except for one thing.  It really is true that America is virtually the last country in the world that tries to tax overseas profits earned by multinational companies in the first place. Everyone else, including all those fine social democrats in western Europe, have long since moved to a seemingly more sensible system in which each country simply taxes its own domestic profits regardless of where parent companies are headquartered.  This avoids all sorts of complications related to double taxation and allocation of expenses and seems to be genuinely more efficient as well.  You can find a pretty good discussion of the basic issues here.

So what's the deal?  Should liberals be in favor of closing this loophole, since it is, after all, a loophole?  Or should we be in favor of not just leaving it alone, but going further and changing our corporate tax law to eliminate taxation of overseas profits entirely?  Or perhaps changing the law, but only as part of a package that makes our corporate tax code more sensible overall?  What's the party line here?

The inconvenient truth about the Inconvenient Truth approach to green pedagogy is that by the time Gore moves past the gloom to What You Can Do, you're too depressed to do more than clutch the nearest stuffed penguin and click on Animal Planet. Not so Annie Leonard's 20-minute Story of Stuff viral kiddie video, an adorable, doomtastic, animated homage to How We're All Killing the Planet (with cuteness and plastic bottles, mainly).

Watch the video below, then pass it on to a teacher you know along with our Waste Not, Want Not special report on the full story of Stuff.

From NYT:

I promise this is the last post in this series.  (For a while, anyway.)

But there's one general point about the debate between carbon taxes and cap-and-trade that I want to make directly.  Namely this: it's an unfair fight.

Here's the thing.  Cap-and-trade is a real-world program for reducing pollutants.  We used it successfully with sulfur emissions in the 90s.  Europe is already doing it with carbon.  The northeastern states are doing it with RGGI.  The Waxman-Markey bill is a real piece of legislation that's hundreds of pages long and festooned with a hundred different compromises that will (we hope) allow it to survive the legislative sausage grinder.

And all of these variations of cap-and-trade are complicated.  When you read about them, you're immediately bombarded with jargon: auctions vs. allocations; caps, floors, offsets, and banking; upstream vs. downstream; how the exchange should be set up; how often permits should be sold; etc. etc.  Those are all real-life questions, and in any real-life plan they have to be addressed.  And they're confusing.  And yes, they all provide potential toeholds for special interests to game the system — something we should fight like banshees to keep to a minimum.

Tax advocates have no such worries.  They propose that we simply tax various fuels based on their carbon content, and voila!  We're done.  Simple and easy.

Ironically, though, the only reason they can get away with this is because of the very fact that a tax is a political nonstarter, which means there are no real-world taxes on the table.  But if there were, they'd have all the same questions as a cap-and-trade plan, plus a whole bunch of new ones.  Should it be levied upstream or downstream?  Can it be tax sheltered offshore?  Are you allowed to apply a tax-loss carryforward to your carbon tax levy?  How do you harmonize the tax with other countries?  Can I get a tax credit for reducing carbon emissions?  How are the revenues going to be distributed?  Should midwestern states that rely more on coal-fired plants get treated differently than, say, California?  What would it take to make a carbon tax on foreign oil compatible with WTO rules?

Rhetorically, tax advocates can pretend that none of these questions exist.  They're able to contrast the genuine messiness of a real-world cap-and-trade plan with a Platonic, whiteboard version of a tax plan.

But that's not how it would work.  If cap-and-trade goes down, we're not going to get a tax instead.  And if we do eventually get a tax instead, it's not going to be a clean and simple tax.  It's going to be a thousand-page monster with every paragraph the subject of a slugfest between a dozen different special interests lobbying half a dozen different congressional committees.  That's reality.

If you're going to compare cap-and-trade to a tax, honest advocates need to compare apples to apples.  We need to hear what a real-life carbon tax bill would be like.  And we should have a few dozen tax experts in the room to laugh at us while all this is going on.  The fact is, cap-and-trade isn't as complicated as it seems, and a tax isn't as simple as it seems.  In the end, though, despite the admitted complexities of cap-and-trade, at least it wouldn't be embedded within an existing 100,000-page corporate tax code.  A tax would be.  I'd keep that firmly in mind whenever you hear about how simple and clean a carbon tax would be.

POSTSCRIPT: Rasmussen reported today that only 24% of voters have any idea what "cap-and-trade" even means.  That doesn't surprise me.  When I set out to write my cap-and-trade piece for the magazine a few months ago, I originally planned to write about the debate between cap-and-trade and carbon taxes.  Very quickly, though, I realized that even among plugged-in people, very few of them really knew what cap-and-trade was or how it worked.  So I switched gears and decided to write a straight ahead cap-and-trade primer instead.  If you're part of the still-confused 76%, my piece is here.

The planet’s largest animal may be returning to prewhaling feeding grounds. This according to a new paper in Marine Mammal Science documenting the first known migration of blue whales from California to British Columbia and the Gulf of Alaska since the end of commercial whaling (sort of) in 1965.
 
Researchers have seen blues whales off British Columbia and the Gulf of Alaska 15 times since 1997. Four of the whales have been previously identified off the coast of California—proving at least some whales are pioneering a return to historical migration patterns.

Blue whales were severely overhunted during commercial whaling in the early 1900’s. The International Whaling Commission enacted a worldwide moratorium (sort of) on commercial whaling in 1966. Since then, blue whales off southern California have recovered slightly. Those farther north never have.  
 
No one knows why the whales seem to be spreading northward now. But the ocean is changing and krill—the primary food of blue whales—might be shifting north too.
 
Blue whales are the largest animal ever to live on Earth, reaching 100 feet and perhaps 100 tons—far larger than any of the dinosaurs. They were hunted nearly to extinction globally and are still listed as endangered under the US Endangered Species Act and the IUCN Red List. The global population is estimated at only 5,000 to 12,000 animals today. Perhaps 2,000 of these live off the west coast of the US and Canada.

Too bad Japan, Iceland, Norway, Canada, Greenland, the US, Russia, the Faroe Islands, a few Caribbean island nations, and Indonesia still hunt whales in one way or another: bloodlust watered down with euphemism and anachronism gussied up as science.


 

The basic argument in favor of financial engineering is that it allocates risk more effectively and thereby increases capital formation.  Which is good.  Or would be, anyway, if that's what happened.  Via Ezra, however, Adam Posen and Marc Hinterschweiger take a look at the growth of credit derivatives over the past decade and conclude that it didn't:

Clearly, growth in new financial products has outpaced fixed capital formation both globally and in the United States by a large margin. This has been especially true since 2006, when investment stagnated, but derivatives continued to grow at a rapid rate. There only seems to be a weak link, if any, between the growth of the newest complex — and now proven dangerous if not toxic — financial products and real corporate investment.

I would just add one other observation to this: the latest and greatest conservative argument for repealing the estate tax is that it would promote capital formation.  Without an estate tax, rich people will be motivated to earn more money instead of frivolously spending it, and heirs will get nice big chunks of capital to invest in America.  As usual with right-wing economic theorizing, it's sort of vaguely plausible sounding, and the conservatives pushing it have some nice charts along with a bunch of equations filled with Greek letters to back them up.  But then, so did the Wall Street rocket scientists, didn't they?  In the event, though, that turned out to be a self-serving argument.  Even trillions of dollars in derivatives didn't have a noticeable effect.

So then, what are the odds that a change in the estate tax amounting to a few billion dollars will have a serious effect on capital formation either?  Slim.  And what are the odds that this is just another self-serving argument?  That's an exercise for the reader.

What, you thought godless liberals were the only ones maniacally tweeting away?

Lord, no; Twitter's evangelical wing is just starting to flap. From online mega church Streaming Faith's e-newsletter:

Pastors John Voelz and David McDonald of Westwinds Community Church decided to spend the past two weeks educating their congregation on how to use Twitter to spread the gospel of Jesus Christ on Sunday morning by allowing them to actually log on during service and send out "tweets"....Now more than ever before, we as believers have brand new opportunities to share the Gospel of Jesus Christ like never before when we leverage these sites appropriately...This is the church's finest hour to build influence with those who we once considered to be outside of our reach.

Thus far, Streaming Faith's tweets range from the usual church-flavored banality: