Thursday, September 26, 2019

Public Health Consequences and Costs of Gun Violence

W&M Oversight, Public Health Consequences and Costs of Gun Violence, September 26, 2019

The public health crisis created by the war on drug users has caused the gun crisis, among other things. The War on Drugs has resulted in harsh criminal penalties for Black men. While some states use diversion for all, particularly Maryland, this is not a universal phenomenon.  

In general, it is the illegality of drugs that leaves only what used to be called “muscle” (and is now called homicide) as the only avenue for settling disputes. Aside from Appalachian bootlegging, there is no longer much violence in the liquor industry, where it was endemic in the days of Prohibition. 

Criminality, as well as being a tool of voter suppression and forced labor, removes Black, White and Latino fathers from the home. This makes gang membership by youth much more likely, and with it, gun violence. If I had joined a gang as a youth, my father would have used a different form of violence to give me the incentive to quit. 

Gun violence will evaporate with legalization and mandatory extended treatment for all substances, from Marijuana to OxyContin and Heroin, as well as for untreated mental illness. Sadly, it is theoretically easier to get treatment for one’s family member by planting drugs on them and call the police. The largest mental health care provider in the nation is the criminal justice system. 

Guns are a public health problem and should be treated as such, with both treatment and confiscation. If criminal penalties are removed, warrants are not needed to seize guns from blighted neighborhoods from East L.A. to Maine. 

The legal issues around gun prohibition are complicated, but not insurmountable. They start with race. The Second Amendment was less about defense than protecting slaveholders from their sins and slave states from federal interference. Canada still invaded in retaliation for our attempts at annexation (fueled by Southern War Hawks) in 1812 and beat us soundly. Impressment had less to do with the war than is taught in high school. 

The issue of federal power itself was settled at Atlanta, Richmond, Appotomax and Vicksburg. This killed the militia rights of gun ownership, which the 14th Amendment unknowingly codified. Section 3 removes political rights from rebels, both then and Congress could surely seize guns to prevent a reprise under section 5.  

This is enough justification to answer Second Amendment objections to banning the sale of assault rifles and the ammunition that makes them so deadly. Collectors do not need ammo and private citizens do not need it outside of well controlled shooting ranges. Hunting with an AR-15 spoils the meat and the trophy value. Real men are bow hunters. 

To mute the opposition to gun regulation, federal contracting is all that is required. Gun and munition manufacturers could be made to choose between sales to government agencies and civilians, with prohibitions against sponsoring certain associations as a condition of federal contracting. As far as local police gun ownership, for all but mass shootings, some officers cannot even be trusted with tasers, let alone handguns. The British may have a point regarding policing without firearms. 

A profound public health issue is suicide. More soldiers die of self-inflicted wounds than the Taliban. Suicide is a very common end to suffers of bipolar disorder, especially with firearms. Suicide by Cop would be less likely with disarmed police. While suicides attempts will continue (another reason for mandatory treatment with adequate funding and bed space), it is a lot harder to kill oneself by other means.  

As a bipolar sufferer, I would rather not have that option. Even for voluntary commitment (especially if it is agreed to when mandatory treatment is the alternative), patients should be given the opportunity to put themselves on a no-gun list when hospitalized. It should not be mandatory, but it should at least be an option. 

Wednesday, September 25, 2019

Today’s Gaps, Tomorrow’s Opportunities, and the Need for Federal Investment

House Budget, America’s Infrastructure: Today’s Gaps,  Tomorrow’s Opportunities, and the Need for Federal Investment, September 25, 2019
Ways and Means, Our Nation’s Crumbling Infrastructure and The Need for Immediate Action, March 6, 2019 

Our comments rely on my experience as a program analyst in the District of Columbia Office of the City Administrator. The City Administrator is an ex officio member of the Chief Financial Officer’s capital projects operations.  

Please see Attachment One for a detailed description of our tax reform proposals. The Carbon Value Added Tax would fund discretionary aspects of the Green New Deal, thus reducing the need to fund these activities with an Invoice VAT. The CVAT may or may not subsume gasoline tax, which is the primary funding source for highway infrastructure. 
The Net Business Receipts/Subtraction Value Added Tax (SVAT) would fund any income redistribution to families (which is also part of the GND). The Income and Inheritance Surtax would fund any reimbursement to the Highway Trust Fund, in the event it ever contains a long-term positive balance. 

For most states and localities, infrastructure is funded with federal fuel taxes, state fuel taxes, tolls and property taxes for neighborhood roads. Many states have increased their fuel taxes to fund infrastructure deficits. States that belong to the Legislative Exchange Council are less likely to take this step, which is perilous. Our federal system allows states to mess themselves up, so we will not address this problem except to say that states who do not charge adequate taxes do not deserve an extra subsidy from federal funds because of their folly. 

In the short term, tolls could be considered for states who will not responsibly increase their fuel taxes. The nature of these projects precludes their adoption on a national basis.  Their use is hardly universal. Local High Occupancy Toll or HOT lanes are created using local entrepreneurs, however are virtually empty most of the time.  

HOT lanes have become transportation for the wealthy, leaving the working class to deal with the crowded main highway system. While HOT lane providers do upgrade the infrastructure to adjacent lanes as well, their rush hour pricing and general disuse will not maintain public favor for long. These roads may help fund immediate infrastructure deficits, their pricing structure may not return promised revenue, which will end their usefulness 
The use of income surtaxes may be used against separate short-term borrowing, which is how HOT lanes are financed, with these funds guaranteeing the debts if projects fail to achieve revenue goals, so backstopping such projects with taxes on the wealthy is justified, but it should not be the normal way of funding this aspect of the GND, which should provide adequate infrastructure funding for everyone. 

As the title of this hearing emphasizes, our need is urgent. Bridges are about to start tumbling down according to the reports of most highway engineers. It is amazing that more have not collapsed. 

For the present, the answer must be higher fuel taxes (or a Carbon VAT). They must also remain a direct excise rather than a proportion of fuel prices because prices vary from state to state. This would violate Article I, Section 8's prohibition requiring equal national excise taxes, although individual states could explore the idea. Regardless, the coalition for a higher national excise collapsed long ago, causing our infrastructure crisis. 

The reason for this collapse is the end of earmarking. The late Senator John McCain (God rest his soul), was a driving force in the elimination of this funding tool, while Congressman Bud Schuster was its champion.   

Earmarks lost favor because of the bad publicity on Alaska's Bridge to Nowhere, which was necessary to reach a vital airport destination. Ironically, the road to the bridge was built and became the road to nowhere because it was part of the overall plan. Governor Sarah Palin's lack of courage in defending the project led to the downfall of earmarks and the coalition for higher fuel excise taxes.  

Earmarks simply codified agreements by the local members of Congress and the Senate, the Federal Highway Administration and state and local government to plan specific projects rather than leave their planning solely up to the Department of Transportation. Without these constituencies, the natural constituency for higher fuel taxes could not hold out against general anti-tax sentiment. In essence, government stopped doing its job to represent the interest of society rather than its vocal anti-tax minority. 
Bringing back earmarks and projects will go forward and fuel taxes can be raised with little heartburn.  

Like HOT lanes, local road funding also has a race and class bias, with higher income neighborhoods often getting better roads due to the linkage of road repairs to property tax levels. This reflects the general inequality in society. 

Reducing general equality is beyond the scope of this crisis, although it will solve our infrastructure problem in the long term. Establishing personal retirement accounts holding index funds for Wall Street to play with will not help. Accounts holding voting and preferred stock in the employer and an insurance fund holding the stocks of all such firms will, in time, reduce inequality and provide local constituencies for infrastructure improvements and the funds to carry them out.  

Employee-ownership can be part of the solution in terms of smart growth and infrastructure funding. See Attachment Two for more about this topic. 

Employee-owned firms could fund local infrastructure in neighborhoods which are located adjacent to their facilities and would join with neighboring cooperative firms to own both local utilities and build improved smart highways. Such highways would be controlled by a central computer, provide electricity and control to operate vehicles through an overhead deck (with different roadways for trucks) and would be funded by payroll lines of credit or employee spending accounts. They would essentially be HOT lanes for everyone. 

State and local governments, as well as automobile manufacturers, would be partners in these consortia and would trade stocks and bonds with other consortium members as their stake in these enterprises. These will be the ultimate earmarks. 

Attachment One - Tax Reform, Center for Fiscal Equity, September 13, 2019 
Attachment Two
A. Employee-Ownership, March 7, 2019
B. From Hearing on the 2016 Social Security Trustees Report 

Thursday, September 19, 2019

Solutions to Rising Economic Inequality

House Budget, Solutions to Rising Economic Inequality, September 19, 2019 - 10:00am

Low marginal tax rates since 1982 concentrated income and wealth at the top. Anyone below the 90th percentile has lost ground. Immigrants, especially those without documents, have it the worst. We rely on their labor for a higher standard of living so we can make ends meet. See Attachment One containing our prior remarks on this issue.

Keeping up the same standard of living requires living off of credit, which wealthier people profit from. They also profit from interest on government bonds and financial speculation, particularly when capital gains taxes are lowered to stimulate the economy. When credit and speculation explode the economy, the rich are bailed out while everyone else faces possible foreclosure and bankruptcy (which is also rigged to favor the rich).

All of these benefits have the top 10% bringing home half the income. They also pay the same proportion of income taxes. The national debt is possible because of our income tax. It is why the dollar is the world's reserve currency. It is also why liability for the national debt must be considered a function of income tax owed. The current factor is $13 if debt for every dollar of income tax. Using tax distribution and debt levels from the last available year, the top 1% owe $7 Trillion. The next 9% owe $6T. The next 40% owe $5T. The bottom 50% owe $570 Billion. The top 1409 households owe more than half the nation at $610B. No wonder many of the rich give money to Americans for Tax Reform.

The answer cannot be shifting liability down or claiming it is a per capita debt. It is raising taxes enough so that the debt is reduced and incomes for most households are increased.

Job one is repealing the Tax Cut and Jobs Act (see our comments in Attachment Two), or at least extending recently enacted Bipartisan Budget Act of 2019, as well the Budget Control Act Spending Caps for as long as the TCJA is in force. Government spending grows the economy more than the tax cuts increase asset speculation. Such speculation has nothing to do with investment in plant and equipment, which is a function of both public and private consumption.

Repealing TCJA is not enough. An increase minimum wage is essential to wring CEO rent-seeking out of the system. Low wage labor is, by nature, monopsonist. The only solution, aside from cooperative socialism (see below), is to increase minimum wages. Those who cannot compete at the higher income are either disabled and deserving of at least the same minimum level of income or need education with stipends at similar levels.

Higher minimum wages lead to higher incomes for the remainder of the bottom 90% of families and less economic rent for the top 10%. This will lead to the recalculation of wage history levels for the retired and disabled. Any shortfall in the Trust Fund because of this will be made up with more payroll tax income with debt financing of immediate shortfalls.

Comprehensive tax reform is essential to deliver an adequate income to families with children. Attachment Three explains our approach. It directs increased revenue to debt repayment, which will especially help the children of wealthier parents avoid the huge dent liability explained above.

The child subsidy level suggested also dictates a minimum wage of $20 per hour. No one should work just for their child subsidy and both must be indexed for inflation.

Ultimately, a more cooperative economy is needed for real equality. See Attachment Four for a reminder of how this would work.

If the debt liability analysis above were more fully known, the top 10% of earners (or their grandchildren) would demand both higher taxes and a more even distribution of income. There is no reason not to start right now once this is understood. The proposals here are in the order they should be executed. Tax reform will take time to enact and implement. We need not wait for an election to start. We can end the use of tax policy as a political football. Only campaign professionals win if we don’t cooperate.

The creation of Personal Retirement Accounts will have to wait until employee cooperation in ownership, consumption and finance are given a try in existing ESOPs. The revolution will not happen in a weekend, but when it does, it will include governmental services as part of the cooperative rather than through the political system.

Attachment One – House Budget, Building A More Dynamic Economy: The Benefits of Immigration, June 26, 2019
Attachment Two – The Tax and Job Cuts Act
Attachment Three - Tax Reform, Center for Fiscal Equity, September 13, 2019
Attachment Four Three 
A. Employee-Ownership, March 7, 2019
B. From Hearing on the 2016 Social Security Trustees Report

How the Tax Code Subsidizes Hate

Subcommittee on Oversight, How the Tax Code Subsidizes HateSeptember 19, 2019 

As you well know, hate is subsidized by both types of non-profit entities, 501(c)(3) and 501(c)(4). While the First Amendment precludes content regulation, that does not prevent the Southern Poverty Law Center from suing them into obscurity. The problem is that the same characters simply pop-up on YouTube (sometimes literally), overnight. One solution is to change bankruptcy law to make obligations follow successor companies. This would also be helpful in labor and tort cases. While this is not possible now, the next congress is less than 16 months away. 

More importantly, we can and should stop all tax favoritism for hate or anything else by ending the deductibility of charitable contributions on the high income surtax. Any tax benefit under the Subtraction VAT for services from non-profit organizations to replace only governmental services would leave out all 501(c)(4) organizations and limit 501(c)(3) status to charities that actually replace governmental operations. Hate groups will never fulfill that function. Educational and social service agencies will still be required to obey Title VII of the Civil Rights Act, however that is adjudicated next month. 

Any non-profit organization who sells or purchases commercial items will pay the Invoice VAT, as commercial organizations must do. Non-profit organization employees will continue to pay the employee contribution to Old Age and Survivors Insurance, assuming it is not subsumed into our proposed Subtraction VAT (S-VAT). 

Non-profit organizations will pay the S-VAT because their employees will benefit from the programs funded by this levy or from offsets to it.  This means that the children of hate group employees will still get the expanded refundable Child Tax Credit and families will still get health and educational benefits. Such groups will not be eligible for investment in any personal retirement account without forgoing non-profit status. Of course, hate ESOPs would be harder to evade the Southern Poverty Law Center. The insurance portion normally attaching to ESOPs is a tough call, as coverage would be paid upon bankruptcy, usually because of management malfeasance. Any lawsuit that leads to such bankruptcy should put individuals who cash out ownership shares at risk, whether for an SPLC judgment or for selling Oxycontin.  

Attachment One - Tax Reform