Michael Battalio

Saturday, December 23, 2017

More on tax cuts

I write again to discourage you from voting for massive tax cuts that will drive up the deficit.  I won’t bother to try to dissuade you from thinking that these tax cuts are anything but a giant gift to the wealthy and your donors.  Either you know they are and don’t care, or you really think they are and will never be convinced otherwise by one constituent’s letter.  Instead, I implore you to think of the future of the country.  I’d like to quote your own website, “Our nation is drowning in debt, and sadly the folks truly hurt by this legacy will be society’s most vulnerable and our children and grandchildren who will be left with the tab.”  That page was just from three short years ago.  (https://www.johncornyn.com/2014/10/09/tx-gop-vote-nation-drowning-debt/)  Why if it was bad for Obama to add many trillions to our debt (which I agree was bad) is it okay for you to add another $1.5 trillion?  I just don’t understand why it is okay only if you do it.  I know the lie you tell everyone:  that these cuts will spur the economy to greater heights.  But if the DOW is at record levels and corporate profits are at records highs, do we really need to help them?  We don’t.  Instead of wishing that corporations bestow their new tax breaks on the middle and lower classes, just help the middle and working classes directly.  Time and time again we’ve seen that corporations don’t trickle the money down. They just issue dividends and stock buy backs that do nothing for the economy.   It is why so many of your fellow senators are trying to write up ‘trigger’ legislation to raise taxes if (when) the ridiculous economic growth projections are not met.  The rich also don’t spread the wealth.  Just look at median incomes after the Bush tax cuts.  They were and are flat.

If we need to have a national conversation about what government needs to fund, then so be it, but cutting taxes then forcing us to cut spending later is holding the economy and the country hostage.  It’s wrong.  Please; please; please, if you’re going to buy off your donors with tax breaks, don’t break the deficit and balloon the national debt more.  Find offsets, whether if be closing corporate loopholes or entitlement reform.  I would even be okay with privatizing Social Security, but we have to have a discussion about it.  Not change it under threat of a default in a few decades because of and irresponsible tax cut.  

Lastly, if this disaster of a bill does pass, please strip it of the provision that eliminates the ability of graduate students to be exempt from having to pay taxes on their tuition vouchers.  If that provision remains, it will destroy research in America.  Tens of thousands of Texan graduate students will no longer be able to afford advanced eduction.  We will cede our research and development advantage to China and India.  That won’t MAGA.  It will make America worse.
Thank you.

Michael Battalio

Friday, December 15, 2017

Letter to Congressmen on the Tax Cut and Jobs Act

It is almost unfathomable that the Senate is considering tacking a repeal of the individual mandate to the tax bill.  It’s like you think you can add the approval ratings together for these two unpopular bills.  That isn’t how it works.  You’re taking an unpopular and regressive tax bill and pairing it with a reduction in healthcare.  Now, I’m fully aware that the individual mandate is forcing people to get health insurance who don’t necessarily want it.  That is the whole point.  The rest of us pay for the healthcare of the healthy in hidden ways, and making them get insurance forces the healthy to pay attention and internalize the risk.  This also broadens the risk pool and lowers rates for the sick.  

I write again to encourage the Senator to vote against the tax bill.  The Joint Committee on Taxation has released the estimated changes in income for taxpayers in the year 2027 with this revised bill.  Everyone in the middle class is getting a tax increase to partly fund tax decreases for the wealthy.  This is an estimate from the Congress itself.  This is especially true given the recent changes to the bill that eliminate the individual tax cuts temporary to make the corporate cuts permanent.  Counting on future Congresses to fix this debacle of a bill is naive at best and idiotic at worst.  

Now, I am not necessarily completely against paying slightly more in taxes.  I believe the government does good overall.  I am strongly against what my additional money will be used to fund.  Corporations and the very rich do not need a tax break, especially egregious is the addition of a deduction for the maintenance of private jet aircraft.  While the nominal rates are high compared to other developed economies, the effective taxes rates are below the average.  We certainly all need a simplification of the tax code, but that is not what the House or Senate bills do.  Reducing the number of tax brackets doesn’t simplify the code.  Reducing the corporate tax rate would be great if you eliminated the innumerable credits and deductions they take (i.e., actually simplifying the code), but you are doing one without the other.  It’s irresponsible and lazy.  Time and time again, the GOP has tried this tactic, and corporations don’t reduce costs of products or increase the salaries of workers.  They return the money to investors, which is their fiduciary responsibility.  I don’t blame them.  I blame you and the rest of the GOP for being naive.  You want a popular tax bill?  Raise the standard deduction slightly without screwing with everything else.  Pay for this by closing loopholes that Wall Street and the ultra-wealthy use (and there are plenty of them to choose from, like the ability of some investment bankers to have their income taxed at the capital gains rate instead of what the rest of us pay–carried interest–interestingly, one of the things your bill doesn’t touch even though the President railed against it in the campaign.).  This is common sense and would be very popular.  It may cost you some campaign contributions, but it will improve the lives of your constituents.  And isn’t that the point?

To make it more clear, I will say that I will carefully compare my tax bill from this year to my bill next year.  The amount of money my taxes increase I will set aside an equal amount of money and give to your closest political opponent both in the primary and the general.

I’m sure the Senator is aware of all of this and doesn’t care, but at some point the rest of us just have to say, “No, this is wrong.”  Eventually we will get the point across.  I hope this makes some small difference.

I’ll end just by quoting the New Quinnipiac poll:
25% approve of the tax plan.
16% think the GOP plan will reduce their taxes.
61% say it will benefit the wealthy most
24% say it will help middle class the most.

Thankfully, despite the false narratives the GOP is putting out, people are paying attention.  While the GOP doesn’t seem willing or able to deal with the numbers in your backwards tax plan, these are much more clear.  I wonder what the poll numbers will look like in 2020 when people’s taxes really start going up and corporate profits skyrocket with little return to consumers.  Good luck.

Thank you.

Michael Battalio

Saturday, December 09, 2017

The Cut Cut Cut Act Letter to congressmen

I write to you about the tax proposals by both the House and particularly the Senate.  I find it astonishing that after eight years of Republicans criticizing the Democratic administration about deficits that the GOP would propose a cut that is not paid for in either reductions in spending or increased revenue elsewhere.  As it usually is in Washington, deficits have become a case of “it’s okay only when we do it.”  As evidenced by the dismal approval rating of both parties and of congress in general, we are tired of it.  If it isn’t okay for the Democrats to run up deficits by increasing spending, then it also isn’t okay for the GOP to do it by cutting taxes.  I realize that some of the GOP’s “math” is based on the trope that tax cuts will stimulate the economy and offset the reduction in revenue.  That’s nonsense, and you know it.  It has never worked.  The annual growth rate to offset the $1.5 T proposed by the Senate’s cuts is unattainable even in the short term – more than double what it is now.  That’s unrealistic.  We are a developed economy.  We cannot expect growth like that of China.

Let me now address where these cuts are going.  Agency after agency has stated that after a few years the middle class will be paying more in taxes.  I’ve heard GOP members explain that’s because a family tax credit must be allowed to expire to let the bill though, but it will be renewed eventually.  I think the last year has proven that only a fool would count on a future congress being more productive than the current one.  

The vast, vast majority of the cuts will go to the wealthy and corporations.  Contrary to the lies peddled by the President, the US does not have the highest tax rate in the world.  Far from it.  Even presently there are companies that pay $0 tax.  They don’t need a cut.  If this cut were accompanied by closing the loopholes that forced all companies to pay reasonable rates, then we could talk about lowering the nominal corporate rate.  That’s not what you’re doing though.  You’re just slashing it for everyone.  That’s irresponsible.  You’re sacrificing long term growth and stability for short term warm feelings (and campaign contributions).  I invite you in the strongest possible terms to revisit your stance on these misguided tax policies.  Instead close loopholes that the ultra-wealthy and Wall Street use to circumvent the spirit of the law in a shared society.  Make them pay what they are supposed to.  They derive an outsized share of the benefits of living in and doing business in America (well-developed infrastructure, a stable government, a safe country backed by a large military, etc.), and they have generated enormous sums of wealth for it; they should pay the majority of the taxes.

Finally, the Estate Tax must not be repealed or reduced.  It was established to prevent the development of a wealthy overclass with unchecked power.  The middle class needs that protection now more than ever.  The three wealthiest individuals in the country have a larger net worth than the bottom 150 million Americans.  You want to cut their tax rate and eliminate the Estate Tax.  I won’t hyperbolically call it un-American, but the stripping of power from poorer voters to the wealthy the way this bill proposes violates the spirit of our democracy.  Their wealth buys them a disproportionate amount of power already.  More wealth gives them more power.  It’s wrong.   (It is also deeply disturbing that the President is advocating for a bill that will apparently generate a giant windfall for his family.)  It is no surprise that the “Cut Cut Cut” Act is so unpopular.  The President is promising some nice platitudes, but you’re delivering the opposite.  If this bill passes, you may get a lot of campaign contributions, but the public will hate you even more.  Decide carefully.  We watch with great interest.

Thank you.

Michael Battalio

Saturday, December 02, 2017

Thoughts on the BRCA

I am as surprised as anyone that the Senate has a new healthcare bill, but they do. TL;DR: it’s called the Better Care Reconciliation Act (BCRA), and it’s just as terrible as the AHCA that I rejected in this post (https://www.facebook.com/battalio/posts/10102924918941056). Not only that, no health care provider, hospital, doctor’s or nurse’s association, or advocacy group affiliated with health care has come out in favor of this bill. This is a bad bill, and it will hurt people.
Instead of point by point saying why it is so bad, which would be redundant given how close it is to the AHCA, let me refute five popular lies that have been promulgated by various politicians and media outlets. 
One: Some Republicans say it will lower premiums. No. As I explained in my post lambasting the AHCA, you don’t get something from nothing. This bill eliminates the individual mandate, so fewer healthy people will get insurance. With fewer healthy people covered, it becomes more expensive for the insurance companies to cover sick people. Insurers aren’t going to just absorb those costs. They will pass them down to the people that keep coverage. The bill even explicitly allows insurers to charge the elderly 5 times as much as younger customers (up from 3 times in ACA). If you are older, this bill will cost you money. Period. (The AARP is against this bill.) This bill dramatically cuts Medicaid (by many hundreds of billions of dollars), which funds half of all births and almost two thirds of all nursing home occupants. If you are poor, this bill will cost you money. Period. The bill also limits those eligible for tax credits from 400% of the poverty line to 350%. Also if you do get sick, the BCRA only requires plans to cover 58% of your medical expenses; the ACA requires 70%. If you are middle class, this bill will cost you money. Period. No matter what your income or age, the BCRA guarantees that you will pay more. 
Relatedly, at first I wrongly thought the BCRA kept preexisting coverage intact. This is actually not true. States are given leeway to decide what costs are covered as essential health benefits. So preexisting coverage is simply gutted in a different form. I.e., an insurer may be required to give you insurance regardless of your preexisting conditions, but nowhere is it mandated that they must actually cover benefits for your condition. So you may have to pay for your condition out-of-pocket until you reach the yearly maximum out-of-pocket every single year. Incidentally, the BCRA also raises the maximum out-of-pocket and reinstates life-time maximum payouts (I.e., once a plan pays out a certain amount, they no longer have to pay for any of your costs, regardless of it you are otherwise still covered.) If preexisting coverage guarantees are eliminated, people will go bankrupt trying to stay healthy. 
Two: The bill cuts money to Planned Parenthood for a year. I know that to a lot of people will think this is a plus, but I don’t know why. It is illegal and has been illegal for years for federal funds to pay for an abortion. The BCRA does not change this. This isn’t a victory for people who view their pro-life stances as their most important political view (not that there is anything wrong with that). The wording in the bill is only there to manipulate you into liking the bill when you otherwise shouldn’t. 
Three: Healthcare is a privilege, not a right. This is one I will never understand. I’ve heard people of all creeds, backgrounds, education and income levels espouse this vile point of view, but the one thing all of them have had in common – every single one – is that they were healthy. *It’s easy to believe something is a privilege when you’re already privileged enough to have it.* I can guarantee you that people who are chronically sick would give their life’s income to have what we privileged healthy have been anointed with. It isn’t about people being greedy or wanting something just given to them. It is about people living. It’s about making the world as fair as we can.
Four: Personal responsibility. I’m as for letting people forgo insurance but then languish in debt if they get sick to teach stupid people a lesson as the next GOP’er, but the consequences of eliminating the individual mandate aren’t just about letting healthy people make stupid choices in the name of liberty. No amount of personal responsibility will protect you from a genetic disease. The small amount of individual liberty provided to people by giving them the option of not having to purchase health insurance is not worth the deprivation of liberty to people who need affordable insurance (through no fault of their own) to not suffer. Forcing people to buy insurance isn’t about protecting people from themselves because the government knows what’s best for them; it’s about the government protecting the public from those who would otherwise unduly stress the healthcare system through their foolish and cavalier attitude.
Finally, the argument (and yes, in so many words I’ve heard this) that because we had one political party lie to us about healthcare (e.g., “You can keep your doctor.”) means we should blindly let the other political party unilaterally alter healthcare is a stupid reason to be in favor of anything. Spite is a moronic way to make policy, but it seems that lately people think that if others they don’t like (or agree with) suffer more than them, then it’s a victory. Victory isn’t relative. You don’t win by making others lose more than you. The health insurance system is no where near bad enough in its current state such that any change is a good change. Fourteen million more people have insurance because of ACA. Millions of people are getting subsidized insurance through ACA. Millions more poor people finally have access to healthcare because of ACA. A lot of people have been helped. The BCRA will help no one who reads this status. It significantly hurts a lot of people you do know to minimally help a very small number of people (the very rich) you don’t know. I can envision no logical argument for any person I am friends with on Facebook being in favor of this bill. If you think you have a reason, I’d love to argue it in the comments before you unfriend me.
I want to take a moment to talk about the process of how this bill was made. It borders on undemocratic. That is not hyperbole. Senate Majority Leader Mitch McConnell (R-KY) appointed 13 senators to negotiate this bill. Except for a few lobbyists and staffers, those were the only people with input and the only people who knew what the bill was until last Thursday. The Majority Leader wants to have a vote on this bill this week. This is far too short a window to have a thorough discussion on the bill. The same senators who wrote this bill lambasted the process seven years ago when the ACA was passed; however, that process was far more transparent and deliberate than this one. ACA had 169 hours of open debate, 110 bipartisan meetings, and 35 weeks of time available for public review. 160 GOP changes to the ACA were accepted. The BCRA will have 20 hours of open debate, 0 bipartisan meetings, and only 1 week of review time. The bill isn’t bipartisan because the GOP doesn’t want it to be. This is the wrong way to pass legislation that changes 1/6 of our country’s economy.
Now the call to action: I don’t care where you live or who your senators are. I don’t care if they are Dems or GOP. I don’t care if they will never listen to you. Call them today, call them tomorrow, and call them every day after that. Tell them you are vehemently against this bill. We need to make every politician concerned about the public outcry against this bill.
Thank you for reading to the end.
2003-2016 Michael Battalio (michael[at]battalio.com)