About That Tuition-Waiver Deduction for Graduate Students

by Veronique de Rugy

I was on PBS the other night to talk about the House and Senate versions of the tax plan. At some point, we started talking about how the House reform plan treats graduate-student tuition waivers as taxable income. In response to the other guest on the show saying that it was malicious, I pointed out that a tuition waiver was indeed income. Based on the response I received from listeners, you would have believed that I had just endorsed torturing kittens.

Yet notwithstanding all the articles and commentaries about supposed cruelty to grad students, the House Republican plan is based on conventional tax analysis. Simply stated, tuition forgiveness in exchange for work is indeed a form of income even if no money technically changes hands. So the “exclusion” currently in the law is a loophole. Saying this doesn’t mean that grad students would feel no pain or wouldn’t have to pay higher taxes — even though with the doubling of the standard deduction and lower tax rates, it may not be as bad as what people fear. By the way, lost in the drama is the fact that outright scholarships would remain tax free. In other words, don’t be surprised if universities re-categorize tuition waivers as scholarships if that part of the House plan is in the final bill. Voila!

Now, let me say this upfront: In the search for a better tax base and genuine tax reform, getting rid of this tax preference is the right thing to do, especially if it is a way to pay for lower tax rates on corporations or individuals. I may not have started with that particular provision but that’s beside the point.

Yet this gives me an opportunity to highlight an issue that I and many others have complained about for a long time. The current tax code is based on a fundamental conceptual flaw (Warning: wonk alert!): As its base, our tax code uses the “Haig-Simons” definition of income: consumption plus the change in net worth.

In other words, it starts with a presumption that there should be double taxation of income that is saved and invested. As Dan Mitchell has explained, you see this approach from the Joint Committee on Taxation. You see it from the Government Accountability Office. You see it from the Congressional Budget Office. You even see Republicans mistakenly use this benchmark.

This is the wrong definition for the tax base. It introduces economic distortions to savings and investment by not accounting for the timing of economic profits. The Haig-Simons tax base prohibits an objective accounting of tax subsidies.

The best example is to look at so-called tax expenditures in Table 13-3 of the Office of Management and Budget’s Analytical Perspectives. The table lists all those tax breaks, exclusions, credits, and deductions as defined by a Haig-Simons tax base. But the result is that it fails to make a distinction between the preferences that are subsidies to special interests and those meant to mitigate some of the income tax’s bias against savings and investment and that attempt to move us towards a more neutral treatment of these activities.

Among the provisions meant to correct the frequent double-taxation imposed on investment and savings income, we find the deferral of taxes on income earned overseas through foreign subsidiaries and affiliates, the exclusions for IRAs and 401(k)s, and the supposedly preferential tax rate for capital gains and dividends.

Among the provisions meant to subsidize particular groups through the tax code, you find tuition-forgiveness deductions, the deduction for domestic production activities, the deduction for entertainment expenses, deduction for employer-provided transportation and parking, and the deduction for moving expenses. All of these and many others are repealed in the House version of the tax-reform plan.

Unfortunately, the House failed to repeal the biggest of them all: the deductions for employer contributions for medical-insurance premiums and medical care. As I have noted in a recent paper on tax preferences:

The exclusion for employer-provided fringe benefits, such as health insurance, is a prime example of a provision that should be repealed. It is distortionary, unfair, and — most importantly — a major contributing factor to the ever-growing cost of healthcare. Because it promotes overuse of insurance, it also dramatically decreases the amount of healthcare costs paid by consumers themselves as opposed to by a third party. Americans today pay only 12 percent of their healthcare expenses out of pocket, which weakens normal market forces. In addition, as Fichtner and Feldman have noted, it also results in profound horizontal inequity since “there is roughly a 30 percent price difference between employer-provided premiums and individual premiums.”

It’s a shame because it would have provided for a lot of revenue that could have been used to reduce the top marginal income tax rate and avoid the idiotic bubble tax.

Hopefully, the House’s effort to get rid of some genuine tax expenditures — and that includes the tuition-waiver exclusion — sets a precedent that could lead one day to the needed repeal of the health-care deductions.

One thing is sure: Fixing the tax code’s internal inconsistencies with tax preferences introduces a number of problems, if only because it complicates the tax code and people fail to differentiate between the good and the bad tax breaks. The U.S. economy would be better served by defining the tax base to eliminate the need for tax expenditures through a neutral “consumption tax.” It would certainly be more simple, efficient, equitable, predictable, and have a more neutral treatment of consumption and future consumption.

Combining Cronyism and Political Correctness at the University of Texas

by George Leef

Yes folks, it’s true — even in conservative states, higher education has been largely captured by the forces of “progressivism.” Nearly all college and university presidents prattle away about their commitment to diversity, to saving the planet, to “enriching” the curriculum with all kinds of grievance courses, and so on. The University of Texas (UT) is no different, with leadership no different from what you’d expect in California or Massachusetts. It is also steeped in cronyism, with leaders cozying up to big donors.

In today’s Martin Center article, UT grad and lawyer Mark Pulliam exposes some dirty laundry at the university. The case involves a Title IX accusation against a male student, his exoneration by an objective fact-finder, and the reversal of that decision by UT president Gregory Fenves. Why? The accusing female student’s father is a UT big-wig — that’s why.

Then the male student, who had been branded as a sexual predator and suspended for five semesters, filed a lawsuit.

“As a result of the lawsuit,” Pulliam writes, “Fenves was scheduled to testify under oath in federal court in late November. The proceedings up to then had been conducted in relative secrecy, but that was about to change. That’s because in court Roark would be able to examine Fenves about his highly-suspect decision on the record, with the attendant public scrutiny and media coverage. Not surprisingly, neither Fenves nor UT wanted to reveal the details of this squalid tale.”

After reading about this, UT donors might think twice before writing another check.

Analyzing the November Jobs Reports

by Robert Stein

The labor-market picture keeps getting brighter for American workers. Nonfarm payrolls increased 228,000 in November, beating consensus expectations. In the past year, payrolls are up an average of 173,000 per month.

Although civilian employment, an alternative measure of jobs that includes small-business start-ups, increased only 57,000 in November, that gauge is up 196,000 per month in the past year, so some convergence in the two measures of jobs should be expected.

The unemployment rate stayed at 4.1 percent, as expected, but we anticipate continued declines in 2018–19. The lowest unemployment rate since the late 1960s was 3.8 percent in 2000 at the peak of that era’s tech boom. We expect to beat that by the end of 2018. The lowest jobless rate in the 1960s was 3.4 percent; assuming we stay on track for a major cut in the corporate tax rate, we think that record will fall in 2019, eventually hitting the lowest levels since the early 1950s.

Although a relatively low participation rate makes it easier to have a lower unemployment rate, the participation rate is slightly higher than a year ago and the size of the labor force is up 1.6 million in the past year after a gain of 1.8 million in the year ending November 2016. In other words, the jobless rate has been falling even though the labor force has been expanding.

Other good news in today’s report includes a drop in the median duration of unemployment to 9.6 weeks, tying the low so far in this expansion.

As usual, we like to follow total earnings, which combines the total number of hours worked and average hourly earnings. Total earnings are up a sturdy 4.8 percent from a year ago, signaling plenty of growth in consumer purchasing power. This is not about the “rich getting richer”: A separate report on the earnings of full-time workers shows wages are rising faster for workers in the bottom half of the income range than the top half.

Put it all together, and we have a recipe that makes a rate hike at next Wednesday’s Fed meeting almost certain. The Fed will also likely say it foresees three rate hikes in 2018. We think that’s about right, but the odds of a fourth rate hike are higher than that the Fed moves only twice.

Ethics Committee Clears Rep. Nunes in Classified Information Case

by Philip H. DeVoe

Yesterday, the House Ethics Committee cleared House Intelligence chairman Devin Nunes (R., Calif.) of disclosing classified information during a March press conference, when Nunes verified that President Barack Obama had wiretapped President Donald Trump’s transition team. The allegations emerged after Nunes admitted to receiving the information that led to his conclusion from confidential White House documents.

Back in March, Nunes said in an interview with Wolf Blitzer that his role as Intelligence chair often leads him to the White House, where officials will show him confidential material relevant to ongoing investigations. He explained that using that information to base his conclusion is a key part of an investigation, a claim the Ethics Committee seemed to substantiate in its decision, finding that nothing Nunes shared in his statement was classified.

In a statement thanking the committee, Nunes said he appreciated the members’ determination that he “committed no violation of anything — no violation of House Rules, law, regulations, or any other standards of conduct.” He concluded his statement by calling out the Democrats on the panel, who made statements “that appeared to prejudge this matter before they began investigating the complaint” and implored the committee to make transcripts of their statements public, to show how partisanship doesn’t influence the outcome of congressional investigations.

One of Roy Moore’s Accusers Alters Her Story About Her Yearbook

by Jim Geraghty

One of the women accusing Roy Moore just did him a huge favor.

Beverly Young Nelson, the former Gadsden waitress who presented her high school yearbook she said was signed by Roy Moore, altered the story she originally told regarding the yearbook signature.

In an interview Friday with ABC’s Good Morning America, Nelson said she made some notes in the yearbook below where Moore signed it. Underneath Moore’s alleged signature is a date and location that Nelson said Moore signed the yearbook – “12-22-77″ and on the next line “Olde Hickory House,” the restaurant where Nelson worked and she said Moore was a frequent customer.

This doesn’t mean that the rest of Nelson’s story about being sexually assaulted is false, or that she “forged” the signature, as some outlets are reporting. But it does mean that her initial press conference misrepresented some of the information:

About a month later, I received my yearbook from Southside High School, where I had spent my freshman and sophomore years. I happened to bring my yearbook to work with me to the restaurant on December the 22, 1977. I put it down at the end of the counter. Mr. Moore happened to notice it and asked me if he could write in my yearbook, and I felt flattered. And I said “yes”. He wrote in my yearbook as follows: ‘To a sweeter, more beautiful girl I could not say Merry Christmas. Christmas 1977. Love, Roy Moore, Olde Hickory House. And it signed it, ‘Roy Moore DA.’”

Except… according to what she’s saying today, he didn’t write “Olde Hickory House.”

Looking back in retrospect, it did seem odd that Moore would write, “Christmas 1977″ above his signature and then write “12-22-1977″ underneath it, and switch from cursive to print writing in the same inscription.

Some will conclude that if part of her initial accusation was false, then the rest of it shouldn’t be trusted, either. Gloria Allred, Nelson’s attorney, has done more to hurt the public trust of the other women accusing Moore than anything his campaign could do.

We Had To Pass the Bill To See What’s In It

by Jibran Khan

Who would have thought that manually amending a multi-trillion-dollar tax-cut bill in the wee hours of the morning would pose problems?

It turns out that when the JCT economists were pulled from their beds last Friday night to score and estimate the last-minute, hand-written deals of the GOP’s tax bill, they made some big miscalculations. For instance, the restored corporate AMT (alternative minimum tax), which they projected would bring in $40 billion of tax revenue to offset new cuts, is now projected to raise over $300 billion in revenue, according to Lily Batchelder of NYU Law School and formerly of the Senate Finance Committee.

As someone concerned about deficits, I would generally rather see revenue being underestimated than overestimated. Nevertheless, the fact that parts of the final calculations could be off by hundreds of billions of dollars raises a red flag about the process. It is hard to see this as anything but evidence that tax reform is being rushed in pursuit of a big ‘win’ before the end of the year.

Congress’ First In-Vitro Fertilization Sex Scandal

by Jim Geraghty

From the last Morning Jolt of the week:

Congress’ First In-Vitro Fertilization Sex Scandal

Picture the scene: a busy, overworked office of the House Ethics Committee.

Staffer One: Urgh. Well, that completes another case. What a weirdo. Who’s next?

Staffer Two: Congressman Trent Franks of Arizona.

Staffer One: And what did he do? Allegedly?

Staffer Two: He asked two female employees to bear his child as a surrogate.

Staffer One: (blinks) Wait, what? Run that by me again.

Staffer Two: It says on the complaint that he asked two female employees to bear his child as a surrogate.

Staffer One: Two? What, did he want twins or something?

Staffer Two: (reading) The congressman says he never “physically intimidated, coerced, or had, or attempted to have, any sexual contact with any member of my congressional staff.”

Staffer One: No, he just wanted his genetic material to be placed within the wombs of his staffers and carried to term. How, exactly, do you bring up a request like that? ‘Hey, I need you to carry something for me… for about nine months?’

Staffer Two: The staffers say the request made them uncomfortable.

Staffer One: I’d imagine so!

Staffer Two: It’s probably worth noting that there’s no sign of any prurient interest.

Staffer One: No, it’s just… weird. I mean, really weird, man! Of course it’s inappropriate for the workplace! How would you feel turning down your boss for a deeply personal request like that? Every time he made a decision after that, you would wonder if he was punishing you for turning him down, or if your refusal was playing a factor in his decision.

Staffer Two: Yeah, but let’s keep in mind, one of the toughest difficulties a couple can go through is infertility issues. People enduring that can find the sight of any child or any pregnancy upsetting, because it feels like they’re being denied something they want so badly, something that everyone else seems to get to have, even accidentally or at an inconvenient time. High school sex-ed classes make it sound like you can get a girl pregnant by looking at her for too long; it’s maddening for couples to find they’re having difficulty getting pregnant after all that time of trying to avoid pregnancy. The yearning for a child, and risk of not having one, can throw anybody for a loop. I once read a book where a guy described going through a difficult pregnancy with his wife and crying at the sight of kids in car repair commercials. My point is that Franks… may not have been at his peak emotional and psychological health when he made these requests.

Staffer One: Those are very good points. But you can’t ask your staffers to do something like this!

Staffer Two: No, of course not. As their boss, Franks had a responsibility to make sure these women never felt like they were obligated to do something inappropriate or excessively personal, and procreation certainly seems to be on that list. But Franks probably shouldn’t be lumped in with John Conyers and all the other creeps in the pile of paperwork in front of us.

Staffer One: In the aspect of seeing others as objects for his sexual pleasure, correct. But in some ways, this case is the clarifier of the current trends because of that difference. The key problem running through so many workplaces, so many prestigious offices, and so many halls of power is not an inherent “brutality of the male libido,” as that New York Times op-ed put it. The problem is people in authority not understanding or not caring about boundaries, not seeing those under them or around them as human beings deserving of respect, and losing any reticence or hesitation about abusing their power over them. Upset or not, it’s hard to believe Franks thought very long or hard about how his staffers would feel upon getting this request, or the awkward and difficult position he was putting them in by making it. The House Ethics Committee will have to–

Staffer Two: (checks phone) Wait, never mind, says here he’s resigning. Well, that saves us a lot of time and paperwork.

Staffer One: Great. With Franken going, let’s call our counterparts in the Senate and ask them if they want to grab a drink. The busy days aren’t likely to end anytime soon.

The Biggest and Grimmest

by Jay Nordlinger

Ash Carter has worn many hats. He is a scientist (having earned his doctorate in theoretical physics from Oxford). He is an academic and professor (spending his career at Harvard). He is a defense official (serving in government, periodically, from Reagan onward). From 2015 to 2017, he was SecDef. He has equal amounts knowledge and experience.

And he is my guest on the latest Q&A. He talks some of the biggest and grimmest subjects: nuclear proliferation, North Korea, and Iran. I also ask him about the defense budget. I am wary of a phrase I have heard my whole life: “lean and mean.” What does he think of that? I also ask him about the relation between the military and the civilian population. Is there too great a gap? Do civilians sentimentalize soldiers? Is it okay to say “Thank you for your service”?

A wonderful guest. Again, to hear this podcast with Ash Carter, go here.

A Righteous Walk-Off

by Jay Nordlinger

In 2009, we published a piece called “My Kingdom for a Safe Zone.” I was talking about the intrusion of politics into places where it really didn’t belong: concerts, sports events, and the like. Was there no refuge from politics — and partisan politics — anywhere?

Readers sent me their stories and their complaints. Their e-mails would be headed “Safe-zone violation!” Some of those stories were infuriating or heart-rending.

In Impromptus today, I have an item about Manny Laureano, the principal trumpet of the Minnesota Orchestra. Rufus Wainwright was the orchestra’s guest that night. From the stage, he talked politics, bemoaning the Republicans’ just-passed tax plan. Laureano, fed up, got up and left.

I write,

Laureano may get into trouble for his action. Later, he made this acknowledgement: “Obviously, my contract says I’m not supposed to walk off stage during a performance.” But, you know? Sometimes a man has had enough. I understand this, having endured these political speeches at concerts for years and years. (This is a recurring subject of mine.)

So, let me say again: Bravo, Manny. Your walk-off spoke for many of us who don’t have the opportunity to make the same gesture.

Tax ‘Reform’: Motivating the Wrong Base

by Andrew Stuttaford

One of the reasons for the speed at which the Republican tax proposals are being pushed through has been the belief that the GOP needs to have a major legislative achievement to its credit before the midterms. There’s something to that, but, as I mentioned the other day that rather assumes that the ‘accomplishment’ will be positive – and popular.

Count me skeptical about how positive that accomplishment will turn out to be. The two bills are certainly not without their merits, but the urge to ‘just do something’ (and to do it on a largely arbitrary timetable – why ‘by Christmas’?) seems to me to have led to a wasted opportunity. A more modest, more carefully considered plan might, in the end, lead to better, more substantive reform and, more than that, reform with a better chance of withstanding a  reversal in the GOP’s  political fortunes.

As for popularity, well…

Ramesh writes:

A political drawback of the Republican tax bills is that they raise taxes on a significant number of voters by curbing the deduction for state and local taxes. A lot of these voters are in households that make between $100,000 and $500,000 in taxable income. About 40 million tax returns come from that group, and its members are disproportionately likely to face higher taxes as a result of Republican tax legislation.

In a recent post, I conceded (it’s obvious enough) that the upper middle class are, by definition, very, very far from the breadline, but the notion that, despite that happy state of affairs, they are incapable of feeling resentment towards those at the peak of the wealth pyramid is misguided.

Ramesh appears to agree, asking “whether Republicans make these households happier if they cut taxes more for households richer than they are?” Somehow I don’t think he believes so. He adds:

The editors of the Wall Street Journal would have congressional Republicans believe that the answer is yes. Once again, they are arguing that cutting the top income-tax rate will salve the pain of voters who are currently slated for tax increases.

I doubt it, and as I argued before, “the Republican leadership also ought to be thinking more carefully about the consequences of taking on the upper-middles, a productive, noisy and influential section of the electorate unlikely to overlook the fact that, so far as this tax plan is concerned, their interests have been clearly subordinated to the interests of the 1% or 0.1%.”

Their discontent could well be bad news for many of the remaining GOP office-holders in blue states (there are nearly 30 Republican Congresspeople in New York, New Jersey and California alone), and not, I reckon, just there.

Over at CNN , Chris Cillizza looks at the midterms (my emphasis added):

Midterm elections — like the one coming up in 2018 — are all about turning out base voters. Why? History tells us that only the most stalwart partisans turn out when the presidential race isn’t on the ballot. So if your side wants to pick up House and Senate seats in a non-presidential election, you need to find ways to excite its most committed members.

Which is where the Republican tax plan approved by the Senate last week comes in. And the fact that, according to a new CBS poll, lots more people hate the plan than love it.

Just 16% of people in the poll said they “strongly” approved of the GOP tax plan. That number pales in comparison to the 40% who said they “strongly” disapprove of it.

A similar question — “Which best describes how you would feel if the Republican tax plan was signed into law?” — produced equally concerning results for Republicans. Just 8% said they would be “excited” by the new tax law while 22% said they would be “angry.” (Another 28% said they would be “satisfied” and 31% said they would be “disappointed.”)

Dig into the numbers and the direness for Republicans becomes more apparent. While 46% of Republicans strongly approve of the tax plan, 71% of Democrats strongly disapprove.

Ditto the “angry” versus “excited” breakdown. Just 19% of Republicans said they were excited about the prospect of the tax bill becoming law as compared to 39% of Democrats who said they were angry.

What those numbers suggest is that the Republican tax bill is a major motivator for Democratic base voters and far less of one for the GOP base. Meaning that the tax bill looks far more likely to drive Democrats to the polls to show their anger and disapproval than it is to push Republicans to vote next November in support of it…

It is not (quite) too late for the GOP leadership to make substantial revisions to their tax package, especially if they can bring themselves to walk away from that unnecessary and  self-imposed Yuletide deadline. There are good economic and fiscal reasons why they should – and the political case for doing so seems close to unanswerable.

Another Bad Idea for the Tax Conferees

by Ramesh Ponnuru

A political drawback of the Republican tax bills is that they raise taxes on a significant number of voters by curbing the deduction for state and local taxes. A lot of these voters are in households that make between $100,000 and $500,000 in taxable income. About 40 million tax returns come from that group, and its members are disproportionately likely to face higher taxes as a result of Republican tax legislation.

Would Republicans make these households happier if they cut taxes more for households richer than they are?

The editors of the Wall Street Journal would have congressional Republicans believe that the answer is yes. Once again, they are arguing that cutting the top income-tax rate will salve the pain of voters who are currently slated for tax increases.

The Journal wants a top income-tax rate of 35 percent. In both the House and Senate bills, the only people who pay more than that are singles making more than $500,000 and couples making more than $1 million. Around 1.7 million returns report taxable income above $500,000, and even many of them would not see any benefits from the Journal’s proposal.

Whatever else a deeper tax cut for the country’s highest earners would accomplish, it can’t do much to help with the political problem that concerns the Journal.

Another U.K. Hospital: NO to Baby Transfer + End Life Support

by Wesley J. Smith

Readers here may recall the infamous Charlie Gard case earlier this year. Charlie was a terminally ill baby with a progressive and terminal genetic disease. Charlie’s parents wanted to take their boy to a specialist in the US, but was refused permission by the hospital, later supported by a judge. Further, the hospital obtained a ruling that Charlie should be taken off life support, an imposition to which the parents eventually agreed after the US doctor said that with the passage of time, he could no longer help.

Well, it is happening again–except in this case the baby isn’t terminally ill but has been unconscious for a year. Moreover, as  I wrote here previously, there isn’t even a diagnosis as to the cause.

An Italian children’ hospital has offered to take the child as a patient for further inquiries and treatment. But the UK hospital administration and doctors are not only saying NO, but as in the Charlie Gard case, also seeking a court order allowing them to withdraw life-sustaining treatment. From the Echo story:

Ader Hey Children’s Hospital has applied to the High Court to switch off life support for a baby in a coma, the ECHO understands.

Alfie Evans’s family said they were now in a “living nightmare” after the hospital said they had exhausted all options in trying to diagnose and treat his mystery brain condition.

It comes shortly after his parents Thomas Evans and Kate James, both 20, said that months of searching they had finally found a hospital abroad that was willing to take him;

But a letter to them, seen by the ECHO, shows Alder Hey are opposing the move to an Italian children’s hospital – and are stepping up the battle over Alfie’s life by taking the matter to court.

Let us focus on the wrongness of this. 

  • Alfie has not been diagnosed;
  • The baby is not terminally ill in the sense that Charlie Gard was, but in a coma;
  • The family has found another hospital willing to continue care, or at least continue to seek a diagnosis;
  • If Alfie is unconscious, he is not suffering;
  • The hospital, in essence, wants a court to declare that dying now is better than being severely cognitively disabled for an indeterminate period.
  • By resisting the transfer, the hospital administration and doctors are essentially declaring that they do not want the child to have any chance of surviving.

The UK’s laws are different than here in the USA. The technocracy there has greater power, and parents have fewer rights over their children.

In fact, I think power is what this and the Charlie Gard case are ultimately all about. Otherwise, why not allow the parents to try other potential avenues of care? Why not give Alfie a shot?

The fact that refusal of transfer would probably not happen here, should not make us complacent. We have our own medical technocrats who want greater power over patient care or withdrawal thereof.

P.S. Alfie’s parents have established “Alfie’s Army” Facebook Page for those who may be interested.

Al Franken’s Farcical Resignation Speech

by Rich Lowry

Al Franken’s resignation speech made no sense. If he is innocent as he claims (he says some of the allegations were untrue and he remembers the rest differently than his accusers) and if he is as confident that the Ethics Committee would vindicate him as he says, he shouldn’t be resigning. Indeed, a duly-elected senator wrongly accused owes it to himself and his constituents to fight on — lies and mis-remembered accounts shouldn’t chase anyone from the Senate. 

Franken tried to square the circle by saying that he couldn’t go through an ethics committee investigation and effectively serve Minnesotans at the same time. If this were true, every senator with an ethics claim against him would have to step aside. If this were true, Bob Menendez, who has been defending himself in a major criminal case for years, would have felt obligated to resign long ago.

A couple of things are going on here: 1) Democrats obviously want to clear the decks to get a clear line of fire on Roy Moore and Donald Trump, and Franken realizes he can’t stand in the way; 2) In the current environment in the Democratic party it is difficult to question the credibility of any accusers, so Franken would have just dug himself in a deeper hole by trying to defend himself (this is a dynamic that could lead to injustices); 3) Franken is pretty clearly not telling the truth in his denials, and that would have become even more obvious over time.

It’s true that what Franken is accused of isn’t as bad as what Roy Moore is accused of. But he’s a groper, who assumed he could get away with it because the women couldn’t or wouldn’t complain. This is a lousy thing. Surely, the state of Minnesota can come up with someone to occupy one of its two senate seats who hasn’t treated people this way and been dishonest about it.

A Bad Idea for the Tax Conferees

by Ramesh Ponnuru

Deroy Murdock argued on NRO yesterday that Republicans should change two provisions of the Senate bill, cutting corporate tax rates faster and expanding the child credit from $1,000 per child to $1,600 (as in the House) rather than $2,000. Robert VerBruggen has already responded by pointing out the counterintuitive effects that a faster corporate-rate reduction would have.

Murdock writes,

Before anyone screams that this would let tungsten-hearted Republicans gleefully “hurl America’s children under the bus,” remember: Today’s per-child tax credit is $1,000, so inserting the House language into the final tax measure would increase by 60 percent the tax credit for “the children, the children; Think of the children!”

However, this would not double that tax benefit, as otherwise free-market Republican senators Marco Rubio of Florida and Mike Lee of Utah want. In exchange for a mere 60 percent more love than today’s U.S. tax code showers on this country’s amazing boys and girls, every American — even the childless and those with adult offspring — would benefit from giving U.S. job creators their biggest tax cut ever, and in just over three weeks, not 13 months.

Murdock is mistaken about the effect of his proposal. He is ignoring another feature of both the House and the Senate bills: the abolition of the dependent exemption. That exemption is worth about $1,000 per child to households in the 25 percent tax bracket. Abolishing it and raising the child credit by $600 leaves many of those households behind by $400 per child. Doubling the child credit just leaves those same households even.

In the 15 percent bracket, the exemption is worth about $600 per child. Abolishing it and raising the credit by $600 leaves those households even rather than “showering them with love.”

And the trade gets worse over time. The dependent exemption increases with inflation under current law. Under both the House and Senate bills, the child credit does not.

Don’t Take the HIT

by Ramesh Ponnuru

Will Republicans let a tax increase take effect on their watch? Obamacare includes a tax on health insurance plans. This “health insurance tax” (HIT) has been suspended, but is scheduled to go into effect in 2018. The effect has been estimated to be a $185 increase in premiums for small-group plans.

Opposition to the HIT has been something of a bipartisan cause. Now Republicans are debating how to handle the issue in the continuing resolution they are using to keep the government funded next year.

One option is to suspend the tax for participants in Obamacare’s exchanges and Medicare Advantage—leaving people who get coverage through their employers in the cold. That option would let the government keep more of the revenue of the tax, and some Republicans say that it’s too late to eliminate the tax on employer-provided coverage in a way that will be passed on to employees. It’s a disputed point. But it would be decidedly odd for Republicans to leave the tax in place for most plans while exempting the Obamacare exchanges.

A spokesman for the House Ways and Means Committee, which has jurisdiction over taxes, tells me, “Members are working to deliver as much relief as possible from the health insurance tax – as soon as possible.”

The Trustworthiness of Social Media, Walter Duranty, and Tommy Tutone

by Jim Geraghty

Today’s Morning Jolt looks at the latest accusation against Senator Al Franken (D-Not For Long) and whether we should heed Andy McCarthy’s advice to reserve judgment on the FBI’s Peter Strzok. Also, an elaboration about how easily disinformation can enter the public debate, and the responsibility of the tech giants…

The Naïve Tech Masters

Over on the home page, I have a column arguing that Twitter, Facebook, YouTube, and Google have grown to encompass duties to the public trust — duties that these companies were never intended to handle in the first place.

Facebook began as “FaceMash” in 2003, when an apparently-inebriated Mark Zuckerberg created a site to allow Harvard students to compare students and rate which one was hotter. These world-dominating Internet tools were created by technical geniuses whose wisdom and understanding of human nature is way behind their ability to design and program an algorithm.

These companies and apps weren’t built with journalism or political communication in mind, and no one really thought through that empowering everyone to send short messages, post videos or create online communities meant it would empower terrorists, criminals, hate groups, garden-variety nut-jobs and child predators to do the same things.  

No system will ever be perfect, and any system can be “hacked” with enough time, effort, and resources. For example, the 2016 election was not the first time Russia was able to fill the minds of some Americans with propagandistic nonsense. In the good old days of professional journalism and old media, the New York Times Moscow correspondent Walter Duranty “shrugged off the Ukrainian famine of 1930-1931 as ‘mostly bunk,’ and in any case, as he admonished the squeamish, ‘You can’t make an omelette without breaking eggs.’” He won the Pulitzer Prize for his coverage. The Times more or less apologized for his coverage of the Soviet Union in 1990, conceding, “having bet his reputation on Stalin, he strove to preserve it by ignoring or excusing Stalin’s crimes. He saw what he wanted to see.”

In the old days, the Russians had to find and influence, flatter, court and seduce a Western media correspondent in order to get their preferred messages and viewpoint before the American public. Today social media allows them to eliminate the middleman. (Insert sarcastic slow clap here.)

I offer two possible solutions. The first is that we get it into Americans’ heads that without verification, what’s posted on social media is as reliable and verified as graffiti or what’s written on the wall of a bathroom stall. Sadly, it turns out Jenny is not eager to show you a good time if you call her at 867-5309.

The second option is that Twitter, Facebook, YouTube, and Google realize that whether or not they intended to be media companies or want to be media companies, they have become media companies, and they need to take responsibility for what appears on their platforms. This means temp workers can’t have access to the president’s Twitter account and shut it down for eleven minutes. This means you shouldn’t have the option of selecting ‘Jew hater’ as a target demographic for advertising on Facebook. This means the criteria for shutting down a Twitter account has to be crystal clear and based upon non-ideological criteria, not the complaints of celebrities. It probably means fewer algorithms making decisions and more human judgments – and more openness about how those humans reached those judgments.  

ADDENDA: My Three Martini Lunch podcast co-host, Greg Corombus, reminded me of this 1991 Saturday Night Live sketch of the Clarence Thomas-Anita Hill hearings. In it, the assembled senators (Joe Biden, Edward Kennedy, Howell Heflin, Strom Thurmond and Paul Simon) come across as sex-obsessed creeps who can’t even begin to understand why harassment is wrong. One of the particularly ironic moments, in light of recent revelations, is Phil Hartman’s Ted Kennedy offering advice to Thomas: “Have you ever tried coming out of the bathroom nude, and acting like you didn’t know someone was there? … Well, that’s too bad. Because that works, too.”

The man playing Senator Paul Simon, asking Clarence Thomas if women weren’t into him because of his bow tie, was… current senator Al Franken. I’ll bet that back then, Franken thought that he would never be like those senators, so tone-deaf and out of touch about sexual harassment.

If you don’t want to get caught watching the sketch at work, a transcript can be found here.

Thursday links

by debbywitt

A day that will live in infamy: It’s the anniversary of the attack on Pearl Harbor: some history, contemporaneous newsreels, and a Monty Python re-enactment.

The voice actress who played Snow White was forbidden by Disney from appearing in films /radio /television. She was paid $970 for her services.

How rats conquered New York City.

If spiders worked together, they could eat all the humans in a year.

This ‘smart condom’ will give insights into your sex life you probably didn’t want.

Do emotions related to alcohol consumption differ by alcohol type?

ICYMI, Wednesday’s links are here, and include the feast day of St. Nicholas of Myra (aka Santa Claus), how Civil War soldiers gave themselves syphilis while trying to avoid smallpox, a famous French fartist from the late 19th and early 20th centuries, and a selection of weird nativity sets.

Babbitt Strikes Back

by Jay Nordlinger

Today, I conclude my notes on Arthur Vandenberg, the Michigan senator who was a staunch isolationist before World War II and then cooperated with President Truman et al. to forge international institutions (go here). In yesterday’s installment, I wrote about a book — a book whose title entered our American language:

In 1922, a book went off like a stink bomb in the Midwest: Sinclair Lewis’s Babbitt. It mocked the values that Arthur Vandenberg embodied and championed. In a strange turn of events, he and Lewis became friends, or at least friendly acquaintances.

Today, I quote a swatch of Vandenberg, and will again here:

Babbitt has a right to strike back. Without him this would be a sodden land. … He is happy and satisfied to be a part of his own ‘home town’ — and to strive, with his neighbors, to make the old ‘home town’ a little better and a little cleaner and a little healthier. … Save us from a society that is all ‘Mencken’ and ‘Sinclair Lewis.’ Give us ‘Babbitt’ at his best — interested in his home — living with his own wife — striving to educate his children — helping his church — still believing in a just God — loving his country and his flag.

As I remark in my column, one could weep.

I also quote a swatch of The Good Society, Walter Lippmann’s book of 1937. Vandenberg quoted it too. It reminds me a lot of what I’ve read in National Review over the years (though you would never think of Lippmann as an NR-type guy):

We are trying to operate a capitalistic system under a government that dislikes the system, and would, if it had the courage and power, replace it with a collectivist system. This inner conflict between the nature of free capitalism and the real purposes of the government has created a deadlock. Business cannot proceed because it is terrorized by New Dealers. The New Dealers cannot proceed because, being only half-hearted collectivists, they dare not follow out the logic of their own ideas.


by Jay Nordlinger

As readers will know by now, Victor Davis Hanson’s latest is The Second World Wars: How the First Global Conflict Was Fought and Won. And VDH is my guest on Q&A (here).

I take the opportunity to ask some fundamental questions: What if Hitler hadn’t declared war on us? Would we have gotten into the war — the European theater? What if Japan hadn’t attacked us? Could they have triumphed in the Pacific?

What were the causes of the war?

Was Hitler a little nuts — did that save our bacon? If he had been saner, could he have pulled it off?

How was FDR as wartime leader? And Truman? Were we right to drop the A-bomb(s)? What about Yalta? Was FDR, were we, guilty there? What about the Holocaust and the war? Could the Holocaust have been carried out without the war? Would it have?

Who are some unsung heroes of the war?

And more. Victor Davis Hanson knows the answers, I can tell you. Knows them cold. This podcast with him is both an education and a pleasure. Again, here.

Make Radicals Pay a Cost for Abusing Courts

by Wesley J. Smith

The lawsuit to declare the Colorado River a “person” entitled to human type rights has been dropped.

It isn’t that the environmental radicals who brought the case realized that geological phenomena should never be considered rights-bearing entities. 

The point is that for once, the defendants threatened the radicals with real pain for pursuing the case. From the Colorado Springs Gazette:

Last week, [Attorney General Cynthia ]Coffman’s office announced she would seek federal sanctions against Flores-Williams for filing a frivolous lawsuit.

Yes! Make them pay for this nonsense. 

Too often radicals–such as these plaintiffs and animal rights types seeking to have animals declared to be persons–are allowed to abuse the court system with ridiculous cases and treated with deference and respect. This is precisely the way to stop such cases going forward.

In other words, stop coddling the radicals who are abusing our courts!