Daily Archives: December 27, 2019

California is a near daily punching bag for White House, so it figures that the largest tax overhaul in decades pushed through by President Trump would take aim at this deep blue state. But Democrats are now working to rid the rules of a particularly galling feature targeting Golden State residents.

By a slim margin Democrats in the House voted to remove a cap on deductions based on state and local taxes collectively known as SALT. Under the Trump rules, a taxpayer can deduct up to $10,000 in such levies, a critically low amount in high tax states such as this one and New York, New Jersey and Illinois. Guess what? These state also happen to reliably vote Democratic, meaning the lower number is a slap at Trump foes.

Why it matters here should be clear. Housing prices mean new buyers have high property tax bills along with state incomes taxes. Holding these SALT levies to $10,000 means that taxpayers are denied thousands more in deductions they took in years past. A state report last year estimated that Californians will pay $12 billion more in taxes.

What the House Democrats did is to undo the cap but with an addition. The super-wealthy earning $100 million or more wont be in line for sky-high deductions as before.

The vote wasnt an easy one. Numerous study groups say that the deductions are a gift to upper income groups who are more likely to have bigger property and sales tax bills. That worried some Democrats and led progressive members to oppose the changes. But the Trump deduction cap harms many more than a plush segment of society.

In an opinion piece in the Times of San Diego, local Rep. Mike Levin, a Democrat, noted that 58,000 people in his coastal district making less than $100,000 per year will lose out due to the SALT deduction changes. Home sales may be harmed if buyers cant look forward to tax benefits that make a buy pencil out.

The future of the House measure is dim given the GOP majority in the Senate. But theres every reason to demand changes in politically contrived tax law.

This commentary is from The Chronicles editorial board. We invite you to express your views in a letter to the editor. Please submit your letter via our online form: SFChronicle.com/letters.

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Editorial: Democrats are pushing the right fix to a Trump tax law - San Francisco Chronicle

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House Majority Leader Steny Hoyer (D-Md.) in some regards might be considered the second most powerful Democrat in the country right now. He is second-in-command in the chamber behind Speaker of the House Nancy Pelosi, and he was given a primetime speaking slot before last week's vote to impeach President Trump. Yet Hoyer is also about to become the latest prominent Democrat to face a serious primary challenge.

The House leadership is simply not cutting the mustard, Hoyer's challenger, McKayla Wilkes, told The Week in an interview. A young black woman from a working-class background, she says current party leaders are out of touch with the country and their own districts. "Hoyer and Pelosi are leading the party badly," she said, "because they're taking tons of corporate money, not standing up to Trump, and they're not championing crucial ideas like Medicare-for-all and the Green New Deal."

Wilke's challenge is rightly seen as part of a growing leftist insurgency within the Democratic Party. If she manages to knock off Hoyer, it might be the strongest signal yet that the movement is winning the battle for the future of the party.

To be sure, party leadership was always going to be a challenge after Democrats won control of the House in 2018. The rise of Bernie Sanders and Elizabeth Warren has demonstrated that the party's previous moderate consensus has fractured. There is a large appetite from progressive voters for more confrontational, left-wing politics, particularly among younger people, a sentiment which is only growing as Millennials reach early middle age and Generation Z reaches voting age. It was these voters who largely propelled the victories of fresh faces like Reps. Alexandria Ocasio-Cortez and Rashida Tlaib.

And yet, the House leadership including Hoyer, which essentially holds institutional control of the party so long as President Trump remains in office, has done little to capitalize on this movement. Instead, they treat the left wing much as they did in the 1990s: as annoying gadflies to be ignored whenever possible.

Instead of a full-bore attack on Trump, they opted for a narrow impeachment focused solely on the Ukraine scandal and only after dragging their feet for months. Instead of locking Rudy Giuliani, John Bolton, or Mike Pompeo in the House basement to force them to testify, they proceeded with the impeachment vote without hearing from some of the central conspirators. And they have largely ignored Trump's wildly corrupt and unconstitutional profiteering off the presidency, not including it in the impeachment inquiry or any other major investigative hearing.

Their legislative priorities have also been less than bold. They passed a trade deal with Mexico and Canada that allows Trump to claim victory in his favorite policy area. And while they have passed a number of messaging bills that Senate Majority Leader Mitch McConnell promptly bottled up, even there the leadership has stymied the left. House leadership froze out progressives from negotiation over a bill to ostensibly lower drug prices, pushing a weak version that included one absolutely loony provision that would increase drug costs outside of Medicare so that program could get more money. That was removed only when the Congressional Progressive Caucus threatened to vote against the bill.

This brings me back to Hoyer's home turf, Maryland's 5th District. It is a very comfortably blue area: In every election since 1998, none of Hoyer's various Republican opponents got over 36 percent of the vote. Yet Hoyer is squarely in the middle of the Democratic caucus, and on its right in some areas he voted for the Iraq War, is a firm partisan of Israel, voted for Wall Street deregulation in 2000, and voted to give China permanent normal trade relations that same year.

All these are major reasons why Wilkes is running. "My vision of the Democratic Party is a party that doesn't take corporate money and instead of triangulating to reach 2 percent of swing voters, does a ton of organizing to reach people who don't normally vote."

Her campaign is also about specific Maryland concerns on which Hoyer has failed to deliver. Wilkes supports a massive program of 7 million new social housing units not just because her district has a severe housing affordability problem, but because "I have friends, actually, who live in the woods in an abandoned school bus," she says. She supports sweeping criminal justice reform not just because of the mass incarceration crisis, but because she has personal experience with the Kafkaesque prison bureaucracy, having once been jailed without bail for the ridiculously piddling offense of driving on a suspended license. She supports Medicare-for-all not just because it is good policy, but because she personally knows "people struggling with long-term care, preventative care, and drug prices." Wilkes supports the Green New Deal not just because of climate change in general, but because her district's coastal communities are under dire threat from rising sea levels. "In Anne Arudnel County, in St. Mary's County, people are concerned about the level of the sea rise. People have homes that are on the water," she says. "It's actually amazing that we haven't been wiped out by a massive flood, because there are parts of Maryland that are surrounded by water."

World greenhouse gas emissions reached yet another record high in 2019. Neither the 5th District nor the country as a whole can afford more Democratic Party dithering as happened during the Obama years, with minor subsidies for renewables coupled to an epic fracking binge that made the U.S. the biggest producer of oil and gas in the world.

It's a bit hard to understand the mindset of the Democratic leadership. Age is certainly one factor. Speaker of the House Nancy Pelosi (who has a primary challenger herself in attorney Shahid Buttar) is 79 years old. Hoyer is 80. Majority Whip Jim Clyburn is 77. At that age, it's rather common to get stuck in one's ways.

But it's not the whole story. Bernie Sanders, the most famous leader of left-wing Democrats, is 78. Elizabeth Warren is 70. Clearly being old in itself is no barrier to progressive politics or to being enormously popular among young people. No, the issue with Pelosi and company is not their age so much as how long they have been in politics, and particularly how long they have been at the top of the party.

Both Hoyer and Pelosi were elected in the 1980s, and both have been in and out of various House leadership positions for decades. Top Democrats of this generation internalized the Reagan revolution believing that the New Deal was dead and buried, that capitalism is basically good, and that America is an unalterably center-right country. Hence left-wing candidates always lose (1980, 1984, 1988, 2000, 2004, and 2016 notwithstanding) and the best that be done for the American people are fiddly tax credits and janky market-friendly schemes like ObamaCare. And while it is always possible for someone to change their mind, the top House Democrats plainly have no intention of doing so.

The only way to change direction, it seems, is to knock the leadership out of their individual seats, and put in some fresh folks with fighting spirit. A leader can't "be a leader in just name only. You have to be a leader and actions have to show that. We have to be bold and we have to be brave," says Wilkes. Leadership is about "sticking your neck out there for the people who actually elected you." Her primary is April 28.

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Democratic leadership should be afraid of McKayla Wilkes - The Week

Democratic candidates for president in 2020 are making big promises about what they'll spend on K-12 education. In fact, four candidates have made the same pledge to triple Title I, the single-largest program for public schools at the U.S. Department of Education, which has a $72.8 billion budget. Another candidate has pledged to quadruple Title I.

But what's less prominent is how much those areas already get in federal funding; quadrupling Title I would bring spending on that program alone to $65.2 billion. So what are those gaps between grand plans and reality?

We highlighted six Education Department programs and compared how much money they get now to how much some of the 15 Democratic presidential candidates want to give them. We focused on four top-tier candidates based on pollingformer Vice President Joe Biden, South Bend, Ind., Mayor Pete Buttigieg, Sen. Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass.and Sen. Cory Booker, D-N.J., who's promised to dramatically increase funding for a program and who hasn't gotten as much attention.

We singled out their promises on relatively big programs (Title I and special education) and for a relatively program (community schools). Figures have been rounded and are in the millions of dollars.

A few thoughts:

We don't mean for these charts to be comprehensive and cover all the candidates' plans. We do hope they provide a good sample of the gap between what Democrats are looking for and the numbers right now.

Candidates don't always make it clear whether they intend to dramatically increase funding for a particular program all in one go, or over several years. (There are obvious incentives for not making it entirely clear.) However, even if their plans are phased in, they still differ dramatically from current numbers.

Several candidates have said they want to fully fund special education under Individuals With Disabilities Education Act. However, Warren is one candidate at least who has put a dollar figure on what that would mean in her administration.

A candidate who wants more money for a certain strategy might want to create a new program within the federal budget. However, the comparison may still be helpful.

There are often several line items that together make up big-ticket federal programs. For simplicity's sake, we stuck with the business end of those programs when making comparisons. For example, we focused on state grants within federal special education funding.

Big promises go in the other direction too: Sanders and Warren have pledged to halt federal aid to charter school expansion. The federal Charter School Program, which exists in large part to promote the growth of charters, is getting $440 million in fiscal 2020, the same level as in fiscal 2019 despite fierce, internecine fights over charters over the past several years. That illustrates the potential difficulty in significantly cutting or eliminating those grants.

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Education Spending: What Democratic Candidates Want vs. Reality, in Charts - Education Week

RUTHERFORD, Calif. To reach the wine cave that set off a firestorm in this weeks Democratic presidential debate, visitors must navigate a hillside shrouded in mossy oak trees and walk down a brick-and-limestone hallway lined with wine barrels. Inside the room, a strikingly long table made of wood and onyx sits below a raindrop chandelier with 1,500 Swarovski crystals.

The furnishings drew the ire of Senator Elizabeth Warren of Massachusetts on Thursday, when she chastised Pete Buttigieg for holding a recent fund-raiser in a wine cave full of crystals where she said guests were served $900 bottles of wine.

Billionaires in wine caves should not pick the next president of the United States, she said. Andrew Yang, a former tech executive, added that candidates should not have to shake the money tree in the wine cave.

On Friday, the billionaire couple who owns the wine cave wine is often stored underground because of the cool, stable temperatures said they were frustrated that their property had set off one of the fiercest back-and-forths of the debate. Watching the contentious moment on television, they grew frustrated as Ms. Warren and other candidates used their winery as a symbol of opulence and the wealthys influence on politics.

Im just a pawn here, said Craig Hall, who owns Hall Wines, which is known for its cabernet sauvignon, with his wife, Kathryn Walt Hall. Theyre making me out to be something thats not true. And they picked the wrong pawn. Its just not fair.

Mr. Hall said he had not settled on a favorite Democratic candidate, but that Mr. Buttigieg, the mayor of South Bend, Ind., was a leading contender. His positions on climate change, gun safety and immigration appealed to the couple, said Mr. Hall, who added that he wanted it to be easier for middle-class Americans to start successful businesses.

The Halls have given at least $2.4 million to Democratic candidates, committees and PACs since the 1980s, according to Federal Election Commission records. They have donated to House Speaker Nancy Pelosi and Senator Kamala Harris of California before she ran for president.

But in this election cycle, some Democratic candidates have criticized the spending of wealthy donors like the Halls, arguing that their large contributions can lead to outsize influence on policy or even jobs in a future administration. Ms. Warren and Senator Bernie Sanders of Vermont, in particular, have harped on other candidates for soliciting wealthy donors and traveling from coast to coast to attend fund-raisers.

For the Halls, the scrutiny has felt personal. Mr. Hall said that during the debate, Ms. Hall turned to him and jokingly said she might go buy something for herself instead of contributing to another political campaign.

Mr. Hall, 69, made much of his fortune in the real estate industry and said he started a business at 18 with $4,000 from his savings account. Ms. Hall, a lawyer and businesswoman, served as the United States ambassador to Austria under President Bill Clinton after donating to his re-election campaign. Her family has worked in the wine industry since the 1970s.

As chairman of the Hall Group, which is based in Dallas, Mr. Hall oversees a financial services company, wineries, art exhibits and a luxury hotel. He said that in Texas, he is often seen as the most liberal among friends and business colleagues, part of why he felt unfairly targeted during the debate.

These people dont know who theyre talking about when they throw me in the class that they did, Mr. Hall said of the presidential candidates. As much as its frustrating, its more disappointing to me that Democrats are fighting with each other when we have a common goal, which is to get back to the White House.

On the debate stage, Mr. Buttigieg responded to the attacks by arguing that the views of donors would not influence his positions and saying that his net worth was one-hundredth that of Ms. Warrens.

Mr. Buttigieg said accepting the contributions of all donors was necessary to build a campaign ready for the fight of our lives, referring to the general election face-off against President Trump.

Ms. Warrens comments also did not sit well with some local residents, who are accustomed to encountering politicians and their high-end contributors. Ms. Pelosi and Gov. Gavin Newsom of California each own a valuable vineyard nearby.

It connoted something snobbish, which it really isnt, said Carl Myers, a retired general contractor who lives in St. Helena.

Wine is stored in caves around the world, and Mr. Hall noted that the Romans followed the practice. Storing wine underground saves money on climate control and humidification, said Jonathan Ruppert, the general manager of Garys Wine & Marketplace in St. Helena.

Caves are a necessity, Mr. Ruppert said. Its the green way to keep wine and preserve it for aging.

Although the wine cave at Hall Wines is occasionally used for fund-raising events, it typically serves as a private tasting room. But the winery was closed on Friday for the employee Christmas party and, in a sign of the times, active-shooter training.

High-dollar donors have visited his wine cave, but Mr. Hall emphasized that his wineries do not sell a $900 bottle of wine or, at least, not a regularly sized one. The $900 bottle they do sell is three liters, he said, which holds as much wine as about four normal bottles. Most of the companys wines cost between $45 and $65.

Mr. Hall said he intended to support any Democratic nominee in the general election, but he admitted it would be hard to back Ms. Warren or Mr. Sanders.

I hope I dont face that question, Mr. Hall said. It may be difficult. But I really want to support whoever the nominee is, and I plan to, but there may be some holding my nose.

Carol Pogash reported from Rutherford, and Nicholas Bogel-Burroughs from New York.

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Democrats Sparred Over a Wine Cave Fund-Raiser. Its Billionaire Owner Isnt Pleased. - The New York Times

Sen. Kamala Harris, D-Calif., disclosed her bundlers before she dropped out of the race, and Sen. Cory Booker of New Jersey, struggling to raise money and gain in the polls, released his list of bundlers last week.

Alan Kessler has considered himself a political fundraiser since 1988, when he worked on then-Tennessee Sen. Al Gores presidential campaign. In the years since, Kessler, a top lawyer at Duane Morris in Philadelphia, has amassed a wide network of Democratic donors.

Not until recently have they termed them bundlers,' Kessler said. But its not different from whats been done from the beginning of time those who not just write checks but solicit people to make contributions at the presidential level.

A bundler isnt legally defined except in the case of lobbyists, but the generally accepted understanding is that its a person credited with collecting donations from others, often by hosting fundraising events.

Bundlers essentially have the roles of local ward leaders in classic political machines, Kolodny said. A ward leader has only a single vote, but has power because of the ability to influence family, friends, and neighbors.

Similarly, bundlers can max out personally only once, but their power comes from the ability to marshal networks of other donors.

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2020 Democrats are naming their fundraising 'bundlers' - Columbian.com - The Columbian

Some politicians running for federal office make it sound as if the biggest problem facing our country is that we dont send enough of our paychecks to Washington, D.C.

They propose increasing or creating new federal taxes on income, payrolls, business profits, carbon emissions, financial transactions, wealth, and more.

Before they start trying to spend more and more of our money, they would do well to consider just how much theyre already spending. Looking back over the last decade, its clear theyve already entered the drunken sailor stage.

SENATE OKS SPENDING BILLS TO AVOID GOVERNMENT SHUTDOWN, SENDING THEM TO TRUMP'S DESK

From 2010 through 2019, U.S. households sent an average of $228,000 to Washington. Heres the math.

The Office of Management and Budget reports that federal revenues totaled $29.3 trillion during that period. The Census Bureau estimates there are currently 128 million households in the country. Thus, each households share of the tax burden comes out to around $228,000.

And this number is conservative, as in low. Adjusting for inflation and the smaller number of households at the start of the decade would cause the estimate to go even higher.

The federal government collected an average of $27,000 in revenue per household in 2019.

According to the latest data from the Congressional Budget Office, federal revenue hit an all-time high of $3.46 trillion in 2019, or roughly $27,000 per household. The vast majority of the haul comes from individual income and payroll taxes. Thats money directly out of your pocket.

The federal bill is hefty enough. When we consider state and local taxes, the full burden of government grows larger. The Tax Foundation estimates that workers need January, February, March, and half of April just to cover their full tax bill.

Federal revenue in 2019 matched the combined economic output of 13 states. It is difficult to comprehend the total amount.

If measured in terms of state economies, it would require the combined output of Indiana, Arizona, Wisconsin, Missouri, Connecticut, Louisiana, Oregon, South Carolina, Alabama, Kentucky, Oklahoma, Iowa, and Utah to reach $3.46 trillion.

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The fruits of that much labor ought to be more than enough to satisfy our politicians.

Each households share of the decades deferred taxes (debt) is $88,000.

We can think of government debt as deferred taxes. Washington placed an absolutely staggering $11.3 trillion on the national credit card over the decade.

That averages out to $88,000 in new federal debt per household.

Some would argue that the debt justifies a significant increase in taxes. This is the wrong prescription. Federal spending has grown far too fast, and is projected to increase even faster as more of the baby boomer generation receives benefits from Social Security and Medicare.

Real alternatives exist. By eliminating wasteful programs and reforming others, we could reduce federal spending and the national debt while protecting families from tax hikes.

A massive expansion of the federal government would require big tax hikes on the middle class.

Some politicians would have you believe it is possible to fund grandiose plans such as "Medicare for-all" and a Green New Deal while only raising taxes on the rich. Its not.

Even if Washington confiscated every dollar of corporate income and every penny of income from those earning above $200,000 per year, it wouldnt come close to paying for the full progressive agenda.

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In reality, a European-style social welfare state requires European-style taxes. Yes, that means higher income tax rates on high earners. But it also means dramatically higher taxes on incomes of $40,000, punishing sales taxes, and anemic economic growth.

American families would be better off keeping more of their hard-earned money in the decade to come. Washingtonis already taking plenty.

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David Ditch: Uncle Sam is picking your pocket with high taxes Democrats want to raise them even higher - Fox News