Posts Tagged ‘the economist’

Camp vs. Washington

Thursday, March 6th, 2014 by Geoffrey Lyons

DAVE CAMP’S (R-Mich.) raison d’etre is to change the way Washington does taxes.  Washington’s is not to change at all.

Last week, Camp revealed plans for the Tax Reform Act of 2014, which aims to simplify the current tax code by reducing the number of tax brackets and significantly scaling back deductions and exemptions that The Economist claims “leak $1 trillion in revenue a year and make compliance a nightmare.”

As good as these proposals sound (despite many kinks), essential to the political terrain of Washington are two insurmountable obstacles that will keep them from becoming law.  The first is partisanship.  Neither party is in the habit of giving a passing thought to tax reform without strings attached.  The Democrats want to see their projects funded and the Republicans won’t consider higher revenue.

The second obstacle is what this blogger is for the first time calling “special interests.”  The term is misused, abused, and overworked for a variety of reasons, but applies quite nicely to the special treatment afforded to certain groups and industries through tax preferences.  Anyone who currently enjoys such treatment is vehemently against the bill.  The National Association of Realtors, a lobbying powerhouse, is “extremely disappointed.”  The Private Equity Growth Capital Council also finds it all “so disappointing.”  These groups enjoy the mortgage interest and carried interest deductions respectively, two features of the status quo that Camp would like to see vanish.

Since Camp’s logic is to simplify brackets, widen the base, and patch the leaks caused by preferences, the bill is expected to generate revenue. The House Joint Committee on Taxation predicts that, were the bill to pass, it would generate an extra $3 billion in the next decade.  Sadly, however, Camp’s most vocal opponents don’t care much for its overall impact.  They care about their industry, and that’s enough to keep them going.  As one reads this, “a tribe of lobbyists is pressing conservatives to snuff Camp’s proposal, threatening to withhold precious campaign dollars.”  Such is the fate of someone who dares challenge Washington.

House of Cards: Fact or Fiction?

Tuesday, March 12th, 2013 by Geoffrey Lyons

DESPITE PROFUSE PLEAS from friends and family, your humble blogger hasn’t seen House of Cards. According to Roll Call, that amounts to repeated missed opportunities to catch a glimpse of Cassidy & Associates’ G St. facade. According to The Economist, it means passing up scenes of politicians:

…lying, leaking secrets to lobbyists, framing rivals, indulging in fistfights (one in front of wide-eyed children) and snorting cocaine, as well as sleeping with prostitutes, their own staff and a story-hungry reporter.

While the Cassidy building’s existence is undisputed, it’s dubious whether any lawmakers are snorting coke. So what’s the veracity of the show?

It’s pretty accurate…

“Honestly, the egos and the quest and thirst for power is very prevalent in Washington…just the drive, you know, the drive to the next position or the drive for the position of power” Rep. Jeff Duncan (R-S.C.)

“The accuracy of the props—from congressional doorplates to visitors’ badges—is much discussed, and praised.” – The Economist

“…after the first couple of shows, [Underwood’s] office starts looking like my office. I have this big map, right, sitting in there. I look over on the wall, he’s got that whip sitting up there….Then in the ninth episode, he’s trying to pass this bill, and he says, ‘I’m going to tell you one thing: You vote your district, you vote your conscience. Just don’t surprise me.’ [I said that.]” Kevin McCarthy (R-Calif.) 

“It’s like evil ‘West Wing.’ And some of the shadier parts are so realistic.” – GOP strategist Amy Thoma

It’s fantasy…

“In real life, says a Democratic campaign aide, members of Congress are too nannied by staff to stride about hatching plots, one-on-one. In the real Washington, says a Republican staffer, leadership coups take longer to ferment….Other errors fall under the heading of flattery: the clothes are too elegant for DC, and the ratio of sexual trysts to committee meetings is strikingly high.” – The Economist

“The notion of any of our leadership team having sex with a reporter makes me laugh out loud.  And besides, everyone knows there is no decent barbecue in Washington.” – Claire McCaskill (D-Mo.)

“[The characters] do mix fundraising and legislation far more than people would do…offering x dollars to anyone who would support this bill.  That would never occur in real life.” – Thoma

“If I were to make one criticism of the show, it’s [that] a South Carolina congressman’s barbecue of choice appears to be fairly sticky ribs, when true South Carolina barbecue uses a mustard-based sauce and even when it’s not that, it’s a more North Carolina vinegar mop.” –  Mike BoberMeat Week founder and Capital Spice blogger

Super Lobbyist Norquist is Talk of the Town

Tuesday, November 27th, 2012 by Geoffrey Lyons

GROVER NORQUIST, founder and president of Americans for Tax Reform and one of the most influential lobbyists in Washington, is receiving a deluge of press. This is most broadly because fear of a fiscal cliff is revitalizing debate around the feasibility of Norquist’s Taxpayer Protection Pledge, which commits signatories to “oppose any and all efforts” to raise taxes and curb deductions. 238 current House members and 41 Senators have signed the pledge.

But it’s also because of public renunciations by a few notable signatories – Rep. Peter King (R-N.Y.) and Sens. Lindsey Graham (R-S.C.), Saxby Chambliss (R-Ga), and Bob Corker (R-Tenn.) – all of whom have either hinted at or openly committed to reneging. This has provoked a torrent of speculation about the future of Norquist’s clout, mixed with some intra-party mudslinging in which Norquist himself has played no small part. (See the Atlantic’s “Timeline of GOP Snubs of the No-Tax-Raise-Pledge”).

Finally, Warren Buffet’s provocative Op-ed in the New York Times on Sunday opened with this:

“Suppose that an investor you admire and trust comes to you with an investment idea. ‘This is a good one,’ he says enthusiastically. ‘I’m in it, and I think you should be, too.’ Would your reply possibly be this? ‘Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.’ Only in Grover Norquist’s imagination does such a response exist.” (Norquist responded by calling this argument “silly”)

Here’s what other notable voices are saying:

“So far, the renunciations of Grover Norquist’s “Taxpayer Protection Pledge”amount to a trickle, not a flood. But we’re seeing the first signs in years that on the question of taxation — one of the fundamental responsibilities of government — the GOP may be starting to recover its senses.” – Washington Post (Eugene Robinson)

“I think Republican leaders who can find a sensible, rational way to defend a break in the pledge stand plenty to gain. After all, their oaths of office were made to their country. They should do what they deem fiscally sound for their constituents, not make decisions based on fear of a bespectacled man who has called Republicans who vote for a tax increase “rat heads in a Coke bottle.” – Washington Post (Jenna McGregor)

“By any standard other than the absurdly high one he has set himself, though, Mr Norquist continues to dominate Washington’s tax debate. Almost all revenue-raising proposals hinge on eliminating deductions, rather than raising marginal rates. If Mr Obama does succeed in raising the income-tax rate for the richest, it will have taken him two elections and all manner of fiscal face-offs and crises to get his way—and success is still far from assured. Even scrapping an economically nonsensical subsidy for ethanol, it seems, is still a highly controversial move. Grover is not over yet.” – The Economist

“This is where Mr. Norquist can give some ground. If taxes are going up anyway because the Bush rates expire, and Republicans can stop them from going up as much as they otherwise would, then pledge-takers deserve some credit for that. Mr. Norquist says it violates his pledge to eliminate deductions without lowering rates, but at the current economic and political moment it is also a service if Republicans prevent tax rates from going up. Speaker John Boehner deserves some leeway to try to mitigate the damage by negotiating a larger tax reform.” –  The Wall Street Journal