Sanders – Sheila Kennedy

It Isn’t Just Tax Rates

A new study has found that at least 55 of America’s largest companies paid zero taxes last year, despite making billions of dollars in profits. It’s infuriating.

As the New York Times reports, that 2017 tax bill eagerly passed by Republicans in Congress and signed with great fanfare by the former guy, reduced the corporate tax rate to 21 percent from 35 percent. On top of that gift,

dozens of Fortune 500 companies were able to further shrink their tax bill — sometimes to zero — thanks to a range of legal deductions and exemptions that have become staples of the tax code, according to the analysis…

Twenty-six of the companies listed, including FedEx, Duke Energy and Nike, were able to avoid paying any federal income tax for the last three years even though they reported a combined income of $77 billion. Many also received millions of dollars in tax rebates.

As Bernie Sanders has reportedly noted, if you paid 135 for a pair of Nike shoes, you paid more for them than Nike paid in taxes.

The Times article has a list of the most profitable companies that paid no taxes last year.

Publicly traded corporations have to file financial reports, and those reports include the amounts they’ve paid in federal income taxes. When challenged about their ability to avoid paying taxes, most respond that they “fully comply” with the laws. Which is undoubtedly true. (Okay, maybe not for those with accounts in offshore tax havens…Although that tactic is more common among filthy rich individuals than corporations…)

It’s relatively simply to “fully comply” with tax provisions (aka “loopholes”) that are intended to encourage socially useful behaviors like investing in clean energy or modernizing aging equipment.

The $2.2 trillion CARES Act, passed last year to help businesses and families survive the economic devastation wrought by the pandemic, included a provision that temporarily allowed businesses to use losses in 2020 to offset profits earned in previous years, according to the institute.

Several of these deductions and credits are justifiable. Others, much less so.

I agree with Elizabeth Warren, who has been quoted as saying that giant corporations with billions of dollars of profit shouldn’t be able to pay $0 in federal taxes. According to the Times, today’s tax avoidance strategies include a mix of old standards and what the report calls “new innovations”. It’s hard to argue, for example, for the social benefit of allowing companies to save billions of dollars by characterizing the purchase of discounted stock options by their top executives as a loss, which they then deduct.

The Biden administration announced this week that it planned to increase the corporate tax rate to 28 percent, and establish a kind of minimum tax that would limit the number of zero-payers. The White House estimated that the revisions would raise $2 trillion over 15 years, which will be used to fund the president’s ambitious infrastructure plan.

Supporters say that in addition to yielding revenue, the rewrite would help make the tax code more equitable, requiring individuals and companies at the top of the income ladder to pay more. But Republicans have signaled that the tax increases in the Biden proposal — which Senator Mitch McConnell of Kentucky, the minority leader, called “massive” — will preclude bipartisan support.

Individual taxpayers have long had to contend with the Alternative Minimum Tax. That provision was created in the 1960s, with the goal of preventing high-income taxpayers from using various deductions and credits to avoid the individual income tax. There’s no reason why a similar mechanism shouldn’t apply to corporate giants using provisions of the tax code to avoid paying any taxes on massive profits.

Meanwhile, It would be illuminating if a Congressional committee were to examine the credits and deductions allowed by the current tax code, and eliminate those that no longer make much sense. (Some never did.)

If nothing else, it would be interesting to see how the Republican supporters of these provisions would defend them.

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An Interesting Analogy

Heather Cox Richardson is an American historian and Professor of History at Boston College who writes a daily Letter addressing many of the subjects covered in this blog. Given her background, it isn’t surprising that she sees historical parallels; in one recent Letter, she analogized the current political situation to the latter part of the Hoover Administration.

After describing aspects of Trump’s disastrous non-response to the Coronavirus, she wrote

In all of this, the administration sounds much like that of President Herbert Hoover who, when faced with the calamity of the Great Depression, largely rejected calls for government aid to starving and displaced families, and instead trusted businessmen to restart the economy. To the extent relief was necessary, he wanted states and towns to cover it. Anything else would destroy American individualism, he insisted.

But by 1932, the same Americans who had supported Hoover in 1928 in a landslide recognized that his ideology had led the nation to catastrophe and then offered no way out. They rallied around Democrat Franklin Delano Roosevelt, who worked together with Congress to create an entirely new form of national government, one that had been unthinkable just four years before.

Ironically, Trump’s disastrous administration and the Republican fecklessness that has enabled it, may have created an opening that Biden, with his deep knowledge of the Senate and his non-polarizing persona–is especially well-situated to use.

Biden has previously been considered moderate, rather than “left” or progressive, but he clearly understands that the times call for significant change.

News and Guts has reported that Biden worked with Bernie Sanders on a recently unveiled plan that would both create jobs and combat climate change, and that the plan was far more ambitious than anything he had discussed during the primary.

Biden’s campaign has characterized his overall economic proposal as the “largest mobilization of public investments in procurement, infrastructure, and R&D since World War II.” It calls for desperately-needed investment in infrastructure and R&D, incentives to revive trade unionism, higher wages, and higher taxes on corporations. It makes environmentalism a high priority, and includes a public option for health insurance that would be a huge step toward universal access. It would also reverse Trump’s horrific approach to immigration.

The New York Times, characterized the plan, in its typically understated fashion.

But the ideas put forth on Wednesday are also indications that progressives succeeded in pushing some proposals leftward, influencing Mr. Biden’s policy platform as he prepares to accept his party’s nomination for president next month.

Richardson notes that the document is strong politically, “undercutting both Trump’s “America First” language and promising concrete policies for voters suffering in the Republican economy.” She also points to an underlying philosophical shift– “a return to a vision of a government that stops privileging an elite few, and instead works to level the economic playing field among all Americans.”

That philosophical shift is reflected in Bernie Sanders’ approving remarks about the campaign’s economic plan; it is also reflected in the decision of the progressive organization MoveOn.org to endorse Biden and the overwhelming vote of its members to do so. (Biden won 82.4% of votes cast by MoveOn members.)

Too many Americans think progress requires revolutionary leadership–that it is the product of extraordinary people who have spent their lives on the ideological barricades. But social change (like so much else) is a complicated process; often, it is the result of a fortuitous combination of factors: when emerging imperatives of a particular time produce leaders who recognize the degree of change required, and possess the personal and institutional skills to make change happen.

Before his election, FDR didn’t look like a revolutionary, but he met the imperatives of his time. Whether Joe Biden can meet the imperatives of ours remains to be seen–but the prospect shouldn’t be dismissed out of hand.

The signs are encouraging.

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It Wasn’t “The Establishment”

In the wake of Joe Biden’s victories on Super Tuesday, there has been a concerted effort by Sanders’ most rabid supporters (undoubtedly abetted by some Russian ‘bots’) to accuse a nefarious (and conveniently un-defined) “Establishment” of dirty tricks.

The folks crying foul look a lot like the Trump supporters who dismiss any and all facts that contradict their fervently-held beliefs as “fake news.”

The data says otherwise.

An analysis of actual data by Thomas Edsell in the New York Times is instructive. Here’s his lede:

Four years ago, in Grant County, Oklahoma, Bernie Sanders crushed Hillary Clinton, 57.1 percent to 31.9 percent.

This year, Sanders didn’t just lose Grant County — 87.5 percent white, 76.9 percent without college degrees — to Joe Biden, his percentage of the vote fell by 41 points, to 16.1 percent.

Grant County reflects what has become a nationwide pattern in the Democratic primaries, including those held Tuesday night: Sanders’s support among white working class voters has begun to evaporate.

What happened?

Edsell mines the data. It shows that large numbers of voters in 2016 were extremely hostile to Clinton; they voted for Sanders because they detested her–not because they were part of Bernie’s “revolution.” Once she captured the nomination, a surprising number voted for Trump.

Edsell suggests that the aversion of these (mostly) male voters to Hillary was also a factor in Elizabeth Warren’s inability to do better in the primary. He cites a recent study,

“Understanding White Polarization in the 2016 Vote for President: The Sobering Role of Racism and Sexism,” by Brian Schaffner, a political scientist at Tufts, and Matthew MacWilliams and Tatishe Nteta, political scientists at the University of Massachusetts, Amherst, was published in 2018 in the Political Science Quarterly.

Trump, according to the authors, deliberately put racism and sexism at the center of the campaign in order to make these issues salient and advantageous to his candidacy:

Trump’s rhetoric went far beyond targeting racial and ethnic groups; he also invoked language that was explicitly hostile toward women. These remarks were often focused directly at opponents, such as Carly Fiorina and Hillary Clinton, or news reporters, such as Megyn Kelly.

Edsell goes into some detail about the study, and it’s worth clicking through and reading, but his larger point was that considerable research demonstrates that a very significant percentage of non‐college‐educated whites hold sexist views. So we shouldn’t be surprised by post-primary analyses that show non-college educated whites –many of whom voted for Sanders in 2016–breaking for Biden in significant numbers now that Sanders no longer faces Hillary.

Overall Sanders is running well below his 2016 vote share everywhere. A lot of people underestimated just how much of his support in 2016 was an anti-Clinton vote, and now that he’s not running against Clinton, those voters aren’t backing him anymore.

Other interesting data points: between 10 and 12 percent of Sanders’s 2016 primary voters voted for Trump in the general election, with an additional 12 percent either voting for a third-party candidate or not voting at all. And many weren’t Democrats; interviews with Sanders-Trump voters over the years suggest that only 35 percent of them had voted for Obama in either 2008 or 2012.

What separated Sanders-Trump voters from Sanders-Clinton voters was simple racism.

When asked how they felt about whites and blacks on a 0-100 scale, Sanders-Trump voters rated blacks 9 points less favorably than Sanders-Clinton voters. But Sanders-Trump voters rated whites 8 points more favorably.

Nate Silver has also crunched the numbers, pointing out that in 2016, Sanders won 43 percent of the primary vote against Clinton; however, if “24 percent of that 43 percent were #NeverHillary voters, that means Sanders’s real base was more like 33 percent of the overall Democratic electorate.”

If Edsell and the scholars he quotes are right about the extent and effect of latent sexism (and not-so-latent racism), it explains why Sanders’ support diminished this time around–although it doesn’t explain the significant reduction in turnout by young voters, especially in a year when Democratic primary turnout overall has skyrocketed. (One tongue-in-cheek explanation: Young people tweet. Old people vote.)

One thing, however, is clear. No matter how distasteful the evidence is to Bernie’s most passionate supporters, neither the pathetically inept DNC nor some shadowy “establishment” are responsible for his likely failure to win the nomination.

It may seem inconceivable to them that a majority of Democratic voters prefer Biden. But the data says they do.

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This is Called Reality

The Presidential primaries are effectively over. Both parties have chosen their candidates (and it is worth reminding everyone that primaries are party affairs, not exercises intended for the general/unaffiliated public).

I am reluctant to re-enter the toxic primary debate between the “Bernie bots” and the Hillary supporters, and I will preface this post with a disclaimer that will no doubt be ignored: this is not an “endorsement” of either of them. I tend to agree with most–not all– of Sanders’ positions, and I have never been a particularly enthusiastic supporter of Hillary–not because I consider her corrupt or dishonest (I don’t), but because, despite her resume and formidable policy chops, she is a defensive and not particularly inspiring candidate.

I will support Hillary. Had Bernie emerged as the Democratic candidate, I would have supported him. But that is a far cry from believing that he would be the stronger candidate against The Donald.

A recent article from Slate spells out what most politically active people know: polls at this juncture in the campaign are absolutely meaningless. The reason Hillary’s negatives are high is that everything that the Republicans could possibly throw at her has been thrown (repeatedly) for the past 25 years. There won’t be any surprises.

Bernie, on the other hand, would go into this election facing the national GOP smear machine for the first time–and given that Trump is head of their ticket, that machine would undoubtedly go into overdrive. The Slate article spells out just some of the more obvious attacks (and no, they need not be fair or accurate–just as many of the efforts to bring Hillary down have not been fair or accurate). Just a few examples from the article:

[Sanders] has never been asked to account for his relationship with the Trotskyist Socialist Workers Party, for which he served as a presidential elector in 1980. At the time, the party’s platform called for abolishing the U.S. military budget and proclaimed “solidarity” with revolutionary Iran. (This was in the middle of the Iranian hostage crisis.) There’s been little cable news chatter about Sanders’ 1985 trip to Nicaragua, where he reportedly joined a Sandinista rally with a crowd chanting, “Here, there, everywhere/ The Yankee will die.” It would be nice if this were due to a national consensus on the criminal nature of America’s support for the Contras. More likely, the media’s attention has simply been elsewhere….

Imagine an ad drawing from the old Sanders essay “The Revolution Is Life Versus Death.” First it might quote the candidate mocking taboos on child nudity: “Now, if children go around naked, they are liable to see each others [sic] sexual organs, and maybe even touch them. Terrible thing!” Then it would quote him celebrating girls who defy their mothers and have sex with their boyfriends: “The revolution comes … when a girl pushes aside all that her mother has ‘taught’ her and accepts her boyfriends [sic] love.” Finally, it would remind viewers that Sanders was one of 14 congressmen to vote against the law establishing the Amber Alert system and one of 15 to vote against an amendment criminalizing computer-generated child pornography. The fact that these votes were cast for entirely principled civil libertarian reasons is, in the context of a general-election attack, beside the point…..

As the nominee, Sanders would have to address his former opposition to public schools and praise for parents who believe that it is “better for their children not to go to school at all than for them to attend a normal type of establishment.” He’d have to explain whether he still feels that sexual repression causes cancer, whether he still opposes the concept of private charity, and whether he still supports the public takeover of the television industry.

Anyone who believes that the GOP would not use–and abuse–these currently little-known positions from Sanders’ past, or that such attacks wouldn’t be highly effective, is being willfully naive.

Bernie Sanders has done the Democratic party an enormous service during this primary campaign. He has raised issues that needed to be raised, and he has moved Hillary Clinton from her more cautious and much more incremental positions. His arguments will strongly influence the party platform. He has brought enthusiastic young people into the political process, and I for one believe he will put the issues above his ego and work hard to keep them involved.

As an old political warhorse, I can tell you that winning an election is not the same thing as winning the argument. The “Bernie bots” can console themselves that he has already won that.

Finally, for those still insisting that Bernie can still win the nomination, or in the alternative, that he was somehow cheated out of winning, please read this.

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What Winning Looks Like

Bernie Sanders won’t be the Democratic nominee. But he’s winning something more important.

Ed Brayton has the best–and most succinct–analysis of the challenge faced by Bernie Democrats. Over at Dispatches from the Culture Wars, he writes:

It’s time for Sanders fans — and again, I’m one of them — to shift their focus from winning the presidency to building a real movement to accomplish his primary goal, which is to get the influence of big money out of our political process as much as possible. So what does that entail?

First, it means supporting Hillary Clinton in the general election. What is it that is currently preventing us from passing any meaningful legislation to limit the influence of big money? The Supreme Court’s Citizens United ruling. If the Republicans win, any hope of adding a liberal justice to the Supreme Court that could help overturn that ruling dies for at least the next generation, maybe more. On the other hand, a Democratic president gets to replace Scalia and there would then be a liberal majority on the court and overturning that ruling becomes entirely plausible. Bernie voters who refuse to vote for Clinton, even if they have to hold their nose to do it, will be cutting off their nose to spite their face and dramatically reducing the chances of achieving Bernie’s top policy priority.

Second, it means building up an organization that can recruit, train and fund candidates who share Bernie’s vision of not only reducing the influence of big money, but also favors stronger regulation of big business — the very thing that the outsized influence of their money seeks to prevent. Overturning Citizens United is just the first step. The second step has to be electing people to Congress who will vote for serious campaign finance reform, not the weak sauce that was McCain-Feingold. This requires money, organization, and professionals who know how to run campaigns and how tothink strategically in politics.

You can rage all you want about how unfair the system is, but that rage doesn’t actually change anything if you can’t translate it into effective legislative action. So yeah, Bernie is going to lose the Democratic nomination. That doesn’t mean he’s going to lose the larger battle. Winning that battle is up to his supporters and those who share his vision, but if all you’re going to do is kick and scream and cry about dark conspiracies, you won’t achieve a damn thing. So if you want Bernie to win something more important than the White House, get your heads out of the clouds and get to work.

Bottom line: Sanders faces a challenge. He cannot win the Democratic nomination. Will he do a reprise of the disastrous Nader “If not me, no-one” ego trip–a position that gave the U.S. eight years of George W. Bush and a vastly more dangerous world, or will he be willing to spend the time and political capital to lead the Democratic party to a more progressive place?

I think he has signaled his willingness to do the latter, because I think he cares about the issues he has raised more than his own importance. At a campaign rally in Oregon, he said

“We need to plant the flag of progressive politics in every state in this country.”

Echoing Howard Dean from an earlier campaign, Sanders also insisted that the Democratic Party as a whole must forge a 50-state strategy focused on restoring civic vibrancy and fueling meaningful outcomes on the key issues people care about.

“The Democratic Party has to reach a fundamental conclusion: Are we on the side working people or big money interests? Do we stand with the elderly, the children, and the sick and the poor, or do we stand with Wall Street speculators and the drug companies and the insurance companies?”….

Now our job is not just to revitalize the Democratic Party—not only to open the doors to young people and working people—our jobs is to revitalize American democracy.”

If Sanders can set the Democratic party on the road to realizing that goal, he–and the American political system– will be the ultimate winners.

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