Monthly Archives: October 2017

Tax Cuts vs. Tax Reform

By tmess2 | Published October 30, 2017

The Republicans have set themselves the goal of passing tax legislation by the end of the year.  They took a major step by passing a budget resolution this past week which authorized tax legislation as long as that legislation had a net cost of less than 1.5 TRILLION over the next decade.  As such, as long as the CBO scores any legislation as complying with that cap, it is exempt from a filibuster.

That cap reflects a significant part of the current debate inside the Republican party — do they want a tax cut (reducing the overall tax burden) or tax reform (a revenue-neutral rewrite of the tax law).  This debate will be significant because the Republican approach is that those who make the most money pay the most taxes and therefore should get the most relief.  Thus, their proposals will be very top heavy on who gets the relief and the deductions most at risk will be those that benefit the middle class.

First, some Taxes 101 to set the background.  Both at the corporate level and at the personal level, calculating taxes begins with defining income.  Then there are certain authorized deductions from income that lead to a smaller income that qualifies as “taxable income.”  There are then income brackets in which you pay x% for the first $Y amount of income, than pay a slightly higher rate on the additional income above that amount (and just that additional income).  (E.g., If the top tax bracket is 40% and kicks it at $500,000, the taxpayer is only paying 40% on the income above $500,000 — so on an income of $700,000 that 40% only applies to the last $200,000 of income and the first $500,000 is taxed at a lower rate. )  After taxes are computed, the taxes can be reduced by tax credits. Continue Reading...

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Fall Elections

By tmess2 | Published October 22, 2017

In most of the world, the practice is to limit the number of races being contested on any given election day.  Thus, regional elections are held on a separate day from national elections.  In the U.S., however, most states opt to hold state elections on the same day as national elections.  Thus, in most states, the election for governor either falls on the same day as the mid-term election or on the same day as the presidential election.  In a small number of states, however, the election for governor occurs in an odd-year.

Two states — Virginia and New Jersey — hold the election in the year after the presidential election.  (Three states — Kentucky, Louisiana, and Mississippi — hold the elections in the year before the presidential election.)  Both New Jersey and Virginia have a tendency — not absolute, but a tendency — to elect a governor from the party not in the White House.  In New Jersey, the last time that the party in the White House won the governor’s race was 1985.  In Virginia, while the party in the White House won in 2013, the last previous time that the party in the White House won was 1973.  There are a lot of reasons for these results — including. similar to the problem that the party in the White House faces in mid-term elections, the simple fact that governing is much harder than running for office, so supporters of the party in power tend to be disappointed with the actual fruits of their victory while those out of power tend to be angry and motivated.

As things currently stand, things are looking very good for the Democratic candidates in New Jersey.  Aside from New Jersey’s normal Democratic lean and the tendency for the party not in the White House to win, the Republicans nominated the current Lieutenant Governor, making it hard to separate the current Republican ticket from the corruption of the current administration of term-limited governor Chris Christie.  The Democratic candidate, Ambassador Phil Murphy, leads by double digits in every poll this fall.  While some of the polls show enough undecided voters to leave a theoretical opening for the Republican candidate, the race in New Jersey is not particularly close. Continue Reading...

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The Future of Redistricting

By tmess2 | Published October 2, 2017

At 10 a.m. on Tuesday, October 3, the Supreme Court Justices will take the bench and the Chief Justice will call for arguments in Gill vs. Whitford — a case on direct appeal from a three-judge panel in which the majority of the panel found that the legislative districts in Wisconsin were the results of an unconstitutional partisan gerrymander.  Then, on Friday, the justices will discuss the case in conference, and — depending on the vote — either Chief Justice Roberts and Justice Anthony Kennedy will assign this case to one of the justices to write the opinion.  Then — probably in February or March — we will get a series of opinions (with possibly no opinion having the support of five justices) that will define the rules for the next cycle of redistricting starting in 2021.

This case has its roots in the framing of the Constitution.  The original structure of the British parliament awarded a certain number of seats to each incorporated borough (town) and to each shire (county).  When combined with the fact that only freeholders (property owners) had the right to vote, by the middle of the Eighteenth Century, there were boroughs that were very small with only a handful of voters (so-called “rotten boroughs”).   The non-representative nature of the British Parliament was one of the reasons why colonists did not accept the argument that they were represented by the British Parliament.  In drafting the U.S. Constitution, at least for the House of Representatives, the framers decided that representation in Congress would depend upon population based on a decennial census.

By requiring that representation in the House would be based on representation, the Constitution created a de facto requirement that states draw new congressional districts (at least when a state’s representation changed).  Some, but not all, states also based representation in state legislatures on population — again requiring periodic redistricting.  In simply requiring redistricting, the U.S. Constitution was ahead of its time.  Now, most countries that use a first-past-the-post system also have periodic redistricting.  The vast majority of them also use a non-partisan commission with specific criteria to draw fair and competitive district lines.  The framers, however, did not have the extra two centuries of seeing what works and what doesn’t work in the redistricting process.  And it is some of what happened next in the U.S. that has led the other countries to have neutral agencies handle redistricting. Continue Reading...

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