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Trump Administration Continues to Attack the Environmental Projections First Put Into Place by the Nixon Administration

If you, the reader, are uncertain whether to support Trump or whoever the Democratic candidate turns out to be, I urge you to consider the devastating reduction in protections for clean air, clean water, and clean land (thus also clean air/water and food) under the Trump administration's 'hate anything Obama' approach that has put industry blowhards in charge of the Environmental Protection Administration, an agency created on December 2, 1970 to ensure federal research, monitoring, standard-setting and enforcement of environmental protection. 

(Image of Trump at West Virginia campaign rally in August 2017, from CNBC article on Trump rollbacks of regulation, cited below)

Under Trump, we have instead a complete disregard for the environment, a view that harks back to the times when rich owners of factories, mines, or corporate farms exploited and polluted land, waters, and people in their greed for profits. For example, in July 15, 2019, the New York Times reported that the Government Accountability Office found that the administration "did not consistently ensure" that its appointees to EPA panels satisfied federal requirements.  This was during 2017, when the Trump administration dismissed academic scientists from EPA advisory boards in order to replace them with industry-connected appointees.  Panels that had in the past included a very high percentage (more than 80%) of academic scientists were reduced precipitously under Scott Pruitt, Trump's first EPA head.  Pruitt, of course, resigned in scandal (as so many in the Trump adminsitration have done) in 2018 after loading EPA advisory panels with industry hacks .  See, e.g.,  E.P.A. Broke Rules in Shake-Up of Science Panels, Federal Watchdog Says, NY Times, July 15, 2019; Removing Academic Scientists from Science Advisory Panels, Harvard Environmental & Energy Law Program, Feb. 26, 2018 (noting replacement of scientists with industry insiders and consultants, including a climate change skeptic, following Scott Pruitt's October 31, 2017 directive).  Scientists removed from the panels refused often to be silent.  For example, some formed their own air pollution panel after Andrew Wheeler, Trump's next EPA administrator, disbanded the Particulate Matter Review Panel in October 2018.  It had "some of the nation's top scientists, who were tasked with reviewing how soot and other microscopic air pollutants impact human health."  Rebecca Beitsch, Scientists booted from EPA panel form their own group, The Hill (Sept 26, 2019).

The Trump Administration labels environmentalists with the same type of derogatory terms that Trump uses for all of his "enemies"--i.e., almost everybody in the country that isn't loyal to the bully-in chief because they recognize his shallow, egotistical, narcissistic lack of knowledge and caring about the well-being of the country or its citizens--even while he claims with his typical bravado and fluff that his administration makes "the very cleanest air and cleanest water on the planet" a top priority.   Meanwhile, Trump is busy rolling back as many environmental protections as possible.  See, e.g., Emma Newburger, Trump is rolling back over 80 environmental regulations.  Here are five big changes you might have missed in 2019, CNBC (Dec 24, 2019) (rollbacks including fewer protections for endangered species).  Trump and other people of wealth think they can live in a cocoon of luxury that doesn't suffer damage when the earth's species die out from pesticides and pollution, when the earth's climate changes to create fires and storms hostile to life, when the earth's waters are no longer clear and drinkable by plants, animals (and humans), when the earth's land is destroyed by overlumbering, fracking, the rapacious thirst of oil drillers, and the careless destruction of mountains of surface mining.  They are wrong, but they may not recognize it until too late.  Trump's stupidity is thinking that he who doesn't read, hasn't studied, and doesn't care about science or life generally is suited to make decisions about wilderness or any of the myriad environmental issues facing us.   He leads rallies where people become mesmerized by being part of a raving crowd, with little recognition themselves of the way the ultra rich are taking advantage of them in their daily lives.  He knows nothing, and cares even less about what he doesn't know.  Yet his administration continues to move to change environmental policy to favor big corporate interests and disfavor local decisionmaking.  He appoints industry hacks as Interior Secretary--there was Ryan Zinke, and then extraction industry lobbyist David Bernhardt.   See, e.g., Michael Greshko et al,A running list of how Trump is changing environmental policy, National Geographic, May 3, 2019 (pipeline order, David Bernhardt as Interior Secretary, safety regulations rolled back, oil and gas access to Arctic National Wildlife Refuge, Keystone XL pipeline approval, etc.). Preservation of pristine natural areas such as the Arctic Wildlife Refuge or the Big Bear Monument are eroded with no concern, so long as corporate grandees are satisfied.  Trump's final budget plan, released Feb. 10, 2020, is yet another example: steep cuts to the agencies and programs that protect our climate, air, water and wildlife.  See, e.g., Trump's final budget enshrines climate denial, war and cruelty into conservative manifesto, Friends of the Earth, Feb. 10, 2020.

This Trump no-holds-barred war on the environment is devastating for most Americans.  The Flint water crisis, where local and state administrators made stupid decisions about switching to cheaper water without protections against lead poisoning are just an early example of what awaits the entire country under this approach.  It is, as Friends of the Earth policy analyst Lukas Ross notes, "an immense moral disgrace" that is hardest on "our society's most vulnerable".  Id.  Communities of color, unsurprisingly given the GOP's empty rhetoric about caring about equality and justice, are the most harmed by these policies.  See, e.g., Amy Patronella & Saharra Griffin, Communities of Color Bear the Brunt of Trump's Anti-Environmental Agenda, Center for American Progress, Feb. 27, 2020.  That piece notes that systemic racism and segregation (including redlining of residential districts) have resulted in low-income communities and people of color being "disproportionately vulnerable" to climage change impacts of greenhouse gas emissions. The column lists key examples of Trump administration anti-environmental actions, including the following:

• removing protections for one-third of U.S. drinking water sources "by weakening the Clean Water Act, finalizing a so-called dirty water rule, and delaying action to protect against toxic chemicals in drinking water;
• easing regulations surrounding disposal of coal ash to prevent its leaking into groundwater sources, which tends to affect communities of color disproportionately with cancer, low birth-weight babies, and premature deaths;
• proposing a roll-back of standards established in 2011 to protect against mercury and other toxic chemicals, including mercury emissions from coal and oil fired power polants, with a particularly negative impact on those living in close proximity, which tend to be African Americans;
• gutting the Clean Power Plan designed to reduce climate-change inducing pollution and improve public health;
• lowering the standards for nitrogen oxide emissions from coal plans, affecting again people of color who tend to make up a large percentage of those living within 3 miles of such plants;
• deregulating oil refineries by changing two Obama-era rules that were expected to lower cancer risks for 1.4 million people;
• requiring air quality standard reviews to consider economic and other costs rather than the health impacts required under the Clean Air Act (and thus favoring polluters, since any improvement from the status quo always comes with an economic cost);
• limiting the role of public comment under the National Environmental Policy Act (NEPA) enacted 50 years ago, in order to keep communities from having a voice in projects that affect them and handing that voice instead to corporate polluters who profit from pollution;
• proposing slashing funding for Superfund site cleanup, when such sites tend to be located in nonwhite communities (note that Andrew Wheeler as head of EPA is now overseeing sites his clients created when he was a lobbyist for the chemical industry);
• refusing to ban toxic pesticides that are linked to brain damage in children after EPA scientists studied and recommended the ban;
• Reducing EPA's budget by more than 25% to decrease its ability to regulate industry polluters;
• continually rolling back regulations and working against climate change remediation, resulting in increases in greenhouse gas emissions and extreme weather damage ($45 billion in 2019 in the U.S. alone);
• diverting FEMA funding to immigration enforcement (which has included dragging children away from parents seeking asylum).

As the article concludes:

In the midst of this systemic elimination of federal protections and willful inaction on climate, the science is resoundingly clear: We must move to a 100 percent clean energy future with equity at the forefront. The Equitable and Just National Climate Platform, co-authored by the Center for American Progress, 12 environmental justice groups, and seven national environmental organizations, recognizes the importance of justice and equity as “central components of our climate agenda.” Additionally, it calls for “healthy climate and air quality for all” as well as “[s]afe, healthy communities and infrastructure.”  All communities, particularly communities of color, can no longer afford the Trump administration’s attacks on public health and the environment.

So what does this have to do with tax policy?  My friends, our tax money is currently supporting the Trump administration industrial lobbyists in their efforts to undo environmental and natural area protections across the country.  This is class warfare at its heart--the lobbyists and corporate managers of the most polluting firms colluding to ensure that they can freely pollute our world without facing any liability for doing so. Our tax revenues are making it possible for Trump to fly to his own resort in Florida for which the US government pays millions in secret service guest quarters so Trump can spend most of every weekend golfing.  Instead, our tax revenues should be supporting good government programs that protect our land, water and air, as well as endangered species, so that our children can enjoy a healthy life and appreciate the natural beauty of this country.  Ultimately, taxes and spending are intricately entwined.  Bad government--like the corrupt Trump adminsitration--means both are working to the detriment of the American people.

Hope Lives: Pressing Collins and Corker and Flake on Tax Bill

The Republicans' proposed tax legislation--whether the House or Senate version--is despicable.  It will exacerbate the already devastating income and wealth inequality in this country, leave the federal government without adequate funds for real infrastructure and social safety net needs, and place in almost inviolable power the wealthiest oligarchs of the country (and even the good ones exert a power that no one should possess in a democracy).

My previous posts on this so-called "tax reform" "simplification" package (it is neither) have outlined a number of pernicious provisions in the bills.  There are a few I haven't mentioned, such as the likely inclusion of taxation of tuition benefits to undergraduate and graduate students.  That will have an immediate impact on education and on basic scientific research.  Not surprising, given Paul Ryan, Donald Trump, and Mitch McConnell's aversion to fact-based science and intellectuals, but nonetheless devastatingly harmful to the country in loss of prestige for our universities, loss of the top minds to other countries, and loss of entrepreneurial and innovational thinking that will hamstring commerce and productivity.  Another is the "new" talk in the House of lowering the tax rate on the weathiest bracket by as much as two and a half percentage points--adding to the largesse for the wealthy otherwise larding the legislation and making it even more obvious that the only Americans the Republican Party sees itself as serving are those with at least millions and probably billions of net worth.  The Republican charade of right-wing "alternative facts" (shown most clearly by the Treasury Secretary's inability to provide a supported rationale for the absurd corporate and oligarch-favoring tax cuts) would have a destructive impact on the entire U.S. economy.  And it is not simplification--it is a huge complication that is ripe for tax abusers to abuse the complicated categories of differently taxed income.

But today there is a ray of hope that this tax scam might just not get passed --or might get turned around very quickly if it does get passed.  Doug Jones' defeat of constitutional scofflaw and likely multiple-sexual-predator Roy Moore should cause any thinking Republican in the House and Senate to take a step back and listen to the views of constituents across the country, where dislike of this tax legislation is the majority view.  The #MeToo movement and its impact on powerful media and other industry harassers, together with the fact that Democrats and Independents got out the vote in Alabama and defeated Roy Moore -- and another 20,000 likely lifelong Republicans decided to  write-in another Republican name other than Roy Moore--should tell current GOP congresspeople that "the times they are a changin' ".  Reaganomics--trickle-down, supply-side tax policies--don't work.  Kansas proved that, if anybody actually had any doubt before.  If the Republican majorities in the House and Senate pass this " Class War" tax legislation--written and argued and honed to a tee to serve the wealthiest multinational corporations and individual campaign donors while stabbing the middle and low-income classes in the back--they will potentially pay a big price at the polls in 2018 and 2020.   They will pay that price because their tax legislation will send the U.S. economy into another tailspin that will lead to cuts in the standard of living of ordinary people so people like the Trumps can have even more gaudy gold faucets in their many mansions.

I call on everyone who can to write and call Jeff Flake (Arizona)--ask him to stand on principle and vote against the end of the Obamacare mandate, the giveaway to the wealthy and big corporations, the ridiculous scammable complication of different rates for the same income depending on what job the taxpayer worked at or whether the taxpayer owned the business or was an employee.  Ask him to vote down this despicable tax legislation for the good of the country and ALL the people.  Do the same for Susan Collins (Maine), who already has expressed real concerns about the impact of the elimination of the health insurance mandate.  Even her 'bargained for' (but not actually promised) two-year patch wouldn't do much good:  millions of people, the most vulnerable amongst us, will lose health insurance and therefore health care if this tax legislation passes.    And let Bob Corker (Tennessee) know how much we all respect him for actually standing firm against this tax legislation travesty--and ask him to stand even taller by resisting the pleas to compromise principles 'just to get a win for  Trump'.  Let's push our Senators and Representatives to stand tall for a sustainable economy based on fiscal responsibility (don't create a $1.5 trillion dollar deficit) and distributive justice (don't push the middle class into dead-end living conditions) and end the giveaways to the wealthy oligarchs.

I predict that if this bill passes the expected accounting for the Republican Party will come even sooner and with even more  strength against those who supported Trump's daily vitriol of falsehoods and the Trump Administration's filling the DC swamp with those who put pollution, despoiling the environment, destruction of the wilderness and national public lands foremost on their agenda.

The Utterly Terrible GOP Tax "Reform" Scam

The Republicans in the House and Senate continue on their downhill rush to pass their so-called "tax reform" plan before the holiday break.  It's a mad rush to nowhere, a corrupt process of "please the oligarch" that will cause a huge deficit increase (on the scale of $1 to $1.5 TRILLION over ten years) and be used by the Ryan, McConnell and Trump cadre of liars to justify a domino effect of Medicare, Medicaid, and Social Security cuts.  It is class warfare of the one percent against everyone else.  And it is being sold to the American people with a litany of falsehoods.

Almost all the provisions in the bill are designed to be generous to the ultra wealthy and stingy to the middle class and poor. 

Corporations and their owners and managers--among the wealthiest people in the country--get the only permanent tax breaks.  It's done in the name of competitiveness, but that's bunk.  It essentially encourages corporations to continue to move profits out of the US because foreign profits are taxed at zero while US profits are taxed at 20%.  It pretends that the multiple tax breaks for big corporations are necessary (under disproven trickle-down and supply-side theories) to lead to more investment in business in the US and to more jobs and higher pay for workers.  But in fact corporations are enjoying record profits under current law and they aren't using those record profits to pay their workers more or to create more jobs or even necessarily to invest in the US.  Mostly they are just doing share buybacks for shareholders (ie, owners/managers and other shareholders) that include the  wealthiest people who own the most corporate stock.  That's because it is demand, not capital, that determines what business expansion is needed and results in labor shortages that give workers leverage to demand more pay.  Tax cuts for corporations just add to the already existing capital glut.

The estate tax cut (elimination in the House bill; doubling the exemption to levels that only the very few multi-billionaires will pay any at all in the Senate) ensures that the wealthy will pay almost no tax at all.  They borrow against their wealth while alive.  Their estates pay no tax on the accumulated wealth when they die.  Their children inherit with a "step up" in basis so they get a huge windfall.  And their children can pay off the parents' debt by selling a few items (because of the basis step-up, with no taxes either) and live on their windfall without ever lifting a finger to do any real work.

Individual workers really lose out in these bills.  Under the House bill, the rate on the lowest wage earners is INCREASED 20%--from 10% to 12%.  And all of the 'tax cuts' for ordinary taxpayers sunset after a few years, while the corporate cuts are permanent.  Shows where the GOP loyalties lie--not to the worker base that put them in office, but to the wealthy oligarchs like the Koch Brothers who donate to the GOP political campaign chests.

The pass-through provisions (a 23% "deduction" from income before tax is one version)--along with the ability of businesses but not individuals to deduct state and local taxes--are a great boon for wealthy owners of real estate partnership interests, like the Trump family.  But they make no sense at all.  The more different kinds of income categories that are created with different rates, the more you empower the wealthy to gamesmanship with the tax system.  That's what this legislation does in spades.

And after the American people spoke up in Town Hall after Town Hall that they wanted the Affordable Care Act health insurance system protected, the Senate's version of the so-called "tax reform" bill (developed in utter secrecy by Republicans bargaining with Republicans as though nobody else counts) eliminates the individual health insurance mandate (and accompanying penalty).  Without that, the entire idea of affordable insurance through government-operated exchanges fails, because the only people on those exchanges will be those who are sick enough or old enough or vulnerable enough to realize that they will need health insurance soon.  Insurance works by diversification of risk--that's why the Republican insurance plan in Massachusetts, the model for Obamacare, called for an individual mandate and penalty.  Without that core feature, the exchanges can't work because the risk isn't sufficiently diversified.  The Republicans who are trying to gut Obamacare know that, and apparently they don't care that this particular "tax cut" will in fact cost more than 8 million Americans the possibility of having affordable health care, likely leading to early deaths for a large number of that group.  They don't care, I guess, because "those people" are less likely to be wealthy and less likely to vote Republican.  If you are so blinded by partisan fealty that you no longer care about legislating for the good of the nation, you descend to the garbage dump level of this Republican tax bill.

Of course, the elimination of the individual tax cuts, the expansion of the real-estate-industry favorable tax cuts, the inclusion of what can only be called a 'mock' provision to deal with carried interest (it doesn't), the elimination of the medical expense deduction (in the House bill) that will leave the disabled, the injured, and the elderly in dire straits, the decimation of the casualty loss provision that helps ordinary people recover from natural disasters, the huge cutback to the state and local tax deduction for individuals (while continuing to allow it for all businesses)--all these provisions prove that Republicans don't care a fig about ordinary people.  We won't be spending money on basic scientific research (needed to be competitive in a global marketplace and needed to save lives from cancer and other diseases).  We won't be spending money on infrastructure (needed to have safe roads, trains, airports. etc).  We won't be spending money on  education (other than Betsy DeVos's favored religious charter schools that teach falsehoods on a daily basis).  We won't be creating a sustainable economy that serves all of our citizens.

Oh, but we will be decimating the environment, as Trump's lineup of industry trolls continues to reduce wilderness areas, as Lisa Murkowski sells her tax and healthcare vote to get to open pristine and irreplaceable Arctic wildlife refuge to the oil and gas fossils that have grown obese off 200 years of government subsidies (see The tax bill is bringing drilling in the Arctic National Wildlife Refuge closer than ever, Vox.com (Nov. 28, 2017)), as Zinke reduces FOR THE FIRST TIME EVER national monuments set aside by other presidents so that those obese coal and oil and gas guys can get even wealthier (see Zinke backs shrinking more national monuments and shifting management of 10, Washington Post (Dec. 5, 2017)), as Pruitt ensures that nobody at the EPA does anything to protect the air, water and land from industry pollution, see Goodby science, hello industry, LA Times editorial board (Nov. 6, 2017). .....

The passage of a tax bill that will create an additional one-to one-point-five trillion-dollar deficit is proof that the Republicans don't care if they destroy this country in their effort to return to the Gilded Age of the past (or, in Roy Moore's definition of the time that America was great, the slavery era when (white) families stayed together and were able to sell black babies away from their black mothers (or half white babies away from their raped black mothers)).

What is the Republican response to the deficit and mal-distribution problems created by such a huge tax cut for the already wealthy?

1) The tax cut will pay for itself.  This is trickle-down gobbledy-gook.  The vast majority of economists and tax experts are quite clear that this is simply not a supportable claim.  It's pie-in-the-sky ideology with no basis in fact when there have been a number of attempts to find such a basis.  It wasn't true for Reagan, back in an economy for which tax cuts held much more promise of economic stimulus than they do for our current situation.  The Kansas experiment shows this trickle-down reasoning is without foundation. Russell Berman, You Better Learn Our Lesson: Kansas Republicans say they are worried that Congress and the Trump administration will repeat the mistake they made in enacting budget-busting tax cuts, The Atlantic (Oct. 11, 2017).  But Treasury has now put out a one-page analysis--compared to the careful, extensive, fact-based analyses usually prepared to support well-researched tax proposals--saying that the GOP plan would produce record growth and that growth would pay for the tax cuts.  See Alan Rappeport and Jim Tankersley, Treasury Defends Tax Plan Cost with One-Page Analysis (Dec. 11, 2017).  Event the speculative Treasury 'defense' assumes away half of the deficit with legislative cuts that aren't even on paper yet.  It's pure fiction.

2) Medicare, Social Security, Medicaid (the "entitlement" programs) will have to be cut to make up for any deficits.  That, of course, is the underlying plan. See Jeff Stein, Ryan says Republicans to target welfare, Medicare, Medicaid spending in 2018, New York Times (Dec. 5, 2017).  Create a deficit and use it to 'starve the government' to justify cutting any programs that don't serve the oligarchs.  Most of that minority of people who voted Trump into the presidency (assuming there wasn't a good bit of ballot falsification, which I think went on in Detroit to not count everyone's ballot) will suffer from this--they depend on Social Security when they retire and on Medicaid when they become incapacitated in their old age and need nursing home or assisted living care.  Under the Republicans, we'll return to the "good old days" of the Great Depression when old folks became homeless and the government didn't have to bother with caring about the vulnerable.

We all should be hitting the phones and telling every GOP member of Congress that they are not there to protect their wealthy donors: they are there to protect us and ensure that the economy is sustainable and viable for all of us.  This tax legislation stinks. Tell Congress to ditch it in the sewers where it belongs.

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The Long Game of Republican Economics

Ever wonder how much you contributed to global warming on Memorial Day weekend?

Yeah, I wonder, too.   And I don't know--though I was mostly a stay-at-home for the day (good), with no outdoor grilling (good), no heat or air running (good), but lots of lights (bad).

But this we all know.  We've used the tax system for almost a century to reward those who who drill for, develop, and distribute fossil fuels.  The use of those fossil fuels is a key factor in human creation of CO2, the major "greenhouse gas" that has warmed the earth so much that our glaciers are melting, the polar ice is disappearing, our oceans are rising, and droughts are increasing.  Global warming--in spite of the attempts of the scientific ostriches amongst us to claim otherwise--is a real phenomena that we need to deal with.

The more we travel one-per-car or by car instead of by bike or foot or rail, the worse it gets.  And of course for all of us who have "second homes" several hours' drive away, the more often we use those homes for just a weekend stay the more likely we are over-contributing to the buildup of CO2 from the major source--cars and homes that burn fossil fuel.  The more we resist switching to more efficient light-bulbs, the more we insist on highway intersections that are lighted all night long as though they were bustling town centers and homes that have "security lights" running day and night (that likely merely light the way for potential theives), the longer we continue building homes with inferior windows, roofs and walls that require extra heating and cooling to be comfortably habitable in this age of indoor lifestyles, the more we refuse to use solar to heat our water and run our electrical systems, the more we rely on animal protein high in the food chain, the worse it will get. The social cost of not acting on climate change, in other words, is substantial, perhaps unimaginable.

Maybe, just maybe, it's time for Congress to start figuring out what to do to ameliorate the harm we humans do to this planet that is contributing to drastic climate change.

First, we need to shun the climate change deniers.  Quit listening to them. They have a selfish agenda--continuing to exploit the planet's resources for their own (or their own group's) profits. 

Second, we need to enlist science in finding the best answers.  That means re-investing in basic science research through NSF and other peer-reviewed governmental funding of basic science.  It also means governments need to provide adequate support for public education from kindergarden through post-doctoral work--something states and the federal government fail to do now.

Third,  we must recognize our obligation to protect the environment (land, air, freshwater and oceans) and to preserve some of the fossil fuel resources for a future that may know better how to acquire and use them in ways we cannot now imagine.  That means saying "no" to the "drill, baby, drill /frack, baby, frack/ pipe, baby, pipe" crowds.  The "purple mountain majesties", the aquifers that have made the heartland the "breadbasket of the nation", the Alaska wilderness, the Amazonian jungles, and all the flora and fauna that depend on those fragile resources depend on our ability to "just say no."  That means obama must say no to the Keystone XL pipeline, and Cuomo,  to fracking in New York State.  Etc. 

Fourth, we should begin immediately to use our federal tax system--as we have on and off since its beginning--to push for appropriate energy development and use.  The development we should support through the tax system is that which increases the efficient use of energy and supports climate-favorable energy-use changes.  We should transition (hopefully, in a relatively short time frame) from the multitude of tax expenditures that  favor "old" energy (oil, gas, coal) to tax expenditures that favor "new" energy (wind, solar). 

One of the ways we could do that--through some kind of "carbon tax," as discussed in the recent CBO report, Effects of a Carbon Tax on the Economy and the Environment (May 2013) (hat tip to Tax Prof).  

 Lawmakers could increase federal revenues and encourage reductions in emissions of carbon dioxide (CO2) by establishing a carbon tax, which would either tax those emissions directly or tax fuels that release CO2 when they are burned (fossil fuels, such as coal, oil, and natural gas). Emissions of CO2 and other greenhouse gases accumulate in the atmosphere and contribute to climate change—a long-term and potentially very costly global problem.

The effects of a carbon tax on the U.S. economy would depend on how the revenues from the tax were used. Options include using the revenues to reduce budget deficits, to decrease existing marginal tax rates (the rates on an additional dollar of income), or to offset the costs that a carbon tax would impose on certain groups of people. This study examines how a carbon tax, combined with those alternative uses of the revenues, might affect the economy and the environment.

***

Fossil fuels currently account for roughly 90 percent of all energy used in the United States, so taxing them would impose costs on the economy. The ultimate economic effects of a carbon tax, however, would depend on how the revenues from the tax were used. Some uses, such as reducing federal budget deficits or lowering existing marginal tax rates, would reduce the total costs to the economy from a carbon tax. Other uses would be unlikely to lower those total costs, but they could target relief to groups that would bear a disproportionate share of the burden from a carbon tax. I

This report, of course, is written primarily by economists and so depends for its predictions on those economic theories about substitution effects and income effects that are less than scientific in their reliability, especially in the discussion of offsetting carbon tax revenues by lowering corporate tax rates.  Big Oil and their major owners have enjoyed enormous profits in considerable part through the low prices they've had to pay for public resources and the tax subsidies provided to them from exploration through extraction, refining and selling of those resources.  I am not convinced that they would merit yet another tax break to "compensate" them for the impact of a carbon tax.

Getting to the point of actually reducing the tax expenditures subsidizing old energy and putting in place new tax provisions supporting the reduction of carbon creation, such as a carbon tax, will not be easy.  Big Oil is heavily invested in lobbying, and oil-state reps know how much Big Oil gives to support their campaigns (directly and indirectly through those notorious C-4s).  Many of our wealthy families have gotten that way in part because of the federal subsidies for fossil fuel exploration and development--they will not go lightly into the night.  Look at the success of the right-wing's ALEC in getting the Interior Dept. to adopt its recommendations on fracking on public lands--not a public-spirited ounce of concern in that one.  A blog commentator with the moniker "John Justice" (in a comment on a blog report on the Mail on Sunday's running of an "anti-green" piece) is worth quoting on this:

A recent highly authoritative report by Lord Stern ... pointed out that taking the necessary action to keep carbon emissions within bounds means writing off the value of about 60% of the reserves of fossil fuels still left in the ground with dire [results] for the companies holding these assets. We can therefore expect a huge lobbying and propaganda campaign from these companies to rubbish any proposals which might stop them getting at these reserves. ....

 

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If Europe Adds a Financial Transactions Tax, Will We Follow?

Has the time come for the US to impose a financial transactions tax?  It would have several positive features.  First, it would raise revenues, which are sorely needed for everything from climate change action to infrastructure improvements to aid for needy families.  Second, it would raise revenues from those who are most responsible for the financialization of the economy--investment bankers, fund managers, and high speed traders interested in bigger and bigger profits no matter the result for ordinary folks.  Third, it would act in some small way to discourage excessive trading that contributes to the volatility of the stock market. 

Of course, such a tax (frequently called a "Tobin Tax" after the Nobel economist who recommended it) would be best if applied by all sophisticated nations.  It appears that the European Union is getting closer to making a financial transactions tax a reality in at least some of the participating countries.  See James Kanter, Tax on Financial Trades Gains Support in Europe, New York Times (Oct. 10, 2012).  Britain will remain exempt so the City of London (Europe's parallel to Wall Street) would continue on its merry way (or even increase the financialization of the UK economy as trades moved from participating countries to London).  Wall Street has lobbied heavily against any tax on its activities, and would fight bitterly if the US were to impose such a tax while London remained exempt.

So my guess is that even if the EU finance ministers approve the measure for some participating European nations, it will take some time before it spreads to Britain and the United States.  Like climate change, we seem determined to put off addressing real problems until they are upon us with such force that we cannot possibly continue as before.  Thus, our financialized economy rocks along pretending that derivatives are safer and banks are fine and life can go on as before, and Congress debates climate change as a "she said, he said" matter rather than looking at the breadth and depth of scientific evidence supporting man-made effects that are reshaping the globe while we watch.

A Fracking Tax?

Ed Dolan has an interesting post on Fracking and The Environment: an economic perspective (May 4, 2012)(hat tip--Mark Thoma's Economist's View).

He suggests that the controversy over fracking would be better handled by some serious development of national energy policy.  My take on what he says is that at least the following is needed:

1. an in-depth assessment of the carbon emissons costs of each type of fuel (not just the cost of burning that fuel, but the cost of finding, extracting, processing and transporting it as well);

2.  an in-depth assessment of the locality costs of each type of fuel (the local environmental effects of fuel extraction and usage, including harm to places of natural beauty, harm to ecologically unique or sensitive areas (thinking here about National Wildlife Refuge), harm to drinking water (thinking here about potential of pollution of underground aquifers and wells from fracking done poorly), harm from toxic chemical dispersion (fracking, again), flaming faucets, etc.);

3, some kind of pricing mechanism to make the types of fuel that do the most harm on either the first or the second level above also the most costly and therefore economically disfavored (a fuel tax that varied according to the score on each of the two category levels would make sense;

4. something not mentioned by Dolan but necessary if we are ever to develop a decent national energy policy--removal of the current subsidies for natural resource extraction and replacement with incentive subsidies for those forms that are scored as least harmful to the environment.

Think this dysfunctional Congress is anywhere near being able to do such a policy?  I doubt it.  So readers who care should consider how to elect a Congress that will enact policy based on the public good, rather than considering primarily how to get themselves reelected by getting dollars from corporate lobbyists.

Payroll Tax Cut -Keystone vote up Saturday at 9 in Senate

Apparently, Senate leaders on Friday ironed out the difficulty between the GOP and the Democratic party.  The GOP got most everything it wanted, and the Dems got just barely more than nothing.  That's the way "negotiating" seems to go in the Congress these days.  The right demands and demands and demands and gets most of it by obfuscating and obstructing. 

This time the Dems were worried about not getting a spending bill.  So while the House passed a spending bill to carry the Federal Government through September 2012, the Senate caved on all the things they'd said they wouldn't cave on--like the ridiculous provision for expedited approval of the Keystone Pipeline.  All to get just a 2-month extension of the payroll tax cut and expanded unemployment benefits--which the GOP knew it could not afford not to pass, no matter what.  And Obama has already flipped on his earlier looks-like-he's-finally-figured-out-how-to-stand-tall position that he would veto any bill that carried the expedited Keystone approval provision.  See Steinhaur & Pear, Senate Agrees to a Two-Month Extension of the Tax Cut, New York Times (Dec. 16, 2011). 

The GOP continues to call the Keystone pipeline project a "job creator", even though it will create no more than 50 permanent jobs, at a considerable environmental cost.  Schumer calls the Keystone provision a "Pyrrhic victory" for the GOP, because he says Obama will not approve it if pushed.  That's not so clear to me.  Schumer also spins the cave-in as a victory for Dems! saying that the GOP won't have the leverage of the need to pass a spending bill when this issue comes back.  See  Rubin et al, U.S. Senate Leaders Agree on Two-Month Payroll Cut , Bloomberg.com (Dec. 16, 2011). 

Again, past experience suggests this may be too rosy an assessment.  There were commentators who thought that surely the Congress would not pass further tax cuts after the 2001 tax cuts resulted in large deficits but instead we got the 2003 bill and the 2004 tax giveaway for corporations bill and many others, with the deficits mounting with each one.  One would have thought that the sunset of the various Bush tax cuts in 2010 would have been a perfect time for the Dems to develop a spine, but they didn't.  And the Dems weren't even able to pass a bill ending the carried interest subsidy for hedge fund managers, in spite of the Great Recession and the need to reign in financial institutions.

The Senate bill will apparently at least not include some of the bad stuff  that was in HR 3630 as passed by the House--it is "scaled back" so it looks like medicare premiums won't rise for seniors, and  the GOP won't win its attempt to end medicare's coverage of outpatient rehabilitative therapy for stroke victims and medicare payments to doctors will not be affected.   Nor will it include the "extensions" of expiring tax provisions like the R&D credit or the active financing exception for the financial  industries' deferral of its offshoreprofits.  Id.

The Senate bill will apparently be paid for by raising the guarantee fees for Freddie and Fannie, something that was included in HR 3630.  Id.  Vote is to take place at 9 am Saturday.

GOP's payroll tax cut bill (with a lot of other stuff) up for vote on Tuesday

[edited 2 pm 12/13 to provide additional links to news coverage of some of the changes]

Congress has been playing politics as usual over the few policies that are on the table that have a real chance of assisting, to some degree, the plight of ordinary Americans and perhaps even the slow recovery that is still trying to gain steam--extension of the reduction in payroll taxes (from 6.2% to 4.2%) and extension of unemployment compensation.

The Republicans have refused to pay for these common sense tax reductions for ordinary Americans with a similarly common sense tax increase on the wealthiest Americans who have continued to capture all the productivity gains in the economyt.  Republicans in the House think that these kinds of provisions should be offset by more goodies for the "uberclass"--at least as evidenced by the H.R. 3630, the bill introduced by Dave Camp (R-MI) and to be voted on today at about 4:30 pm. 

• It would restructure unemployment compensation in ways that add hurdles and make it less likely that unemployed Americans will qualify--providing more state flexibility and experimentation (including paying employers to cover part of cost of wages exceeding the recipient's prior benefit level), permitting demeaning drug testing of all unemployment compensation recipients (section 2127), and requiring a high school diploma or participation in state "reemployment services" for which recipients may be charged up to $5 weekly out of their unemployment compensation.  It would severely curtail the total number of weeks for which federal unemployment assistance is available--moving to a 59-week limit from a 99-week limit.  Methinks I see Scrooge here.....
• It will interfere with the Environmental Protection Agency's ability to regulate, letting corporations continue to harm the environment at the expense of ordinary Americans.   See Subtitle B.  Section 1102(b) lists rules that are "stayed" by the legislation and provides that no new rules can have an effective date earlier than 5 years out and requires consideration of various factors in determining that date.  Further, it requires adoption of the laxer 2000 definitions for certain key terms and the imposition of the "least burdensome" among potential regulatory alternatives.  This is a key cave-in to corporate polluters. 
• It will expedite the KeystoneXL pipeline by requiring a permit to be issued within 60 days unless within that time the President determines that the pipeline will not serve the national interest (in which case within 15 days the President must provide various committees and members of Congress a report justifying that conclusion from various perspectives).  It indicates that the environmental impact statement from August will be treated as satisfactory for environmental and historical preservation purposes and shall not have to be supplemented if there are modifications to the plan  and no further federal environmental review shall be allowed.  This is a clearly ideologically driven provision, failing to give due regard to the potential longterm environmental impact on drinking water aquifers or historical preservation impact. 
• It would provide yet another tax reduction for US corporations that have paid less and less taxes over the last decade, with a renewal of the ill-advised 100% expensing provision in section 168(k)(5) (along with the alternative of accelerating AMT credits)
• it makes further changes to medicare such as applying a cap to hospital outpatient therapy services and reversing part of the Health Reform Act passed earlier, by permitting new doctor-owned hospitals and permitting existing ones to expand, even though it has been shown that such hospitals spend more on testing and procedures (and profit more from them).  See, e.g., Pear, G.O.P. Bill Would Benefit Doctor Owned Hospitals, New York Times at A24, Dec. 13, 2011.
• it would continue funding for the "healthy marriage and responsible fatherhood" initiative, see 42 U.S.C. section 603(a)(2)  (the cynic in me suspects that these funds primarily go to programs supported by religious institutions and that they proselytize more than they teach reasonable relationship skills)
• it includes an extensive section remaking flood insurance provisions, including, in section 3005, lifting the cap for premium increases for flood insurance from 10% to 20% (an apparent boon to insurers), and another section prohibiting the administration from "disregarding" any levee or floodwall, even if it is not accredited.  The goal, made clear in section 3009, is privatization of the national flood insurance program.
• It includes extensive broadband spectrum auction provisions in Title IV, Subtitle A, reallocating spectrum from federal to nonfederal use.  These provisions, among many detailed ones, e.g., permit private administrators of state public safety networks to use the public spectrum for private purposes as well as the public safety  purpose and prevent states from denying requests for modifications of existing wireless towers that do not substantially change the physical dimensions thereof.
• It increases the guarantee fees charged by Fannie Mae and Freddie Mac.
• It requires a social security number for the refundable child credit
• It provides in section 5895 a 100% tax on "excess unemployment benefits" that go to millionaires (unemployment compensation is reduced proportionately as the adjusted gross income increases from $750,000 to $1 million)--The Times today has an article on the bill and notes that the number of millionaires receiving unemployment compensation is very small, but that their participation is predicated on the fact that the unemployment compensation program is a type of insurance into which payments are made to cover payouts.  Means testing such insurance programs is in sync with the right-wing goal of means-testing as a prelude to privatizing and/or eliminating all federally administered social welfare insurance programs, such as medicare and Social Security (and, see above, national flood insurance).
• It increases pension contributions from longterm federal workers by .5% a year for 2012-2014 and for those "secure annuity employees" with less than five years of service, by more than 10% a year and using 5 year average pay rather than 3 year average pay, sets annuity amounts, and ends the annuity supplement for post-2012 retirees.
• it extends the general freeze on federal pay for another year
• It increases the premiums for Medicare Part B and Part D for those making $80,000 or more (for those making $200,000 or more, the applicable percentage is 90%)--this again appears to move these national social welfare insurance programs towards more means-testing that will facilitate privatization or eventual elimination. 
• It sets up a number of procedural hurdles in the Senate, which is already hogtied by the ease with which a minority of its members can filibuster and thus stop legislation that is supported by a solid majority of its members.  For examples,
  • it requires a 2/3 vote in the Senate to amend the dates for section 601(c) of the 2010 Tax Relief Act--that's the temporary employee payroll tax cut;
  • it provides that a point of order by any Senator against an emergency designation in a bill eliminates that designation and makes it impossible to bring the designation through a floor amendment unless there is a supermajority 3/5 vote in favor of doing so (limiting debate to 1 hour)--thus one right-wing Senator intent on obstructionism can make it very unlikely that an important provision can pass by preventing even reasonable debate about the importance of the provision!

The GOP, of course, touts its bill as creating jobs.   While the Keystone pipeline may create some short-term jobs (the New YorkTimes reports estimates from Transcanada itself  and the State Department of only about 6500 temporary construction jobs  and maybe 50 permanent new jobs--see Keystone Claptrap, Editorial, New York Times at A34, Dec. 13, 2011), the potential negative impact on aquifers could be life-threatening.  Most of the other provisions are Scrooge-like additions of hurdles and caps on social welfare provisions or attempts to roll back the social welfare insurance provisions into means-tested ones that will be even more susceptible to the derogatory and inflamatory class-action warfare that the right has increasingly unleashed on anything that doesn't give a break to the wealthy and corporate clients of the all-powerful Washington lobbies. 

On lobbies, just read the New York Times article about the wealth that online educators are getting from state and federal taxpayer dollars for delivering no or sub-standard education, and the amount of taxpayer money being spent on lobbying to ensure the continuous flow of that wealth.  See Saul, Profits and Problems at Online Charter Schools, New York Times, Dec. 12, 2011.  It's obvious that the corporatist agenda sees no problem with siphoning off taxpayer dollars for private benefit with little public good created, but complains mightily about any siphoning off of exorbitant corporate profits--that tend to go to wasteful excess managerial compensation or portfolio enhancement--for taxes intended for public benefit.

The inclusion of the Keystone and other right-wing-rhetoric-driven items in a bill to provide the payroll tax cut and a limited unemployment extension (with hurdles) demonstrates the absurd level of ideological partisanship engaged in by the House Republicans.  Senate Majority Leader Reid characterized the bill as loaded with "ideological candy" that the Senate would reject.  Sloan & Rubin, House to Vote on Payroll Bill as senate Eyes Tax Sweeteners, Bloomberg.com (Dec. 13, 2011).    Of course, most of the sweeteners that Reid proposes adding are components of the right-wing corporate-friendly agenda--like the R&D credit that rewards what companies do anyway; the active financing exception for big banks, insurers and other financial institutions that lets them defer taxation on their financing income earned overseas; and accelerated depreciation for restaurants and motorsports tracks that provide special tax subsidies to particular industries!

Right-Wing Tax Rhetoric--defining a tax increase

Grover Norquist, a right-wing propagandist who is pushing the no taxes/starve the government/redistribution to the owners and managers of multinationals agenda, seems to define anything as a tax increase if it involves 'his people' paying more.  Cutting subsidies for the poor-- Social Security benefits,  medicare,  medicaid,  unemployment--those aren't tax increases.  But cutting tax expenditures in the Code that function the same way as subsidies for the wealthy--those are tax increases in Norquist's anti-tax book.

Look, folks.  Everybody thinks that some government spending is wasteful, we just don't agree on which things.  And Nobody really likes to pay taxes--we'd all rather spend money on ourselves, our families, even our favorite charities than not have it to dispense ourselves.  But when you get down to it, there is no such thing as a good society that doesn't have a workable tax collection system and a workable social consensus that trusts government, relies on government representatives to make the mostly difficult decisions about spending and tax collection, and pays taxes willingly because there are so many good things that taxes support that we cannot do for ourselves as individuals and can only do acting collectively through government--like public transportation, public schools, food safety, water safety, environmental protection, natural resource protection, parks, and similar public infrastructure.

So we need taxes.  And then we need a fair way to collect them.  Getting rid of subsidies in the tax code that coddle one group unreasonably--i.e., with no commensurate gain for the public good--is a good idea.  Talking about it as a "tax increase" is a bad idea, because it increases tax fairness to get rid of it.

Norquist calls all such things tax increases because his propaganda machine wants Americans to think poorly of their government and think poorly of taxes.  When that happens, it is easier for the elite at the top (owners and managers of most of the financial assets and wealth), to gain control of the system and pass more and more tax cuts (and tax expenditure subsidies) favoring themselves, while eliminating more and more of the social programs that take the edge off brutal vcapitalism and render democracy possible in a mostly capitalist economy.

Tom Coburn is at least challenging his own party to recognize this truth about elimination of tax expenditures.  Eliminating a tax break shouldn't be viewed as a tax increase, even among die-hard right-wingers sworn to keep taxes low for arbitrary or proven wrong reasons.

Read Rubin's article on "Chicken Breeders Face Tax-Cut Hawks in Senate Ethanol Showdown, June 14, 2011, Bloomberg.net.  Note that S 782 was defeated by a 40-59 vote.  See Senate Rejects Bid to Kill Ethanol Tax Break, Bloomberg.net, June 14, 2011.

Oil Companies Want Tax Breaks (surprise)

As anyone who drives a car knows, gas prices are rising almost by the minute.  Oil companies profits are likewise on the ascendance, as gas revenues skyrocket, and tax subsidies make sure they don't have to pay much over to Uncle Sam.

Oil company executives from BP, Chevron, Shell, ConocoPhillips, and ExxonMobil were called to Congress Thursday to talk to the Senate Finance Committee about their tax breaks-- like the oil depletion allowance and the wacky "domestic manufacturing deduction" that Congress enacted as a giveaway for almost all domestic companies when it fixed the problematic provision that discriminated against foreign companies. 

Company executives didn't like the fact that Americans are apparently becoming much more aware of the extraordinary tax breaks that they have enjoyed for decades, so they couched their objections in terms of the current craze for "corporate tax reform" (which means reducing, probably only temporarily, some of the tax expenditures favoring corporations and using the revenues gained from that to cut tax rates on corporations--a stupid proposal when we should be using the revenues saved to fund government programs and reduce borrowing).  Of course, the executives also rattled off their usual warning that taking away their special tax breaks would end up reducing domestic production.  Since domestic production doesn't really affect the price we pay for gas at the pump, this argument is akin to the "give us tax breaks so we can compete" argument.  They both amount to the same thing--the claim that if only companies have to pay even less in taxes, they will use the money saved to do good things.

 

Sen. Orrin Hatch (R-Utah) helped the corporatist message along in his opening remarks.  As the Daily Tax Report for May 13, 2011 (93 DTR G-4) notes, Hatch asked  “With respect to tax incentives available for all U.S. manufacturers, is it wise—and this is an important question—is it wise to single out one industry and treat it differently from others?” And Louisiana Senator Mary Landrieu, from a Big Oil state, predictably opposes the bill.

For once, Baucus seemed to be moving towards the right side of this debate.  Even though he agreed that all of the Code provisions should be examined in due time (especially those silly "extenders" that Congress can't seem to treat as the temporary provisions that they were created to be), he talked about the importance of using the elimination of oil and gas subsidies to make real progress in reducing the deficit.  But he still hasn't indicated whether he supports S. 940, the bill that Charles Schumer is trying to get through Congress, which would take $21 billion saved by repeal of the subsidies and use it to cut the deficit.

The testimonies offered on behalf of BP, Chevron, Shell, ExxonMobil, and ConocoPhillips, as well as the opening statements by Baucus and Hatch, are available in TaxCore.