Category Archives: Public Policy and Governance

Pesky Data!

Andrew Yang’s campaign for the Presidency introduced the UBI , or Universal Basic Income, to millions of Americans unfamiliar with the concept. He put that policy debate “on the table”–following which policymakers have ignored or ridiculed it.

In previous blogs about the UBI, I have acknowledged how unlikely it is that contemporary American lawmakers would pass, or even consider, such a program. But research suggests a high probability that  millions of jobs will be lost to automation within the next 15-20 years– a probability that will present a daunting challenge that America’s current inadequate and bureaucratic social safety net is clearly unable to meet.

The right-wingers who believe that taxation is theft, and the contemporary Calvinists who believe that poverty is the result of sloth and/or moral defect, respond to UBI advocacy with horror: those sluts who are producing babies in order to get added welfare payments of a munificent 150/month would obviously become an even greater burden on the “makers.”

Pilot programs and academic research continue to crank out evidence to the contrary. Those programs continue to multiply:the latest effort is in Germany, where a Basic Income Pilot Project will start next spring and will send 122 people €1,200 ($1,422) per month for three years. No strings attached. The study, initiated by the German Institute for Economic Research and My Basic Income, a Berlin-based nonprofit, will investigate the effects of an unconditional basic income.

Recently, a new multi-agency report backed by the United States Agency for International Development reported on a project to compare the effectiveness of workforce training programs with direct cash transfers. It found a “marked increase in entrepreneurialism, well-being and productivity within the cohort that received only cash.” Other experiments have found that unrestricted cash payments went for food, medicine and education, and did not–as cynics warned– increase joblessness or substance abuse.

Our policymakers, of course, prefer ideology to pesky evidence…

There actually is substantial data showing that, contrary to Americans’ deep cultural disdain for social welfare programs, a UBI would be both efficient and socially unifying.  Universal programs escape the stigma of benefits targeted to the poor.

Aside from the ideologically-grounded and empirically dubious belief that “handouts” encourage sloth and vice, the major objection to a UBI is cost. My own proposal for finding the money to pay for such an expensive program would begin with ending fossil fuel and other subsidies that have long since outlived any usefulness they may have had, and curtailing our bloated military expenditures–all measures that are overdue in any case. But there are several other approaches.

A while back, William Gale of the Brookings Institution’s Hamilton Project made a persuasive case for coupling a UBI to a tax that would pay for it– a 10 percent Value-Added Tax (VAT).

As he pointed out, a VAT is a national consumption tax—like a retail sales tax but collected in small bits at each stage of production. It raises a lot of revenue without distorting economic choices like saving, investment, or the organizational form of businesses. And it can be easier to administer than retail sales taxes. The big problem with such a tax is that it is usually regressive–but interestingly, not when combined with a UBI.

As I explained in an earlier post,

The Tax Policy Center estimates that the VAT in conjunction with a UBI would be extremely progressive. It would increase after-tax income of the lowest-income 20 percent of households by 17 percent. The tax burden for middle-income people would be unchanged while incomes of the top 1 percent of households would fall by 5.5 percent.

It may seem counter-intuitive, but the VAT functions as a 10 percent tax on existing wealth because future consumption can be financed only with existing wealth or future wages. Unlike a tax imposed on accumulated assets, the VAT’s implicit wealth tax is very difficult to avoid or evade and does not require the valuation of assets.

Assuming that Gale’s numbers are sound, a VAT would generate more than enough money to pay for a UBI. Meanwhile, a growing body of research confirms the benefits of the UBI approach to social welfare.

But this is America, where Republican senators are climate change deniers. America, where Republican governors dismiss overwhelming evidence that mask wearing helps abate a pandemic. America, where lawmakers reject the very idea of implementing the sort of national healthcare programs that work well elsewhere.

America–where our lawmakers pay absolutely no attention to evidence contrary to their preferred beliefs.

 

Pay Your Dues!

I recently saw yet another study that attempted to quantify just how much money is lost to national treasuries by reason of what is politely called “tax avoidance.” 

The report, from an organization named the “Tax Justice Network,” is touted as the first study to thoroughly measure how much money each country loses each year to corporate tax abuse and private tax evasion. Its calculations were based upon data that had been self-reported by corporations to tax authorities.

I realize that one person’s loophole is another person’s policy choice, but with that caveat…

The research found–unsurprisingly–that wealthy countries are the primary drivers of tax revenue loss. (I say “unsurprisingly” because you have to have money to evade taxes.) Wealthy countries contributed most to the total of $427 billion in losses annually. Those losses, as the report noted, affect the ability of countries all over the world to provide services to the public.

This report puts numbers to the problem, but any sentient citizen is aware of the arguably pathological aversion to taxes displayed by many wealthy citizens and corporate entities. Certainly that’s true in the United States, where politicians with straight faces equate taxation with theft, and bemoan the extraction of dollars from presumed self-made “makers” to support those they dismiss as “takers.”

Probably the best response to this mischaracterization was Elizabeth Warren’s smackdown  a few years ago:

There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Economists are quick to point out that economic growth–and the ability of wealthy Americans to prosper in an economy heavily dependent on consumption–requires that those at the bottom of the income distribution have disposable income sufficient to spend in the marketplace. Corporate bigwigs don’t create jobs–job creation is a function of demand. (No one is going to be hired to produce more widgets if few people have the resources to buy those widgets.)

What I always wonder, however, is whether these “captains of industry” treat their country clubs and other membership organizations the way they treat their countries. How would the Orange Menace react if members of Mar-A-Lago declined to pay their dues?

Those golf courses need tending. The clubhouse roofs and mechanical systems require maintenance. The properly servile “help” won’t be there to bring you your Scotch and soda if they aren’t being paid. Etc. Why don’t the same people who presumably understand the need to pay dues adequate to keep these organizations functioning acknowledge that–as members of the polity–they have similar obligations to the country?

Because they do know better.The loss of those billions of dollars isn’t accidental.

“A global tax system that loses over $427 billion a year is not a broken system, it’s a system programmed to fail,” said Alex Cobham, chief executive of the Tax Justice Network.

The ability to evade paying one’s membership dues–the chutzpah required to be a “free rider” on the contributions of others– doesn’t mean that a businessperson is “smart.”  To the contrary, it demonstrates just who the real “takers” are.

 

Skinning That Cat

There’s an old adage to the effect that there is more than one way to skin a cat. I thought about that when I read a recent opinion column in the New York Times, focusing on Mitch McConnell’s packing of the federal bench with rightwing judges.

The article began by acknowledging that McConnell and Trump–enabled by their allies in the Senate– have packed the federal courts with more than 200 conservative judges over the last four years. Their remaking of the federal judiciary includes three Supreme Court justices, and is part and parcel of the rightwing effort to achieve what it could never manage to achieve through legislation– “including eliminating health care for millions and undermining what remains of the Voting Rights Act.”

The authors of the essay remind readers that we are not entirely helpless in the face of this ideological takeover; they advocate taking a page from the conservatives and forging “a new form of progressive federalism.” 

First, state elected officials must be ready to respond quickly to, or act in advance of, rulings from the Supreme Court. If, for example, the Affordable Care Act is weakened or struck down, Democratic state legislatures should have bills drafted to introduce that day to protect people who will lose coverage. And officials must act now to protect and expand access to reproductive health care — especially for poor women and women of color — given the clear threat to Roe v. Wade.

Are excessively business-friendly federal courts making it easier for companies to pollute? Harder for government agencies to address racism? Progressive states can pass policies “to patch holes ripped open” by those courts.

if the Supreme Court further constrains the Consumer Financial Protection Bureau, states can go after corporations for violations of state securities and consumer protection statutes. If the court adopts cramped readings of federal environmental statutes, state regulators must use their tools to go after the country’s largest polluters. And if the court continues to undermine federal bribery laws, state attorneys general can bring corrupt politicians to justice under state criminal law.

What about states like Indiana, deep red and highly unlikely to follow that prescription? In those states, progressive advocacy groups and lawyers outside government can bring lawsuits to enforce rights protected by state constitutions. When I was Executive Director of Indiana’s ACLU, our affiliate brought such suits, and several were successful. And in the early days of the gay rights movement, organizations like Lambda Legal and the ACLU achieved state-by-state victories that ultimately helped change a nationally homophobic legal environment.

Recently, Nevada became the first state in the country to officially protect same-sex marriage in its Constitution. As the essay reminds us, several states have refused to allow their police take part in the federal government’s immigration crackdown. States

can rely on conservative decisions that promote state independence from the heavy hand of Washington. The very jurisprudential tools that make it harder for Washington to achieve progressive aims can empower states to do so instead.

Ironically, the same federalism that facilitated slavery and Jim Crow under the veil of “states’ rights” can be turned to progressive ends.

It’s slower and will take more work, but there’s more than one way to skin that cat.

 

Middle Schoolers Solve Gerrymandering!

One of the many structural problems that prevents America from experiencing genuine democratic accountability is gerrymandering. Those of you who have been reading this blog for more than a few months will have encountered my frequent posts describing the multitude of ways that partisan redistricting–aka gerrymandering–distorts election results and operates to suppress citizen participation.

Over the years, the Supreme Court’s majority has declined to find partisan redistricting unconstitutional or even justiciable–piously labeling it a “political question.” One of the Court’s excuses was the unavailability of reliable tests to determine whether a vote margin was the result of a gerrymander or simply a reflection of majority sentiment. Even after tests were developed that proved their accuracy to the satisfaction of lower courts,  the Supreme Court declined to rule against the practice, reinforcing the widespread conclusion that the Justices’ decisions were impelled more by ideology than an inability to determine whether gerrymandering had occurred.

Now, according to a fascinating article from Forbes,  a group of middle-school children has demonstrated the ability to separate the wheat from the chaff–or in this case, the gerrymander from political enthusiasm.

The article began by noting that the practice of gerrymandering is used to “dilute the voting power of certain constituents, minorities, and other groups.” (In the felicitous phrase coined by Common Cause, gerrymandering is the process that allows legislators to choose their voters, rather than the other way around.)

As the subject of their science research project, three middle school students from Niskayuna, New York, decided to take on this serious issue. In their work, Kai Vernooy, James Lian, and Arin Khare devised a way to measure the amount of gerrymandering in each state and created a mathematical algorithm that could draw fair and balanced district boundaries. The results of the project were submitted to Broadcom MASTERS, the nation’s leading middle school STEM competition run by the Society for Science & the Public, where Vernooy, 14, won the Marconi/Samueli Award for Innovation and a $10,000 prize.

These middle schoolers, who are too young to vote, decided to use scientific research to solve the problem of identifying when a redistricting map was the product of a gerrymander. They came up with a method of identifying political communities and regions of like-minded voters, then grouped those communities together to form precincts.

Each precinct was adjusted to include a compact or circle-like shape, a similar population size and a similar partisanship ratio. The result was a simple representation of where groups of like-minded voters live in each state.

These precincts were then compared to actual voting districts within the state. The comparison shows the percentage of people that are in the precinct but not the district, therefore illuminating the number of people that the district fails to represent. Using this method, they were able to give each state a gerrymandering score.

The article included color-coded maps illustrating the process the middle-schoolers devised. It ended with the pious hope that “the right people” would take note.

The article should serve to remind us that there are solutions even to seemingly intractable structural problems. The disinclination of the Court and Congress to actually implement those solutions is a different kind of reminder.

That disinclination reminds us that the people who benefit from cheating are unlikely to be interested in stopping the practice.

Trump’s Frivolous Litigation

Not long after we were married, my husband–who was active in the state chapter of the American Institute of Architects– took me to an AIA-sponsored cocktail party. A somewhat inebriated attendee who had heard that I was a lawyer cornered me and wanted to know why the profession couldn’t keep lawyers from filing so many frivolous lawsuits. 

It turned out that he defined a frivolous suit as one that the plaintiff lost. (I hasten to report that most architects I know are considerably brighter than that particular specimen.)

I thought about that long-ago conversation as I listened to media reports about Trump lawyers filing multiple challenges to the election results. Thus far, those challenges have been overwhelmingly unsuccessful, and in this particular case, those losses–and the reason for them– are evidence of their frivolity. 

Wikipedia addresses the confusion between a claim that is ultimately unsuccessful and one that is frivolous.

Frivolous litigation is the use of legal processes with apparent disregard for the merit of one’s own arguments. It includes presenting an argument with reason to know that it would certainly fail, or acting without a basic level of diligence in researching the relevant law and facts. The fact that a claim is lost does not imply that it was frivolous.

The entry goes on to explain that a frivolous claim may be one that is based on an “absurd” legal theory, or it may involve repeated, duplicative motions or lawsuits–basically, it’s a lawsuit that lacks a genuine, underlying justification in fact, or because existing laws or legal judgments unequivocally prohibit the claim.

The federal courts, and most states, do provide remedies when a lawsuit has been deemed to be frivolous. Most allow the judge to award court costs and attorneys’ fees to the targeted person or company. In several states, lawyers who bring civil actions without probable cause will be liable to the prevailing party for double or even triple damages if the court determines that the action was brought “with malice to vex and trouble.”

The prevailing party may also file a grievance against the attorney who filed the suit for violating the Rules of Professional Conduct, which clearly prohibit an ethical lawyer from engaging in such behavior.

Thus far, to the best of my knowledge, only one lawsuit filed by the Trump campaign achieved anything. That was a Pennsylvania case that succeeded in moving the Republican observers of the count–who were already in the room–six feet closer to the people who were actually doing the counting. Every other suit has been summarily dismissed for lack of any evidence of fraud or wrongdoing.

In an earlier post, I quoted Justin Levitt’s observation that–in the absence of facts sufficient to show a legal violation– these lawsuits were simply “tweets with filing fees.”  They aren’t intended to change an election result; they are intended to support the narrative  being conveyed to Trump’s credulous and angry base.

Every lawyer with whom I’ve discussed this PR tactic–including longtime Republicans–has dismissed the flurry of lawsuits as a delaying gimmick, a way to forestall an admission that  Trump lost. 

The Trump Campaign has nevertheless begun fundraising to cover its legal costs (although apparently, the “fine print” notes that monies raised will mostly go to pay off campaign debt). If I were a Biden lawyer defending against one of these petulant exercises masquerading as a lawsuits, I’d ask for whatever damages for frivolous lawsuits are available in that state–and I’d file a grievance with the state’s Disciplinary Commission. 

Evidently, the Lincoln Project intends to publicize the appalling lack of legal ethics being displayed by the lawyers willing to subvert the rule of law for monetary and partisan ends.There are also reports that a few principled lawyers have resigned from the firms that have agreed to handle these cases.

When this bratty tantrum concludes, its inexcusable assault on legal principle will be added to the very long list of norms attacked and weakened by this pathetic excuse for a human and his enablers. 

No one who has lived through the last four years could reasonably expect anything better from Trump–but the lawyers who are facilitating this travesty know better. They should be held to account.

And Bill Barr should be disbarred.