Biden – Page 4 – 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 Intriguing Analysis

Paul Krugman recently had a column that–almost incidentally–amplified the findings I reported on yesterday from Democracy Corp’s focus groups.

He began by noting that Biden simply doesn’t arouse the same degree of animosity that Obama did. Krugman leaves it there, but the reason for the moderation of vituperation is pretty obvious: Biden’s a White guy. Yes, he’s a hated Democrat/Socialist/Leftie/Whatever, but at least he’s not Black.

Krugman focused on the lower level of animus and hostility aimed at Biden by Republicans, and speculated over what that “low energy” opposition might mean for the prospects of upcoming legislative proposals.

Just about every analyst I follow asserted, almost until the last moment, that $1.9 trillion was an opening bid for the rescue plan and that the eventual bill would be substantially smaller. Instead, Democrats — who, by standard media convention, are always supposed to be in “disarray” — held together and did virtually everything they had promised. How did that happen?

Much of the post-stimulus commentary emphasizes the lessons Democrats learned from the Obama years, when softening policies in an attempt to win bipartisan support achieved nothing but a weaker-than-needed economic recovery. But my sense is that this is only part of the story. There has also been a change on the other side of the aisle: namely, Republicans have lost their knack for demonizing progressive policies.

Krugman is careful to note that the decrease in demonization applies to policies (after all, lots of Republicans still believe that Democrats managed to steal a federal election at the same time they were sexually exploiting and then feasting on small children…) But as he notes, there’s been an absence of “bloodcurdling warnings about runaway inflation and currency debasement, not to mention death panels.”

True, every once in a while some G.O.P. legislator mumbles one of the usual catchphrases — “job-killing left-wing policies,” “budget-busting,” “socialism.” But there has been no concerted effort to get the message out. In fact, the partisan policy critique has been so muted that almost a third of the Republican rank and file believe that the party supports the plan, even though it didn’t receive a single Republican vote in Congress.

Krugman notes a number of possible explanations: the obvious hypocrisy of screaming about deficits under Obama and then incurring huge ones via tax cuts for the rich; the fact that none of their past, dire warnings of inflation under Obama–or their rosy predictions of a boom under Trump–materialized (although, as he points out ” inconvenient facts haven’t bothered them much in the past.”)

Or perhaps Republicans no longer know how to govern. They are trapped in a culture war of their own creation. As Krugman notes, while the Democrats were fashioning legislation and hammering out policy compromises, Republicans were screaming about Dr. Seuss and Mr. Potato Head.

In short, the prospects for a big spend-and-tax bill are quite good, because Democrats know what they want to achieve and are willing to put in the work to make it happen — while Republicans don’t and aren’t.

I have been extremely happy with what the Biden Administration has done–and failed to do–thus far. This is a highly competent operation. What is undoubtedly true, however, is that one reason the path has been smoother for Joe Biden is simply because his skin is white.

And that is an incredibly sad commentary on the current state of America.

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The EPA Is Back!

A recent headline from the New York Times warmed my heart. It announced “EPA to Review Attacks on science Under Trump.”

One of the most damaging aspects of the four years in which America experienced crime-syndicate-as-government was the ruthless attack on facts. From Kellyanne Conway’s “alternative facts” to the elimination of scientific advisory panels, the only consistent agenda of the Trump administration was its persistent attention to its donors’ bottom lines, and disregard of the human need for clean air and water–not to mention a habitable planet and non-toxic foods.

The Biden administration is taking the unusual step of making a public accounting of the Trump administration’s political interference in science, drawing up a list of dozens of regulatory decisions that may have been warped by political interference in objective research.

The effort could buttress efforts to unwind pro-business regulations of the past four years, while uplifting science staff battered by four years of disregard. It is particularly explicit at the Environmental Protection Agency, where President Biden’s political appointees said they felt that an honest accounting of past problems was necessary to assure career scientists that their findings would no longer be buried or manipulated.

In a blunt memo this month, one senior Biden appointee said political tampering under the Trump administration had “compromised the integrity” of some agency science. She cited specific examples, such as political leaders discounting studies that showed the harm of dicamba, a popular weedkiller that has been linked to cancer and subsequently ruling that its effectiveness outweighed its risks.

The list of suspect decisions and disregard for settled science is expected to reach at least 90 items.

The current E.P.A. administrator, Michael Regan, sent out an email message in which he emphasized the danger of allowing politics to drive science, and the likelihood that making politics the priority would end by sacrificing the health of the “most vulnerable among us.”

President Donald J. Trump’s well-documented attacks on science include doctoring a map with a black Sharpie to avoid acknowledging that he was wrong about the path of a hurricane and then pressuring scientists to back his false claim; meddling in federal coronavirus research; and pressuring regulators to approve Covid 19 vaccines and treatments. Those actions provoked bipartisan concern during his administration.

Those actions may have received the most media coverage, but what really alarmed me was the less noted elimination of scientific panels and the appointment of fossil fuel lobbyists to positions of authority in both the EPA and the Department of the Interior.

Trump’s first choice for the EPA, Scott Pruitt, removed the agency’s web page on climate change and fired and barred any independent scientific advisers who had been awarded grants from the E.P.A. The courts found that latter policy to be illegal. Pruitt also rolled back several scientifically-supported policies after holding meetings with executives and lobbyists.

Andrew Wheeler, who succeeded Pruitt, repeatedly ignored the advice of scientists: he curbed but refused to ban asbestos; insisted that the health effects of a widely-used pesticide were “unresolved” despite years of agency research proving its danger to infants; and pushing through a policy (which has also died in the courts) to limit the type of health and epidemiological studies that could be used to justify regulations.

The incoming staff has uncovered multiple instances in which agency personnel were told to disregard scientific consensus, and to help favored businesses avoid “problems.”

Competence and integrity in government is incredibly important in the development of environmental policy, just as it is in management of a pandemic. Peoples lives–and the livability of the planet–are at stake. The willingness of the Biden Administration to commit to science, fact and empirical knowledge is incredibly welcome.

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Blast From The Past Makes Me Happy!!

On family excursions into nature–admittedly, not my strong suit, but hey! grandkids–I became aware of the lasting contributions of FDR’s Civilian Conservation Corp. That program not only offered employment to some three million Americans who had found themselves out of work during the Depression—it also built lasting improvements to the nation’s parks, roads and forests.

Workers enrolled in the CCC planted more than three billion trees. They paved 125,000 miles of highways, and built 3,000 fire lookouts.. Trails and structures from the Grand Canyon and the Pacific Coast Trail to the Smokey Mountains remain in use today.

According to The Guardian, Joe Biden has taken a leaf from the CCC–one of FDR’s most popular and successful efforts.

As part his recent climate policy spree, Biden announced the establishment of a “Civilian Climate Corps Initiative” that could harness the energy of the very generation that must face – and solve – the climate crisis by putting them to work in well-paying conservation jobs.

After Biden’s omnibus executive order, the heads of the Department of the Interior, the Department of Agriculture and other departments have 90 days to present their plan to “mobilize the next generation of conservation and resilience workers”, a step toward fulfilling Biden’s promise to get the US on track to conserve 30% of lands and oceans by 2030.

This is exactly the sort of effort we need right now. Not only will this Civilian Climate Corp provide gainful and undeniably useful job opportunities at a time when the economy is reeling from COVID, not only will it provide training to young people who participate, not only will it be an important part of America’s response to climate change, but it will offer the demonstrable benefits that attend national public service programs.

This is far removed from “make work” programs. This CCC will work on projects that are clearly and substantively important. The article quotes Mary Ellen Sprenkel, head of the National Association of Service and Conservation Corps, for the range of issues such a Corp can address:

Far beyond just planting trees, a new conservation corps could pour money into tackling a bevy of other environmental problems, too. According to Biden’s website, projects will include working to mitigate wildfire risks, protect watershed health, and improve outdoor recreation access. Sprenkel thinks the effort could also include more activities at the community level, like urban agriculture projects and work retrofitting buildings to be more energy-efficient. And as Sprenkel pointed out, the federal government owns and manages thousands of buildings that need help to become more energy-efficient. The buildings “could even become sources of renewable energy generation with solar or wind power installations”, she added.

This reconstituted and reimagined CCC can and should provide apprenticeships and on-the-job education equipping participants for long-term employment. But even more important, at a time when Americans live in very different realities and occupy informational and residential “bubbles,” it will provide the democratic benefits offered by public service programs by bringing young people from widely different backgrounds together.

Back in 2014, I advocated for a new GI Bill that would require young people to enroll in a year of civil service between high school and college or trade school. Among the many benefits of such service would be an appreciation for the role of government; another benefit would be the experience of working with Americans from diverse backgrounds and communities. The original CCC was segregated by race and gender–realities that detracted from its otherwise positive influence. Biden’s CCC, to the contrary, would build non-corporeal bridges along with the physical ones–and it would do so at a time when the bonds of citizenship have become deeply frayed.

My youngest grandson is currently taking a year with Americorp, and as I watch his progress, I can attest to the maturation and flourishing–and cross-cultural understanding– that occurs in such programs.

I say three cheers for the three Cs!

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Joe Biden And Childhood Poverty

Joe Biden has been President for barely a month, and he has already proved me wrong.

Don’t misunderstand–I have always really liked Biden. I have read enough stories and heard about enough incidents from people who know him personally to recognize that he is a genuinely decent, caring human being. A mensch. I was in agreement with his platform, and I was happy to vote for him. But his long history of bipartisanship in the Senate–not to mention the Obama Administration’s (constantly rebuffed) efforts to reach across the aisle–led me to expect more of the same.

Instead, Biden hasn’t just “hit the ground running.” He has been aggressive and arguably transformative. He has acted decisively to rid the federal government of the sleeper agents (my terminology, but I’d argue it’s accurate) inserted in various agencies; he’s appointed highly competent, experienced people to replace the corrupt lobbyists and know-nothings intent upon crippling those agencies, and I have applauded his clear commitment to the environment, to ending the pandemic and getting the economy back on track, among numerous other things.

While Biden has been civil and welcoming to Republicans who have made noises about compromise–Eugene Robinson of the Washington Post dubbed Biden’s recent meeting with ten GOP Senators an “exercise in performative bipartisanship”– he’s also made it very clear that he intends to fulfill his campaign promises with or without them. No more falling for what has aptly been called the GOP’s “Lucy and the football” ploys.

In other words, the good news has just kept coming!

And here’s more: I only recently became aware of an incredibly important element of Biden’s pandemic stimulus–a measure that experts say could reduce childhood poverty by fifty percent.

As Nicholas Kristof explained in his column in the New York Times,

President Biden included a proposal in his $1.9 trillion American Rescue Plan that one study says would cut child poverty by half. We in the news media have focused on direct payments to individuals, but the historic element of Biden’s plan is its effort to slash child poverty.

“The American Rescue Plan is the most ambitious proposal to reduce child poverty ever proposed by an American president,” Jason Furman, a Harvard economist, told me.

It will not surprise anyone to know that this provision was entirely absent from the Republican “compromise” proposal. (The party of “religion and Jesus and children,” as Representative Rosa DeLauro sarcastically put it…Or as Kristof writes, “Jesus says (19:14) suffer the little children to approach him; he absolutely does not recommend that the little children shall suffer.”)

Biden’s plan to address child poverty would expand the existing child tax credit, up to $3,600 a year for young children. There is an existing child tax credit, but the way it currently works, the families that are most in need of it earn too little to take advantage of it. They earn too little to pay taxes, and the credit is taken against taxes owed. So it looks progressive–even magnanimous– but in practice, it isn’t.

Biden’s plan would change the credit into a monthly stipend–and as Kristof notes, even a sum as modest as $3,600 would be utterly transformative for many low-income families.

One reason to think that this would be so successful is that many other countries have used similar strategies to cut child poverty by large margins. Canada’s parallel approach cut child poverty by 20 to 30 percent, depending on who’s counting, and Britain under Tony Blair cut child poverty in half.

Now that Democrats are in power, Republicans can be expected to protest that the country can’t afford Biden’s plan. (That protest conveniently overlooks the $2.3 trillion dollar cost of their massive tax cut, which primarily enriched the already affluent.) A cost-benefit analysis says we certainly can afford it, because it will ultimately save money– current estimates put the costs of child poverty to the United States at about $1 trillion annually, a sum that reflects reduced adult productivity, increased crime and higher health care costs.

During the primaries, I worried that both Biden and Bernie were too old. I was wrong. It may be that Biden expects to be a one-term president–a realization that frees him from second-term electoral calculations, and reminds him that he has a limited time to turn the country around.

Whatever the reason, I’ve never been so happy to be wrong. Biden is on his way to being a truly transformative president.

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