Tuesday, August 31, 2010

More Tax Brackets?

James Surowiecki at the New Yorker makes the case for more widely differentiated tax brackets:

Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms—while the incomes of the top one per cent grew ten per cent a year. That one per cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the ninety-ninth percentiles of income have represented a fairly constant share of the national income for twenty-five years now. But in that period the top one per cent has seen its share of national income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen their share of national income triple over the same period. All by themselves, they now earn as much as the bottom hundred and twenty million people. So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

The current debate over taxes takes none of this into account. At the moment, we have a system of tax brackets well suited to nineteenth-century New Zealand. Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent. (People in the second-highest bracket, starting at a hundred and seventy-two thousand dollars for individuals, pay thirty-three per cent.) This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.

This is an idea that I think Republicans and Democrats could find common ground on. It's worth keeping in mind from a historical perspective that, when the graduated income tax was introduced in 1913, the highest tax rate only kicked in for those making over $500,000 a year. That would be equivalent to millions of dollars in 2010.

The motivating idea behind raising the income threshold for the top bracket is not class resentment (unless all graduated income schemes are motivated by class resentment) but a reflection of the notion that it may not be the wisest public policy to tax the megarich at the same rates as the uppermost middle class.

Reorganizing tax bracket thresholds could help the GOP create the infrastructure for lowering the taxes of a broader swath of America while still ensuring that the government's bills could actually be paid.

Monday, August 30, 2010

A Misguided Siege?

The Hill, Politico, and others are reporting that the Tea Party Express is taking aim at Rep. Mike Castle (R-DE), as he campaigns for the Republican nomination for Senate in Delaware. As the Hill puts it,
The Tea Party Express, which spent some $600,000 on Alaska Republican Joe Miller's primary challenge to Sen. Lisa Murkowski (R), says it's preparing to do the same on behalf of Christine O'Donnell (R) in Delaware.

O'Donnell is challenging Rep. Mike Castle (R-Del.) from the right in the state's Sept. 14 Senate primary, but she has yet to capture the same kind of attention from conservative activists as other Tea Party-backed candidates have this cycle.

Tea Party Express spokesman Levi Russell said Monday that his organization is already cutting TV and radio ads in Delaware and expects to be on the air by the end of the week. Russell said he hopes to match the support the group offered in GOP primaries in Utah, Nevada and Alaska this year.

This may not be the most strategic spending on behalf of the Tea Party Express. Delaware ain't Alaska or Utah or Nevada. Alaska and Utah are about as Republican as you get, and Nevada isn't too far behind. The last time Delaware voted for a Republican presidential contender was 1988. Delaware is a territory where centrism is a key political qualifier for Republican aspirants to statewide office.

And Mike Castle has a record of proven success in Delaware. He's been winning statewide elections since the 1980s, and has served since 1993 as the state's only member in the House. Though his record might not be what some of the most conservative Republicans in the country dream about, Castle has proven a fairly loyal Republican and has stood with the party on many (not all) big issues.

Do you know who Mike Castle would be a lot more conservative than? Democratic nominee Chris Coons. Castle has led Coons in polls taken throughout the year with huge margins.

O'Donnell? Most polls have shown her double digits behind Coons.

There's definitely a place for O'Donnell in Delaware Republican politics, but gambling on her candidacy may be too big a risk for Republicans in 2010. With Castle, this seat could be close to a guaranteed pickup. With O'Donnell, this race would definitely lean heavily in the favor of Democrats. If Republicans were going into this election with close to fifty seats, it would be one thing to think about gambling in Delaware. But right now Republicans have a long, long way to go to 51 seats. They are in no position to turn their backs on a relatively safe candidate.

(One wrinkle: Erick Erickson claims that Castle has made a deal to switch to the Democratic party once he gains the Senate seat and vacate this seat in favor of Beau Biden. He says that Delaware "party regulars" have told him this. If this deal has been made, these "regulars" have a responsibility to tell this to the world---and not just be whispering this to Erickson. If this deal is a reality, the Tea Party Express and Republicans nationwide would be well within their rights to work as hard as possible to ensure Castle's defeat in the primary. Otherwise, they might be better off saving their money and spending it to help tip a general election race---like Angle's in Nevada---the Republicans' way.)

UPDATE: In response to some comments and a few emails, a few points. I'm, shall we say, far from convinced that the parenthetical wrinkle above is a completely credible one. More shocking things have happened, but I'm still pretty skeptical. But I thought I should at least acknowledge that the rumor is there, since some anti-Castle activists talk about it now and then.

On accusations that Castle is a RINO, etc.: It's a free country, and the Republicans of Delaware can support whomever they like for senator. But it should be noted that Castle's American Conservative Union lifetime rating of 52 (in 2009, it was 56) does not make him the least "conservative" Republican in Congress. His score is ahead of that of both of the Republican Maine senators. You can ask Mitch McConnell---you can even ask Jim DeMint---if he's glad to have their votes in the Senate. This "progressive" rating system of members of Congress also finds that Mike Castle is not the most "progressive" Republican in the House. And he's most likely to vote with Republicans from other moderate districts---not the Democratic leadership.

Monday, August 9, 2010

Freshmen Fighting

The Boston Globe has an interesting article on the challenges facing freshman Democrats in November. Many of the seats analysts expect to be most likely to flip to Republicans are held by freshmen.

Overall, Republicans need to gain 39 seats to reclaim the majority. While all 435 House seats are at stake every two years, the nonpartisan analyst Stu Rothenberg has estimated that 88 seats are in play. Of those, 76 are currently held by Democrats. Among the most vulnerable are the 31 freshman Democrats seeking reelection, and Kilroy is considered to be in one of the tightest races because she is in a rematch of a race she won in 2008 by only 2,311 votes.

“Trouble is an understatement for many of them,’’ said David Wasserman, who follows House races for the nonpartisan Cook Political Report, which rates nearly three-fourths of the freshman Democrats as being in competitive races. “They’ve won under ideal circumstances. They haven’t had to run in a neutral political environment, let alone a difficult political environment.’’

The freshman Democrats face a conundrum: They have few of the trappings of incumbency (longtime name recognition and a list of accomplishments) but many of its downsides (being portrayed as part of a broken system in Washington).

Voting lockstep with leadership has not helped some of these Democrats separate themselves from the idea of a "broken system in Washington."

Consider the case of Mary Jo Kilroy, who's running against Republican Steve Stivers.

Representative Mary Jo Kilroy, one of nearly three dozen freshman Democrats elected on the coattails of President Obama, has been true to her campaign vows. She supported virtually every component of the Obama agenda, and she recently stood beside House Financial Services chairman Barney Frank of Newton to declare her pride in backing a financial regulatory bill.

Now, however, the Ohio Democrat is in the midst of a bitter reelection campaign, forced to defend her vote on financial reform. And health care. And climate change. And federal stimulus spending.

Kilroy had a very close battle for her election in 2008, so hers could definitely be a race to watch. The Globe notes that four Democratic freshmen in Ohio could be having an intense battle for reelection.

Monday, August 2, 2010

Broken Senate?

George Packer has an interesting article up at the New Yorker about the (supposedly) broken Senate. Packer's article assumes that the Senate is horribly, horribly broken, and that assumption colors the whole piece, but he does provide a number of details about the legislative process in the contemporary Senate.

Though some on the left might take this piece as another demonstration of the need to get rid of the filibuster, the filibuster doesn't actually take center stage in this article. Indeed, many of the procedural problems the Senate now faces (and it does face some problems of that nature) stem from increased partisan animosities, which cause members of both sides to derail debates and appointments using heretofore obscure procedural moves. Indeed, the attempt on the "progressive" front to destroy the filibuster is itself a symptom of these increased animosities, as a temporarily reigning left-wing majority tries to break any hope of minority resistance.

I think the despairing final paragraph of Packer's article results from a kind of confusion:
The two lasting achievements of this Senate, financial regulation and health care, required a year and a half of legislative warfare that nearly destroyed the body. They depended on a set of circumstances—a large majority of Democrats, a charismatic President with an electoral mandate, and a national crisis—that will not last long or be repeated anytime soon. Two days after financial reform became law, Harry Reid announced that the Senate would not take up comprehensive energy-reform legislation for the rest of the year. And so climate change joined immigration, job creation, food safety, pilot training, veterans’ care, campaign finance, transportation security, labor law, mine safety, wildfire management, and scores of executive and judicial appointments on the list of matters that the world’s greatest deliberative body is incapable of addressing. Already, you can feel the Senate slipping back into stagnant waters.
There seems to be a presumption here that the Senate should be doing something on these issues. The desire for a government capable of responding to national issues is a laudable one. However, sometimes putting forth no plan for certain types of reforms is better than putting together a very bad one. Many of the policy positions of the current Democratic leadership and the president are both unpopular (see the latest polling for Obama on immigration, for example) and have undesirable results.

The Senate can certainly "address" these issues if "addressing" means passing legislation about it. On plenty of these measures, a centrist majority could easily be found; left-wing insistence and right-wing resistance has thus far prevented action on a number of these issues. This lack of action may, especially from a conservative perspective, be desirable, and there is no reason for members of the center-right to cede their convictions to left-wing radicalism. Compromise is only worth so much.

If "addressing" means solving these issues, that's a much taller order. Certainly, the Senate did "address" job creation issues when it passed the stimulus. Its success in doing so has fallen far below the initial estimates of the president and his allies. The successful addressing of issues depends upon having effective ideas that are capable of gaining popular support. Perhaps unfortunately for the republic, no easy procedural mechanisms will ensure that these ideas rise to the top.