‘More Debonair’

by Jay Nordlinger

Years ago, I interviewed Leon Fleisher, the great American pianist, and I asked him about George Szell: the legendary, and sometimes oppressive, Hungarian-born conductor. Once, they were recording Beethoven’s Piano Concerto in B flat. The orchestra was not getting the opening to Szell’s satisfaction. Fleisher had a suggestion for Szell — which took some temerity, believe me. He said, “Perhaps a bit more debonair?” Szell loved the idea. “Gentlemen,” he said to the orchestra, “more debonair.” And so it was.

I have recorded a new Jaywalking, here. (You can also subscribe in a number of ways.) Toward the beginning, I play Walking the Dog, the Gershwin number.

The most debonair music ever written? Quite possibly. See if you agree.

P.S. Someone should write a piece for our own time: Wagging the Dog.

P.P.S. I once met Kitty Carlisle Hart at a party at the Buckleys’. Someone said to me, “You just met a woman to whom George Gershwin proposed marriage.” That was a dizzying fact. Took some math. Remarkable.

‘Too Anti-Trump to Check’

by Rich Lowry

I wrote about the media’s Russia mistakes today:

It’s a wonder that President Donald Trump devotes so much time to discrediting the press, when the press does so much to discredit itself. 

The media’s errors over the past week haven’t been marginal or coincidental, but involved blockbuster reports on one of the most dominating stories of the past year, Robert Mueller’s Russia investigation. They all slanted one way — namely, toward lurid conclusions about the Trump campaign’s alleged collusion with the Russians.

Every media outlet makes mistakes. It’s easier than ever to run with fragmentary or dubious information in a frenzied news cycle that never stops. But underlying the media blunders was an assumption — not based on any evidence we’ve yet seen — of Trump guilt in the Russia matter. This was news, in other words, too anti-Trump to check.

No, Apple Isn’t Getting a ‘$47 Billion Windfall’ from the Tax Bill

by Veronique de Rugy

Over at Vox, Matt Yglesias has an article that is supposed to outrage all of those who already believe that the Senate and House tax-reform plans are just a big handout to the rich and American corporations. He makes the claim that the GOP will reduce Apple’s tax bill by “a staggering $47 billion.”

Unfortunately, this article is completely misleading. Apple isn’t going to benefit from a tax windfall of $47 billion. Instead, the IRS is going to get a $31 billion windfall from Apple.

How can we have such different numbers, you may ask? Because Yglesias is operating in a make-believe world. He arbitrarily and unrealistically assumes that Apple will bring its overseas profits to America in the absence of tax reform.

In the real world, however, one of the reasons for tax reform is that the current system of “worldwide taxation” harshly penalizes firms that bring money back to America.

Here’s what you need to know. When American companies earn money in other countries, they pay taxes to the governments of those jurisdictions. That’s the reasonable part. And it works both ways: Foreign companies that earn money in America pay taxes to the IRS.

The screwy part is that current tax law tells American companies that if they bring their already taxed foreign profits back to the U.S., the IRS gets to impose another layer of tax. Very few other nations practice this self-destructive form of double taxation. To make matters worse, the United States has the highest corporate tax rate in the developed world.

So it makes perfect sense that U.S. multinationals indefinitely defer this tax by holding their profits abroad (or they “invert” and permanently protect their foreign-source income from the IRS).

That’s what Apple, like many other companies, is doing. Indeed, American multinationals are holding about $2.5 trillion overseas. It’s not terribly efficient for them to lock up their funds, but it’s better than needlessly paying an additional layer of tax to the IRS.

So how do we encourage companies to bring this cash home? Many of us have been clamoring for a shift to a lower rate and a system of “territorial taxation.”

And that’s what the Senate or the House plans would do, hence the change in Apple’s tax situation. The new law would tax domestic corporate income at 20 percent but no longer would impose U.S. tax on profits earned (and subject to tax) in other nations. For our friends on the left who always want America to copy the rest of the world, they should be happy. Almost all other countries already have territorial taxation.

And our leftist friends should be doubly happy because Republicans are engaging in a big revenue grab as part of reform. There would be a one-time repatriation tax of roughly 14 percent on that foreign income whether the company brings the money back or not. In Apple’s case that tax would collect roughly $31.4 billion.

In other words, Apple would go from paying zero dollars on its foreign profits kept abroad to paying a one-time $31.4 billion tax bill. But Yglesias claims that the company is getting a windfall of $47 billion, which is the difference between a $78.6 billion tax payment that exists solely in his mind and the $31.4 billion that actually will be collected if tax reform gets enacted.

The Wall Street Journal has a good article on this, this time about the same claim made by the Financial Times (so much for financial literacy on the part of the newspaper). The editorial board concludes:

This is the latest of many false claims that corporations are the sole beneficiaries of the Republican tax plan, even though the GOP agenda includes “base erosion” rules and many other clamps designed to address current tax loopholes and prevent future corporate tax trickery. Whether the media attacks on the Republican tax bill represent economic illiteracy or ideological tendentiousness is a judgment we’ll leave to readers.

No kidding.

The Officer Shouting Instructions at Daniel Shaver Was Not the Officer Who Killed Him

by Robert VerBruggen

I agree with David French: What happened to Daniel Shaver was nauseating. The police employed horrendous tactics and gave confusing instructions that made it difficult for Shaver to comply — and needlessly required him to make a series of movements that could lead to his hands’ ending up in the wrong place.

I’m seeing a mistake all over, though, that needs correcting. The officer who shouted instructions at Shaver was not Philip Brailsford, the officer who fired five rounds and was later tried for murder. There is an important legal question about whether bad tactics can make an officer culpable for a subsequent use of force, but in this case the bad tactics were not executed by the officer who used force.

David didn’t make this error, to be clear. But CNN is in the process of revising a piece largely premised on it, and it was my initial impression, too, upon viewing the video.

This doesn’t excuse the officer’s decision to shoot, but it makes the jury’s decision more understandable. After being called to a report of someone waving a rifle out of a hotel window, Brailsford was faced with a shoot/don’t-shoot decision where the suspect unambiguously reached toward his waistband. As I’ve written several times, officers are trained to react quickly to such movements when suspects have been instructed not to make them, because if a suspect is in fact armed, the cop will be dead if he waits to find out what the suspect is reaching for.

In this case, the broader circumstances — a drunk, crying man crawling on the floor, trying his hardest to comply with confusing instructions and begging the officers not to shoot him, outnumbered by the police many times over — still make the decision to shoot wrong. I hope the family’s lawsuits succeed spectacularly. But in the context of Brailsford’s trial, the video does look somewhat different when you realize the voice and the gunshots don’t come from the same person.

The Loopholes and Glitches of the Tax Bills

by Robert VerBruggen

Some tax scholars have put together an important report detailing loopholes in the current tax bills that Congress should close, as well as numerous other issues. In general these problems will tend to cost the government more revenue than expected as people shield their money from taxes in unanticipated ways, but there are some unintended tax increases as well.

A handful of the biggies:

Our tax system is “poorly equipped to address a scenario in which corporations are taxed at a much lower rate than individuals,” and the new corporate rate is significantly below the top individual rate. In theory, corporate income is supposed to be double-taxed — once at the corporate rate and again when it goes to shareholders as a capital gain or dividend — but that second layer of tax is avoidable or mitigable in various ways. As a result, a taxpayer could gain from investing “through a corporation so her investment income accrues at the lower corporate rate,”  from “simply setting up a corporation (or checking the box so that a partnership or other entity is treated as a corporation for tax purposes), and having their income accrue in the form of corporate profits,” or (for shareholder-employees) from “reducing their wages paid out by the corporation, thereby increasing the corporation’s retained profits.”

The Senate’s new tax advantages for “pass-through” businesses (whose profits are “passed through” to their owners and taxed through the individual income tax) might also be gamed. Law-firm associates might be able to become “partners in Associates, LLC — a separate partnership paid to provide services to the original firm.” The self-employed might “either mischaracterize or rearrange relationships to be independent contractors rather than employees.” The House’s provision, meanwhile, encourages owners to reduce their involvement in their businesses (as it’s targeted toward “passive” owners), and to acquire capital in the firm they don’t really need (such as when lawyers or doctors buy the buildings they work out of).

Both bills limit the deductibility of state and local taxes, which is supposed to raise a ton of money. But in response, states could shift their revenue efforts to other sources that will still be deductible. The bills allow a $10,000 deduction for property taxes, so states could set up “circuit breaker” policies allowing taxpayers to pay less in income taxes but more in property taxes. They could also tax income through payroll taxes on employers, which will still be deductible. Since the charitable deduction will stay, states could even allow residents to “donate” to the public coffers and count it against their state income tax.

Technical aspects of the corporate reforms could encourage companies to “locate real assets and investment offshore,” and could violate our treaty commitments.

Numerous provisions create opportunities for tax arbitrage, where deductions are taken against high tax rates and income is generated at low rates. I’ve written before about how delaying the corporate rate until 2019, but allowing businesses to fully deduct equipment purchases immediately, should encourage a lot of investment in 2018. The authors point out it could also encourage companies to buy equipment in 2018, deduct it against a 35 percent tax rate, and then just turn around and sell it again in 2019, when the tax rate will be 20 percent.

As Jibran Khan has noted, Congress’s tax pros made a serious last-minute screw-up regarding the corporate Alternative Minimum Tax that will hit corporations far harder than intended, though this is already a known issue.

Please, congressional Republicans — let’s find out what’s in this thing, and fix it, before we pass it.

The Fruit of Chain Migration

by Mark Krikorian

Sen. Tom Cotton asked on the floor of the Senate last week, “Shouldn’t we have an immigration system that focuses on the needs of America’s workers and economy, not one that gives out green cards by random chance?”

Yesterday’s bombing in New York highlights the importance of this question. Sure, without any immigration at all we’d still have frustrated losers to deal with, but they’d be our frustrated losers. We chose to add Bangladeshi jihadist Akayed Ullah to our stock of dirtbags through the ridiculous provisions of the federal immigration program.

Ullah came here on what amounts to a nephew visa – as the under-21 nephew of a naturalized citizen who sponsored his sibling (one of Ullah’s parents) for a green card. And Ullah’s uncle (or maybe aunt – we don’t know) only got here in the first place because he or she won the visa lottery.

So, we admitted a random person from Bangladesh without any meaningful consideration of his or her suitability or likelihood to contribute to the national good. And then, once a citizen, that person sponsored a sibling and that sibling’s spouse and children (including a then-20-year-old Akayed), again without any consideration of suitability or likelihood to benefit Americans. As my colleague Andrew Arthur wrote, “No investment in the United States, its systems of beliefs, or its institutions is necessary. Not even support for its economic success is a prerequisite for admission. The only tie and admission requirement is one of blood.” In other words, we leave it to yesterday’s immigrants to determine tomorrow’s immigration flow.

There was nothing in Ullah’s immigration backstory that we know of so far that was illegal. Nor is this necessarily a failure of vetting; Ullah and his family were no doubt checked against the usual terrorist databases. As another colleague, Jessica Vaughan, has written, “No matter how much we improve our vetting, the sheer momentum of chain migration-driven immigration from terror-afflicted parts of the world is itself a national security risk.”

Neither higher walls, nor more officers, nor better databases would have made any difference in this case. The problem is too much immigration, selected using flawed criteria.

Luckily, there are several measures before Congress to remedy this situation. The RAISE Act of senators Cotton and Perdue, Rep. Lamar Smith’s House companion Immigration in the National Interest Act, and Rep. Dave Brat’s American LAWs Act all would abolish the visa lottery and eliminate chain migration by limiting special family immigration rights only to spouses and minor (under age 18) children. The first two bills would also change the skills-based portion of our immigration program to better identify top talents.

The debate over a legitimate amnesty for the beneficiaries of Obama’s illegal DACA program should serve as an opening to finally end the visa lottery and chain migration. Let’s hope our representatives don’t squander the opportunity.

Did Monday Mark a Turning Point for #MeToo?

by Jim Geraghty

Happy Hannukah to all who celebrate the Festival of Lights, and happy Alabama-Ragnarok to everyone following today’s Senate election. Today’s Morning Jolt looks at the problems for pollsters in that special election, an odd, newly-revealed connection between Fusion GPS and the Department of Justice, and then one of yesterday’s scandals…

Did Monday Mark a Turning Point for #MeToo?

My interactions with Ryan Lizza, formerly a prominent political correspondent for The New Yorker, are limited to some cordial exchanges in cable news green rooms, so I don’t know if he’s guilty as sin or innocent as a lamb. But late Monday afternoon, the magazine announced, “The New Yorker recently learned that Ryan Lizza engaged in what we believe was improper sexual conduct. We have reviewed the matter and, as a result, have severed ties with Lizza. Due to a request for privacy, we are not commenting further.”

(What does that “what we believe was” qualifier there mean?)

Within a few minutes of the New Yorker’s announcement, a chunk of the Twitter crowd was mocking and denouncing Lizza as a creep… without knowing what, exactly, his alleged misdeeds were. Did he say something? Do something? Was this a digital form of inappropriate behavior? Was it a particular event or interaction, or was it a pattern of behavior?

Apparently due to the not-named victim (or victims?) request for privacy, the magazine felt we in the public shouldn’t know. But they felt we should certainly know that he’s a bad guy.

Lizza responded quite differently from the other prominent men accused in the recent spate of scandals. He insisted he had done nothing wrong, and that the magazine was railroading him on baseless charges – and from his statement, this appears to stem from a single complainant.

“I am dismayed that The New Yorker has decided to characterize a respectful relationship with a woman I dated as somehow inappropriate. The New Yorker was unable to cite any company policy that was violated. I am sorry to my friends, workplace colleagues, and loved ones for any embarrassment this episode may cause. I love The New Yorker, my home for the last decade, and I have the highest regard for the people who work there. But this decision, which was made hastily and without a full investigation of the relevant facts, was a terrible mistake.”

Douglas Wigdor, who heads up one of the country’s top employment litigation law firms issued a statement countering Lizza: “Wigdor LLP represents the victim of Mr. Lizza’s misconduct. Although she desires to remain confidential and requests that her privacy be respected, in no way did Mr. Lizza’s misconduct constitute a ‘respectful relationship’ as he has now tried to characterize it. Our client reported Mr. Lizza’s actions to ensure that he would be held accountable and in the hope that by coming forward she would help other potential victims.”

Lizza’s insistence that he did nothing wrong, and that all of the complaints stem from a consensual relationship, ought to set off alarm bells. “Improper sexual conduct” covers a really wide range, from awkward unwanted flirting to being the villain from The Silence of the Lambs. If we’re all supposed to think worse of Lizza because of his actions, it seems fair to ask for at least some sense of why. And if he’s going to have his career and reputation destroyed, doesn’t he have a right to have his side of the story heard?

Just how thoroughly did the magazine investigate the accusations? Just how much evidence was there? Were there particularly strong reasons to believe or disbelieve his accuser? For now, the magazine is effectively saying, “trust us.” The irony is this is the magazine that obliterated the reputation of Harvey Weinstein with a mountain of evidence and testimony collected by Ronan Farrow. The reporters at The New Yorker would not just take it on faith from any other institution.

I don’t know if this is the case that will cause the backlash against #MeToo, but it’s coming. So far, most of the famous men named have more or less admitted the behavior, and the alleged acts are beyond the pale: Harvey Weinstein’s monstrous assaults, threats and blackmail; the bizarre secret button in Matt Lauer’s office, Charlie Rose just getting on top of a woman during a private plane ride. Very few of the allegations have been in anything resembling a “gray area.” Everybody knows you’re not supposed to pinch or grab a woman’s backside when posing for a photo… apparently except for one of Minnesota’s senators.

But after the Weinstein revelations, BuzzFeed and a few other publications reported about a “[Expletive] Men in Media List” spreadsheet that various women had put together, listing allegations against a slew of men, mostly in the New York media and publishing world. This list can now be found on the Internet if you’re clever, but I’m not linking to it, as the whole thing is unverified allegations. There’s a huge range of allegations, from sexual assault to “idea theft” “emotional manipulation” and “those weird lunch dates that aren’t about work.”

The list includes names that are famous and not-so-famous, those that have already faced public accusations and those that haven’t. (The list does not, at least as far as I can tell, include any men who work for conservative publications. I continue to wonder if our cultural elites include a disproportionate share of men who believe that because they’re self-proclaimed feminists and progressives, they’ve earned some free passes for bad behavior.)

You’re already hearing some progressives grumbling that they’ve sacrificed too much with Al Franken’s resignation. More than a few men who haven’t committed these acts wonder how they will be able to defend themselves if they’re falsely accused. And there are probably still some powerful creeps around, nervously chatting with their lawyers and wondering how to mount a defense.

At some point, some #MeToo accusation will turn out to be false, or a well-regarded man will be accused of behavior that doesn’t really sound all that inappropriate. A complaint of “weird lunch dates that aren’t about work” doesn’t really belong on the same list as sexual assault, and doesn’t sound like a firing offense.

The day a #MeToo complaint is discredited, all of these factions who are wary of this movement will push back, aiming to discredit as many women as possible. I suspect few figures in public life are really ready for that moment.

BREAKING: New York City Bombing Suspect Chose Subway Due to Christmas Posters

by Philip H. DeVoe

Update 4:40 p.m.:

According to investigators, Ullah said he selected the subway station due to its Christmas-themed posters, hoping to mimic attacks on European Christmas markets. His motivation regarding the attack itself, however, is still unclear. Law enforcement officials initially indicated his attack was intended as a protest against Israel. Now, they’ve suggested he was retaliating against U.S. airstrikes on ISIS.

Update 2:00 p.m.:

New York City subway bombing suspect Akayed Ullah told law enforcement officials that he carried out the attack in response to recent Israeli actions in Gaza.

The photo above, from the New York City Taxi and Limousine Commission, is the second public photo of Ullah. The other is a 2011 driver’s license photo.

Update 1:15 p.m.:

Authorities are searching suspect Akayed Ullah’s Ocean Parkway, Brooklyn, residence. According to the Times, federal and local law enforcement officials have indicated Ullah’s prosecution will go through the U.S. attorney for the southern New York district. The FBI’s Joint Terrorism Task Force is investigating the inicdent.

Update 12:30 p.m.:

According to NBC News, multiple law enforcement officials have said off the record that Ullah made statements leading them to believe he was inspired by ISIS. The suspect arrived in the United States with an immigrant visa on Feb. 21, 2011, and is now a legal permanent resident holding a green card. A New York City Taxi and Limousine Commission spokesman told NBC that Ullah was a cab driver in the city for three years, until March 2015. He is 27 and a resident of Brooklyn.

Update 12:19 p.m.:

Grainy surveillance footage shows the moment the bomb was detonated inside the tunnel:

Update 11:51 a.m.:

President Donald Trump has yet to respond to the attack in New York City, despite criticizing the New York Times for a piece alleging he watches 4-8 hours of television every day.

11:30 a.m.:

An explosion rocked the passageway between the Times Square and Port Authority subway stations in New York City at 7:20 a.m. this morning, injuring four. In a press conference, Mayor Bill de Blasio said the explosion was an attempted terrorist attack, and the New York police have a suspect, Akayed Ullah, in custody.

According to the New York Times, a senior city official said Ullah was wearing an explosive device, which police had to strip him to remove. Police commissioner James O’Neill said Ullah was wearing an “improvised low-tech explosive device attached to his body.” Police say the device went off prematurely, which may have prevented greater injury. According to fire commissioner Daniel Nigro, Ullah is being treated for lacerations and burns at Bellevue Hospital.

This story is developing and will be updated.

The MS Word Theory of Free-Market Social Services

by Fred Schwarz

A few days back, Kevin wrote a very helpful explanation of the factors that make health-insurance reform so difficult, and proposed some ways that market forces could be combined with widespread coverage. His ideas are unassailable, as usual, but I do have a couple of tangential comments:

1. One reason that conservative health-care schemes are less popular than we’d like is this: They assume that what Americans want is choices, when in fact what most Americans want is a comfortable default. The same goes for school choice, even in otherwise conservative areas. New York City has a vast number of options for schooling your kids — large, small, public, private, parochial — and I have yet to meet parents who consider it anything but a burden. Customizing health insurance and education options is like customizing Microsoft Word — yes, that little elevated “th” every time you type an ordinal number is annoying, but hardly anyone bothers to fix it. That’s why people say they like their employer-provided health insurance: It’s not because of the benefit structure or the customer service, but because you don’t have to do anything to get it; it’s just there.

2.  I have always thought that the main reason people on the left want “Medicare for all” is not because of the purported (and illusory) cost savings, which have the air of an after-the-fact rationalization. The real reason, I suspect, is that they believe that if rich and poor alike have to use the same system, either (a) the rich will make damn sure that quality and service are improved or (b) if somehow that doesn’t happen, then the rich will suffer along with everyone else. Our experience with highways, airports, the DMV, etc., has shown that (b) is a better bet than (a), which is great for the Left from a schadenfreude perspective but less so from a political one. The trouble with applying option (b) to health insurance is that imposing a single universal system would end up punishing today’s truly privileged elite — government workers. Nowadays government workers have significantly better coverage than those in the private sector — and they often get it from private insurers. So if government employees get stuck with the same crummy insurance as everyone else, it would be a large step backwards for a group that has long been the backbone of the Democratic party.

A Trio of Trump’s Accusers Meet the Press, Ask for a Congressional Investigation

by Jim Geraghty

Three women who accused President Trump of past sexual misconduct — Samantha Holvey, Jessica Leeds and Rachel Crooks – repeated their accounts at a press conference Monday morning and urged Congress to hold hearings on the allegations.

Rachel Crooks, who accused Trump of kissing her without consent in 2005, called on Congress to “put aside party affiliations and investigate Trump’s history of sexual misconduct.”

That is unlikely; Congressional Republicans will be distinctly uneager to reopen a discussion about allegations of crude, obnoxious, or even criminal behavior on the part of the president, regardless of how the Alabama Senate race turns out. Democrats are likely to be quite eager to hold hearings and a formal investigation if they win control of the House of Representatives or the Senate in next year’s midterm elections.

The allegations against Trump could, at least theoretically, be used as fodder in impeachment hearings, although it’s likely that there would be intense debate about whether the alleged actions rise to the level of “high crimes and misdemeanors.” No president has ever been indicted on criminal charges while in office, and many legal and Constitutional experts contend it’s not clear that a president can be indicted while in office. (After a president leaves office, he’s fair game.)

The press conference was organized by Brave New Films, a left-of-center film nonprofit.

The White House response was blunt: “These false claims, totally disputed in most cases by eyewitness accounts, were addressed at length during last year’s campaign, and the American people voiced their judgment by delivering a decisive victory. The timing and absurdity of these false claims speaks volumes and the publicity tour that has begun only further confirms the political motives behind them.”

Yesterday on CBS’ Face the Nation, U.S. Ambassador to the United Nations Nikki Haley said of Trump’s accusers, “They should be heard, and they should be dealt with. And I think we heard from them prior to the election. And I think any woman who has felt violated or felt mistreated in any way, they have every right to speak up.”

Some are interpreting Haley’s remarks as a significant break from the administration, but they’re actually pretty mundane; she’s not indicating she believes the accusations, merely that every woman has a right to speak about her experiences.

Fetal Body Parts Seller Forced to Donate Instead

by Wesley J. Smith

Two companies that sold fetal body parts for profit have been put out of business. From the LA Times story:

Two bioscience companies that once operated in Costa Mesa have reached a $7.785-million settlement with the Orange County district attorney’s office over allegations that they illegally sold fetal tissue to companies around the world, prosecutors said Friday.

According to the settlement signed Monday, DV Biologics LLC and sister company DaVinci Biosciences LLC, both based in Yorba Linda, must cease all operations in California within 60 to 120 days. The agreement also requires the companies to admit liability for violations of state and federal laws prohibiting the sale or purchase of fetal tissue for research purposes, prosecutors said.

In actuality, the companies are not paying millions in damages. Rather, they are donating the body parts:

About $7.5 million of the settlement amount is the estimated scientific value of a planned donation of the company’s adult biological samples, tissues and cells to a nonprofit academic and scientific teaching institution affiliated with a major U.S. medical school, according to the agreement. Prosecutors did not disclose the name of the medical school.

It’s not really “damages” when the actual monetary “punishment” is refraining from profiting from illegal activities.

The actual out-of-pocket to the company was $195,000 in civil penalties and loss of  $10,000 worth of equipment–although being put out of business ain’t bean bag.

I wonder if an equivalent punishment will ever be meted out to Planned Parenthood for their alleged trafficking in fetal body parts? There is, after all, an FBI investigation now underway.

Nah. Too many friends in very powerful places–plus it would help David Daleiden, the pro-life activist who exposed PP’s potential illegality with undercover tapes. (No, they were not “discredited.”) 

Tax Reform: “Unintended Consequences”

by Andrew Stuttaford

There’s a lot that’s wrong with the GOP’s tax overhaul, and much of it can be put down to the speed at which it has been flung together, speed that, given the breadth of the proposed changes and the complexity of the tax system, is quite astonishingly reckless. There is absolutely no need to declare ‘victory’ (it’ll be anything but) by Christmas.

And, yes, while the complexity of the tax system is part of the problem that the GOP has set out to tackle (without, I suspect, much success), that does not mean that it can avoid the uncomfortable reality that simplifying the complex can itself be complex. The Gordian option is not always available.

A week or so back, I quoted something written by the Wall Street Journal’s Greg Ip:

In their rush to pass a sweeping tax overhaul, Republicans and the Trump administration may be headed for a reckoning with the law of unintended consequences. The U.S. tax system is a complex, jury-rigged contraption. At the best of times, tampering with any part invariably triggers collateral consequences. Those risks are magnified now by Republicans’ determination to pass the plan with minimal hearings on party lines by Christmas.

Now there’s this from Politico (my emphasis  added):

Republicans’ tax-rewrite plans are riddled with bugs, loopholes and other potential problems that could plague lawmakers long after their legislation is signed into law…

Republicans may try to pass subsequent legislation to address problems, but that may not have the ”reconciliation” protections — a set of complex rules in the Senate that allow them to shut off Democratic filibusters — on which they’re now relying to move their plan through the chamber. That would enable Democrats to block any fixes.

In many cases, Republicans are giving taxpayers little time to adjust to sometimes major changes in policy. An entirely new international tax regime, one experts are still trying to parse, would go into effect Jan. 1, only days after lawmakers hope to push the plan through Congress.

“The more you read, the more you go, ‘Holy crap, what’s this?’” said Greg Jenner, a former top tax official in George W. Bush’s Treasury Department. “We will be dealing with unintended consequences for months to come because the bill is moving too fast.”

Republicans may try to pass subsequent legislation to address problems, but that may not have the ”reconciliation” protections — a set of complex rules in the Senate that allow them to shut off Democratic filibusters — on which they’re now relying to move their plan through the chamber. That would enable Democrats to block any fixes.

Lawmakers could also punt some of the issues to Treasury to figure out with government regulations. But that’s typically a slow process, and most of the Republican plan would take effect Jan. 1.

Quite how that is taxpayer-friendly escapes me.

And then there’s this (via Richard Rubin in The Wall Street Journal, again, my emphasis added)

Some high-income business owners could face marginal tax rates exceeding 100% under the Senate’s tax bill, far beyond the listed rates in the Republican plan. The possible marginal tax rate of more than 100% results from the combination of tax policies designed to provide benefits to businesses and families but then deny them to the richest people. As income climbs and those breaks phase out, each dollar of income faces regular tax rates and a hidden marginal rate on top of that, in the form of vanishing tax breaks

Virtue-signaling (for the benefit of an audience that will not be won over) comes at a price.

Meanwhile, while we should be pleased that the GOP withdrew its earlier plan to attack 401k plans, it appears that the Republican war on savers is not over.

The Wall Street Journal:

A little-discussed provision in the Senate tax bill could lead to a higher tax bill for millions of small investors and cause many to unload stocks before year-end to avoid those costs.

Under the Senate’s $1.4 trillion tax overhaul, investors would lose the ability to choose which shares they can sell to reduce a position. Instead, investors selling partial stakes in a company would have to unload their oldest shares first, a process known as selling on a “first-in, first-out” basis.

After complaints, mutual funds and ETFs have been exempted from this particular twist of the Republican knife, but the GOP Senate majority’s message to individual investors is to drop dead or, rather, to pay up. It’s a move that punishes both the buy-and-hold and dollar cost averaging approaches preferred by many smaller investors and is made all the more iniquitous by legislators’ long-standing refusal to inflation-adjust capital gains that, in the real world, may be far less than they seem.

At least House Republicans appear to see that there’s a problem:

The House’s tax proposal doesn’t include the first-in, first-out provision, and some lawmakers are trying to kill it. In a letter to Senate leaders on Thursday, 41 House Republicans urged their colleagues to drop the provision, saying it would amount to “massive, fundamental change that inhibits investor autonomy.”


Some money managers and analysts say there has been so little discussion of the Senate provision that investors may be surprised to learn that the new rule could reduce—or even wipe out—what they would save from an income-tax reduction.

“If someone thinks their tax bill is going to get cut next year, some investors may wait until 2018 to sell stocks and then have this huge tax bill” since they will be forced to sell their oldest holdings first, said JJ Kinahan, chief market strategist at TD Ameritrade.

Another vote-winner! When are the midterms again? 


Another concern for small investors: The first-in, first-out provision will make it more expensive to perform regular portfolio rebalancing to keep their mix of stocks and bonds constant, since the provision will raise the amount of taxes they pay.

“This discourages investment rather than encourages it,” Mr. Kinahen said. “That’s dangerous.”

Meanwhile, via Politico (yet again, my emphasis  added):

The Treasury Department said Monday that the GOP tax plan currently before Congress would need an assist from other Trump administration priorities to pay for itself. 

Tax cuts alone aren’t enough, Treasury said in a one-page analysis, citing welfare reform and infrastructure spending as additional boosts to the economy.


Treasury Assumes the Tax Cuts Will Work Fantastically Well

by Ramesh Ponnuru

The Treasury Department asserts that a combination of tax cuts and other Trump-administration policies will raise annual economic growth by an average of 0.7 percent over the next decade, so that it runs at 2.9 rather than 2.2 percent. Half of this alleged boost to growth, it says, will come from changes to corporate taxation. Treasury provides no explanation of how it reached its 0.7 percent figure, but does explain that if you assume all this growth occurs then the federal government will end up with more revenue than it would have had without the tax cuts. I assume that the point of this one-page press release was to allow Republicans to continue to pretend that there are economists who have looked seriously at this issue and believe that their tax-cut bill will result in higher revenues over the next decade–and thus there is no need to scale it back, cut spending, or admit that deficits will be higher.

‘Mr. Trump grew uncomfortable after two
or three days of peace’

by Rich Lowry

There is lots to chew on in the big New York Times piece from over the weekend on Trump in the White House. The contention in the article that Trump watches four to eight hours of TV a day has gotten a lot of attention, including from the president who denied it in a tweet today, not very convincingly:

If we’re counting having the TV on in the background, it’s not hard to believe Trump is at four hours or more a day. In the piece itself, the Times noted an earlier preemptive denial from Trump: 

…he is leery of being seen as tube-glued — a perception that reinforces the criticism that he is not taking the job seriously. On his recent trip to Asia, the president was told of a list of 51 fact-checking questions for this article, including one about his prodigious television watching habits. Instead of responding through an aide, he delivered a broadside on his viewing habits to befuddled reporters from other outlets on Air Force One heading to Vietnam.

“I do not watch much television,” he insisted. “I know they like to say — people that don’t know me — they like to say I watch television. People with fake sources — you know, fake reporters, fake sources. But I don’t get to watch much television, primarily because of documents. I’m reading documents a lot.”

What stuck out to me most in the piece was this passage:

To an extent that would stun outsiders, Mr. Trump, the most talked-about human on the planet, is still delighted when he sees his name in the headlines. And he is on a perpetual quest to see it there. One former top adviser said Mr. Trump grew uncomfortable after two or three days of peace and could not handle watching the news without seeing himself on it.

This really gets to the underlying motive of the tweets, which aren’t a brilliant ploy to distract from other news or a threat to the republic, as is often argued; they are largely a way for Trump to entertain himself by continually stirring the pot and keeping all the attention on him. This is where all the TV-viewing comes back in. The tweets are performance art, for the enjoyment of the artist (Trump) and the viewer (Trump).

It Shouldn’t Be this Uncertain in Alabama

by Theodore Kupfer

And yet it is. Roy Moore might hold a lead in the polling average, but honest observers are taking that with a grain of salt. The turnout for special elections is famously irregular, and the Moore scandal only makes the outcome harder to predict. The polls have accordingly shown a wide range of outcomes — everything from Moore up 53–44 to Doug Jones up 50–40. In fact, both of those margins are from polls released today.

The first is from Emerson College, which has had Moore consistently ahead of Jones since the allegations first surfaced. The nine-point lead represents a significant bump from the last Emerson poll conducted a week ago, which had Moore up four. Meanwhile, the poll showing Jones in front is from Fox News, which had Jones up eight on November 15. The difference between these two pollsters lies in the partisan composition of their samples: Emerson’s 600-person sample was 50 percent Republican and 33 percent Democratic; Fox News’ 1,127-person sample was 44 percent Republican and 42 percent Democratic. It seems a lot will hinge on which candidate can get out the vote.

Which is the case with most competitive elections. But this election should not be competitive. The last time a Democrat won a senatorial election in Alabama was 1992; the candidate was the solidly conservative Richard Shelby, who switched parties two years later and remains in office today. The last time a senatorial election was competitive in the state was 1996, when Jeff Sessions beat Roger Bedford by a mere seven points to capture the open seat. But Bedford was a pro-life Democrat who said things like “the old liberal days of tax and spend are over.” Jones’s beliefs are much farther afield from those of the Alabama electorate, and any reasonable candidate would be trouncing him.

Some commentators insist on casting Moore’s thin lead in the polling average as evidence of Steve Bannon’s strategic genius. At Bloomberg, Jonathan Green tells the story of how Bannon “rescued” Moore’s campaign “against all odds.” But a Republican victory in the Alabama special election would be a safer bet were Bannon not involved.

Study Shows Hormonal Contraception Increases Breast-Cancer Risk

by Michael J. New

Last week, the New England Journal of Medicine published a study finding that hormonal contraceptives increase the risk of breast cancer. It is among the first studies to specifically analyze the effect of newer, low-dosage methods of contraception. The study is both thorough and comprehensive, as it analyzes nearly 1.8 million women over a span of 17 years using Denmark’s comprehensive medical registry. The study has been covered by a number of mainstream media outlets including the New York Times, USA Today, Slate, NPR, and Time.

A significant body of public-health research finds that contraceptives with high doses of estrogen increase the risk of breast cancer. For instance, a 1996 meta-study in The Lancet analyzed data from 54 studies surveying 25 countries and found solid statistical evidence that both current and recent users of oral contraceptives were at an increased risk for breast cancer. Many public-health researchers believed that newer methods of contraception with lower doses of estrogen would eliminate these risks. In fact, a relatively small 2014 study of Seattle-area women arrived at this exact conclusion.

But this latest study — which analyzes a larger, more comprehensive dataset over a longer period of time — is among the first to provide statistical evidence showing that even low-dosage hormonal contraceptives increase the risk of breast cancer. The study also contains enough data to analyze the effects of various types of low-dosage contraceptives. It finds that long-term use of each of seven different types of low-dosage contraceptives significantly increases the risk of contracting breast cancer.

The media’s coverage of this study has been surprisingly accurate. Most outlets tend to downplay research finding that either abortion or contraception poses health risks. For instance, in 1997 the New England Journal of Medicine published study methodologically similar to this latest one, which also used data from Denmark’s health registry to analyze the abortion–breast cancer link. When covering that study, outlets claimed that induced abortion does not increase the likelihood of developing breast cancer, when in fact, the study found that abortions performed after 18 weeks gestation significantly increased the risk of breast cancer.

However, despite the fact that this new research reports that low-dosage contraceptives increase the risk of breast cancer, the increase in that risk is relatively slight, and the media have emphasized this finding in their coverage. Additionally, in the days after the study was released, many commentators were quick to tout the purported health benefits of oral contraceptives. That said, in an era of exceptionally politicized news coverage, it is heartening to see the mainstream media cover research on a potentially controversial public-health topic in a reasonable manner.

The Sports Tail Keeps Wagging the College Dog

by George Leef

College football and basketball can be great spectacles, filling American TV screens with action and color. But as Frederic Bastiat would have advised, we should also think about the unseen — what is not happening because of all those games?

One thing that isn’t happening is much studying by the student-athletes involved. The time demands of practice and travel leave little left for actual learning. That’s the reason why schools find ways of helping the players stay eligible with easy credits that call for little effort.

In today’s Martin Center article, Jenna Robinson examines this problem. She writes,

Time for sports . . . crowds out time for class. The average Division I men’s basketball player missed 2.2 classes per week during basketball season. Twenty-one percent of basketball players missed more than three classes per week during the season. It’s no wonder that the Federal Graduation Rate for Division I men’s basketball players was only 48 percent in 2017. The rate for all students was 66 percent. The increasing number of “one-and-done” players in college basketball is a vivid demonstration of athletics crowding out education. The NBA broke its record for the most freshmen selected in the first round of the draft this year, taking 14 one-and-done players in June.

And then there is the financial cost of the sports mania. It costs a lot of money to fly teams around the country, or sometimes out of the country. A big early-season basketball tournament was just held in the Bahamas.

Most college sports programs are a net revenue drain on school budgets and those that appear to run in the black usually do so only because they get large infusions of student fee money.

What to do? Back in 2012, the NCAA put in place a freeze on the number of sporting events, but that does little to ameliorate the problem.

Robinson points to a recent survey showing that many college athletes think they are overburdened by the demands placed on them.

Many said they wanted more time off after travel and mandatory eight-hour rest periods overnight between required practice or competition activities. (In the existing NCAA rules, travel time can be counted as days off.) They also wanted more athletics-related activities to count towards the 20 hour NCAA maximum, including ‘voluntary’ workouts and practice preparation. In short, student-athletes would like more time to act like students, instead of professional sports stars. More time to visit family, socialize, relax, work, and maybe even hit the books.

Good, but it’s hard to see how their opinions will lead to any change.

‘Why Claims of Unconscious Racism Fall Flat’

by Roger Clegg

That’s the title of a panel discussion this Thursday, December 14, at noon at the Heritage Foundation. The subtitle is “Debunking the Implicit Association Test,” and the occasion is the publication by Heritage of a paper by Center for Equal Opportunity research fellow Althea Nagai on this topic.

Claims of “unconscious racism” and for the validity of the implicit-association test (IAT) have become commonplace on the Left in recent years, of course — but they should not be accepted. From the Heritage description of the panel: “Supposedly tapping into the subconscious, the [IAT] measures disparities in millisecond response times on a computer. While it has been hailed as ‘proof’ of deeply seeded racism in American society, policymakers should consider the growing body of research suggesting the test cannot predict real-world behavior before enacting policies to counterbalance so-called unconscious bias.” Accordingly, while “academia, police departments, and corporate America are seeking to root out unconscious racism,” and while “the IAT has started popping up in employment discrimination lawsuits,” “policymakers and employers should think twice before embracing these dubious claims of racism.”

On the panel will be Dr. Nagai, the Manhattan Institute’s Heather Mac Donald, and yours truly. To RSVP or livestream the event, click here.

A Suicide Bomber Attacks the New York City Subway... and Life Goes On

by Jim Geraghty

Let’s hear it for the quick work of the NYPD and the resiliency of New Yorkers. This morning, a would-be suicide bomber caused an explosion in an underground subway passage between Times Square and the Port Authority Bus Terminal, wounding four people. It’s a miracle more people weren’t hurt; police believe the explosive device detonated prematurely. Two Port Authority Police Department officers grabbed the injured bomber and successfully removed his remaining explosives without further harm to anyone.

New York Times correspondent Rukmini Callimachi, who covers ISIS, wrote earlier today, “After every attack where the casualties are few, I see misinformed people labeling it a ‘failed terror attack’ and theorizing ISIS won’t claim it because it was botched. Let’s be clear: This man walked into Times Square wearing a bomb. That is not a fail in ISIS’ eyes.”

Indeed, we were lucky this time. But the city is also resilient. About twenty minutes ago, I took the New York City subway from Penn Station to Columbus Circle. The 42nd Street Station is evacuated, and the empty platforms looked spooky, but beyond the immediate vicinity of the blast, busy New Yorkers are going about their Monday morning business. There’s a bit more of a visible police presence in Penn Station, on the subway platforms, and in the streets, but by and large, for many New Yorkers, this will be a typically blustery December Monday.

Dreading Holiday Political Arguments?

by Richard Brookhiser

Will there be wing-nuts roasting before an open fire? If you’re having political smack-downs with spouses, family, friends, or significant others, Jeanne Safer (my liberal wife, and long-time friend of NR) would like to talk to you, for research on her next book, I Love You, But I Hate Your Politics (All Points Books). You can email her at [email protected].