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This Just In: $2,000,000,000,000 Needed to Upgrade Infrastructure Will Require Higher Taxes! But… the Good News is the US Chamber Acknowledges the Need to Spend that Much and the Libertarian Reason blog asks “Higher Compared to What?”

March 31, 2021 1 comment

Today’s NYTimes business section included a lengthy article by Jim Tankersley and Emily Cochrane describing the Biden administration’s plans to seek higher taxes to cover the cost of necessary infrastructure upgrades. The most compelling argument for these projects came from Ed Mortimer, the US Chamber of Commerce’s vice president of transportation and infrastructure, who stated for the record that : 

….the scope of Mr. Biden’s spending proposals appears to be “in line with what we need to do not just to fix our physical infrastructure, but to encourage innovation, to bring clean energy online. The numbers that are being bandied about, they’re high, no doubt about it, but they’re in line with the needs.”

Having the typically anti-government and anti-spending Chamber of Commerce supporting “the numbers being bandied about” by a nominally “liberal” President as “in line with the needs“is an indication that the business community is not in denial about the need for the government to fund these projects. And while the Chamber is distressed over the proposed increase in corporate taxes, it is willing to negotiate the details on spending!

“Raising corporate taxes, and others, is kind of a nonstarter for Republicans. It’s kind of a nonstarter for us, too,” said Ed Mortimer, the chamber’s vice president of transportation and infrastructure. But he said: “We believe the administration has opened the door for other ideas to be considered. It’s a legislative process. Whatever the president lays out is not going to be the final bill.”

Their stance can only be viewed as good news to the Biden administration. But from my perspective, Ira Stoll’s Reason blog post, “Here’s How Biden’s Proposed Tax Increase Will Affect You” has even better news. Why? Because the post acknowledges that the tax rates proposed by the Biden administration are not unprecedented. 

And while Biden’s tax plans add up to a hefty hit overall, some of the pieces themselves seem incremental.

He’d increase the top corporate rate to 28 percent. That’s more than the current 21 percent, but still less than the 35 percent that applied between 1993 and 2017.

He’d increase the top individual income tax rate to 39.6 percent. That’s up from the current 37 percent, but it’s a rate that applied from 1993 to 2000 and again from 2013 to 2017, so it’s not exactly unknown ground.

The two most extreme aspects of the Biden tax plan each have political pitches behind them that are at least plausible.The 12.4 percent payroll tax for Social Security’s Old-Age, Survivors, and Disability Insurance is capped for 2021 on a wage base of $142,800. Biden would apply the tax to income above $400,000. That, not the increase to 39.6 percent from 37 percent, would be the real hit to high-income earners in the Biden plan. The combined effect—39.6 percent plus 12.4 percent—would be that at the margin, the federal government would take 52 percent, or more than half, of dollars earned over $400,000. There’s an additional Medicare tax of 3.8 percent, which would take the top federal marginal tax rate up to 55.8 percent.

I often disagree with the pro-business libertarianism of Reason, but their articles ARE based on facts and, in this case, the facts are far different than the rhetoric coming from the GOP and are, from the perspective of an anti-government-spending media outlet, not outrageous. They are “incremental” and “plausible”. 

The tax hike for corporations, which will inevitably be characterized as a 33% increase by some media outlets and many GOP politicians, could just as easily be presented as 20% LOWER than that in place from the Clinton through the Obama administrations. As Reason writer Stoll notes, this is “not exactly unknown ground” .

The increase for top earners is a small increase, but it, too, reflects what was in place during the Clinton and Obama administrations and it applies only to those earning $518,000 for joint filers and over $311,000 for individuals… a very small proportion of taxpayers. But because the top 1% is constituted of 1.6 million households and because many CEOs get mind-boggling compensation, that small increase on the highest tax bracket will yield millions. Indeed, if that marginal increase is applied to the aggregate salaries of the top ten CEOs it would yield $19,240,000 toward the improvement of infrastructure. 

And as readers of this blog realize, I have no problem with the collection of social security payments for those who earn in excess of $400,000. It never seemed fair that I would get a pay raise in November because there was a cap on social security payments… but I never aspired to making millions of dollars. 

The bottom line is that there is a consensus on infrastructure but an unwillingness to restore tax cuts that have yielded no demonstrable improvement to the well-being of the general populous. The only way Biden could not get this bill passed is if voters somehow buy into the notion that a 2.6% increase on the wealthiest Americans and a restoration of businesses taxes to levels of the turn of the 21st century are detrimental to them. Rest assured that the GOP and their donors will be promoting that idea!  

 

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NY Times Editors Excoriate Profiteers Preying on Veterans. When Will They editorialize Against PreK-12 Profiteers?

March 31, 2021 Leave a comment

Today’s NYTimes features an editorial titled “How to Stop Schools That Prey on Veterans“. The editorial expresses support for undoing everything the Trump-DeVos era did to deregulate profiteering at the expense of Veterans:

That means reversing, as quickly as possible, Trump-era rules that benefited the for-profit college industry at the expense of the public. Beyond that, the Department of Veterans Affairs and the Department of Education need to wield their existing authority to cut off federal funds to predatory schools.

But, as noted in a comment I left, why stop your critique at the post-secondary education? Why should ANY “for profit” institution receive government funds for pre-K-12 public education? Schools are a public good, not a commodity to be marketed like a refrigerator or automobile. As noted often in this blog, the NYTimes editors consistently champion the idea of “choice” as a panacea for “low performing” schools that are starved of resources… and they inevitably include predatory for-profit schools among the acceptable “choices” parents are encouraged to consider. K-12 schools that leave children in the lurch are at least as bad as the predatory for-profit colleges that leave veterans in the lurch. From the perspective of Donald Trump, Betsy DeVos, and the GOP, PreK-12 schools should be viewed as a commodity to be marketed to parent-consumers. And from their perspective, the unregulated marketplace will sort out the bad from the good. As for the parent-consumer? Caveat emptor!

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Counterpunch’s Compelling Protest Notwithstanding, I Stand By Biden’s Decision on Tests Given the ESSA Consensus

March 30, 2021 Comments off

A few days a go i wrote a post on Biden’s broken promises that offered a tepid defense of his team’s decision to break the promise on standardized testing. After reading today’s compelling Counterpunch post by Gael Greene I felt my blood pressure rise and my bile start to circulate until I re-read a revision and expansion of that post that I recently submitted as an op ed piece to our local newspaper… a revision that appears below. I am sharing it as what I believe to be a reasoned rejoinder. Alas, as much as I agree with Ms. Greene, I believe that there is much more at stake in the early months of the Biden administration than standardized testing… and given the huge margins ESSA passed by in December 2015 (a 359-64 vote in th house and an 85-12 vote in the Senate), picking a righteous fight on testing seems foolhardy given the higher stakes in play with SB 1, the infrastructure bill, and the need to address climate change. As noted at the conclusion of this op ed essay, I think the time to pick this battle and fight it tooth and nail is when ESSA is up for reauthorization. Here’s the op ed submission:

I started this op ed essay in late February when I learned that Joe Biden broke his promise to end standardized testing in public schools. As one who has long decried the misuse of these tests, I was dismayed that he reneged on his pledge to end the use of standardized tests and perplexed at the logic his staff used when they issued an edict disallowing States from issuing blanket waivers for the tests, something even Betsy DeVos permitted.  The reasons for suspending tests during this year are particularly compelling. We didn’t need to give standardized tests to know that students who had high speed internet and computers would outperform the students who lacked either. We didn’t need to give tests to know that in-person instruction is superior to remote instruction. We don’t need another round of tests to prove what we already know: students from well-resourced schools in affluent communities with a good tax base will outperform students from under-resourced schools in poverty stricken communities with a weak tax base. 35 years of lawsuits in New Hampshire are based on that fact. Will taking yet another round of standardized tests in 2021 change the thinking of the NH legislature? What, exactly, will another round of tests tell us that we don’t already know?

But the battle over the American Rescue Plan (ARP) changed my perspective. A bill that was widely popular among voters in both parties, the ARP passed without a single GOP vote in early March. As a result of this purely partisan pushback, I began to appreciate the strong headwinds Joe Biden faced as he tackled a long list of daunting challenges and contentious issues, challenges and issues that include:

  • Unity: In the toxic environment in Washington, even Biden’s call for unity in his inauguration speech was seen as “partisan”. GOP heard “unity” as a call for the country to fall in line under the Democrat’s “socialist agenda”. Unity is impossible without bipartisanship, and bipartisanship cannot be achieved as long one party pledges to reject any legislation proposed by the other.
  • Resetting and reforming the economy: The pandemic exposed the deep flaws of our nation’s economy. Economic inequality, the lack of full-time jobs that pay a living wage, the lack of affordable childcare, and the lack of affordable health care all predated the pandemic and all undercut the strength of the economy.
  • COVID-19: The previous administration’s decision to politicize and federalize the response to the pandemic divided our country at a time when a unified and consistent approach was needed. Instead of following a coherent national policy based on medical science, each state issued varying guidelines on issues like mask wearing, social distancing, and the reopening of schools and businesses. Too often, these guidelines were driven by politics instead of medical advice. In addition to dealing with this disjointed framework, the Biden administration faces challenges in achieving herd immunity since recent polls show that 41% of the GOP voters do not intend to get vaccinated.
  • Racism: Racism existed before the pandemic. It is a complicated systemic problem, one that can only be addressed through earnest and honest debates and compromises. Branding COVID-19 as “the Asian Flu”, conflating BLM protests with the July 6 riots, and passing laws making voter registration more difficult for minorities make honest discourse about race more difficult.
  • Rebuilding International Alliances to solve International Problems: Joe Biden needs to mend fences with our allies in order for his administration administration to address the many complicated interdependent problems that affect everyone in the world. Problems like global climate change, endless wars, refiugee crises, and authoritarian rule and the erosion of democracy require international solutions and international consensus. America cannot solve any of these problems unilaterally.
  • Restoring faith in government and elections: For more than 40 years we’ve heard that government is the problem. Since the middle of last year we’ve heard that elections are rigged. Without faith in the government’s ability to help solve problems and without trust in the results of elections democracy cannot survive.
  • Fallout from the January 6 storming of the Capitol: The investigation of the riots of January 6 is fraught with political peril. The gathering of evidence for the trials of those who participated in the riots and the trials themselves will keep the July 6 riots in the news cycle and those in the House and Senate who believe the election was stolen will fan any flames of doubt and discontent.
  • Immigration: When Central American refugees sensed that new leadership in Washington might lead to less restrictive entry into the US, refugees seeking asylum began moving north. Biden’s early Executive Orders reinforced that notion. As a reult, immigration is an urgent—and divisive– crisis.
  • Guns: In the wake of two horrific shootings, the highly contentious issue of gun control requires immediate attention.

Given this list of tough challenges and highly partisan issues, I understand why Joe Biden decided to break his promise on standardized testing. The Every Student Succeeds Act (ESSA), the law that requires States to administer standardized tests, was the last piece of truly bipartisan legislation. In December 2015 it passed in the House with a 359-64 vote and the Senate with an 85-12 vote. It is not surprising that an experienced politician like Joe Biden decided to break his promise on an issue that both parties supported, especially since the American Rescue Act provides a huge influx of cash for public schools.

ESSA is up for reauthorization shortly, though, and when it is considered in Congress I will finish my op ed article urging his administration to offer a new means of accountability. We need to use something other than pencil and paper tests as the primary metric of “success” for students and schools. The issues on the list above are, I must admit, far more urgent and important at this point. For now, I forgive Joe Biden for breaking his promise.

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