Kevin Drum - April 2010

The 4,543 Word Tax Code

| Thu Apr. 15, 2010 10:18 PM EDT

A conservative umbrella group called "Tea Party Patriots" unveiled its Contract From America today, composed of items that were the top ten vote getters from their members. Here's my favorite:

4. Enact Fundamental Tax Reform

Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words — the length of the original Constitution. (64.90%)

I have to admit that I like the symbolism of the 4,543 word limit, but what I'd love is to see one of these geniuses actually write a modern tax code that length. And when they're done, I'd like them to build a 747 using instructions no longer than those used to build the USS Constitution.

And that's that. With this little bit of snark I've gotten through Tax Day without writing a single post about tax rates, tax shares, income tax vs. all federal taxes, who does and doesn't pay taxes, whether people know how much they pay, or anything else related to the barrage of tax nonsense that assaults us annually on this day. Can't we just celebrate the birth of Leonardo da Vinci instead?

Advertise on MotherJones.com

Birchers Yesterday, Tea Partiers Today

| Thu Apr. 15, 2010 7:37 PM EDT

I've had several conversations recently about the damage the tea party movement has done to political discourse, and I've generally taken the position that, bad as they are, we've seen it all before. Compared to the red-baiters of the 50s, the Birchers of the 60s, and the Clinton paranoids of the 90s, it's just more of the same.

But I'm not entirely sure of myself on this score. Maybe they are worse. And so I've thought, "I should call Rick Perlstein and chat with him about this. He'd know." But now I don't need to, because here he is in the New York Times today:

“When was the last time you saw such a spontaneous eruption of conservative grass-roots anger, coast to coast?” asked the professional conservative L. Brent Bozell III recently. The answer, of course, is: in 1993. And 1977. And 1961. And so on.

And so yet much of the commentariat takes Bozell at his word, reading what is happening as striking and new. I’ve studied the reactionary florescence of 1961-1962 most closely (I wrote about it in “Before the Storm”), and the parallels are uncanny.

The same “spontaneous eruption” of folks never before engaged in politics. (“I just don’t have time for anything,” a housewife told a news magazine. “I’m fighting Communism three nights a week.”) The same blithely narcissistic presumption that the vast majority of Americans (or, at least, “ordinary Americans”) must already agree with them, and incredulity that anyone might not grasp the depth of the peril....The same lunatic persecution fantasies. (In Robert Welch’s 1961 it was probable internment camps for conservatives. In Glenn Beck’s 2009 it was ... probable internment camps for conservatives.)

OK, I'm convinced. In fact, one of the most intriguing findings of the Times poll of tea partiers confirms Rick's suggestion that they're convinced that the vast majority of Americans agree with them. Take a look: a stunning 84% of tea partiers believe their views "reflect the views of most Americans." Virtually everyone else disagrees. But why shouldn't they believe that? If you watch Fox News all day and listen to Sarah Palin telling you that you're just a "common sense conservative," you'd believe it too. It's an alternate universe out there.

The GOP Dilemma

| Thu Apr. 15, 2010 3:45 PM EDT

Jon Chait points us to Politico's reporting of the great dilemma Republicans find themselves in this year:

House Minority Whip Eric Cantor wants a document, akin to Newt Gingrich’s 1994 Contract With America, that identifies specific pieces of legislation Republicans could pass if they win back the House. He thinks Republicans should “put up or shut up,” an aide close to the process said. So does Indiana Rep. Mike Pence, the House Republican Conference chairman. The party doesn’t need “sloganeering,” someone familiar with his thinking said.

....But Rep. Kevin McCarthy, the California Republican who is leading the effort to craft the document, says that including specific legislation in the contract would smack of the backroom deals the GOP accuses Democrats of making, so “you won’t see it written out.”

A backroom deal! You can't really call this Orwellian because at least Orwellianism makes a certain kind of sense. This is the kind of thing you blurt out when you can't think of anything to say but you know you have to say something.

Likewise, Steve Benen finds Sen. Scott Brown (R–Mass.) explaining that he can't support financial reform because it's "going to be an extra layer of regulation." Which is like saying that you don't want better brakes on your car because "they're going to slow me down." And when the reporter followed up to ask what he wanted fixed in the current bill, he just got completely flummoxed: "Well, what areas do you think should be fixed?" he said. "I mean, you know, tell me. And then I'll get a team and go fix it.''

Republicans must be praying that they can keep this up for the next six months. They've got a pretty good shot at it, I suppose, since people are unhappy enough about the economy that they don't really care much what the GOP is actually saying. Still, it's a risk. "Time for a change" may be one of the two all-time classic campaign slogans, but usually you need to give people at least a rough idea of what kind of change you're campaigning on. But Republicans are afraid that even a rough idea is going to expose the fundamental incoherence of their positions. It's quite a tightrope they're walking.

The Popularity of Healthcare Reform

| Thu Apr. 15, 2010 1:48 PM EDT

A lawyer friend takes a crack at explaining why the healthcare bill isn't getting more popular post-passage, as a lot of us thought it would:

I've noted alot of ground-level discussion about the tax increases in the health bill. Frankly, whenever the bill is in discussion in my professional experience, it is usually in the context of taxes — not ideologically per se, but just something our clients need to be made aware of because there are concerns of hidden liabilities (and tax lawyers could be on the hook if they fail to point them out).

So the zeitgeist seems to be that the health bill has introduced a lot of financial-related uncertainty in the near term (despite active benefits). And it's this uncertainty (whether founded or not) that people seem to be absorbing more than any messages about immediate benefits. In fact, I haven't really heard anyone talking up the benefits. Maybe they are, but the financial negatives (perceived or otherwise) take center stage right now, which I guess is to be expected given the high unemployment.

My own guess is that this is just a matter of time. Healthcare reform will, in fact, eventually get more popular, but it's going to take a while. The tea party madness needs to calm down, the tax stuff has to get sorted out, the benefits have to start kicking in, and the public has to digest everything the bill is going to do. I suspect that this will all kick in a little bit before the November elections, but not massively. Passing the healthcare bill was better for Democrats electorally than caving in and doing nothing, but in the short term the effect will be pretty small.

Cui Bono?

| Thu Apr. 15, 2010 12:15 PM EDT

Fortune magazine reports on corporate revenue:

Last year, Fortune 500 sales fell 8.7% to $9.8 trillion, the largest percentage decline since 1983.

And yet profits soared:

For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that's the second largest in the list's 56-year history....The 500's profits virtually returned to normal after years of extremes — bubbles in 2006 and 2007, collapse in 2008 — despite a feeble overall recovery that's far from normal.

So corporate profits tripled during a recession year in which sales fell 8.7%. Has that ever happened before? The key to this, of course, was layoffs: "In 2009, the Fortune 500 shed 821,000 jobs, the biggest loss in its history — almost 3.2% of its payroll." In other words, we have now been through a recession in which, essentially, nobody has really suffered except for all the workers who have been let go. Wall Street is doing great. Corporate profits are doing great. The stock market is recovering. Is it any wonder that Republicans don't really care about any further fiscal stimulus? Their constituency is doing fine, thankyouverymuch.

Corker and Financial Reform

| Thu Apr. 15, 2010 11:14 AM EDT

Poor Bob Corker. He's the rare Republican senator who actually seems to be serious about financial reform, but his own party is undermining him with the usual Luntz-inspired deceptions about "endless taxpayer-funded bailouts," coddling of Wall Street, and so forth. Corker has basically asked the GOP leadership to put a sock in it, explaining exactly how his proposals to wind up failing banks would work and how it would protect taxpayers. Matt Yglesias:

Corker is exactly right about this. Chris Dodd’s bill, as written, would make bailouts less likely not more likely. But Corker is also correct that there are a lot of doubts as to exactly how much punch it really packs. This is a concern that responsible Senators should actually look at and try to address, rather than just fling around vaguely as a cover for the fact that they don’t want banks to be regulated at all. But will Corker stand his ground on this, or will he follow the lead of so many of his past colleagues and end up giving in to Rush/Fox/Tea Party pressure to simply obstruct?

And more to the point, even if Corker does defy expectations and continue to work on financial reform seriously, can he persuade any of his fellow Republicans to join him? And if he can, will the price be the watering down of legislation that's already too weak to really have much of an impact? Stay tuned for answers to these exciting questions.

Advertise on MotherJones.com

Quote of the Day: Tea Party Economics

| Thu Apr. 15, 2010 12:16 AM EDT

From tea party supporter Jodine White of Rocklin, California, trying to explain how she reconciles her desire for smaller government with her support for Social Security:

That’s a conundrum, isn’t it? I don’t know what to say. Maybe I don’t want smaller government. I guess I want smaller government and my Social Security. I didn’t look at it from the perspective of losing things I need. I think I’ve changed my mind.

More tea party info here.

J.K. Rowling's Patriotism

| Thu Apr. 15, 2010 12:12 AM EDT

Harry Potter billionaire J.K. Rowling on why she chooses to continue living in Britain even though she could reduce her tax bill considerably by residing elsewhere:

I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s.

....A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism.

Fraud and the Financial Meltdown

| Wed Apr. 14, 2010 9:07 PM EDT

A few days ago a reader asked me what I thought of Bill Black. Answer: he's a pretty fascinating guy. I met him at a conference last year, and probably the best time I had was the hour I spent sitting next to him and Dean Baker one night at dinner as they regaled each other with stories about financial fraud and the S&L crisis of the 80s. (Black was a bank regulator at the time.) As it happens, I don't think fraud is the be-all-and-end-all of the 2008 meltdown, but it was a significant piece of it and it doesn't get as much attention as it should.

Black isn't in the news much, which means I don't get a chance to link to him much. But TRNN recently did an interview with him, so this is my chance. And yours. Watch the video and hear him toss out Taibbi bait like this about the finance industry: "Think of it as a giant engorged leech on Main Street." Or listen to him explain that "We now have sociopaths in control of our major financial institutions." Booya! Part 2 of the interview is here.
 

Obama and Taxes

| Wed Apr. 14, 2010 8:32 PM EDT

Peter Suderman calls out President Obama as a tax cheat today. "If you make less than a quarter of a million dollars a year," Obama said on the campaign trail, "you will not see a single dime of your taxes go up." But according to the Joint Committee on Taxation, taxpayers earning less than $200,000 a year will pay nearly $4 billion more in taxes in 2019 thanks to a change in the medical expense deduction mandated by the recently passed healthcare reform bill. J'accuse!

Well, maybe. But I need some help here. When Obama made his campaign pledge, he was talking about his comprehensive tax plan. He wasn't promising that no bill he ever signed would ever raise taxes in any way for the under-$200,000 crowd, was he?

I'd like to set the record straight on this because it keeps coming up over and over and over. It came up in the context of an increase in cigarette taxes. It came up in the context of cap-and-trade. Now it's come up in the context of the healthcare bill — which has other tax increases that would hit middle class families too. (Why do you think unions were opposed to the excise tax?) So: did Obama promise to never raise taxes in any context for any purpose for all time for everyone making less than $200,000? Or was it always just in the context of his specific campaign tax plan?