Today’s Edition: “Pay as you go.”

September 14, 2021

         Democrats are experimenting with a radical new form of government: Pay as you go. Well, almost. Biden wants to pay for much of his expansive $3.5 trillion reconciliation package by recapturing tax cuts gifted by Trump to corporations and the nation’s top individual earners. The Biden administration hopes to raise $2.9 trillion by raising taxes, including raising the corporate tax rate from 21% to 26.5%. The new corporate tax rate would still be less than the rate prior to the Trump tax cut. The plan would also raise the top marginal tax rate for individuals at from 37% to 39.6% (limited to those earning over $523,000). See Washington Post, “With big tax push, Democrats aim to tackle enormous gains of top 1 percent.”

          Moderate Democrats have trimmed some of Biden’s proposed taxes—effectively allowing intergenerational wealth to pass tax-free. See NYTimes “House Democrats’ Plan to Tax the Rich Leaves Vast Fortunes Unscathed.” As described by the Times,

          [T]he proposal, while substantial in scope, stopped well short of changes needed to dent the vast fortunes of tycoons like Jeff Bezos and Elon Musk, or to thoroughly close the most egregious loopholes exploited by high-flying captains of finance. It aimed to go after the merely rich more than the fabulously rich.

          The proposal focuses on taxing income rather than wealth, thereby allowing the super-rich to shelter most of their wealth. Jeff Bezos, founder of Amazon and one of the world’s richest men, is paid a base salary of $80,000—but sits on a fortune of $203 billion. It is perplexing that moderate Democrats want to draw a line in the sand to protect billionaires while they are wary of ending the Trump-era limitations on state-and-local-tax (SALT) deductions. Trump introduced the limitation on SALT deductions primarily to punish blue states that did not vote for him in 2016. So, while middle class families pay federal taxes on income that was used to pay state and local taxes, Jeff Bezos pays nothing on most of his fortune.

          Senator Joe Manchin twisted himself in knots by claiming simultaneously that the nation can’t afford the $3.5 trillion reconciliation package and that he opposes the corporate tax increases to pay for the reconciliation package. See WaPo op-ed by James Downie, “Joe Manchin’s selfishness.” At least Montana Senator Jon Tester was consistent in his approach, saying that “100 percent' of reconciliation package must be paid for.” That’s fair, unlike Joe Manchin’s “damned if you do, damned if you don’t” approach.

          Ah, well! That is how sausage is made in Washington. The public posturing is almost unbearable but is a precondition to reaching a deal. As I noted last week, even if Biden achieves only a portion of his ambitious agenda in the reconciliation package, it will be a monumental success. Don’t be distracted by the bickering. What can you do to help? Call your Senator to urge passage of the reconciliation package. For contact details for your Senator and suggested talking points, see “Chop Wood, Carry Water” by Jessica Craven.

I thought this story was a joke. It turns out to be true—but is still a joke.

          Mitch McConnell rammed through the confirmation of Justice Amy Coney Barrett in a matter of days on the eve of Trump’s landslide loss to Joe Biden. Barrett was a hand-picked protégé of the Federalist Society’s effort to overturn Roe v. Wade. Barrett returned the favor to McConnell and the Federalist Society with alarming speed, effectively overturning Roe by allowing the Texas anti-abortion law to go into effect despite its blatant unconstitutionality. Justice Barrett appeared at celebration to thank her puppet-master, er, sponsor in the Senate, Mitch McConnell. Despite her vote to uphold a law that was designed to violate the Court’s ruling in Roe v. Wade, Barrett told the assembled crowd that the Justices were “not a bunch of partisan hacks.”

          That line will haunt Barrett’s legacy on the Court, especially because she uttered it while seated next to Mitch McConnell—the ultimate partisan hack! And with due apologies for the lack of originality, the following line is begging to be said: “The lady doth protest too much, methinks.” In her first year on the Court, Barrett has proved beyond all doubt that she is a partisan hack. Any Supreme Court Justice who wants to avoid the appearance of impropriety (or partisan hackishness) should not give the appearance that she is ‘singing for her dinner’ in the year of her appointment.

Pandemic news.

          In really good news, the CDC said that vaccines could be available for children ages 5 to 11 sometime this year, perhaps by mid-October. See Huffpost, “COVID-19 Vaccines For Those Under 12 Could Come Before End Of Year, Says CDC Head.”

          In instructive news, about 20% of the unvaccinated employees at Delta Airlines got vaccinated after the airline announced a health premium surcharge of $200 per month for unvaccinated workers. See Business Insider, “Delta's $200 Surcharge Led 20% of Unvaccinated Workers to Get Vaccine.” I assume there is a complicated algorithm that will predict the maximal surcharge for optimizing vaccination rates among recalcitrant employees. In my simplistic view, it is five times the $200 monthly charge, or $1,000 per month. Even at that exorbitant rate, the additional premium dollars won’t pay for the healthcare costs for unvaccinated Delta employees hospitalized for Covid.

          In disappointing news, Florida Governor Ron DeSantis has achieved a temporary victory that allows the state to punish local school boards for requiring masks. See NPR, “A Court Rules DeSantis' Ban On School Mask Mandates In Florida Can Stand.” DeSantis has pinned his entire career on the notion that allowing parents to endanger their children’s lives is good politics. Florida doesn’t give parents the right to forego vaccinations for mumps, measles, or rubella. See Florida Department of Health, “School Immunization Requirements,” (“Florida requires certain vaccines to be administered before children may enroll and attend childcare and school.”) DeSantis is a hypocrite who is gambling with the lives of Florida schoolchildren to advance his presidential ambitions. Disgusting and depraved!

          Let’s hope that California Governor Gavin Newsom survives his recall challenge by a wide margin—which will send a signal to other Democrats that opposing the antivaccination platform of the GOP is a winning strategy. We will have initial returns on Tuesday evening on the recall campaign, though a final count may take weeks. If you haven’t already voted against the recall, the last day to do so is Tuesday, September 14th. Vote NO!

Concluding Thoughts.

A reader said she disagreed with my suggestion that Justice Breyer should retire. During the course of our correspondence (in which we failed to convince one another to change our respective views), I made a point I should have included in yesterday’s discussion. The reader noted that Justice Breyer is in good health and can remain on the Court for years to come. That is true. But it was also true of Justice Kennedy, who retired when Trump was in the White House and McConnell was majority leader in the Senate.

          Kennedy retired when he was 82 years old. He was replaced by his former law clerk, Brett Kavanagh, who was 54 years old when confirmed. Kennedy may have served for another five years or so if he had not retired “early.” But by doing so, he was replaced by a conservative justice who will remain on the Court for another 30 years.

          Breyer should resign for the same reason. Although he could conceivably serve another five years, his replacement could serve on the Court for another 30 years. Justice Breyer apparently believes that his continued presence on the Court for a few more terms is more important than ensuring a replacement who can serve for a generation. That judgment bespeaks a lack of self-awareness and humility.

          Justice Ruth Bader Ginsburg made the same assessment that Breyer is making now. Sadly for Ginsburg, after a distinguished career as a trail-blazing woman and brilliant liberal justice on the Court, Ginsburg’s judicial legacy will be written by Amy Coney Barrett.

          I acknowledge that decisions regarding retirement are difficult. In my career as a lawyer, I was on the Executive Committee of a global law firm. On the day that I was appointed to the Executive Committee, a “management consultant” hired by the firm gave me advice I will never forget. He said, “Starting today, your job is to identify and train your replacement.” That is how institutions survive and thrive. Whether we are three years or thirty years away from retirement, training the next generation and giving them opportunity to advance is vital to the health of every organization.

          Thanks to the many readers who expressed concern about our cabin in the path of a fire in Sequoia National Park. The CalFire incident page is here, KNP Complex Information - InciWeb the Incident Information System. (It is the KNP Complex Fire on Paradise Ridge that threatens our cabin.) Although it is difficult to predict the behavior of wildfires, the emerging consensus seems to be that the fire will reach our small community; the question is whether CalFire can create firebreaks sufficient to save the historic cabins. All we can do is wait and watch from afar.

          Talk to you tomorrow!