Sunday, July 16, 2017

The Bob Andrews Strategy

When I was a kid, boy, I must be getting old because I seem to start more and more of these post this way. But when I was in school and first getting acquainted with Virginia politics, I met a member of the House of Delegates named Bob Andrews from McLean. Bob was a liberal Republican, he voted right on a few things but mostly voted the way the Democrats wanted.

Now, Bob was such as obscure figure that I doubt there is a picture of him on google, but let me describe him. He looked just like the character Dean Travers in the old sitcom Three’s Company. For those of you that don’t remember Dean was Jack Tripper’s cooking instructor. But I digress.

Well at the time Democrats controlled the General Assembly, so they got to redraw the legislative districts every 10 years. Most Republicans lived in fear that they would be drawn out. Most Republicans, but not Bob. Why not you ask. Well, Bob let it slip one night at a party in McLean. A GOP activist asked him, “Why aren’t you afraid that the Dems will redistrict you? “Bob, responded with a smug look on his face, “I vote with them most of the time, they won’t get rid of me.”

Well, they did get rid of him. You see despite his shall we say moderate voting record, Democrats in Richmond wanted a fellow Democrat. Sure, Bob didn’t vote with the Republicans often, but they didn’t need him when they could get the genuine article, that is another Democrat.

Well, fast forward a couple decades and another McLean Republican, Rep. Barbara Comstock, is thinking of adopting the Bob Andrews strategy. Buck the Republican leadership, on the hopes of appeasing enough Democrats and keep your seat.

Word on the street is that Barbara Comstock is going to buck the Trump agenda. My guess is she won’t vote for a single Trump priority, all in the hopes of keeping her seat in toney Great Falls and McLean.

Let me tell you it won’t work. The best political strategy for her, and for virtually all other House Republicans, is to embrace Trump. Work to get good legislation passed. And talk about future good bills to work on. Rank and file Republicans want their member to work with Trump not against him.

And Barbara, Jim Moran has several more ex-wives Democrats can nominate. And no matter how anti Trump you become, heck you can demand that Trump be impeached tomorrow morning, it won’t matter, Democrats will still vote for Moran’s ex-wife, or whomever else they nominate.

Barbara, may I call you Barbara, please stick with the people that elected you, Republicans, don’t become another Bob Andrews.

Wednesday, July 12, 2017

A Fine Mess

I just finished reading A Fine Mess: A global quest for a simpler, fairer, and more efficient tax system.”, by T.R. Reid. It may not seem like a page turner, but for a policy wonk like me, it was not bad.

Tax reform is no doubt high on the priority list for the Trump administration. Americans spend an estimated 10 billion dollars and billions of hours preparing their taxes every year. A simple, fairer, tax code has been the goal of nearly every President of the 20th and 21st century.

The author T.R.Reid points out the time may be right for a major overhaul of the tax code, it seems every 32 years tax reform gets done. It happened in 1922, then again in 1954 and then 1986. So, 2018 is the 32nd year. The last major tax reform took place when I was a kid in 1986.

The driving principle behind the last big tax reform was summed up with the acronym LRBB, which stood for low rate broad base. Members of Congress realized that numerous tax breaks and loopholes have two negative consequences. The longer the tax code the more complicated and time consuming for taxpayers to comply with it. Secondly, more tax breaks and write-offs lead to higher rates. If taxpayers can write off state and local taxes, mortgage interest, charitable deductions, and a hundred other things, tax rates will have to go up to make up the difference. And since 1986 lobbyists succeeded in adding hundreds of pages to the tax code.

A few takeaways from the book:

America has a high corporate tax rate at 35 percent. And it applies not just to money US corporations make domestically but it also applies to money they make overseas. But the money is only taxed when it comes back to the US. So, it has been estimated that US corporation have some 2.3 trillion dollars parked overseas.

Naturally the US treasury would like to get some taxes out of it, but at a 35 percent tax rate it will probably remain overseas. Many on Capitol Hill want to lower the rate to increase Federal revenue and stimulate the economy. The process for getting the money back to the US is commonly called repatriation. The author cites a study that says the treasury can lower the rate all the way down to 9 percent and get as much in tax revenue as they are getting now at 35 percent.

One way corporations avoid paying the high corporate tax is through a method called inversion. A well-known example took place a couple years ago when Burger King bought a Canadian company, Tim Hortons, which mostly sell coffee and doughnuts. They have great doughnuts BTW. After the sale Burger King claimed to be a Canadian company, which enabled them to bypass Uncle Sam.

The book also describes the VAT tax and GST tax. Both are known as hidden taxes. A VAT, which stands for a Value added Tax, is where a product is taxed as it is being made, not just at the time of sale. For example, let’s say you buy a book. Here you pay the tax at the cash register. But the way a VAT works is the tax is added as the book is being made, printed, published. There is a tax on the paper, the ink for the print, etc.… The problem with this tax is that it is hidden. Economists agree that taxes should always be known to the consumer. The tax collector likes the tax because they get their money whether the book sells or not.

The GST stands for goods and services tax. It is a similar concept of the VAT. I could support those taxes in exchange for getting rid of the sales tax, but not as an additional tax.

Other than the corporate tax rate the author confirms that America is relatively speaking a low taxed country. Americans give more to charity than other countries, but he argues that one reason for this higher level of giving is that taxes are lower here. And many other governments do what we relegate to private charities.

The author spends a lot of time talking about inequality of taxes. He believes that the tax code should promote redistribution of wealth. I have never heard a good economic argument for government redistribution of wealth. The free market redistributes wealth every day.

In making his point for an inheritance tax is cites an example:

“If some rich American leaves 100 million to his granddaughter, she might have to pay 41 million, but it still leaves the lucky kid 59 million.” He then went on to claim her inheritance was a windfall. But the grandfather paid taxes all his life. The 100 million was his estate after he paid his taxes. So the government confiscated 41 million after tax dollars simply because he died. Inheritance taxes to me never seemed right. I have always questioned the morality of them. But to people like Reid inheritance taxes offer a great opportunity to redistribute wealth.

He also opposes a flat tax because he claims it is unfair. But what could fairer than everyone paying the same rate?

The author also defended IRS agents as good civil servants who simply enforce the rules that congress writes into the tax code. I agree with him, Congress is to blame not the IRS. He makes the point that every few years Congress calls up a bunch of IRS agents and before the cameras berates them. Members of Congress think it is great PR. He cites an example of an IRS agent responding bluntly, “But Congressman we are simply enforcing the laws you guys created.”

In telling that story he cited the impeachment attempt of IRS commissioner John Koskinen in 2015. The author seems to imply that the attempt to impeach him had to do with the complexity of the tax code. What the author didn’t mention is that Congress tried to impeach him over a scandal where the IRS tried to silence tea party groups by delaying their nonprofit filings.

The IRS destroyed the servers with possibly incriminating emails, and for good measure had the servers buried in a landfill. Why a landfill? My guess is that Koskinen and others at the IRS were worried that erasing the hard drives might not be sufficient.

Overall a good informative book. I agree with Reid now is the time for Congress to overhaul our tax code.

Tuesday, June 6, 2017

Soros Sets His Sights on The Thomas Jefferson Institute

Franklin Roosevelt once said, "I ask you to judge me by the enemies I have made.” His point was that he was so effective that he had developed some potent enemies, enemies that an ineffective President would not have developed.

The Thomas Jefferson Institute for Public Policy is the premier conservative think tank in Virginia. A few years ago when the left tried to expand the welfare program Medicaid to 140 percent of the poverty rate, the Jefferson institute almost single handily put a stop to it. And there are lots of other examples though the years of the effectiveness of the Jefferson Institute. Their reports and studies are read by policy makers all across Virginia.

Now the left's great dream was and still is to expand Medicaid in every state. Expanding welfare is the ultimate way to grow government, redistribute wealth, and raise taxes on future generations. In Virginia nearly 20 percent of the budget is already dedicated to Medicaid. And that is without expansion under the ACA. If Virginia expanded Medicaid like George Soros and the left wanted we would be looking at Maryland style taxes in several years.

I am speculating here but I think Soros took note of the Jefferson Institute during that campaign and has not forgotten. If Soros has an enemies list no doubt the Jefferson Institute made the list.

There is evidence that through his "Center for Media and Democracy", a funny name in an Orwellian sort of way, Soros is sending people into Jefferson Institute events to record speakers remarks, in search of a gaffe, or comment which can be twisted and taken out of context to smear the Institute.

The Jefferson Institute is fighting to keep Virginia a low tax, business friendly state. George Soros and his gang want to remake our state in the image of Maryland. A high tax big government state. A state where you are charged for bags at the grocery store, and can be pulled over for the crime of not wearing a seat belt. A state that taxes rainy days. And perhaps one day a tax on sunny days.

If we use the Franklin Roosevelt standard of judging groups by their enemies than the Jefferson Institute is doing a great job.

Tuesday, May 30, 2017

Pat Mullins RIP

I woke up this morning to some sad news. Former VA GOP Chairman Pat Mullins passed away in an accident last night. I did not personally know Pat very well, but as a Republican in Fairfax county I knew Pat well. I went to school with his son Steve, and through the George Mason College Republicans I met Pat. He was very involved in our club and from time to time he would come by some of our meetings, give us advice and offer some words of encouragement. He was a frequent guest at our Wednesday night meetings.

In the early 1990's, I am not sure of the year, Pat ran for Fairfax County GOP chairman. It was one of the first campaigns I ever got involved in. I remember that Pat's campaign colors were burgundy and gold, reflecting his devotion to the Washington Redskins. Pat won that election and built a campaign organization in the county that was never sharper or stronger. It is fair to say that Pat rebuilt the GOP in Fairfax county. Shortly after he was elected county chairman Republicans re-took the Board of Supervisors. That's right we once had a majority on the Fairfax county board!

In those days our county committee meetings were held in the cafeteria at Falls Church High School. The cafeteria was always packed, in large part due to Pat's recruitment efforts. And in a such large, raucous crowd it is natural for people to start talking amongst themselves as the meeting was in progress. If you were ever on the committee you will always remember Pat's response to the talkers. In his southwestern Virginia accent Pat would raise his voice and say, "If you want to tawk go outsiide." Everybody got the message.

Leadership is not something that can be taught or acquired. A person either has leadership aptitude or not. Pat was a natural born leader. Volunteers and supporters felt a connection with him. They knew he was honest, straightforward, diligent, fair, and a true conservative.

Pat also served as state party chairman where he re built the state party and returned Virginia to the status of a Republican state. I think it is safe to say that Pat was the greatest state party chairman since Dick Obenshain.

Pat will be missed.