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#budget – Firstly, yes: the President’s new budget proposal is highly unlikely to pass and serves more as an election-year messaging stunt rather than as an actual policy proposal. Sure. Nevertheless, it is an indicator of where Democrats are and which direction their thinking is headed. And so, even though we here at PolicySphere don’t like talking about politics and hope to do it as little as necessary, it is worth taking a short look at.
The New York Times has an ok writeup, and we recommend the CRFB’s analysis if you want to look at the big numbers. The Tax Foundation’s analysis is also very good and is a little more detailed. See also Heritage’s report.
The headline you will see everywhere will be accurate: it’s a tax-and-spend budget. And, of course for a Democratic budget, it claims to tax only the rich but takes a very expansive definition of “rich.”
In particular, the budget would raise the total rate on some investment income to 44.6%, which would hit a lot of small and medium-size business owners. More eye-widening, it would eliminate what’s known as the “step-up in basis for inherited assets”, a provision that allows capital gains in an asset to go untaxed upon transfer to an heir. We try to shy from hyperbolic language here at PolicySphere, but this would simply take a flamethrower to the middle class in America. Anyone who bought a house that has risen in value and would like to pass it on to their children would see that asset’s value depreciated by a likely necessity to sell it to pay the taxes. Yes, again, this is a “messaging” budget but it is striking that something like this could even be publicly contemplated. Note to any Republican campaign consultants: start cutting your ads. “Anybody who votes for this budget is voting to take away grandma’s house”–this is only slight hyperbole. Another eye-watering proposal is the taxing of unrealized capital gains for high-net-worth households–anyone who understands how a private business or even a household operates understands why that is unworkable and, if implemented, would lead to a wholesale economic crash as all affected households rush to sell their assets at the same time to raise the money to pay tax on virtual value. There’s something very unpleasant here, which is taking advantage of ordinary people’s economic ignorance. Ordinary people believe that “the rich” just have lots and lots of cash in their bank account, but in reality they are mostly invested in illiquid assets like real estate and private equity whose value is theoretical and cannot be “monetized” at the snap of two fingers. “Unrealized capital gains” sounds like some sort of debulous loophole, when it is simply the normal fact that while a business (or a house) might have risen in value, that value has not yet been converted to cash and therefore it is impossible (without a fire sale of the asset) to pay taxes on.
Other proposals are more “standard” left-Democrat fare: a new “billionaires tax” (for households worth at least $100 million (last we checked, 100 million was less than a billion)), putting the tax rate back to 39.6% for individuals -earning more than $400,000 (many people, particularly in big coastal cities–oh, the irony–, earn this amount of money and aren’t “rich”), increasing the corporate tax rate to 28%…
On the spending side, it’s a litany of Democratic wishlists: paid family and medical leave, free community college, increased Pell Grants and other higher education spending, “behavioral health, mental health, and other public health spending” (also fodder for attack ads), “affordable housing”. It also includes other spending that Republicans might theoretically like or at least accept such as an expansion of the Child Tax Credit through 2025 and an expansion of the EITC. If this budget was a basis for a negotiation with the legislative branch and not a press release, these ideas might be the basis for a potential compromise.
Finally, like every President’s budget in living memory, this one has, ahem, “generous” economic assumptions to make its numbers work.
The bottomline is this: unlike ’90s and ’00s Democrats, today’s Democrats believe that “take successful people’s money and fund programs” is winning rhetoric. They are also willing to go on the record as supporting policies that would have been considered extreme just a few years ago.
#TikTok #bigtech #Chyna – TikTok! TikTok!
The way that the Protecting Americans from Foreign Adversary Controlled Applications Act has come together is noteworthy as an example of how policy happens in Washington, and why we should remain optimistic about the possibility of policy actually happening (which is one of the beliefs on which PolicySphere was founded).
First, there is a political change: bipartisan opposition to China and growing bipartisan awareness of the power of Big Tech platforms; then, there is a lot of discussion. This is the part people misunderstand the most. It feels waffly and vague–and very often it is. It feels like it goes nowhere. Senator Smith introduces a bill–and then, it seems, nothing happens. Think tanks write reports. But that time of maturation is necessary, until the second moment. A political opportunity arises–and in that case, things can move very very fast. Hemingway wrote that bankruptcy happens very slowly, and then all of a sudden. This is often the same way with policy change. When a political “moment” opens, policymakers “reach on the shelf” for all the ideas, proposals, reports, that have been sitting there apparently collecting dust.
We have all been told that we have an incredibly polarized nation, a deadlocked Congress with razor-thin majorities, and a nothing-happens election year. And yet, the Congress of the United States is about to vote on a bipartisan bill to do something truly significant: force TikTok and its owners to either divest from CCP-linked entities or face a ban in the US.
Here are Mark Warner and Marco Rubio, respectively chairman and ranking member of the Senate Intelligence Committee, talking about TikTok’s dangers on Face the Nation.
Pirate Wires has a good reported look at the battle for the bill, which started with intelligence community briefings of Congress. Quote: “The real motivation of TikTok’s loudest defenders … appears to be political support ($$$) from Bytedance investor Jeff Yass. Jeff Yass has funneled millions of dollars into relentless TikTok defender Vivek Ramaswamy’s ‘American Exceptionalism PAC'”
Here is Heritage President Kevin Roberts laying out the case for the bill. Here is Rand Paul laying out his libertarian reasons for opposing it.
Also of note, this quote by left-populist policy analyst Matt Stoller: “The bill to force a divestment of TikTok is obviously constitutional and a good idea. We would not have allowed the Soviet Union to buy NBC in 1964 and it’s lunacy to argue the Chinese government has First Amendment rights over American communications facilities.”
Now for everything else you need to know…
#Boeing #AmericanManufacturing #Financialization – F.A.A. Audit of Boeing’s 737 Max Production Found Dozens of Issues (NYT); see also: United Tells Boeing to Stop Making Its Long Delayed Max 10s; Airline confirms it’s in talks to substitute some Airbus A321s (Bloomberg)
#AI #Jorbs – Sure, ChatGPT is fun, but these guys built an AI that can replace software developers. Maybe “learn to code” wasn’t such a great idea after all.
#SocialIssues #LGBT – Support for same-sex marriage dips for the first time in nearly a decade: Survey (The Hill)
#SocialIssues #LGBT – U.K. National Health Service to Stop Prescribing Puberty Blockers to Kids (National Review)
#Science – Yet another AI-created fake scientific paper passes peer review. All of this is taxpayer-funded.
#Liberty – Sen. J.D. Vance’s ban on federal mask mandates signed into law
#Immigration – Noah Rothman: On the Border Crisis, Biden Lurches from Can’t to Won’t (National Review)
#Immigration – Vance bill would ban sanctuary cities from receiving federal housing grants
#Family – Institute for Family Studies: Family Dinners Offer a Silver Lining in a Bleak Social Capital Landscape
#SmallBusiness #Regulation – NFIB: Bipartisan Legislation in the U.S. Senate Will Reduce Burdensome Healthcare Reporting Requirements
#self-recommending – Heather McDonald: Disparate Impact Thinking Is Destroying Our Civilization
#Politics – Buck to retire next week, narrowing House GOP majority (The Hill)
#Politics – RNC Fires Dozens of Staffers After Leadership Shake-up (National Review)
Chart of the Day: New college graduates are severely overestimating their starting salaries (via)
We can foresee no negative long-term political consequences of elite overproduction and severe disillusionment of the college-educated…
Mental Health Break / Competency Crisis Watch: Recently unveiled Kobe Bryant statue contains typos on box score at base “Former Lakers guard Von Wafer’s name is misspelled as ‘Vom Wafer.’ Former Toronto Raptors guard José Calderón’s name is incorrectly spelled as ‘Jose Calderson.’ And the word ‘decision’ is wrongly spelled twice in ‘Coach’s Decision,’ misspelled as ‘decicion.'” Let he who has never misspelled “decision” while engraving the base of a statue cast the first stone…
