Trade Policy 2022

WM: Biden Administration’s 2022 Trade Policy Agenda, March 30, 2022

Finance: The President’s 2022 Trade Policy Agenda, March 31, 2022

Please consider the following issues, which are likely left off of the President’s current agenda.

If the Belt Road and forced labor in China are still an issue, the answer is probably resurrecting some form of the Trans-Pacific Partnership. The right of businesses to short-circuit local law in special tribunals must be modified or  ended in any redux. This should be the case with all such trade agreements.

Agreements which try to modernize other nation’s labor arrangements need  an awareness that America’s performance on issues of democracy, organized labor, wage & hour and safety enforcement are far from stellar. Perhaps any arrangements should include monitoring American employers and the government agencies that should be looking out for them.

At the very least, end right-to-work. Such laws are really right-to-exploit laws, including through the use of human trafficking. Migrant workers in the food industry, from harvesting to processing and packing face all sorts of bad treatment, sometimes with that treatment abetted by local law enforcement.

Immigration reform must be part of the trade policy agenda. Workers who do not have documentation problems cannot be easily exploited - especially if they are able to unionize. This will also help level the playing field for American workers. A unionized worker, whether they be an immigrant or a citizen, will make more money and be safer. The stories of workers having to do so sick was highlighted in the early days of the Pandemic. I have not heard that things have gotten any better.

An analysis of how consumption taxes can improve our trade policy is found in a second attachment. The first attachment on tax reform is included to clarify the terms of the second. These are attachments because they have been provided before. I am available to explain these topics. There are many who can talk about how value added taxes relate to trade, but I am the only one who can walk the Committee and staff through how an employer-paid subtraction value added tax applies.

Part of the trade equation is the recently completed agreement on Corporate Minimum Taxes. This faces challenges to enactment in the Senate. Perhaps it should. I am no fan of corporate income taxation when value added taxes (both GST/Invoice VAT and Subtraction VAT) are available.

Our proposal for an Asset Value Added Tax will require international cooperation. Part of trade is moving money around - including financial assets. An asset VAT as a replacement for capital gains taxes and capital returns must go farther than the border. It is too easy to shift to offshore stock exchanges where such taxes do not exist. International agreements on rates and enforcement structures are vital for such a tax to work. The model for negotiating the CMT on a multi-national basis can be used for this effort.

The other issue not usually discussed with Trade Policy is its impact on national debt ownership. Bond holdings backing the currencies of our trading partners is a key consideration. The possibility that the debt may outpace our trading capital needs must be a concern. A more urgent concern is the impact on Treasury bond prices if the European Union creates a consolidated debt with a continental tax system to back the Euro. Such an option would bring about a day of reckoning on our debt - a reckoning that income taxpayers will have to face. 

It is important to understand who owns and owes the debt. We are currently revising our previous study: Settling (and Squaring) Accounts: Who Really Owes the National Debt? Who Owns It? available from Amazon at https://www.amazon.com/dp/B08FRQFF8S  I can provide free copies of the prior version upon request and will distribute the latest edition once it is completed. The most recent bottom line estimates can be found in the second attachment. This shows who is on the hook for the debt and who benefits from it.

Note well that the top 22,000 households break even on debt owned and owed. Everyone else is in hock. Such an imbalance cannot continue. Please see the third attachment for more on this issue.

A main conclusion of our analyses is that the national debt is the leverage for capitalism to the extent that debt securities allow Wall Street to offer riskier assets, such as mortgage backed securities embedded in Exchange Traded Funds, as well as more traditional offerings. Wealth held by the few (and the attachment shows how very few we mean), provides management absolute control of most workplaces. Employee-owned firms would not need such an unbalanced economy leveraged by American Treasury holdings.

As you may have heard, China is in the middle of a housing finance and development crisis. The impact of these developments on both bilateral and world trade will be huge. They demand a separate set of hearings by multiple committees - but especially Finance and Ways and Means.

The most important long term trade issue is international employee-ownership, which is discussed in the second attachment. Domestic employee-owned firms will find it in their interest to offer the same standard of living and ownership rights to overseas subsidiaries and their supply chain. In the long term, such ownership ends the need for any political agenda on trade. 

Trade issues will take care of themselves within the enterprise, leaving currency arbitrage in the dust. Enacting the proposed Asset Value Added Tax, with zero rated sales to such firms, will make that day come sooner - leading to a more integrated world without the need for a worldwide war machine.

Our most urgent concern in trade is climate change. Our current approach is inadequate. We need to put our money where our mouths are - or rather - where the world is. We need more than international agreements. We need international retrofitting, primarily in the energy sector. This means funding abatement issues in the developing world - and helping to carry them out. It is not enough to insist on goals. We must pay for action anywhere our trading partners will let us.

Attachment: Trade Policy Video

Attachment: Tax Reform (with videos)

Attachment - Debt Ownership as Class Warfare Video

Behavioral Health Care Parity and Integration

Finance: Behavioral Health Care When Americans Need It: Ensuring Parity and Care Integration, March 30, 2022

Parity is a worthy and enduring goal that is more aspirational than achievable. 

Behavioral health wards and rehabs are run very differently than the standard hospital floor. You simply cannot treat patients who may be having suicidal ideation in settings with electrical cords and intravenous bags. 

There are also security concerns Behavioral health patients have different medication issues - and sometimes must be court ordered to take meds if they are out of control. They (actually we, as I have been a patient more than once) may have self-control issues.. 

Leaving AMA from a standard hospital room is unlikely and is usually only a danger to the patient. Behavioral health patients are held on a somewhat involuntary basis. Behavioral health patients held in the criminal justice system cannot leave at all.

Please see the attached comments from last year before this committee and Ways and Means from February, where mental healthcare in the criminal justice system and the need to hold patients longer and deal with either alcoholic relapse or medication noncompliance are discussed.

Behavioral health is a specialty like no other. Prescribing psychiatric meds takes training and is an art, rather than a science. Not just any nurse can work in behavioral health wards and social workers to protect children and manage behavioral health patients have very different tasks. Nurses in a cardiac unit do not have to provide group therapy three times a day.

Without a massive infusion of public funding, it is hard to create behavioral health beds - which will require dedicated staff (in more than one meaning) and facilities that can only be used for behavioral health. In the current environment, getting a treatment bed is not easy (unless you are in custody). Behavioral health care is ultimately custodial care in the early stages.

Patients sometimes need more intense care after initial care. Once one is discharged, it is almost impossible to get back in - especially for “medication management.” Changing medications can be unpredictable and painful. Patients should have the ability to do this in a  safer space than a shelter - or even subsidized housing. Likewise, it takes a long time to be able to cope with medication management from a patient perspective - and even then it is sometimes hard to get on the right meds with minimal side effects. 

Hypomanic (bipolar 2) patients have it harder, mostly because what is needed by bipolar 1 patients in terms of antipsychotic medication is not needed for them. Some antipsychotic meds are prescribed for sleep - and insomnia is a concern for such patients - but may be better managed with other treatments like hydroxyzine and Melatonin. 

Patient education through Psychiatric Rehabilitation Programs are a valuable resource - but the supply is nowhere near the demand. While some patients will never work again if their issues are disabling, others need PRPs as a form of workforce (re)development. Quoting from testimony from June 2021 before this committee:

For workforce development and general recovery, Psychiatric Rehabilitation Programs, such as the Center for Behavioral Health in Rockville and Cornerstone Montgomery in Gaithersburg are essential. To make them more attractive, and to increase our ability to manage - especially in the period before disability programs kick in, participation should be paid at the minimum wage. 

People will participate in this care more frequently if their opportunity costs are met. Those with less than a full education should receive it through public and private providers and also be paid to do so.

Health care currently provided through Medicaid should be dual eligible for everyone, regardless of income and before it kicks in entirely be a public option. Instead of using a larger system, clients should have the option of receiving coverage through the PRP provider’s employee plan.

In the old days, behavioral health patients were locked into asylums. Now we are often locked up in jail (again, as discussed in the attachment), burden relatives or live on the street.. We have been penny wise and pound foolish. 

Society cannot work for merely parity. Behavioral health patients need special attention and the system needs a huge influx of resources - both for physical infrastructure, housing for disabled and partially disabled clients, and trained personnel. The latter requires its own set of incentives - including willing workers.

One way to free up case management resources is to move them from other social services. Having higher minimum wages, paid ESL, remedial, technical and associates degree level training and much higher child tax credits will take many clients out of the anti-poverty sector. Signing up for programs like TANF needs to be replaced with enrollment in a training program with easy entry and pay to meet client opportunity costs. This will free up an army of social workers who might be interested in more client contact and less paper shuffling. It is harder work, but more satisfying - especially if funded correctly.

Attachment: Mental Healthcare in America Video

FY 2023 Budget

House Budget: The President’s Fiscal Year 2023 Budget, March 29, 2022

Earlier this month, the Committee held a hearing on Ensuring that Women Can Thrive in a Post-Pandemic Economy. My comments were based on last year’s budget proposals, with recommendations on how these can be enacted. Please take a second look at these as you consider the President’s 2023 Budget Proposals. They should also be the central focus of Build Back Better - with other items delayed until after the midterm elections. The current Democratic Majority is not robust enough to pass them at this time - nor should they be passed if it is at the cost of securing a permanent refundable child tax credit.

The President’s Budget also reportedly includes tax law modifications - including increasing the Corporate Income Tax Rate to 28%. Barring comprehensive reform, this is a good move. The Pass-Through, Capital Gains and Dividend rates should match this rate (and the ACA surtax repealed accordingly). Rates are essentially at 23.8% now. In a perfect world, a bipartisan 26% rate could be passed with a promise to quit revisiting the issue every four years. 

I doubt that the Minority would go along with this. Both sides raise too much money playing ping pong with tax rates. Heaven forbid we could find some kind of stability.

A key feature of my proposals for distributing benefits to families through the child tax credit, health benefits, childcare benefits and expanding leave are found in my  proposed tax reform plan - which replaces corporate income, pass through and sole proprietor tax subsidies with a uniform employer-paid subtraction value added (or net business receipts) tax. The latest iteration of the plan is also attached.

A key element that must be highlighted again is our proposed Asset Value Added Tax, which would replace capital gains, dividend and interest taxation at preferred rates. It would only have one rate - 28% (although, again, I urge a bipartisan 26% rate) and would be collected with each payment or transaction. It would be marked to market at initial public offering, option exercise and the first sale after inheritance, gift or donation. 

The only exception would be sales to broad based employee stock ownership plans. There is already such a carve out in capital gains taxes for ESOP conversions. This benefit should be eligible for all sales to ESOPs, including those that are publicly traded.

Taxing transactions rather than year-end results ends tax benefits that reward failure. Our plan separates distribution of benefits, asset taxation and a goods and services tax from taxing wages and salaries. While salary taxes can be added to our proposed subtraction VAT, there would be no offsets for taking strategic losses. Again, quit subsidizing failure with the Tax Code!

Enacting a goods and services tax, which allows for border adjustability on exports and full taxation on imports, assures that everyone pays taxes. The child tax credit should be high enough for families to pay such taxes without pause (along with increased minimum wages). 

Enacting such a tax would allow the end of the inheritance tax. Inherited assets would be taxed when sold - and not until then - so that family businesses and farms would be held harmless. This would also end the need to retain preferred retirement accounts and life insurance policies designed for tax avoidance (aside from those favoring employee-ownership). There is no evading a goods and services tax.

I fully support increasing NATO spending and direct military aid to Ukraine. I had favored a diplomatic solution yielding the eastern portion of the country to Russia, as long as the remainder could join NATO. Comrade Vlad, in the face of having his army killed, has reduced his war aim to just those territories. He lost the right to set terms when he started bombing Ukrainian cities for no strategic reason.

The President’s Budget needs one more addition. Poland needs some new aircraft so that it can transfer its Russian fleet to Ukraine. Add this item - or have it enacted as a supplemental. Ukraine needs these aircraft to destroy the ability of Russian artillery to shell civilian population centers. These planes cannot be based in either Germany or Poland, but with the right anti-missile systems, some kind of airfield could be built in Ukraine. Put a Patriot battery on their shopping list.

Just talking about this issue - including questions for Budget Director Young - could convince Putin to stop shelling civilian targets. It is time to increase the pressure and explore the question of whether Russian nuclear forces are as pathetic as its invasion force. If so, appeasement must end.

Attachment: Ensuring Women Can Thrive Video

Attachment: Tax Reform (with videos)

Charitable Giving and Nonprofits

Finance: Examining Charitable Giving and Trends in the Nonprofit Sector, March 17, 2022

There are two questions for the taxation of charitable contributions. The first is where the money comes from. The second is how the outgo should be taxed.

Under our proposed asset value added tax, assets would be marked to market at initial public offering, option exercise and the first sale after inheritance, gift and donation. When assets are donated to charities and nonprofits, no tax will be paid. When these institutions sell these assets, taxes will be collected in full. Whether endowment income is taxed is an open question, although usually the asset value added tax would be levied.  

Sales to employee-owned or cooperative firms will be zero rated, just as they are when a single owner sells out to an ESOP when transitioning out. We propose expanding this privilege to all asset sales. Note that as long as a business or family farm is kept in the family or sold to a cooperative, no tax is levied.

Large religious organizations, charities and nonprofits have become big business and need to be taxed accordingly, where appropriate. Some are legally held as the property of the minister or bishop. Taxing such entities as sole proprietors makes legal sense. While this could be seen as targeting certain religious organizations, such as the Catholic and Episcopalians, their choice of organizational form is not the fault of the public. As such, their tax treatment must match similar business classes.

Charities that have commercial operations will be subject to an Invoice VAT (I-VAT), aka goods and services taxes. They do so under the TCJA provisions in question like any other commercial company. If so, these operations compete with type C corporations (which pay corporate taxes), as well as type S, partnership or sole proprietor firms (that pay individual income taxes at pass-through rates). 

Paying Invoice VAT is essential after tax reform to provide visibility to paying customers who also pay a VAT so as to capture all tax payments imposed by the entire supply chain. Without such treatment, every business will turn into some form of charitable organization overnight, this would not be advisable.  Fiscal conservatism should not be synonymous with empowering tax evasion schemes. 

Whether non-commercial operations are subject to an I-VAT depends on how payroll taxes are financed under reform.  For example, if Social Security or Medicare were to become I-VAT funded, thus becoming zero rated at the border and replacing the payroll tax, then charitable organizations must continue to fund non-commercial operations, as they will benefit the employees of these organizations.  If, however, entitlement services are funded under a payroll tax are funded through our proposed Subtraction VAT (S-VAT), then there is an argument to leave the non-commercial activities of these entities Invoice VAT (GST) exempt. 

Political organizations and committees would also pay S-VAT (or I-VAT) on their payroll and their purchases would not be I-VAT exempt in the long term. Committees that give little to candidates should not be tax exempt, as they are essentially corporations whose high salaries are essentially partnership income in disguise, without the corresponding risk. As such, they should be taxed at pass-through rates. As such, they should pay the asset value added tax on such distributions.

Charitable 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).

Likewise, employees would be paid the same child tax credit as commercial employees – again as an offset to S-VAT levies.  Health and higher education credits proposed for other enterprises would also be available to charitable organizations, as well as any other applicable credits.  Note that because certain payroll and personal income taxes will be eliminated, the gross pay of charitable employees will decline in like manner to those of their commercial counterparts once tax reform is enacted.

Finally, this schema is as applicable to governmental organizations as it is to charitable organizations, with modifications.  State governments would be the federal S-VAT, while federal organizations would pay the state S-VAT, both on the same basis relating to value added through payroll.  These organizations would not pay the S-VAT to themselves, however their personnel systems should contain a similar range of benefits.  

This schema provides a better explanation of how a Fair Tax might work on these levels, while also providing a rationale for adjusting government employee salaries and providing for non-governmental performance of services through the same type of alternative S-VAT programs.

Attachment: Tax Reform (with videos)

Attachment: Tax Administration https://youtu.be/igngee62T_I

Prescription Drug Price Inflation

Finance: Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare, March 16, 2022

These concerns have been with us for decades. They still demand attention. PhARMA and AARP have put so much money into advertising on both sides that something must either be done, or loudly ignored. The advertisements on both sides have, to date, provided more heat than light - which was to be expected. Let us try to move to the facts so that we might find solutions.

The decision to not allow Medicare Part D to follow the Department of Veterans Affairs and negotiate down drug prices helped end the balanced budget that President Bush inherited from President Clinton. 

This bill also pushed Bruce Bartlett out of the Republican Party and prompted the writing of the book that sealed the deal. The passage of that legislation was fishy, from leaving the vote open unto the wee hours of the night to future hiring of the law's author by big PhARMA. 

While the Affordable Care Act helped ameliorate the worst feature of Part D, the coverage gap in the middle, it did not eliminate it. Perhaps competition will allow that gap to be filled.

PhARMA relies, in part, on claims that negotiation will lead to cost shifting. The dirty little secret in this debate is that single-payer solutions in the rest of the OECD have already resulted in cost shifting, where the rest of the world shifts its cost to the United States. Most people with insurance don’t notice this. Single payer healthcare, either through a public option or Medicare for All, will further bury this. For now, allowing drug price negotiation will give drug companies leverage to renegotiate their deals with the rest of the world.

PhARMA also relies on the claims that new cures for pandemics and subsidizing the development of orphan drugs and new therapies requires the right to charge the most the market can bear. This ignores the fact that most basic research comes through government grants and contracts, not drug company profits. The latter fund commercial, not scientific, development. 

(Comments to Finance on Organ Transplants)

In comments to Ways and Means,, House Budget and this Committee in 2019 and 2020, we discussed how to fund orphan drugs and new treatments so that no one remains untreated due to insurance coverage.

A main problem with high cost drugs, especially orphan drugs, is the high development costs and the cost of small batch manufacturing. This could drive the need to raise drug prices for mature drugs in order to subsidize the orphans, although some hikes are undertaken because no one can stop them. The solution for this is for NIH and the FDA to own the rights to orphan drugs and to contract out research and development costs as it does basic research, as well as testing and production.

PhARMA would still make reasonable profit, but the government would eat the risk and sometimes reap the rewards. NIH/FDA might even break even in the long term, especially if large volume drugs which were developed with government grants must pay back a share of basic research costs and the attached profits, as well as regulatory cost.

Universal coverage, starting with a public option under the Affordable Care Act, with eventual evolution to some type of single-payer system is inevitable. Unless we start building negotiation into the system now, we will give the drug companies a reason to oppose reform later. 

A public option will only pass if pre-existing condition reforms are abolished with public option enrollment being automatic upon rejection. The public option must be subsidized, replacing Medicaid for the disabled and those not requiring long-term nursing care. Long-term care should be removed from states and replaced with a new federal Medicare Part E.

The profit motive, with the need to constantly increase profits to attract Wall Street investment or keep stock prices growing will lead to an ever increasing number of people who will be considered uninsurable, thus relying on the public option.

Most healthcare systems will provide services to both comprehensive insurance beneficiaries, the retired, the disabled and those with the public option. In other words, Medicare for All is our future, with the only exception being firms abandoning the system and providing their own doctors while making arrangements with local hospitals and specialists - essentially creating local HMOs. 

The major issue here is funding, although more efficiency will reduce prices. Costs are already minimized by the for profit and by governmental medical care (which often uses for profit networks). To repeat, with a shout THE ISSUE IS PRICE, NOT COST!

VIDEO of these comments

Attachment: Single Payer Video 

Attachment: Tax Reform (with videos)

Home Visiting Nurses

WM, Worker and Family Support:  Improving Family Outcomes through Home Visiting, March 16, 2022

This program should be available to all families, whether they are in “the system” or not. When this Congress or the next adds a public option to the Affordable Care Act, this should be included. It should also be featured in any Medicare plan used by the disabled. If pre-existing condition protection is repealed, the end of private insurance is inevitable, turning the public option into a single-payer program. If, on the other hand, we find single payer through Medicare for All, this program is a must-have.

In short, home visits for expectant and new mothers should be included in all plans, including those where employers hire their own nursing staff. 

When my daughter was born, we could have used this. While my wife and I could get to services needed, if I had not been available, we may not have been able to go to services rather than have them come to us (from lactation consulting to depression screening). Indeed, lactation consulting is best handled in the home, where a more intimate setting would be helpful.

Looking at the title alone, one could get the impression that it was talking about welfare visitation or housing inspection - which could be punitive in both cases. Even those visits should not be punitive. Paid remedial and job training should be available to one and two parent households with no qualification process required. Anyone over 16 with less than an associates degree or vocational certificate must be made eligible. 

Working toward literacy and seeking a decent level of education should be compensated at the minimum wage - and not the current level. The Minority countered the Fight for $15 with a $10 counter-offer. The appropriate response should be yes - but also  immediately. The wage should transition to $12 per hour, or $11 with a 32 hour work week, with the child tax credit increased to the level received by families at the median income. $1,000 per month is a good number.

The (refundable) Child Tax Credit and minimum wage must both be indexed to inflation. The CTC should be included with other government benefits, from Unemployment to paid education to Social Security. An adequate CTC would allow discontinuing orphan benefits and most child support arrangements, as well as SNAP for families.

In certain circumstances, unemployment compensation should be available on a no-fault basis. Better still, employees should be allowed to voluntarily leave firms with a history of quickly dismissing employees without penalty. There should be no expendable jobs or workers. 

Working parents should receive their CTC through wages (the full amount). This can be accomplished in one of two ways: employers could deduct CTC payments included with wages from their quarterly payments to the IRS - or even receive a rebate. 

An employer-paid subtraction VAT paid by all employers would take this scheme to the next level as part of more comprehensive tax reform. We believe that such reform is necessary to break the log jam on providing adequate support to all families. Our most recent tax reform proposals are included in the attachment.

An adequate CTC and minimum wage are pro-life issues and must be scored as such. This is the best way to make these provisions bipartisan. Republican legislators should be made very uncomfortable voting against this and pro-life clergy should be made very uncomfortable for not insisting that these matters be put at the top of the anti-abortion agenda.

Such benefit improvements will put the free market for housing back in play for many families - although equal housing opportunity enforcement must be beefed up. Criminal penalties for violating fair housing rights should be enacted as well. Do these things, and the only home inspection required for any family would be home nursing visits.

Thank you for highlighting this worthy program, which again, should be available to all households - especially as we consolidate toward some form of Public Option, Medicare for All or other form of Single Payer insurance.

Attachment: Tax Reform

IRS 2023 Budget and 2022 Filing Season

Finance, The IRS, the President's Fiscal Year 2023 Budget, and the 2022 Filing Season, April 7, 2022

WM, Oversight: IRS Commissioner Rettig on the 2022 Filing Season, March 17, 2022

Feel free to pass along our Tax Reform plan to the witness so that you may ask him for comments (especially regarding using a subtraction VAT to distribute the Child Tax Credit to workers and their families).

Let me also reiterate my concerns with Mr. Rettig’s involvement with the obstruction of the transfer of Mr. Trump’s tax returns to the Committee. These issues are still before us, as far as I am concerned.

Finance: Spotlighting IRS Customer Service Challenges, February 17, 2022

WM, Oversight: National Taxpayer Advocate on Challenges Facing Taxpayers, February 8, 2022

I urge you to submit a written question (or one during the hearing) about the advisability of using support contractors - both for the hotline and for audit services. There are many qualified revenue agents working in the private sector who are up to this task, as well as top flight federal customer service providers to handle simple questions and arrange follow-up calls with revenue agents. 

We are sure you already have questions on how Build Back Better can help the IRS meet these challenges as well. This is especially true regarding the suspension of payments refundable child tax credits to parents. Hopefully she will not have to handle inquiries for long from distressed families.

The Child Tax Credit should be the focus of BBB, as well as childcare and sick leave. While other matters are certainly important, they realistically will have to wait for a larger Senate majority. In the interim, it should be shouted from the housetops that the CTC is anti-abortion legislation. The Catholic Bishops must be urged in the strongest possible language to assure that increasing the CTC be scored as a must-pass pro-life vote.

As we have said before, to end the “stink of welfare” that Senator Manchin so objects to, CTC payments should be included with wages for all employees - not just those with three or more children. They should also be distributed through other federal and state assistance programs - some of which can be reduced to do so.

For middle income taxpayers whose increased credits are less than their annual tax obligation, a simple change in withholding tables is adequate. Procedures are already in place to deliver refundable credits to larger families. For the coming year, they merely need to be expanded to all families with children. 

Employers can work with their bankers to increase funds for payroll throughout the year while requiring less money for their quarterly tax payments (or estimated taxes) to the IRS. The main issue is working out those situations where employers owe less than they pay out. This is especially true for labor intensive industries and even more so for low wage employers. 

A higher minimum wage would make negative quarterly tax bills less likely. Indeed, no one should have to subsist mainly on their child tax payments.

Please ask, either orally or in written form, how such a CTC proposal might work and how it would make things easier for taxpayers whose returns would be simpler - with fewer having to file at all.

We have attached the latest version of our tax reform plan, with a separate attachment on how implementation of this plan would affect IRS manpower. The answer is that the change would be drastic. It would also allow the Committee to focus more on how social welfare is being delivered in general, as well as eliminating current roadblocks to promptly filing for Social Security Disability Income.

Attachment: Tax Reform

Attachment: Tax Administration

Strategic Trade in the Asia-Pacific Region

Finance: The Promise and Challenge of Strategic Trade Engagement in the Indo-Pacific Region, March 15, 2022

Forced labor is also a concern outside of China. When poor people go to work, especially children, they accept conditions that are simply unacceptable in the developed world. International inspection, (which includes the American workplace), would help this. International employee-ownership, with transfer pricing based on a common market basket of worker goods, is the ultimate solution.

Let me reiterate - we are not exemplars in the matter of forced labor. It can be found on our soil. By the same token, we are not as “developed” as we think we are. American development is uneven. In some parts of the country, poverty and poor labor conditions are as common as any “third world” country. Meanwhile, some nations on the pacific rim are as advanced as we are. Just as there is a global upper class, there is a global middle class. We don’t have a monopoly on sky scrapers or fast food. 

From the Indian subcontinent to southeast Asia and Indonesia, a key concern is climate change. When I shared that I was doing comments for this hearing with a friend in Jakarta, she responded with a map of global sea level rise. I had already seen it.

Warming in the United States is merely inconvenient. In the Indo-Pacific region, it will be deadly. Island nations and Bangladesh will simply be eliminated. This constitutes a large share of the global population. Java has 154 million people in the same space that the United States has 53 million in the Boston-Washington urban cluster. Visual relocating them.

Sea level rise is more than the matter for academic debate (which is largely settled - climate change is an imminent threat). It is time to be serious people on this issue.

Finance, International Trade: The Strategic Benefits of a Multilateral Approach to Trade Policy in the Asia-Pacific Region, June 22, 2021

The foundational question must be this. What strategy is the nation pursuing? 

Are we putting consumers ahead of the interest of workers, both here and abroad? 

Are we acting in the public interest or in the interest of commercial concerns? How are we balancing these two concerns? 

What is the impact of our relationships on the environment, not only on warming but on the basic questions of pollution? Stopping the warming of polluted air and water still leaves us with polluted air and water. 

Most importantly, how are donors affecting how we approach these questions. Who is donating to member political  and to “public information” campaigns?

Any actions the Subcommittee or the Special Trade Representative take must consider these matters.

The next issue is tax policy. The easiest form of multilateralism is to comply with the rest of the world on taxing imported and exported goods. This means enacting a border adjustable value added tax. Goods that come in our taxed while goods that go out are not. The current system puts consumers over workers, encourages the exploitation of overseas workers and constitutes an unconstitutional export tax. See attachment one for our usual analysis of this issue.

The remaining issues concern China.

The first is bilateral and multilateral. How are we responding to the first set of questions in this relationship, particularly in regard to workers and large firms. Intellectual property is also a concern, although given the growth of the Chinese technical sector, perhaps the Chinese have more to lose than we do. On artificial intelligence, we are falling behind. Perhaps we need to send more American students to Chinese universities (although they should be armed with questions and answers about our political system.

Authoritarian regimes  see the protection of the ruling party in one of two ways. One is simply the preservation of political and social power. The other option is that the ruling party is committed to its ideals and fear that outside influences will threaten the nation’s way of life. We can catch more flies with honey, so gently educating Chinese leadership should be tried. If they were to see how the nation can be improved by losing an election, perhaps they will be amenable to a change in tactics. 

A multilateral approach is helpful here. Of course, many of our partners may not be paragons of Democracy. Of late, neither is the United States. Our own problems are a teachable moment. No society is perfect. The nation can use our current struggles as an example that democracy is not an end, it is a process. Our difficulties with a vocal authoritarian movement supporting an authoritarian former president can be used as a teaching moment. The Chinese leadership will not need much convincing on how bad an authoritarian leader can be, given the last four years.

This dovetails nicely to the question of the Uighurs. Much discussion has occurred on this front over the last few years. Our analysis of this issue has been shared with Congress on more than one occasion, including the need to look inward on the issue of slavery - an not merely at our past sins. See our second attachment. We can also add our support of tyranny throughout our history and the Native American genocide. Again, our flawed past and how we are overcoming it may be our best narrative in dealing with our future and China’s.

Multinationalism on this issue should cast a wide net. It might even be an occasion to make peace with recent enemies, especially the Islamic Republic of Iran. Including them in a coalition of conscience regarding the Chinese Turkmen (as well as in dealing with the Taliban) would be a powerful statement. This is an opportunity that rarely presents itself. A united front on this issue threatens the Chinese plans for a Belt Road. We can use that to help the Uyghurs. 

The Belt Road takes us to our last destination, containing Chinese hegemony. The Trans Pacific Partnership was designed to counter emerging Chinese power. Now the Belt Road projects are in full swing and our biggest tool is no more. While I share the concerns of many regarding the power of industry in enforcing such agreements, some of these concerns are allayed by the recently negotiated US - Mexico - Canada Agreement. The gains for workers and the environment should be migrated to all such agreements and the TPP process should be reopened.

The final question is to examine who really killed the TPP and why. Was this a case of an inept presidential candidate running amok or did he gain personally from raising the issue. Was it merely sparring between the major campaigns that killed the agreement or were there more organized interests behind the scuttling of the agreement.

This matter demands investigation. The intelligence community needs to follow the money (assuming it has not done so already). The Public Integrity Section of the FBI must take part. Even the Federal Election Commission has a role in this (OK, stop laughing). The death of the TPP and the rise of the Belt Road are too much of a coincidence not to take a second look. Our democracy needs this question answered, even though many are not asking it. The Subcommittee must.

Attachment: Trade Policy 

Attachment: Fighting Forced Labor Video

Substance Use and Suicide Risk

 WM: Substance Use, Suicide Risk, and the American Health System, March 2, 2022

Substance abuse is a mental health issue. It should not be a criminal one. As I stated last month, primary responsibility for mental health and substance abuse calls (including alcohol related ones) should be under the control of mental health professionals.  The death of George Floyd had as much to do with his alcoholism as his race. Intoxicated arrestees are more likely to be combative and met with unnecessary restraint, from choking to tasing.

I am sure that there will be plenty of statistics provided by invited witnesses. Let me add an anecdotal one that illustrates my point.

My family is no stranger to addiction issues. Some of them have become rather public - largely because it was impossible to intervene quickly and effectively due to requirements in law that prevent mandatory detention until after a crime has been committed. My situation is slightly different, as I sought treatment before my family could stage an intervention and before too much legal trouble. (My mother informed me when I was in treatment that one had been planned for the coming Christmas holiday).

The reason that I was to be intervened on was that I had been brought home by a police officer for walking with a blood alcohol level just above the legal limit, but because I know how to talk to police (and had a DC government ID card), I was released into the custody of my family. They should have been able to say no and have me sent to a treatment facility right then.

Sadly, aside from jail, it is not that easy to get into treatment for either alcoholism or mental health care (and especially not for medication management - which is a time where hospitalization could be the difference between life and suicide). For most in recovery, addiction is seen as suicide on the installment plan. Prompt care is the best mitigation in either case.

I have a sibling who was hospitalized at death’s door twice in the last month for almost drinking himself to death. He was discharged this past Sunday with no placement and a promise to go to meetings. No beds were available (especially not for a Medicaid patient) and there was no avenue for the rest of us to put him into treatment without his consent. As I write this, he is not in communication and may not be alive.

That he cannot find a bed and be forced into one are serious flaws in the system. Were he a cardiac patient, he would get the care needed immediately. As it is, over last weekend, he was treated for an orthopedic condition that he had been ignoring (I am not sure whether opioids are part of the story, but it would not surprise me). The reason he was hospitalized, however, was not dealt with satisfactorily.

In the 1970s, there was a rush to deinstitutionalize long-term mental health facilities. This led to the criminalization of mental healthcare (or the medicalization of crime - take your pick). Our national experience with medical liberty has not worked out well at all. - even budgetarily.

There is another item that merits attention - child custody. One of my relatives, in a custody battle and under the influence, absconded with her daughter. This was on the national news (see above). Had her use not been a custody issue - and with the ability to mandate care (from a relapse) had existed, there would have been no news to report.

Our foster care system is littered with stories of people losing their children because of addiction. When this occurs, getting their child back often becomes a priority over their own sobriety - or is the reason for it. The truism is that whatever you put in front of recovery will be lost - although sometimes the person who does so simply dies.

Foster whole families, not children. Fostering the child of an addict should not be the answer to a prayer for having one’s own children. Indeed, if the child has the same genetic predispositions as the parents, the fantasy of adoption will turn into a nightmare for the unprepared sober couple. 

This leads us back to last month’s attachment. Addicts deserve a chance to be the parents of their children once they have sound recovery. This includes making this decision affordable. This is an area where we must Build Back Better. Removing financial uncertainty by increasing the child tax credit to middle income levels and making it refundable takes away pressure that could lead to relapse. 

If readmission to treatment is automatic if relapse occurs, foster care can be resumed - or arrangements made - until recovery is on a sure footing.

Compassion is the answer to dealing with addiction in families. The current punitive system works for no one - especially the children of alcoholics and addicts.  Seeing addiction as a health issue, rather than a criminal one, makes reentry for those formerly convicted for drug offenses all the more possible.

Comprehensive reform of both welfare and a higher minimum wage are also important. The current “job training” system readies women for low wage labor - as does parole for men. Labor should never be “low wage” and the social welfare system should feature paid education, rather than job or job readiness training. By paid - I mean with a stipend at minimum wage levels with a child tax credit - not simply paying for tuition. 

Again, we must build back better.

Attachment: Mental Health Care, February 2, 2022