Investment in American Infrastructure

[LFC]

Oct 8, 2021 17:16:38 GMT Traveler said:

I really think the Dems have totally shot themselves in the foot if this is the case.  For starters on the revenue side, they kept carried interest in place, current drug purchases in place, no step up in basis at death, and let the trust thingy continue.  All of which benefit only a few.  Scarcely democratic IMO. 

I don't understand since there is a step up in basis at death. Do you mean that you think Dems should get rid of that? 

I wholeheartedly agree on the carried interest giveaway and GRTs (grantor retained trusts) serve no legitimate purpose other than estate tax dodging. Personally I find all of the qualified trusts at least a bit sketchy though some like qualified charitable trusts and qualified marital trusts can muster a bit of a defense though they're still used as tax dodges. QPRTs (qualified personal residence trust) are nearly as illegitimate as GRTs AFAIC.

Unfortunately the current shackles on Medicare when paying for drugs are protected by 51 Senators' votes. Thanks, Sinema.

On the cost side, I am for means testing this stuff. I dont think anyone making at least $150k needs these programs. Phase them out on a sliding scale. And figure out that which you can live without, and fight another day. As it is, we are definitely circling the drain. 2022 sure looks like it is shaping up to be a blowout.

I wonder how much of an impact means testing would really have on the bottom line. A quick lookup shows that a person making $150,000/year is already at 92% among earners. Will having a phase-out for 8% of people save much and be worth the regulatory confusion when you start talking household vs. single, flush years vs. lean ones, etc.? I'd love to see a good analysis.

[Traveler]

I misspoke I guess. I meant eliminate the step up in basis. The last time I looked (my inheritance), we paid taxes on the sale price less stepped up basis.

[LFC]

Oct 10, 2021 13:48:25 GMT Traveler said:

I misspoke I guess. I meant eliminate the step up in basis. The last time I looked (my inheritance), we paid taxes on the sale price less stepped up basis.

We've spoken about this before and I'm dead set against eliminating the step up in basis for two reasons. First, directly from a very high-end estate attorney I've worked with, the record keeping and opportunity for shenanigans jumps up with cross-generation basis. Second, not forcing tax with step up allows multi-generational deferral which in the case of the wealthy may often mean de facto tax avoidance.

I still like the Canadian system. When you die the property is considered as having been "sold" at its current value, income/capital gains taxes are assessed, and since gains were realized the step up in basis occurs. Since our taxes are generally assessed on transfer and gains at realization this seems completely fair.

[Traveler]

In the Canadian system, do they have to pay that tax upon reassessment? If so, that is pretty draconian. Family farm and all that. I much prefer assessing at the new basis, but not actually taxing the item until it is sold. Then there is no controversy over value, and nobody has to sell. But the government gets its take when transferred(gains realized) by the heirs.

[LFC]

Oct 10, 2021 15:42:42 GMT Traveler said:

In the Canadian system, do they have to pay that tax upon reassessment? If so, that is pretty draconian. Family farm and all that. I much prefer assessing at the new basis, but not actually taxing the item until it is sold.

a) Yes, tax is due on the value at death the same way estate tax is due on the value at death. I really don't see what's draconian about paying taxes on capital gains. In fact I find it to be the very opposite of draconian. It's YOUR stuff and when YOU die it's time to pay the taxes YOU were able to defer and never pay during YOUR lifetime. Wanting to leave it to your kids shouldn't magically wipe away YOUR responsibility for taxes.

b) F*** the family farm. I'm sick and tired of this special, romanticized, and extremely minimal use case being held up as a reason to upend the tax code and allow the lion's share of estates to get a massive tax break. The number of family farms that have this issue are miniscule. I posted figures over on the old TRS before and here's another analysis from the USDA showing 0.16% of 31,000 family farm operators who died in 2020 were subject to any estate tax. Woop-dee-doo. Plus all it takes is a little planning such as having life insurance for estate liquidity. If that's still not good enough then put in a higher exemption for family f***ing farms like a number of states do but no other assets. Now can we please be done with this right-wing talking point? It has about as much validity in the topic of estate taxes as accusations of in-person voter fraud in elections. Yes it occurs but barely at noise levels.

Then there is no controversy over value, and nobody has to sell. But the government gets its take when transferred(gains realized) by the heirs. I much prefer assessing at the new basis, but not actually taxing the item until it is sold. Then there is no controversy over value, and nobody has to sell. But the government gets its take when transferred(gains realized) by the heirs.

Again, as I've pointed out multiple times, why should a dynasty be able to defer taxes for a virtually infinite number of years just because they're wealthy enough that they don't need to sell? Should the Bezos fortune be allowed to escape taxes as long as Amazon exists and continues to supply enough income to live on to his heirs and their heirs' heirs and their heirs' heirs' heirs? If so please explain why this is fair to those not wealthy enough to defer taxes forever.

If you want to use the word "draconian" then by all means let's create two parallel paths of taxation, one where normal people get taxed on gains if they need to use the money during their lifetime and the other where rich people don't get taxed (potentially for a century or more) if they don't need the money. The Ayn Rand types would be touching themselves over a proposed law like this.

[Traveler]

Good points all. But I fear a bridge too far. Dems didnt even try.

[LFC]

Oct 14, 2021 16:56:07 GMT Traveler said:

 Dems didnt even try.

That just pisses me off. At the very least they should sunset the special giveaways in the TCJA early rather than waiting for them to expire in 2026.

[Traveler]

An interesting window on Sinema. Not encouraging either. 

The second bill is looking like toast, and Dems are in a free fall. Biden sure blew Afghanistan.  Lost a ton of goodwill with his honoring an agreement that the Taliban had already violated.  No reason he had to hold to an arbitrary deadline.  So his approvals are in the tank now, and unlikely to be positive by 2022.  

[LFC]

Oct 15, 2021 13:18:18 GMT Traveler said:

No reason he had to hold to an arbitrary deadline.  

From multiple things I read the biggest worry was that the military would drag their feet and bog him down into staying through inertia. It's what they did to both Obama and Trump and they're very good at it. As VP as suspect Biden had a front row seat to see how good at it they really are.

[AnBr]

^ so much this. Anyone that thought it could have been better is just deluding themselves. Of course the Repugs and the media were going to point to it and say "what a disaster!" That would have happened no matter the outcome. Remember that Obama tried get us out, but the entrenched warmongers drug their feet, whining and crying until it did not happen. We are out. End of story.

[LFC]

Oct 15, 2021 13:18:18 GMT Traveler said:

An interesting window on Sinema. Not encouraging either. 

I think the NYT author has it completely wrong. They're projecting John McCain's approval ratings and long history in the state onto somebody who has neither. Her poll numbers are downright awful. She's got a 70% disapproval rating from likely Arizona primary voters and is vastly underperforming both Biden and Sen. Mark Kelly.

As she continues to stonewall the $3.5 trillion reconciliation bill, Sen. Kyrsten Sinema’s (D-AZ) net disapproval among likely Democratic primary voters is 70 percent, according to a new poll by progressive group Data for Progress.

From the link to the poll:

Meanwhile Republicans want to throw out Liz Cheney for being too liberal and they've already thrown out many Republicans for not being crazy so she can't switch parties and survive. That leaves her with virtually no base on either side and certainly little ability to survive a primary challenge. And since only Democrats and unaffiliated voters can vote in the primary she can't depend upon a critical mass of Republicans to vote for her who just want to create trouble for the Dems. That leaves her dependent on turning out a massive number of independents for a Democratic Party primary, a rather daunting challenge for anybody.

Who knows, maybe she can pull it off. But I wouldn't bet money on it.

[jackd]

I wonder if Sinema has considered the possibility that wrecking the Biden agenda could bring about not just change of control of Congress, and the Senate in particular, but also the election of Trump in 2024.

[goldenvalley]

Oct 15, 2021 14:19:17 GMT jackd said:

I wonder if Sinema has considered the possibility that wrecking the Biden agenda could bring about not just change of control of Congress, and the Senate in particular, but also the election of Trump in 2024.

She's only looking at her reflection in the mirror and her own re-election.

[jackd]

What she's seeing may be just her fantasy and not the actual image in the mirror. The only way the Biden agenda could be more crippled would be if Congress were actually required to vote on it.

[LFC]

It appears that Manchin will block an effort to save the planet in order to save his portfolio.

Biden’s Climate Centerpiece Imperiled Thanks To Manchin

It looks like Sen. Joe Manchin (D-WV), an actual coal baron in his home state, might have won in his fierce opposition to President Joe Biden’s effort to replace coal and gas-powered plants with clean energy in the sweeping reconciliation plan.

• The program is likely to be cut from the bill, congressional source told the New York Times.

• West Virginia is exposed to more flood damage than any other state thanks to climate change, by the way.

[LFC]

Manchin seems to just want to throw last minute grenades. I think he's trying to kill or squeeze all the juice out of the reconciliation through foot dragging and goal post changing. I can't see how springing surprises on various Dems can be interpreted as bargaining in good faith. And the last part I quoted sounds like it could have been describing Paul Ryan.

Sen. Joe Manchin’s (D-WV) sudden reversals against various policies in the reconciliation bill often come as unhappy surprises to his fellow Democrats.

With the Clean Electricity Performance Program (CEPP), Sen. Tina Smith (D-MN), the policy’s crafter, told reporters months ago that she’d been keeping Manchin apprised and that he was open to it. Flash forward to last week, when Smith told CNN that Manchin had just let her know that he wouldn’t support it.

Manchin’s reported major changes to the child tax credit are going the same way. He recently told the White House that he wants to enforce work requirements and set the family income cap at $60,000 according to an Axios report — less than half of the $150,000 cap to receive the full credit the policy included in the American Rescue Plan, which proponents hope to extend in reconciliation.

The draconian cuts are news to some of the policy’s biggest champions.

Sens. Michael Bennet (D-CO) and Jeff Merkley (D-OR), two of the credit’s leading proponents, told TPM Tuesday that he hadn’t shared those changes with them.

“I think what we have in place right now is very good, and I do not want to see a tax increase on those vulnerable Americans,” Merkley added.

Accepting a change that would strip so many families of their eligibility to receive the credit would be an awfully bitter pill for most Democrats to swallow; the policy is one of the most dearly-held provisions in the reconciliation package.

“The Child Tax Credit as written is such an extraordinarily important effort,” Sen. Ron Wyden (D-OR) told reporters.

“I think we should make these programs more inclusive, not more constrained,” added Sen. Richard Blumenthal (D-CT) to TPM.

Manchin maintains that he is ardently opposed to what he calls an “entitlement society,” advocating for means testing and other requirements to shrink the pool of people eligible for various benefits in the reconciliation package.

And Sinema just seems content to say nothing and let Manchin kill it.

[jackd]

As he has said, he's not a liberal and if the party wants liberal policies, it should elect more liberals. The party should try to take his advice although Sinema's election on apparently fraudulent campaign positions demonstrates that this is easier said than done. One thing that is clear is that the party has zero leverage over Manchin.

[LFC]

Apparently some of Sinema's people are none too happy with her either. I'm starting to believe she's just a moron Machiavelli.

Five military veterans on Sen. Kyrsten Sinema's advisory board resigned from their roles this week, slamming the Arizona Democrat as one of the "principal obstacles to progress."

In a letter to Sinema, the veterans expressed frustration with her refusal to change the Senate filibuster to protect voting rights, failure to support prescription drug negotiations, her opposition to parts of the Democrats' sweeping budget reconciliation package that make up President Joe Biden's agenda and criticized her for not voting on the January 6 commission.

"You have become one of the principal obstacles to progress, answering to big donors rather than your own people," the veterans wrote. "We shouldn't have to buy representation from you, and your failure to stand by your people and see their urgent needs is alarming."

"We do not know who has your ear, but it clearly isn't us or your constituents," they added.

The criticism from the five veterans, whose resignations were effective Wednesday, adds to the growing backlash within the Democratic Party and from Arizona activists against Sinema for not backing elements of Biden's Build Back Better plan.

Their letter will be featured in a new ad from the progressive veterans group Common Defense, which will air on TV in Phoenix and Tucson.

[Traveler]

The ad is killer. Just saw excerpt on CNN

[Traveler]

Seems to me the logjam is breaking. Sinema came out her closet finally, and seems to be accepting most of the goals. Sausage making at its bet. 

[LFC]

Manchin may have finally realized the damage he was doing and now wants to get this done.

Yesterday’s Senate Democratic caucus lunch seems to have been a turning point. Sen. Joe Manchin told his colleagues he’s ready to get this done this week and willing to hash out the compromises and specifics necessary to do so. He seems to have convinced them that he was serious. It’s a given that those compromises are going to be largely on Manchin’s terms. But for many of us that reality has been clear for some time. What hasn’t been clear is whether Manchin actually felt any urgency about getting this done or whether he actually wanted to at all.

The actual negotiation is finally underway and it seems pretty far along.

But speaking of Sinema...

Kate noted that Sen. Sinema wasn’t even at the caucus lunch – both typical and revealing. But most of the senators seemed to think Manchin was enough. Implicit in this attitude is that no one thinks Sinema can stand the pressure or the heat if Manchin is on board. That’s been my assumption all along, though in recent weeks I’ve begun to have my doubts – just too much wish for chaos and personality defects in the mix. But the senators don’t seem to think she’s up to it. We’ll see.

[LFC]

Here’s the Story with Kyrsten Sinema from Josh Marshall. This jumped out.

Lots of people who’ve crossed paths with her over the last two decades are sure she sees herself as a future president. That seems completely bonkers today. But … state house, state Senate, House, Senate. Why shouldn’t she see herself as a future president?

I think the story is that she got it in her head that this McCain 2.0 branding was her ticket to political success in Arizona, that the way you know you’re doing McCaining right is when you’re bucking and annoying members of your own party and getting the branding of what D.C. calls “maverickyness” and “independence.” That’s her plan and she’s sticking to her plan.

Now, it’s important to remember that something like that plan was absolutely the right move for her. It would be political suicide for her to be a senator in the mold of a Sherrod Brown or most Democratic senators from the Northeast or West Coast. She couldn’t be the kind of senator who is in line with the national Democratic party’s enthusiasms of the moment. She would need to make a big part of her brand independence, not just be a rubber stamp for national Democrats. The lucky thing for her is that Arizona Democrats would give her lots of room for maneuver. They hadn’t elected a new Democrat to the Senate since 1976.

The truth is that she took a pretty smart and politically sensible model and went about it in the most rigid, clumsy and inept way imaginable. There are lots of senators who manage to check those same boxes and yet manage to be with the rest of the party when it really matters. And the kicker is that I think she still thinks she’s right and it’s all going to work for her. Because … well, remember, she’s the new John McCain.

This is all, one might say, quite unfortunate. The real John McCain, whatever else you think of him, managed to vote with his party virtually all of the time, especially on the big things, the stuff that really counted. The iconic thumbs down on abolishing Obamacare was a major exception. And God bless him for it. But it was very much an exception. McCain also had a reserve of goodwill because of his personal legend – Navy scion, fighter pilot, POW, “maverick.” That gave him room for a fair degree of heterodoxy within the GOP. And in any case Arizona was and generally still is a pretty Republican state. So the only real challenge he was ever going to face was in a primary. And he was far too embedded in the state’s politics for that to succeed.

Sinema, to put it gently, has none of that.

Is she toast?

I’ve spoken to a number of Arizona Democrats who think or fear that she’s gotten so deep in with the lobbyist crowd in D.C. that she can just carpet-bomb the state with TV commercials at election time and that she doesn’t feel she needs them anymore. Everybody talks about her having basically zero presence in the state. No meetings. No outreach. Nothing. Others point out that to get primaried you have to have some plausible Democrat step forward and run against you. And it’s not totally clear who that is. Anyone who is a plausible candidate probably has to give up some current good gig to make the run and there are many reasons why the path through a contested primary against an incumbent to actually getting to the Senate is an arduous one.

[LFC]

Negotiations continue. I've heard that the number is zeroing in to closer to $1.75T. Here's TPM's scoreboard of provisions:

Here’s The State Of Play On Negotiations

Negotiations of what gets into the reconciliation bill and what doesn’t make the cut are still ongoing, but here’s where proposals stand so far, as far as we can tell:

Up in the air:
• Lowering prescription drug costs by letting Medicare negotiate with drugmakers
• Child care program
• Tax hikes on corporations and the wealthy
• Tax incentives to spur clean energy

Slimmed down from original proposal:
• Child tax credit
• Universal pre-K
• In-home care for seniors and people with disabilities
• Housing aid
• ACA subsidies
• Medicaid gap in GOP-led states that refused ACA expansion

Might get dropped:
• Paid family and medical leave for all U.S. workers
• Expanding Medicare to cover dental, vision and hearing benefits
• Clean Electricity Performance Program (CEPP)

Dropped:
• Free community college

A bit more on the demands of Manchin and Sinema. In addition to her known protection of the taxpayer tit for Big Pharma there's this: "She has opposed tax hikes on the wealthy and corporations, though Democrats hope to win her support for other tax schemes, including a so-called billionaire tax." It really does make you wonder if she's hoping to open up a slot as a moderate Republican in a purpling state in the hopes of eventually riding that reputation to the White House.

[LFC]

One provision I have to agree with Manchin on is funding the expansion of Medicaid in states that refused to do it.

Politico reported earlier today that Manchin has some issues with Democrats’ plan to close the Medicaid coverage gap in red states. The centrist senator confirmed that story just now.

“For states that held out to get rewarded with 100% that’s not fair,” Manchin told reporters, according to Bloomberg News.

He also said he is still opposed to proposals to expand Medicare through the package.

Per Politico:

"This is basically a service, as it’s supposed to be in all 50 states. The problem that I have with that one right now, we're paying 90/10. So 10 percent is being paid by all the states. For states that held out and be rewarded 100 percent is not fair," Manchin said.

The states that refused the expansion voted for that. And they voted against the ACA. They screech to high heaven about the evils of socialized medicine except when screeching to high heaven about the government touching their Medicare. To paraphrase a famous quote from "Cool Hand Luke":

Some men you just can't reach. So you get what we had here last week for multiple elections, which is the way he wants it... well, he gets it.

Most Democrats clearly care more for these people's lives then they do themselves. I'm a firm believer that if somebody continually refuses help and is bound and determined to harm themselves well then have at it.

[LFC]

Parental leave is being hacked back to 4 weeks, if even that passes. The NY Times has an article on just how pathetic that is in terms of close to every single nation in the world. No, not every single OECD nation. Not every industrialized nation. All nations. We're just one of 8 without it and of the 185 that do there is only one that has less than 4 weeks. So this would vault us from the bottom 8 all the way up to 10! Woo-hoo!