There's a handy reason that I'm sure was a major factor among his considerations: the Democrat-majority Illinois legislature reconfigured his district so that he'd have to go up against a Trumpist in the primary. That is some plain writing on the wall.
But Adam's not done being part of this twilight struggle. I'm actually keenly awaiting his next move. I think he has a lot to say that his current role as sitting House member has constrained him from saying plainly. He's going to be a lot more visible on the media landscape. And given that he says he's not done in the political realm, it's exciting to think about what he might be contemplating.
I do think he's going to have to aggressively pursue the objectives of the January 6 select committee, so that his actions speak louder than any claims of being hobbled by lame-duck status.
But what of Liz Cheney? With the departure of ten Republican House members who aren't interested in kissing the ring of the Very Stable Genius, it's hard to see anyone who might have her back now. But she is likewise a strong adult who knows what she stands for and why and will be effective in advocating for it, in or out of office.
The struggle goes on, against truly daunting odds. It can't be otherwise. We may be like the rifle-weilding men of the Alamo, who, as their leader William Barrett Travis well knew, were likely to die to a man, but, like them, honor compels us to be agents of truth and vision, whatever our fate.
The controversy she's catalyzed by assuming the role of President Pro Tempore in a denim vest and checking her phone from the dais spans left to right. I kind of think some of the ire from the left is intertwined with progressives' frustration about her opposition to their cherished aims, such as a $15 minimum wage, governmental intrusion into the setting of drug prices, and taking a grab-bag approach to infrastructure legislation.
It's clear she gets a kick out of being an unpredictable combination of traits. It may be that she has embellished some aspects of her upbringing, but it's pretty clear that it was weird at best, involving as she's claimed a time when the family lived in an abandoned gas station. The family was Mormon; she broke with the Latter-day Saints upon graduating from Brigham Young. She was quite the progressive herself in her social-worker days and the first years of her political career (Green Party member, PhD in "justice studies") and expressed her views colorfully ("These women who act like staying at home, leeching off their husbands or boyfriends and just cashing the checks is some sort of feminism because they're choosing to live that life. That's bullshit. I mean, what the fuck are we really talking about here?") She's described herself as bisexual, a status that has always perplexed me. Doesn't one have to be pretty promiscuous to determine that one is bisexual? And doesn't one have to have lovers of either the opposite-sex or same-sex variety who are, shall we say, understanding of one's efforts to conclude that that is indeed one's status? (Oh, that's right, in a world where secularism and and emphasis on individuals' feelings have snuffed out conventions rooted in religion, we no longer devote any thought to how others conduct their sex lives.)
But since her election to the Senate, she's been the kind of Democrat that makes the majority of that party's members pull their hair out. She voted against the Green New Deal. She voted for confirming David Bernhardt (a former - gasp! - oil company executive!) as Interior Secretary. And, as noted above, she does not dig the idea of a $15-per-hour minimum wage.
The way she's positioned herself in the last couple of years had righties - of the sort who live for clicks on their daily sensationalizing - providing lots of oxygen to the restroom incident of a couple of weeks ago. And, I mean, who couldn't - unless one were an ate-up activist type - see the utter absence of basic decency in chasing a Senator into a restroom stall while haranguing her about how she was going to vote on massive spending bills?
Now, with regard to the stunt at hand, I weigh in on the side of tradition and decorum. It was wrong for her to wear the denim vest. Then again, ideologically, I'm part of a breed that quite possibly faces extinction - that is to say, an actual conservative.
WHENEVER ANYONE under the age of 50 sees old newsreel film of Joe DiMaggio's 56-game hitting streak of 1941, he is almost certain to be brought up by the fact that nearly everyone in the male-dominated crowds--in New York, Boston, Chicago, Detroit, Cleveland--seems to be wearing a suit and a fedora or other serious adult hat. The people in those earlier baseball crowds, though watching a boyish game, nonetheless had a radically different conception of themselves than most Americans do now. A major depression was ending, a world war was on. Even though they were watching an entertainment that took most of them back to their boyhoods, they thought of themselves as adults, no longer kids, but grown-ups, adults, men.
How different from today, when a good part of the crowd at any ballgame, no matter what the age, is wearing jeans and team caps and T-shirts; and let us not neglect those (one hopes) benign maniacs who paint their faces in home-team colors or spell out, on their bare chests, the letters of the names of star players: S-O-S-A.
Dressing down may first have set in on the West Coast, where a certain informality was thought to be a new way of life. In the 1960s, in universities casual dress became absolutely de rigueur among younger faculty, who, in their ardor to destroy any evidence of their being implicated in evil hierarchy, wished not merely to seem in no wise different from their students but, more important, to seem always young; and the quickest path to youthfulness was teaching in jeans, T-shirts, and the rest of it.
Life in that different day was felt to observe the human equivalent of the Aristotelian unities: to have, like a good drama, a beginning, middle, and end. Each part, it was understood, had its own advantages and detractions, but the middle--adulthood--was the lengthiest and most earnest part, where everything serious happened and much was at stake. To violate the boundaries of any of the three divisions of life was to go against what was natural and thereby to appear unseemly, to put one's world somehow out of joint, to be, let us face it, a touch, and perhaps more than a touch, grotesque.
Today, of course, all this has been shattered. The ideal almost everywhere is to seem young for as long as possible. The health clubs and endemic workout clothes, the enormous increase in cosmetic surgery (for women and men), the special youth-oriented television programming and moviemaking, all these are merely the more obvious signs of the triumph of youth culture. When I say youth culture, I do not mean merely that the young today are transcendent, the group most admired among the various age groups in American society, but that youth is no longer viewed as a transitory state, through which one passes on the way from childhood to adulthood, but an aspiration, a vaunted condition in which, if one can only arrange it, to settle in perpetuity.
Am I vulnerable to a charge of hypocrisy here? After all, and this is a mindset I'd developed before the pandemic, but which was greatly reinforced by it, I tend to think in terms of how much of my day I can maneuver through in short and a tee shirt. But if that's the case, that's what I am, and I consider it a step up from never having known better. And when a situation absolutely calls for formality, I'm happy to rise to the occasion.
My conclusion is that, 2021 post-America being what it is, we're just going to be encountering a fairly constant parade of characters in our political and cultural life. Sinema's gonna Sinema, and sometimes it will please this bunch and some other times, the other bunch.
I suppose the argument can be made that having a greater number of characters in proportion to the number of button-down serious people makes us a more fun society. But then I survey the landscape, and it doesn't look like too many folks are having much fun at all.
I've tried mightily to give a respectful hearing to arguments that the Republican-Democrat duality that has characterized national, state and local elections since 1860. Many people I respect still hold that view. The main argument goes something like this: No one has the combination of resources - finance, connections, influence in media, broadcast, print or social, extraordinary leadership qualities - to build something requisite to the task of serving as a foil to the remaining party.
That argument becomes less compelling in the light of new revelations about what the Republican Party has become.
There are three that have transpired in recent days.
One involves a lobbyist close to Kevin McCarthy - who, let us remember, while under siege in the House chamber on January 6, was so exasperated in a phone call with Trump about Trump's unwillingness to put a stop to the insurrection, that he screamed, "Do you know who the fuck you're talking to?", but weeks later was making the pilgrimage to Mar-a-Lago to kiss the ring - and, almost certainly, McCarthy himself:
A prominent Washington lobbyist close to Kevin McCarthy, the House minority leader, is warning Republican political consultants that they must choose between working for Representative Liz Cheney or Mr. McCarthy, an ultimatum that marks the full rupture between the two House Republicans.
Jeff Miller, the lobbyist and a confidant of Mr. McCarthy’s dating to their youthful days in California politics, has conveyed this us-or-her message to Republican strategists in recent weeks, prompting one fund-raising firm to disassociate itself from Ms. Cheney, a Republican from Wyoming.
In response, The Morning Group, a fund-raising firm she hired to help prepare for a primary next year against a challenger endorsed by former President Donald J. Trump, informed her last month they could no longer work on her campaign, according to Republicans familiar with the matter.
This is a party that has jettisoned all its principles and scorched the political terrain so that it's uninhabitable for actual conservatives or anyone with a subatomic particle of integrity.
And to those who counter that the GOP stands a good chance of taking back the House next year, I would ask how that can possibly be construed as a good thing. It just sets up November 2024 to be a nightmare.
"Wonderful to see Colin Powell, who made big mistakes on Iraq and famously, so-called weapons of mass destruction, be treated in death so beautifully by the Fake News Media," Trump said in a statement released Tuesday morning. "Hope that happens to me someday. He was a classic RINO, if even that, always being the first to attack other Republicans. He made plenty of mistakes, but anyway, may he rest in peace!"
Nearly one year after the 2020 presidential election, a majority of Americans (58 - 35 percent) say they do not want to see Donald Trump run for president in 2024, according to a Quinnipiac (KWIN-uh-pea-ack) University national poll of adults released today. Democrats say 94 - 4 percent and independents say 58 - 35 percent that they do not want to see Trump run.
Republicans, however, say 78 - 16 percent that they do want to see Trump run for president in 2024, compared to 66 - 30 percent in May.
This is what actual conservatives are up against. Yes, we have Principles First. Yes, we have Adam Kinzinger, Liz Cheney and Ben Sasse. Yes, we sanity-based outlets like The Dispatch, National Review, and Commentary. (We sort of have The Bulwark, I guess, but it's a rather wobbly participant in the search for a way forward, given as it is to expressions of fondness for policies that are anything but conservative.)
But even more Republicans now than in May want to see this charlatan, this six-year-old in a geriatric body, re-elected.
Do I need to burnish my anti-Left bona fides before closing out here, just to circumvent any accusations of squishiness? I don't know. A scroll of LITD archives going back to this site's founding makes it pretty clear I have no use for collectivism, redistributionism, identity politics, climate alarmism or Great Reset-style utopian fantasies. I'm well aware that the Democratic Party is as useless to the cause of Western renewal as the GOP, that its freak-show and pillager wings work in tandem to make the unrecognizability of our nation irreversible.
That's why I say, once again, save that binary-choice argument for somebody who thinks we have any kind of shot at a decent future within that framework.
My most recent essay at Precipicehas to do with what eduction is and is not. It is not about preparing one for a career or making someone obsessed with his or her demographic classification. Ideally, an educated person would be one who retained a broad, lifelong curiosity, and who felt spurred to cultivate wisdom, humility, civic bonds and a sense of the transcendent, who was in awe of what his or her species had achieved over the last three millennia or so.
I came across this First Things piece by Harvard historian James Hankins shortly after writing it. It's entitled "Virtue vs Virtue-Signaling." A taste:
The question I’m left with now is how long elites can remain elite when their “elite” educational system is turning the next generation into ignoramuses, people who have never been allowed to think for themselves, androids who know only how to repeat the approved slogans and adopt approved attitudes. A decade from now, won’t the children who have been brought up on great literature, encouraged to think for themselves, taught how to argue and speak with eloquence, urged to develop their full humanity, children who know history and poetry and philosophy—won’t they become the new elite, the “true nobility”?
An example of a truly educated person can be found in this interview with Leon Kass, the Addie Harding Clark Professor Emeritus of Social Thought at the University of Chicago:
When someone introduces me for a lecture, and they recite my path through life—medicine, biochemistry, St. John’s Great Books, Chicago, bioethics, the Hebrew Bible—from the outside, it sounds like this is a guy who didn’t know what he was doing and had a midlife crisis every five years. From the inside, it’s one life.
I like to say everybody has one question. If you’ve got any questions, you’ve got one. And my question is how to live a humanly rich life for yourself and help create a community that’s conducive to most people having a crack at living a humanly rich life for themselves, separately and together.
This fits with the fact that, of all the things I love in life, it’s serious conversation that I love the most: serious conversation about the questions that matter, in the service of trying to make people thoughtful about how they’re living, and how to make the most of this very precious gift of life on Earth, which we have not by merit or by right.
We live in a world in which the dangers and the threats to living a humanly rich life are legion, from the distraction of the cell phone and social media to the threats of degradation, of hatred and prejudice and inequality, to the dehumanization of new technologies. How do we keep the world safe for the highest human possibilities of heart and mind and soul?
It’s of a piece. It’s taken different forms in different places. But from the inside, it seems seamless. I was 15 when I started college. I was too young. I was majoring in the sciences and did fine. That doesn’t require maturity. I didn’t take to the humanistic side very well until Joseph Schwab, PhB’30, SM’36, PhD’38, woke me up in my last year and showed me that there were questions to which the answers I thoughtlessly held were inadequate.
That was the beginning of my education, but I owe the University of Chicago everything. I owe it for having shown me that learning for its own sake rather than for something useful was a supreme part of a rich life. I owe it for showing me that asking questions that go to the root of things is the best possible way to think about things.
I learned this there. I acquired lifelong friends. I acquired the love of my life. We were invited back to Chicago to practice that for 34 years, an inestimable blessing.
Another example serendipitously came across my radar screen as well. At The Dispatch, Guy Denton takes an in-depth look at the life and career of of Robert P. George, the director of Princeton University's James Madison Program in American Ideals and Institutions. His is a life containing many colorful chapters.
James Broughel at Discourse says that, yes, patently out-to-lunch figures such as Paul Krugman have won the Nobel Prize in Economics, but let us remember that even mostly-head-on-straight guys like 1986 recipient James Buchanan have some decidedly underbaked notions in their track records.
Seattle talk-show host Jason Rantz says that separating groups into demographics that can't possibly inhabit the same society is underway in his area to the point that, well . . .
The school delivered the ghoulish news in an Oct. 8 newsletter to parents.
“As a school with foundational beliefs around equity for our students and families, we are moving away from our traditional ‘Pumpkin Parade’ event and requesting that students do not come to school in costumes,” the newsletter reads.
Even though the news will disappoint students, the newsletter says, the decision is meant to show respect for all B.F. Day students.
Halloween events create a situation where some students must be excluded for their beliefs, financial status, or life experience. Costume parties often become an uncomfortable event for many children, and they distract students and staff from learning. Large events create changes in schedules with loud noise levels and crowds. Some students experience over stimulation, while others must deal with complex feelings of exclusion. It’s uncomfortable and upsetting for kids.
Nothing says equity quite like making every student miss out on the fun because some administrator invented a scenario where students feel excluded. And we wouldn’t want to distract students from learning — except, of course, on National Walkout Day when students were allowed to ditch learning to form a giant peace sign in a political protest on gun violence.
At Reason, Nick Gillespie interviews Chloe Valdare, who is a champion of social and emotional learning in the broadest sense, but has an entirely different approach from most of those who advocate it:
Let's say I run a corporation and I want to bring you in to facilitate better relationships across my staff. How do you proceed? What does the Theory of Enchantment look like?
You could have us come in and do an actual day-long workshop, just to pilot a program to see if you really agree with or like our approach. Or you could enroll in our self-paced program, which anyone can enroll in at any time.
Those are structured differently. But both of them are based upon the three foundational principles of the Theory of Enchantment, which are: Treat people like human beings, not political abstractions. Criticize to uplift and empower, never to tear down or destroy. And try to root everything you do in loving compassion. So the objective of both of those approaches is to get the practitioner embodying those three practices.
What are the exercises that lead to that?
In our workshop, for example, when we talk about treating people like human beings, not political abstractions, we then have to unpack what it means to be a human being. Which is quite inexhaustible, actually, and quite vast, which is part of the beauty and the wonder of what it means to be human. So people go through different practices that have to do with vulnerability, that have to do with exploring tools like stoicism, which helps us as a species deal with things like our need for control.
The reason for this is very simple. When we talk about the concept of supremacy, supremacy is not just a racial concept. If someone cuts me off in the street and I begin to see that person as less than me, to see myself as greater than or better than that person, I have entered into a supremacist superiority complex, right? And when I'm doing that, I'm basically acting out of insecurity. I'm using supremacy as a defensive mechanism, because I am operating out of a sense of lack. So all the exercises in the Theory of Enchantment help the practitioners develop tools to deal with their insecurities—because all human beings have insecurities, unless you're the Buddha or something—so you'll be less likely to overcompensate for them by being attracted to supremacist ways of thinking. And again, it's not strictly racial. It's a fundamentally base human instinct that we get looped in as a defensive mechanism.
One of the things I found really interesting is your use of literature and popular culture. You use music, books, movies, etc., to explore these themes. Can you talk about that? It seems like a really good way to break down abstractions, because you're talking about a common text. But then it also seems like the minute you start talking about a particular song (and you use some hip-hop stuff) or particular writing (you use a lot of pieces by James Baldwin), you're immediately going to start fighting with each other. What are some of the specific texts you use, and how does that play out?
I love the arts. I've always been drawn to the arts. I love literature. I love dance. I love music. And the reason we use these as tools to give people the sense of an affordance of a common humanity is because, even though we're living at a time where it's politically in vogue to caricature people and to reduce people, the task of the arts is to give expression to the full range of the human condition. This is something that one learns, for example, when going to acting school and being in theater.
We use, as you said, sources from hip-hop. We use Kendrick Lamar. In our full self-paced training, we use songs by Lil Wayne. But it's a full range. So there's songs in there by John Mayer. There's literature in there by John Steinbeck. There's literature by Cheryl Strayed. There are snippets of Disney films that are used as prompts for exploration and identity discovery.
Michael Beckley and Hal Brands of the American Enterprise Institute, writing in Foreign Affairs, offer a view, well substantiated, it seems to me, of China's role on the world stage going forward that runs counter to common assumptions. The piece is entitled "The End of China's Rise."
True, China has been on the move on many fronts recently, but . . .
. . . if Beijing looks to be in a hurry, that’s because its rise is almost over. China’s multidecade ascent was aided by strong tailwinds that have now become headwinds. China’s government is concealing a serious economic slowdown and sliding back into brittle totalitarianism. The country is suffering severe resource scarcity and faces the worst peacetime demographic collapse in history. Not least, China is losing access to the welcoming world that enabled its advance.
Welcome to the age of “peak China.” Beijing is a strong revisionist power that wants to remake the world, but its time to do so is already running out. This realization should not inspire complacency in Washington—just the opposite. Once-rising powers frequently become aggressive when their fortunes fade and their enemies multiply. China is tracing an arc that often ends in tragedy: a dizzying rise followed by the specter of a hard fall.
The authors review China's history since the First Opium War of 1839, how it went from being exploited and humiliated to coming together under Communist rule, to self-imposed isolation, to opening up, beginning with the Nixon-Kissinger outreach, to the age of accessible markets and exchange of technology, to having an abundance of working-age citizens. The world kind of forgot the foundations of the regime as Western companies set up plants and joint ventures there and China sent students to America's most prestigious business schools.
It would be follow to proceed on the assumption that that is still the state of affairs, though:
But once-in-an-epoch bonanzas don’t last forever. For the past decade, advantages that once helped the country soar have become liabilities dragging it down.
For starters, China is running out of resources. Half of its rivers have disappeared, and pollution has left 60 percent of its groundwater—by the government’s own admission—“unfit for human contact.” Breakneck development has made it the world’s largest net energy importer. Food security is deteriorating: China has destroyed 40 percent of its farmland through overuse and become the world’s largest importer of agricultural products. Partly owing to resource scarcity, growth is becoming very expensive: China must invest three times as much capital to generate growth as it did in the early years of this century, an increase far greater than one might expect as any economy matures.
China is also running out of people, thanks to the legacy of the one-child policy. Between 2020 and 2035, China will lose roughly 70 million working-age adults and gain 130 million senior citizens. That’s a France-sized population of consumers, taxpayers, and workers gone—and a Japan-sized population of pensioners added—in 15 years. From 2035 to 2050, China will lose an additional 105 million workers and gain another 64 million seniors. The economic consequences will be dire. Current projections suggest that age-related spending must triple by 2050, from ten percent to 30 percent of GDP. For perspective, all of China’s government spending currently totals about 30 percent of GDP.
Dealing with these problems will be especially difficult because China is now ruled by a dictator who consistently sacrifices economic efficiency for political power. Private firms generate most of the country’s wealth, yet under President Xi Jinping, private firms are starved of capital. Instead, inefficient state-owned enterprises receive 80 percent of government loans and subsidies. China’s boom was spearheaded by local entreprures of eneurs, but Xi’s anticorruption campaign has scared local leaders from engaging in economic experimentation. His government has essentially outlawed negative economic news, making smart reforms nearly impossible, while a wave of politically driven regulations has squelched innovation.
As China has become more assertive and authoritarian, the world has become less conducive to Chinese growth. Beijing has faced thousands of new trade barriers since the 2008 financial crisis. Most of the world’s largest economies are walling off their telecommunications networks from Chinese influence. Australia, India, Japan, and other countries are looking to cut China out of their supply chains.
China is now dealing with a major economic slowdown. It is home to 50 gleaming metropolises, complete with high-rises and multi-lane expressways that lack the essential component to make them viable: residents. The Communist Party is returning to its Maoist roots. Due to China's expansionist gestures of recent years, its neighbors, from Japan to the Philippines to Indonesia to Vietnam, are becoming increasingly united in seeing the need to stand up to it.
China's leaders see a window closing:
China today checks many worrying boxes. Slowing growth? Check. Strategically encircled? Check. Brutal authoritarian regime with few sources of organic legitimacy? Check. Historical axe to grind and revanchist ambitions? Check and check. In fact, China is already engaging in the practices—the relentless military buildup, the search for spheres of influence in Asia and beyond, the effort to control critical technologies and resources—to be expected from a country in its position. If there is a formula for aggression by a peaking power, China exhibits the key elements.
Many observers believe China is throwing its weight around today because it is so confident in its continued ascent. Xi certainly appears to think that COVID-19 and political instability in the United States have created new possibilities to advance. But the more likely—and much scarier—possibility is that China’s leaders are determined to move fast because they are running out of time. What happens when a country that wants to reorder the world concludes it might not be able to do so peacefully? Both history and China’s current behavior suggest the answer is: Nothing good.
National conversations about government spending go back at least as far as the New Deal. Every so often, they attain front-burner status. but lately we seem to have become so inured to spending's effect on our future and the changing relationship between the state and the individual that even the recent uptick on attention to it doesn't seem to garner much buzz beyond the worlds of news and punditry. It's not exactly coffee-shop fodder.
But government profligacy's steadily gathering momentum under administrations of both major parties gets easier as its enthusiasts are ever-more able to say, quite correctly, that when those who have a record of saying that they want to see a reversal gain control of a branch or branches of government, there is only continued acceleration. This is why Donald Trump's election and the takeover of the Republican Party by Trumpists has been particularly pernicious. They demonstrably don't care about the size, scope, intrusiveness and insolvency of the federal government. One could point to the tax cuts of 2017, but tariffs soon countered the cuts' beneficial effects.
There are several components to the current round of attention to the matter. There's the tax aspect, the debt-and-deficit aspect, the statism-on-steroids aspect, and the inflection point at which Democrats find themselves.
Taxation inherently produces tension in a society founded on the primacy of human freedom. It's considered bad form to bring up the basics of what taxation is; that's for subtlety-lacking libertarian types to chime in with, according to modern perception. But it merits spelling out plainly on occasion: It is government using its monopoly on the legitimate use of force to take that which belongs to citizens and the organizations they form. Obviously, the functions of government envisioned by Madison need to be financed somehow, and healthy debate about how to go about raising that revenue ought to be encouraged.
That's not what we have now. Taxes of various sorts are proposed as a way too demonize certain categories of people and organizations. The broadest target of this effort is "the rich," who are still, at this late date, accused of not paying their "fair share."
According to the latest IRS data for 2018—the year following enactment of the Tax Cuts and Jobs Act (TCJA)—the top 1 percent of taxpayers paid $616 billion in income taxes. As we can see in Figure 1, that amounts to 40 percent of all income taxes paid, the highest share since 1980, and a larger share of the tax burden than is borne by the bottom 90 percent of taxpayers combined (who represent about 130 million taxpayers).[2]
In case you are thinking, “Well, the rich make more, they should pay more,” the top 1 percent of taxpayers account for 20 percent of all income (AGI). So, their 40 percent share of income taxes is twice their share of the nation’s income.
Similarly, in 2018, the top 0.1 percent of taxpayers paid $311 billion in income taxes. That amounted to 20 percent of all income taxes paid, the highest level since 2001, as far back as the IRS data allows us to measure. The top 0.1 percent of taxpayers in 2018 paid a greater share of the income tax burden than the bottom 75 percent of taxpayers combined.
Under current law, the United States statutory corporate tax rate of 25.8 percent (21 percent federal statutory rate plus the average of state and local corporate tax rates) is slightly below the OECD average (weighted by GDP) of 26 percent. The METR [marginal effective tax rate] on corporate investment in the United States, under current law, is 18.3 percent, 2.9 percentage points higher than the OECD average. The AETR [average effective tax rate] in the United States is 23.4 percent, which is roughly in line with the OECD average of 22.8 percent.
The Biden administration has proposed raising the statutory corporate income tax rate to 28 percent, while the House Ways and Means Committee has approved a proposal to raise the corporate tax rate to 26.5 percent. Lawmakers have also proposed reforming the tax treatment of foreign profits of US multinational corporations and repealing or reforming the low tax rate on foreign-derived intangible income (FDII). Their goals are to increase federal revenue, increase the tax burden on capital income, and reduce profit shifting by US multinational corporations.
The Biden and House proposals would raise the statutory and effective tax rates to either the highest or nearly the highest in the OECD (see the table below). Both proposals increase the tax burden on corporate investment, reduce the incentive to invest in the United States, and increase the incentive to shift profits and high-return assets into low-tax jurisdictions.
The central thesis of Treasury’s article is that business owners are the primary source of all tax cheating in the U.S. According to the article, “about half of the individual income tax gap accrues to income streams from proprietorships, partnerships, and S-corporations, where there is either little or no information available to the IRS to verify the veracity of tax filings.” Put differently: Unless the IRS has third-party information to verify the claims made by self-employed people, they will systematically cheat on their tax returns.
This claim is based primarily on IRS audit results; yet as I’ve written in the past, these data are simply unreliable. It is well-documented that the IRS’s audit results are wrong between 60 to 90 percent of the time, depending on the issue. Moreover, because IRS auditors are themselves undertrained in tax law, they often misapply the proper legal standards to their audit decisions. Even worse, auditors routinely use tactics of bluff and intimidation, misinformation, and disinformation, and even outright lie to citizens during audits to coerce taxpayers into accepting audit results that are simply not accurate.
Your government would like you to believe that it is only going to go after "the rich," and that the noble intentions of the non-rich will not be disrespected. Are you buying it?
The author of the article continues to advance the party line that Biden’s tax plan will not affect anyone earning less than $400,000 per year. Consider this statement:
It is important to understand what this improved information reporting proposal is not: It is not about using new financial account information reports to increase enforcement scrutiny on lower-income taxpayers. The Administration has been clear that audit rates will not rise relative to recent years for those with under $400,000 in actual income. Instead, these proposals are about targeting enforcement actions where they belong: on higher earners who do not fully report their tax liabilities.
In light of the claim that the underreporting is attributable to “proprietorships, partnerships, and S-corporations,” it is — to use a kind word — disingenuous to suggest that self-employed individuals operating under one of these entity forms will not be targeted for enforcement action. The vast majority of self-employed people operate under one of these entities, and the vast majority of them earn under $400,000 annually. The reality is that, as a whole, the money in America is largely in the hands of the middle class. You can be sure, then, that’s where the IRS attacks will be targeted.
Propaganda is what it is, and so I was unsurprised to read in the article the claim that we have a “two-tiered tax system.” The author claims that our tax system contains “two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe.”
This is not so. There are absolutely not two sets of rules in the tax code. The Internal Revenue Code applies to all taxpayers equally. A person earning a small amount of income must report all of it and pay whatever tax is owed after the application of allowed deductions, credits, etc. The same is true for high-income people.
This is merely a thinly veiled attempt to use class envy as a device to persuade lower-income people that while they must pay through the nose on their taxes, high-income people are permitted to systematically cheat on theirs. In that case, the former will likely countenance any plan to attack the latter without considering the possibility that they also might be harmed. But that’s exactly what will happen since there are simply not enough high-income earners available to raise the revenue needed to support the trillions of dollars in proposed spending and deficits.
There are a number of counter-arguments to be made against the assertion that we could afford all the statist designs of the overlords if the cheats could be brought to heel. It really boils down to one essential point: those statist designs are the problem:
In truth, though, your taxes are high and getting higher for one reason only: Congress spends way too much of your money, without any incentive to stop . . . To suggest that policy-makers engage in some level of intellectual “give and take” over the friction between higher deficits and lower spending is complete nonsense.
Anybody who’s spent any time studying these policy issues knows full well that Congress sets its spending agenda first. That agenda is determined by the social and political issues of the day. It then sets tax policy based on the same considerations. At no point does Congress say: “We have X dollars to spend, so how do we allocate those funds?”
If the $3.5 trillion Democratic reconciliation bill becomes law in anything close to current form — including paid parental and sick leave, universal preschool, some free college, and an annual check to households with younger children — it would be a big step toward turning the United States into a European-style comprehensive welfare state. Many progressive Democrats speak highly of the Scandinavian social democracies, in particular. As Bernie Sanders has put it: “I think we should look to countries like Denmark, like Sweden and Norway and learn what they have accomplished for their working people.”
But those loving glances toward Team Nordic often produce fuzzy vision. They typically miss something really important: how those countries pay for those massive welfare states. As Wall Street Journal columnist Greg Ip notes:
Yet if other countries’ welfare states are a template for American progressives, their taxes aren’t. In Germany, the typical worker pays 49% of her labor compensation in income and payroll taxes (including the employer’s contribution); in France, the proportion is 47%, in Sweden, 43%. In the U.S., it is just 30%. The U.S. alone, among major advanced economies, doesn’t impose a value added tax on consumers of goods and services.
On that last point: Denmark, Sweden and Norway all have VAT rates of 25 percent, according to the Tax Foundation, with each collecting close to 10 percent of GDP through the levy. Yet Democrats have made a big deal about not raising taxes on households earning less than $400,000 a year. (There are some exceptions as Ip notes: “Smokers, for example, will pay a higher cigarette tax, and middle-class stockholders will indirectly bear some of the higher corporate tax rate.”)
One could argue that there’s still plenty of room to fund more social spending through higher corporate taxes and higher top income-tax rates before talking about an economy-wide VAT. That, especially given higher income inequality in the US. But clearly creating Nordic America is going to require lots of additional revenue, whether through a VAT, carbon taxes, or a combination of both. Again the Tax Foundation: “In 2019, Denmark’s tax-to-GDP ratio was at 46.3 percent, Norway’s at 39.9 percent, and Sweden’s at 42.8 percent. This compares to a ratio of 24.5 percent in the United States.” And these WSJ charts highlight the current gap in social spending and spending commitments between the US and Europe:
It’s hard to avoid the reality — unless you’re a progressive politician, perhaps — of a fundamental mismatch between the left’s spending dreams and the economics of taxation. One caveat, which I point out in a recent The Week column:
Unless of course, Democrats adopt novel theories of macroeconomic policy that suggest significantly less need to pay for government spending. But there’s little evidence that anyone outside deeply left progressive politics or EconTwitter takes such ideas seriously. Certainly there’s no evidence that Federal Reserve Chairman Jerome Powell does, and he’s likely to be renominated for another term as boss of the central bank. If the far left really wants a transformational presidency — whether Biden’s or someone else’s — the lives of all Americans would need to fundamentally change.
Now, to the specifics of the current situation.
Manchin and Sinema have much of the rest of the Democratic Party pulling its hair out.
It's been somewhat amusing to read the columns and essays purporting to ascribe motives such as ego and political calculation to their reluctance to sign onto both an infrastructure bill that, for all its pork and statism, at least addresses actual infrastructure, as that term is commonly understood, and then, on the heels of the passage of that, a $3.5 trillion (hopefully you're not so numb that the magnitude of that figure didn't get your attention) reconciliation bill. According to these theories, they are merely getting a kick out of tweaking progressives' noses, or they are kowtowing to the red-statish inclinations of their constituents with no real convictions on the concerns they raise.
The good news for post-Americans who still prioritize the sovereignty of the individual is that those two Senators are going to make it, for all intents and purposes, impossible for the Democrats to impose this new degree of statist intrusion into our lives and get away with the fiscal peril it entails.
There's still a Herculean task before us, though. Way too many people in this country would be fine with a Nordic model, in which government would take a good half or more of everything someone busts his or her ass to earn, in return for a set of services and benefits in such areas as health care, education, and retirement that government would dispense at a level of quality and within a range of what it deemed suitable for you to choose from.
This is a major step on the way to reducing us to the status of cattle.
There's a reason why the telephone, the airplane, the television and the personal computer all originated in the United States of America. Our government honored ingenuity. It turned loose the basic human impulse to improve one's lot. The more government has moved away from that, the more saddled with debt we've become, and, more to the point, the less we think about the value of freedom.
