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Just Wait Till Next Year!
The Democrats are wrapping up their first year in the congressional majority, and pretty much everyone agrees that it has been, to be charitable, less than a rousing success. Here is a comprehensive list of their legislative accomplishments:
- An increase in the federal minimum wage, to $5.85 an hour from $5.15, effective July 24, 2007.
- An increase in the federal minimum wage, to $6.55 an hour from $5.85, effective July 24, 2008.
- An increase in the federal minimum wage, to $7.25 an hour from $6.55, effective July 24, 2009.
That's it. Other than that, the Democrats have failed at everything they have attempted, from routine matters like relief from the Alternative Minimum Tax to ambitious projects such as turning Iraq into a haven for al Qaeda.
But the one thing you can't say about the Democrats, at least according to the Washington Post's E.J. Dionne, is that they're responsible. To the contrary, Dionne writes, "the Democrats' core problem is that they have been unable to place blame for gridlock where it largely belongs, on the Republican minority and the president."
Dionne makes a damning case against the Republicans:
- "The GOP kills bills by coming up with just 41 [Senate] votes. Senators defend themselves by saying that their House colleagues don't understand how the august 'upper' chamber works these days."
This practice is called the "filibuster." Here is how a certain far-right columnist--never mind his name, that's not important--rationalized this affront to democracy a few years ago:
If the principle at stake is "majority rule," consider that the Senate is, by its very nature, an affront to majoritarian principles. The 52 senators from the nation's smallest states could command a Senate majority even though they represent only 18 percent of the American population. . . .
What does majority rule really mean in this context? . . . We could choose to institute a British-style parliamentary system in which majorities get almost everything they want. But advocates of such a radical departure should be honest enough to propose amending the Constitution first.
The filibuster isn't the only obstacle in the Senate:
- "The Democrats' nominal one-vote majority is frequently not a majority at all. A few maverick Democrats often defect."
Is it really the fault of "maverick Democrats" that they "often defect"? Of course not! After all, if it weren't for Republicans, there would be nowhere for them to defect to. And it's not as if they're defecting on their own initiative. Surely Democrats would vote in lockstep if the Republicans weren't so darned persuasive.
- "The party runs short-handed when Sens. Joe Biden, Hillary Clinton, Chris Dodd and Barack Obama are off running for president."
This is George Bush's fault. Democratic senators wouldn't be "off running for president" if the incumbent would just end the suspense and declare himself president-for-life. C'mon, George, we all know you want to do it!
- "And Bush is learning that even when bills reach his desk, he can veto them with near impunity."
Some reactionaries would say that the Constitution gives the president the power to veto legislation. To which we have two rejoinders: First, isn't that the same Constitution that says African-Americans are six-tenths of a person? (Yeah, we know it says three-fifths, but we refuse to practice the politics of the lowest common denominator.)
Second, while it is true that the Constitution gives the president the power to veto bills, the idea that he can veto them "with impunity"--a phrase that never appears in the Constitution--shows just how far this president is willing to go in grabbing more executive power, and just what a bunch of hypocrites conservatives are when they claim to oppose judicial activism.
We hope we've given you some sense of what the Democrats are up against. Is there anything they can do to overcome the GOP juggernaut? Yes. Dionne offers this suggestion:
The party's congressional leaders need to do whatever they must to put this year behind them.
This means the Democrats will have to wait for a full 2 1/2 weeks--plus three hours, in the case of those representing West Coast districts--until 2007 is behind them. It won't be easy, but then no one ever said leadership was supposed to be easy. And remember: They also serve who only stand and wait.
Flailing the Frugal
Reader Jim Doyle raises an objection to the so-called Fair Tax that we hadn't thought of:
Assume that I am a very frugal individual--saved my money, drove used cars, didn't spend for nonessentials. Also assume that I have a very large savings or investment account from my earnings over the years.
Now comes the "Fair Tax," and I go to buy something using money from those savings. I am taxed double on that expenditure. I paid income tax on the money that I earned, and now I pay the "Fair Tax" on the money when I spend it.
How can the enactment of the "Fair Tax" be structured to ever avoid the double taxation on earned and saved money?
Another reader, who asks not to be identified, elaborates on the point:
I have been reading the "fair tax" comments in you column and I would like to point out something that advocates of a value-added tax seem to ignore.
Take the case of a retired couple that has saved a nest egg of $200,000. The money in is bank CDs earning 5%. They get $20,000 or so from Social Security or some pension source. Eliminating the income tax would mean that that couple's income is now $30,000 for the year, but it was $30,000 even with income taxes because the income tax for a couple with the income described above is zero. So the net tax benefit for our retired couple is zero.
Now when the couple goes to spend their $30,000, they only get $23,100 worth of goods. Even if corporations do lower prices because they no longer pay any income taxes, the savings in prices won't come anywhere near that loss. Total corporate income taxes as a percentage of revenue is not anywhere near 23%. It is more likely to be in the 3% to 5% range at most.
To make matters worse, if the couple starts spending their nest egg, they will find it doesn't buy what it did before the VAT was enacted. The VAT is a de facto tax on assets. It is a wealth transfer from the oldest part of the population to the people that still earning income.
This is not to say that a national sales tax is not workable. It does have the advantage of taxing the underground economy. The hooker and drug dealer lobby is probably gearing up right now. However, it not the simplistic plan that many advocates envision.
Every shift in the tax burden will have its winners and losers. People living off of their accumulated savings are the biggest losers in this plan. Last time I checked, they were still capable of voting.
The FairTax.org Web site addresses this question:
How does the FairTax help seniors who have paid taxes on their retirement savings or invested in Roth IRAs?
Simply put, the FairTax is a revenue-neutral proposal, raising no more money than does the current system. The FairTax only changes where the money is raised, not the amount.
Additionally, some erroneously believe that people who have invested in Roth IRAs will never pay taxes on this money again. They may not know it, but they are paying corporate income taxes, employer payroll taxes, plus the associated compliance costs that are hidden in the price of every retail purchase they make. Under the FairTax, these hidden taxes are driven out of retail prices. And note, they can determine the amount of tax they pay through their own lifestyle choices.
Furthermore, used goods are not taxed because they have already been taxed once--when they were new. Therefore senior citizens, like all Americans, do not lose purchasing power, but gain it instead. Moreover, the FairTax preserves the purchasing power of Social Security benefits, and seniors receive a monthly prebate so they don't pay taxes on the purchase of necessities. Tax-deferred investments get a one-time windfall. Savings invested in any long-term, income-generating asset such as a stock, real estate, or a long-term bond that can't be called, increase substantially in value. Finally, complex estate planning is an artifact of an earlier age.
This is not only unpersuasive but astonishingly disingenuous. It begins by offering the reassurance that the Fair Tax is "revenue neutral" and "only changes where the money is raised." But that is precisely the worry: that the proposal would "change where the money is raised" at great disadvantage to people who have spent decades saving their after-tax income.
Let them eat cake, the Fair Tax folks suggest: "They can determine the amount of tax they pay through their own lifestyle choices." But the Fair Tax would punish them for a "lifestyle choice" they have already made and cannot reverse: to save their money and defer their consumption.
But there is an alternative: they can buy used goods, which "are not taxed." How would that work, exactly? Example: The Fair Tax FAQ mentions--albeit only in passing, presumably because dwelling on the point raises a host of additional questions and problems--that the proposed tax would apply to the purchases of homes as well as consumer goods.
So let's say you pay $500,000 for a newly built house. Under the Fair Tax, 23% of the purchase price, or $115,000, goes to Uncle Sam. Now suppose you get transferred to a different city and need to flip the house right away. Will you have to sell for $385,000 and eat the tax loss? Of course not. The market is not going to value a "used" house at far less than what a "new" house is worth.
That is to say, the buyer of your house would end up paying something close to the $500,000 you paid, not just the $385,000 pretax price of the new house. This is known as an "embedded tax"--a concept the Fair Tax folks are well familiar with, but which they seem happy to ignore when their own tax is the one that's embedded.
Homer Nods: Yesterday's item on this topic quoted a retailer's email complaining about the prospect of being conscripted as an "unpaid tax collector." For whatever it is worth, FairTax.org says that under its proposal, retailers would receive a collection fee from the government.
The Enemy's Imaginary Friend
From a New York Times Baghdad report:
Three days ago, a prominent Sunni extremist, Abu Omar al-Baghdadi, called for an escalation of attacks against local residents who aligned themselves with American forces.
Mr. Baghdadi is the purported leader of the Islamic State in Iraq, a militant group linked with Al Qaeda in Mesopotamia, a homegrown Sunni Arab extremist group that American intelligence agencies have concluded is foreign led.
Just one problem: As Cliff May, a former Times reporter, notes at National Review Online, it appears Baghdadi does not exist:
Maj. Gen Kevin Bergner has repeatedly said that--based on intelligence obtained from the captured al-Qaeda leader Khalid al-Mashhadani--it is clear that Omar al-Baghdadi is only "the fictional head" of al-Qaeda in Iraq, a character played by an "actor . . . they use another individual to be his voice."
Why does al-Qaeda do that? Bergner says: "To put an Iraqi face on the leadership of al-Qaeda" in Iraq. Bergner adds: 'The Islamic State of Iraq is a front organization that masks the foreign influence and leadership within al Qaeda in Iraq . . ."
Of course, the New York Times has decreed, as a matter of editorial style, that al Qaeda in Iraq--which it insists on calling "al Qaeda in Mesopotamia"--is a "homegrown" Iraqi group that has nothing to do with al Qaeda, which has nothing to do with Iraq, uh, Mesopotamia.
Apparently one headline writer didn't get the memo: "British Inquiry of Failed Plots Points to Iraq's Qaeda Group" is the title of an article in today's Times. The actual text, however, follows the paper's usual style:
Investigators examining the bungled terrorist attacks in London and Glasgow six months ago believe the plotters had a link to Al Qaeda in Mesopotamia, which would make the attacks the first that the group has been involved in outside of the Middle East, according to senior officials from three countries who have been briefed on the inquiry.
Wait, if this is happening in London, should it be "al Qaeda in Albion"?
Homer Nods (Slightly)
In Wednesday's item on Mike Huckabee's AIDS comments, we faulted the former governor for distinguishing between the words isolate and quarantine, which we wrote are synonyms. It turns out that there is a technical distinction, described on a Centers for Disease Control Web site:
Isolation refers to the separation of persons who have a specific infectious illness from those who are healthy and the restriction of their movement to stop the spread of that illness. Quarantine refers to the separation and restriction of movement of persons who, while not yet ill, have been exposed to an infectious agent and therefore may become infectious. Both isolation and quarantine are public health strategies that have proven effective in stopping the spread of infectious diseases.
In the case of AIDS, however, this distinction is without a difference. People who are infected with HIV are capable of transmitting the disease even before becoming symptomatic. Thus it doesn't make sense to "isolate" AIDS patients if you aren't going to "quarantine" everyone who is HIV-positive.
Fun With Dowdification
"Senate Democrats yesterday bowed to Republicans and stripped . . ."--Washington Times, Dec. 14
Who Says There's a Clash of Civilizations?
"Christians Agree With Muslims They Must Have Goat in New Jersey"--headline, Bloomberg, Dec. 13
Fox Butterfield, Call Your Office
"Wholesale Inflation Surges, but Sales Up"--headline, Associated Press, Dec. 13
And Are Promptly Consumed by Flames
"Arrest Warrants Issued in Malibu Fire"--headline, Associated Press, Dec. 14
Guess What Dad's Getting for Christmas?
"Mentors Build Ties With Freshmen"--headline, Grand Rapids (Mich.) Press, Dec. 12
If a Recipe Bites Blondie, That's News
"CORRECTION: Blondie Bites Recipe"--headline, Daily News Journal (Murfreesboro, Tenn.), Dec. 13
Bad News for the Old Dog
"New Rochelle Passes $147.3 Million Budget, New Dog Rules"--headline, Journal News (White Plains, N.Y.), Dec. 12
All Your Base Are Belong to Us
"E.ON, Enel Better for Poweo Than Verbund, Dexia Says"--headline, Bloomberg, Dec. 13
News You Can Use
- "All-Nighters May Not Improve Grades"--headline, Associated Press, Dec. 14
- "Why Use Steroids? They Work"--headline, Reuters, Dec. 13
Bottom Stories of the Day
- "Blogger Remains Anonymous"--headline, Paris (Texas) News, Dec. 13
- "ABBA Museum to Be Built in Stockholm"--headline, CNN.com, Dec. 14
- "Tajikistan Launches Campaign Against Witchcraft"--headline, Reuters, Dec. 13
- "Democrats in Debate Urge Taxes on Rich"--headline, Associated Press, Dec. 14
Global Warming Is for the Birds
We're not on the Democratic Senatorial Campaign Committee Web site, but a reader forwarded us a DSCC email signed by Robert F. Kennedy (junior, we presume):
Where I live in upstate New York, I've recently seen robins and bluebirds show up in the middle of winter. And this past January, a friend of mine ate asparagus he harvested in the Catskills, which are normally frozen this time of year.
Global warming is no longer a distant threat. It's happening now. And we're running out of time to stop it.
But Senate Republicans are proving once again to be the most anti-environment legislators this nation has even seen. . . .
51 Democratic seats in the Senate just won't cut it. If you care about taking bold action to restore a government that will actually serve the desires of its people, then you've got to care about expanding the Democratic Senate majority--and you've got to support the DSCC.
So RFK Jr. wants to make innocent birds freeze to death, and to force his buddy to drive his SUV to the supermarket to buy imported asparagus--but it's all worth it to elect more Democrats to the Senate. How selfishly partisan can you get?
(Carol Muller helps compile Best of the Web Today. Thanks to Israel Pickholtz, Mark Schafer, Wendy Stone, Lewis Sckolnick, Lyle Katz, John Palchak, Mike Schwendeman, Odessa Elliott, Steven Allen, Don Stewart, John Williamson, Don Hubschman, Andrew Pietila, Tim Willis, Joel McLemore, Jerry Skurnik, Bruce Goldman, Ethel Fenig, William Golden, George Sturve, Terry Holmes, Jane Vawter, Marc Johnston, Paul Giansante, Douglas Welsh, Tom George, Brian Azman, Ben Peltier and Bart Adler. If you have a tip, write us at opinionjournal@wsj.com, and please include the URL.)
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