Tax reform dead on arrival, killed by Dems, GOP

Democrats and Republicans have again shown their unusual capacity to get nothing done in Washington.

Both parties recognize the federal tax code is a mess, riddled with so many deals for a wide variety of special interests that it is no longer fair in the way it treats most Americans. 

The last time there was full-scale tax reform was in 1986, when Ronald Reagan, a Republican president, negotiated an agreement with Sen. Daniel P. Moynihan, a New York Democrat.  It cut rates and eliminated loopholes.

But loopholes seem to regenerate almost by themselves.  Now the code is again riddled with special breaks and is hopelessly complex.

Rep. Dave Camp, a Michigan Republican and chair of the House Ways and Means Committee, has waded into the mess and come up with a proposal for tax reform.  It’s a serious plan that does much the same as was done by Reagan and Moynihan.

The reaction of the parties?  The Democrats rejected it instantaneously, because it does not raise taxes on the rich.  The New York Times, friendly editorially to the Democrats, echoed their view, finding it “a huge missed opportunity.”

On the other side, GOP House Speaker John Boehner’s reaction, when asked to comment on the proposal, was devastatingly simple: “Blah, blah, blah, blah.”  To him, it was not worth commenting on a plan that was dead on arrival.

What Camp offered was a comprehensive and thoughtful attempt to eliminate tax breaks, many benefiting big business and the wealthy, and using the proceeds to reduce rates for all.  The proposal was intended to be “revenue neutral,” meaning that it would raise the same amount of money as the current tax code.

That’s the essence of tax reform.  It fixes a broken code without at the same time either raising or cutting tax revenues.  The object is increase fairness.  Tax increases or decreases are completely separate matters.

A tax loophole allows somebody to avoid paying some taxes, leaving it to others to pick up the shortfall.  To lower rates for most people who do not use many of the loopholes, they have to be closed for others. 

A good illustration was provided recently by the Maine Center for Public Interest Reporting, which found TIFs – tax increment financing – amount to a tax break for some towns at the expense of others.  Yes, loopholes exist in Maine law, too.

Tax breaks find their way into the federal tax code thanks to the pressure of those who expect to benefit from them and politicians who favor them, often in anticipation of some of that money flowing back as campaign contributions.

Those who benefit from the breaks defend them by claiming they are essential to the well-being of the country.  They want more of them, not fewer.

What both sides miss, probably intentionally, is the Camp proposal is serious and likely to produce its promised result, making it a good starting point for negotiating a compromise version of tax reform.  Camp has not said it is a take-it-or-leave-it proposal.

But this is a Congress that does not negotiate or compromise.  Camp, in his last year as head of the powerful House tax-writing committee, has tried to get something going, but it looks like he has failed.

Take one example.  He proposes interest on mortgage debt should only be deductible for loans up to $500,000.  That covers most people, but New York City mortgages are often for much more.  Does that mean the plan should be killed?

If it makes sense to vary the allowance for mortgage interest, the amount could be set for each county.  That’s not difficult to do.  But the discussion will never get that far.

The reasons are simple.  Members of Congress find it less politically risky to leave the tax breaks alone rather than getting rid of them, even though, in some cases, those benefiting from the breaks would do even better with reform.

Reforming the tax code makes those using loopholes nervous.  So they make some more campaign contributions to Democrats and Republicans, who helpfully kill reform proposals. 

Members of Congress have become more responsive to the special interests supporting them than they are to average people, who are almost completely unrepresented in tax policy discussions.

Democrats want to see government play a bigger role in the economy and want tax increases to pay for it.  Republicans want to cut taxes and government’s role, leaving the economy to the private sector.  

Both oppose real, “revenue neutral” tax reform, because it does neither – just makes life more fair.

Traditional Republicans Allow Tea Party Takeover

The recent vote on raising the ceiling on the national debt spotlighted the reason why Congress fails to act on virtually anything and manages to achieve record low popularity.

The debt limit is really a sham.  The debts have already been incurred, and the U.S. must pay their cost.  Presumably, blocking an increase means cutting spending so there’s money available to pay interest on the debt.

The Republicans in both the House and Senate wanted to avoid the issue becoming the cause of another government shutdown, for which they could once again get the blame.

But Tea Party partisans were willing to have the GOP take the heat for a shutdown, if they could take a victory blocking the debt ceiling increase into this year’s elections.

That put non-Tea Party Republicans on the spot.  If they voted to increase the debt limit, they might find themselves facing tea party opponents in GOP primaries this year. 

In the House, GOP Speaker John Boehner made a move possibly marking him in political history as a person who put the good of the country ahead of political survival.  Or it could simply show he is a smart politician, who knew the way the wind was blowing among the voters.

Boehner decided to let the House vote on suspending the debt limit. He knew only a few Republicans would be willing to ignore the Tea Party and vote for the suspension, joining with almost all Democrats.  The Speaker’s move was unusual for the GOP, more courageous than most of what followed.

The only face saver was the debt ceiling was not increased, but only “suspended.”  That ploy gave the impression, almost certainly false, that, in 2015, House members could revert to the old debt ceiling.  Or could the issue melt away, by substituting more suspensions for actual increases?

The Speaker’s move worked.  Most Republicans could proudly state they had voted against the suspension, thus warding off challenges from the Tea Party.  They passed the buck to Senate Republicans.

The rest should have been easy for the GOP.  By avoiding a formal vote to cut off debate, the Senate could have simply voted on the House bill.  Given the Democrats’ Senate majority, all of the Republicans could have voted against the bill and still seen it pass, which is what most of them really wanted.

But the Tea Party was not about to let that happen.  To pick up seats from traditional GOP senators, they had to make the debt ceiling an issue.  So they demanded a procedural vote requiring 60 votes to bring the House bill before the Senate.  The Democrats alone can muster 55 votes.

Texas GOP Sen. Ted Cruz, darling of the Tea Party, was more than happy to force the procedural vote.  Rarely does one see the open hostility of other Republican senators to one of their own as arose after his action.  Cruz even crossed his party leader, Sen. Mitch McConnell of Kentucky.

His tactics meant some Republicans would have to join all the Democrats in voting to end debate and proceed to a vote, putting some of them in the Tea Party line of fire in the primaries, including McConnell himself.

A dozen GOP senators joined the Democrats in ending debate.  Then the Republicans unanimously voted against the House bill, allowing it to pass with the votes of the majority Democrats.  Remember, most Republican senators wanted the bill to pass. They just didn’t want to be responsible for it.

Maine Sen. Susan Collins dutifully voted to end debate.  But sharing the worries of her party about a rightwing takeover by the Tea Party, she voted against the sensible House bill.  Of course, that vote cost her and her fellow Republicans nothing, because they knew the Democrats would pass it.

The Republican Party seems to be held hostage by its fear it will be taken over by archconservatives like Cruz.  It does not often resist them, much less get tough with their destructive tactics.

Why is the GOP, a party with a proud conservative history, allowing the Tea Party, representing about 20 percent of voters, to take it over in Congress?

Many Republicans seem unwilling to fight for constructive conservatism focused more on economic issues than political grandstanding.  Instead, they cede control to people like Cruz who exploit division rather than promoting positive solutions.

If senators like Collins try to survive the Tea Party threat by letting it set the agenda, traditional Republicans could turn out to be little more than foot soldiers in a right-wing army.   

Olympics: politics, profits and cheating triumph over its ideals

Political rivalries, the profit drive and cheating are characteristic of the Olympics.

Russia, as host of the 2014 Winter Games and seeking to regain its prime place in the world, has sought to pile up the medals.  That explains why South Korean Ahn Hyun-Soo easily got Russian citizenship so his gold medals could be attributed to Viktor Ahn, the same skater with a different name and nationality.

There’s little doubt that during the cold war, the relative outcomes of the United States and the Soviet Union were supposed to tell us something about their rivalry for power.

Remember the East Germans, seeking to show they were superior to West Germans, sending participants loaded with performance enhancing drugs.

The national medal count itself is misleading.  For one thing, the Olympics were supposed to promote closer relationships among athletes, reducing the importance of national distinctions.

Interestingly, that has become more likely the case of annual world championships in many sports, where the national standings mean less than the individual results. 

For only a few countries, Olympic participation has retained its traditional emphasis on amateur participation. But the Games themselves showcase professionals, because the stars bring in more revenues and public attention.

The medal count competition promotes cheating.  In the past, figure skating competitions were tainted by judges cheating on the scores they handed out.   This year, charges flew over the ice dancing results where the U.S. pair was the surprise winner.   

Somewhat more subtle this year, we saw a downhill ski course designed by an Austrian, claimed by some to favor the skills of his country’s skiers, who obligingly won gold and silver medals.

  

But instead of reducing the chances for cheating, new “sports” – scored by judges rather than timed or measured – increasing the chance for results influenced by national prejudice or just plain faulty judgment.

The International Olympic Committee found interest in the Winter Games faded when there were fewer events, so they simply trumped some up.

For example, luge (a word unknown to my spellchecker) is a sport for only a few people and barely heard of between sessions of the Winter Olympics.  Now the IOC has added team luge, a sort of relay where the baton is passed figuratively when a sledder hits a touch pad at the end of the run.  Here’s sport that would not have even been possible without the computer.

Also new this year is “slopestyle” skiing. Competitors have to slide over a variety of manufactured obstacles and perform air-borne spins to get their ratings. Is old-fashioned downhill racing is so boring we need this gimmick? 

That’s only one of several team events added this year to beef up the schedule.  In recent years, the number of different “sports” has doubled, and the IOC is looking for more.

The people responsible for keeping Olympic ideals alive with the focus on fair competition among athletes from all countries are responsible for politicizing the Games.  It starts with their choice of sports.

The IOC tries to come up with events designed to give smaller countries the chance for a medal or to prevent the larger countries from dominating the Games.  The results can be absurd.

Sports, like luge and something called skeleton, involving only a few thousand people in the world are fine, the IOC says.  In the Summer Games, a woman can get a gold medal for dancing with a ribbon.  

But the IOC threw both baseball and softball out of the Summer Games.  Though they are played by millions of people in scores of countries, the IOC saw them as too likely to yield American gold medals.

Can anything be done to return the Olympics to the kind of events pictured in the film “Chariots of Fire,” where athletes were more driven by a spirit of cooperation than cutthroat and nationalistic rivalry?  Almost certainly, that’s impossible.

Television networks, athletic federations and the IOC itself are all wrapped up in going for the gold. Not medals, but the profits they gain from their heavily hyped extravaganzas.

If viewers have to put up with the Games as they are, they should at least do so with their eyes open.  The Olympics are political and run to make money.  They probably produce less reliable results than the national and international championships held annually but little noticed.

Fortunately, the Olympics fade quickly from memory, and they should.

Celebrate George Washington, not a parade of presidents

On February 17, we celebrate Washington's Birthday.

Not Presidents Day, but Washington's Birthday.  That is the official U.S. government designation of the day, and it ought to be.

George Washington, vaguely remembered as "the father" of our country, is fading from consciousness. Because we want to remember Abraham Lincoln and other presidents as well, the holiday honoring Washington has all but disappeared.

It’s time to remind ourselves about this exceptional man.

During the war for independence, Washington alone embodied the United States. It was a heavy responsibility, and he knew it.

During the war, Washington was a better politician than a general. His strengths were his unwavering commitment to the idea of the United States and to civilian control of the military.

When he assumed the presidency, he understood that almost everything he did would set a precedent for history. Each step -- from how he was addressed to the creation of a functioning government to his relationship with Congress -- required careful thought and preparation and showed deep respect for the popular will. The long-lasting results are a testament to his wisdom.

Between 1776 and 1789, the United States was composed of a collection of independent and sovereign states. Washington faced the task of bringing and holding the country together. His experience as the only truly national figure during the war, dependent on voluntary state contributions of money and soldiers, taught him that a strong national government was essential.

But there was strong opposition from those whom worried that the national government would override states’ rights and individual freedoms.  Washington came to accept the Bill of Rights as an essential part of the deal to make a new country.

Washington, a slave owner, agonized over slavery. He recognized that the two parts of the country had deep differences about its future and that the country might break apart. If it did, a friend reported in 1795, "he had made up his mind to remove and be of the northern."

Washington believed that slavery would end as the nation's economy developed, though he was excessively optimistic about the timing and ease of the transition. He recognized that the future lay in the development of "manufactures" produced by wage labor, as was beginning to happen in the North.

Thus, 70 years before the Lincoln's defense of the Union in the Civil War, Washington used his national standing to hold the country together, even against opposition from Virginia, his home state.  His will provided for his slaves to be freed after his death.

Washington found that Thomas Jefferson bitterly opposed him on how to deal with the rest of the world. The president subscribed to a view later formulated by a British statesman: "Nations have no permanent friends or allies, they only have permanent interests."

For Washington, it made sense to sign a treaty with England rather than France, America's wartime ally but then in the throes of a bloody revolution. Jefferson and his group disagreed, later launching the disastrous War of 1812 against the British.

Because of Washington's willingness to establish a working relationship with the British, the Jefferson group charged that he really wanted to create something like a hereditary monarchy in the United States. Yet they could not produce a scrap of evidence against him, and he had no child who might succeed him.

Washington might have taken more power, but he carefully avoided making his position regal and always deferred to Congress.

He was disappointed at the development of political parties, and he split completely with Jefferson, who had formed an opposition party.

Unlike other Founding Fathers, Washington had a deep religious belief. Many others were deists, believing that God's role was limited to creating the universe, while Washington was a practicing Christian who often prayed.

Yet he did not believe that the United States was a Christian nation, writing that "All possess alike liberty of conscience and immunities of citizenship." He opposed religious "toleration," saying it implied that "it was by the indulgence of one class of people that another enjoyed the exercise of their inherent natural rights."

Perhaps his most amazing action was to resign first as general and then decline to serve more than two terms as president.  When Britain’s King George III was told that Washington would walk away from high office, he said, “If he does that, he will be the greatest man in the world.”

Washington was an amateur soldier, a general, a president and, above all, a man -- a great man. We should not forget him.