MauledAgain

For more than a decade I have advocated the enactment of mileage-based road fees to replace the increasingly less effective and less efficient liquid fuels tax. One slice of my reasoning is not unlike the realization, a long time ago, that reliance on taxes imposed on telegraph messages wasn’t going to work once newer technology came along. I have explained how the mileage-based road fee works, and why it is the best solution on the table, in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, and Mileage-Based Road Fees: A Positive Trend?.

Recently, reader Morris directed my attention to a letter to the editor in the Sacramento Bee. The writer was reacting to an article describing the possibility of California substituting a per-mile road fee for its gasoline tax. This is not surprising news, because California has been exploring the mileage-based road fee for several years, as I discussed in Between Theory and Reality is the (Tax) Test.

The letter writer was upset with the idea of a mileage-based road fee. He writes:

Now all those people who purchased hybrid or electric cars will get punished along with the rest of us. It won’t matter whether you get 5 miles to the gallon or 50 miles to the gallon, you’ll pay the same tax. Right now, if you drive more miles, you buy more gas and pay more tax.

His comments demonstrate why it’s important to gather facts before conducting analysis and reaching conclusions. First, paying for the use of roads is not punishment, because paying for the use of roads is no different from paying for the use of an apartment, a rental car, or a seat in a movie theater. Second, it is not true that the same tax applies regardless of fuel economy, because the mileage-based road fee can take into account, and in some experiments has taken into account, factors such as vehicle weight, number of axles, and fuel economy. Third, it is not true that driving more miles means buying more gasoline, because the amount of gasoline purchased depends in part on fuel economy, in part on traffic conditions, in part on driver acceleration, braking, and speed tendencies, and in part on vehicle occupant use of air conditioning and similar features. Fourth, the notion that hybrid and electric vehicles, unlike liquid-fueled vehicles, do not generate pollution is misleading, because pollution is generated when power plants produce the electricity used to charge those alternative fuel vehicles.

Understanding the mileage-based road fee requires study. It requires time. It requires thought. It requires analysis. It requires much more than first-impression reaction. I have tried, for more than a decade, as have others, to explain how the mileage-based road fee works. It’s not too late to become acquainted with the details.

Though it is only one instance of many, the confession from the CEO of the home builder Toll Bros. provides more proof that tax cuts for corporations and wealthy individuals do not create jobs. As reported by Joseph N. DiStefano in his recent column, the legislation being railroaded through Congress will put between $80 million and $150 million of additional cash in to the bank accounts of Toll Bros. Though the CEO thinks the windfall will be on the lower side and outside analysts suggest it will be on the higher side, there is no doubt that Toll Bros. will have a much improved cash flow. When asked by a stock analyst what the company plans to do with the cash, the CEO admitted, “We don’t have any particular direction for that cash.” Goodness. There must be some operatives in D.C. who are annoyed that the CEO didn’t trot out the usual propaganda, “Oh, we will hire more employees.” My guess is that the Toll Bros. CEO is too smart to make a promise that he knows would not be kept. Toll Bros. did not announce plans to hire more employees because it has no plans to do so, and has no plans to do so because it does not need more employees. Even though the Toll Bros. CEO did not earmark the expected tax cut windfall for any specific purpose, the company plans to pay more to investors and top executives. That’s not job creation. That’s simply an increase in the flow of wealth and income into the bank accounts of the wealthy.

What might encourage Toll Bros. to create more jobs? The answer is simple. More demand for its product, which is housing. For demand to increase, there needs to be an increase in the number of people willing and able to purchase that housing. With tax cut money flowing primarily to people who don’t need more housing, and insufficient tax cut funds ending up in the wallets of people who would like, but cannot afford, to purchase Toll Bros. housing, the disastrous tax legislation isn’t going to do what its advocates claim. Worse, the proposed reductions of the mortgage interest and real estate tax deduction will make housing less affordable for all but the wealthy.

It’s bad enough that the greedy and insatiable money addicts manipulate, lie, and distort in order to feed their habit. What’s worse, far worse, is the willingness of too many people to buy into the lies, accept the distortion, and embrace the manipulation. Is it a personality flaw? An educational defect? A delusional expectation? An epidemic of apathy? Why is it so difficult for enough people to comprehend the heist that is about to get underway?

In a recent commentary, George Will rushes to the defense of the badly drafted, error-riddled, unwise, and catastrophic monstrosity of a tax bill being railroaded through the Congress. Though Will usually speaks with wisdom and manifests common sense, this time he seem to be swept up in the false euphoria of getting something done for the sake of getting something done.

Will describes opposition to the legislation’s tax cuts because they benefit the wealthy as a “recyclable denunciation of any significant tax cut.” Of course it is a recyclable criticism, because the tax cut advocates keep recycling their policies and those policies keep recycling into economic messes. As I’ve pointed out multiple times, this tax-cut-for-the-wealthy approach, despite apparent short-term success, has failed in the long-term every single time. Will argues that because the “top 1 percent of earners supply 39 percent of income tax revenues,” they should get a chunk of the tax cuts. But they’re getting far more than 39 percent. Will conveniently forgets, or intentionally fails to mention, that the purpose of the income tax is to prevent income and wealth inequality and to prevent the establishment of A dynastic oligarchy. He concludes that for a tax cut to be effective it “must be primarily a cut for the affluent.” That is absolute nonsense. What would work, though politicians lack the courage to pursue what works, is an increase in taxes on inherited, that is, non-earned, income and wealth coupled with steep tax decreases for the consumer class that drives the demand that fuels the economy.

Will then dismisses concerns that the tax-cut advocates will use the deficits generated by the tax cuts to justify cutting Social Security and Medicare. He is confident that the President, who “vowed to oppose” such cuts, will adhere to his promises. It’s disappointing that Will has confidence in someone keeping promises who has a track record of not doing so and whose mendaciousness has risen to levels of which the Tempter in the Garden would be envious.

Will concedes that the legislation is a gamble. He concludes, though, that it is a “wager . . . worth trying.” Of course, if the wager turns out well, the wealthy are even wealthier and everyone else, to a greater or lesser extent, is worse off or perhaps holds an even keel. And if the wager turns out badly, it’s not the wealthy who will feel the pain. It’s always safe to gamble with someone else’s money.

Yet in his commentary Will himself hedges his bets. He concedes that the advocates of this horrific legislation do not know with certainty that it will work. Will goes so far as to claim that nobody knows. He fails to mention that some of us, at least, know with certainty that in the long run this legislation will not work. How do we know that? It didn’t work in the past, and it won’t work now. But insanity, like addiction, is doing the same thing repeatedly, despite bad outcomes, because the brain cannot let go of that to which it is attached. Examining the Congress through that lens is far more instructive than dragging out the same disproven laughable justifications so typical of addicts’ excuses.

Will concedes that the hopes of the tax-cut advocates require continuation of the current economic expansion, one which is 44 months past the average length of an expansion and which is almost certainly headed for a recession. In reaching for a higher rate of expansion, the proponents of this senseless tax legislation risk a recession bordering on depression. Why trade slow but steady growth for a speedy but risky shot of economic adrenalin? That’s how addiction works.

Will then exposes the underlying hypocrisy of the entire racket. He writes, “What the legislation’s drafters anticipate, indeed proclaim, is that Congress will not allow to happen what the legislation says, with a wink, will happen.” The tax cuts for individuals are set to expire in 2025, though corporate tax cuts are tagged as eternal, but one of the chief architects of the legislation claims that a future Congress will extend those cuts. Perhaps. Perhaps not. It’s a gamble, predicting what a future Congress might do. In the meantime, Will concedes that this smoke-and-mirrors approach “is an $800 billion fudge, a cooking of the books.” Once upon a time, people went to jail for doing those sorts of things. Now they are elected to Congress and high office, appointed to positions of fiduciary responsibility, and worshipped as heroes by a segment of the population claiming to have a monopoly on moral righteousness.

I expected much better from George Will. I wonder why he has chosen to ride with the gamblers. Whether using one’s own money or someone else’s, there are certain gambles a person ought not take, for reasons of moral righteousness. This horrendous tax legislation is a perfect example of a gamble that must be avoided, mostly because, aside from being morally unrighteous, it is a sure losing bet.

A bit more than a year ago, in Robots Doing Tax Returns?, I explained the reasons I hesitate to jump on the “let the robots prepare tax returns” bandwagon. After pointing out the shortcomings of self-driving vehicles and allegedly intelligent traffic signals, I shared these thoughts:

The folks who think that artificial intelligence, which is nothing more than complex software, can replace tax return preparers face a stark reality. For some taxes, surely artificial intelligence has advantages. But for any tax preparation that requires judgment, wisdom, experience, and intuition, artificial intelligence fails. Perhaps decades from now, when neuroscientists have figured out how judgment, wisdom, experience, and intuition are reflected in the biochemical and electromagnetic functions of the human brain work, and software engineers have figured out how to translate those functions into computer code, the idea of robots doing federal income tax returns might come to a worthwhile fruition. Until then, the likelihood of crashes that weren’t supposed to happen and time wasted at badly programmed traffic signals will make the robot tax return preparer a fine wine that no one should drink before its time.

Nothing during the past 15 months has changed my mind.

Recently, I heard a story about artificial intelligence being used to do tax planning. At a meeting of tax professionals, the presenter shared the advice generated by an artificial intelligence system designed to do tax return preparation and tax planning. The system generated some very bizarre ideas. For example, it suggested that an elderly couple whose only income was social security benefits should start their retirement planning by setting up an IRA and contributing to it. It also suggested that a middle-aged couple who had paid off the mortgage on their residence should borrow money to purchase another home in order to create mortgage interest deductions and additional real estate tax deductions. Those sorts of responses on a tax exam would earn an inescapable F grade.

As I suggested in Robots Doing Tax Returns?, “technology needs to generate results that have at least the quality they would have if an expert did the work.” I understand technology. I understand how it can fail. I understand that failure can be at least as bad, if not worse, than the outcome when an expert fails. For that reason, I cautioned, “For me, until a technological ‘advance’ is ready for prime time, it needs to remain in the world of testing and experimentation. It ought not become mandatory or widespread until it proves its superiority.”

The rush to let artificial intelligence and robots “do the work,” a temptation perhaps fueled by expectations of leisurely lives, poses grave risks. Quoting again from Robots Doing Tax Returns?, “Technology is no better than the programmers who design the hardware and software. Sometimes I wonder if the advantages of multiple sets of eyes and brains reviewing the product are being lost on account of cost-cutting goals that misperceive the difference between long-term and short-term success.”

At the moment, very few people are likely to communicate directly with an artificial intelligence system to get advice. But most people are communicating with experts, advisors, and guides to get help. It makes sense to ask questions to get assurances that the assistance isn’t simply being cranked out of an artificial intelligence system, bereft of judgment, wisdom, experience, and intuition.

Every now and then an idea pops into my head. This time, after reading a story about Senate Majority Leader McConnell’s absurd claim that cutting taxes will raise revenue, I decided it’s time to hold government officials, elected or appointed, to their claims. They should be held financially, if not criminally, liable for making promises that don’t pan out, knowing that they cannot pan out, and causing misery for Americans.

Every sensible and educated economist, analyst, and financial professional who has examined the monstrosity of a tax bill being railroaded through the nation’s capital reaches the same result. The proposed legislation would cause the federal deficit to balloon, with attendant short-term and long-term adverse consequences. Though they disagree on the exact number, almost all are somewhere north of one trillion dollars.

So in rushes McConnell, anxious to placate the oligarchs who are demanding the additional wealth that the legislation will shift from the non-wealthy to the oligarchy. He makes the same ridiculous claim that was made when previous tax legislation of this sort was foisted on America. He claims that the tax cuts will generate enough economic growth to produce additional tax revenue. That didn’t happen in the past and it won’t happen now. The recipients of tax reductions will not be generating economic growth. They will not be buying much of anything because they already have what they want and need, other than more cash in the offshore bank. The recipients of tax reductions will not be hiring workers, because they don’t have any work for them to do. The recipients of tax reductions, financed by increased taxes on a significant swath of the poor and middle class, are too few in number to trigger the sort of consumer demand that stokes the fires of healthy economies.

McConnell surely knows that his claim is false. He knows that the tax legislation is one of the worst tax bills ever to get approved by the Senate. So why does he say what he says? Is he deluded? No, he simply is so beholden to the “donor class” that he says whatever he needs to say to wiggle out of the mess he is complicit in creating. He’s not alone, of course, but as the majority leader he has a higher degree of responsibility for which to answer. At the moment, the only responsibility he is exhibiting is allegiance to those who finance his campaigns and permit him to remain in office.

The extent to which McConnell is willing to make excuses for this horrendous inequality exacerbation machine is apparent from his reaction to claims that most of the tax reductions in the tax bill favor the wealthy and large corporations. McConnell claimed, “I haven’t run into anybody during this whole tax discussion who’s very successful who thinks they’re benefiting from it.” Really? What possibly could explain such an absurd claim? Perhaps McConnell hasn’t spoken to anyone. Perhaps McConnell hasn’t spoken to anyone who benefits from the legislation. Neither seems plausible. Perhaps the people who benefit from this legislation simply are unwilling to admit, or should I say, confess, that the legislation makes them wealthier. Part of the con game is to persuade Americans that this tax bill does nothing but put significant amounts of money in the pockets of the poor and middle class. Playing that game requires silence on the part of the legislation’s beneficiaries.

Now comes the best part. McConnell explained, “Look, a year or two from now, you guys can make an assessment which one of us was right. The proof will be in whether or not the economy picks up and things get better.” Instead of a year or two, how about five or six years? If, as has happened with the other enrich-the-rich tax laws, the economy bubbles for a few years and then crashes, to the further detriment of the poor and middle class, how about an escrow account funded by the folks who have championed this legislative disgrace? How about hold harmless clauses that guarantee reimbursement to those poor and middle class Americans whose tax bills increase because some wealthy individuals decided they needed even more income and assets? How about legislation permitting Americans harmed by the impending economic crash to sue those members of Congress and the Administration who voted for this dangerous legislation? Are the proponents of this legislation willing to put their money where their mouths are? The very fact that they laugh off these proposals speaks volumes. America, are you listening, learning, and understanding? Or still enthralled by the con artists and snake oil sellers?

And in the long parade of those claiming that tax cuts for employers create jobs comes nonsense from Pennsylvania Senator Pat Toomey. According to Toomey, tax cuts for employers and businesses “will increase demand for workers.” He somehow thinks that by letting businesses take immediate deductions for outlays that provide benefits over a longer term, those businesses will need workers and wages will increase.

Here’s the problem, Senator Toomey. Whether it’s an existing business paying less tax or a new business writing off capital expenditures, those folks are not going to hire people unless they have something for those people to do. To have something for those people to do, those businesses, whether existing or start-up, need to sell goods and services. To sell goods and services, these businesses need customers. To have customers, these businesses need a vast consumer class that can afford to make those purchases. The proposed legislation gives some of the consumer class a few dollars and actually raises taxes on another portion of the consumer class, thus reducing their purchasing power. Aside from that deep flaw, why would companies spend $1,000,000 on a piece of equipment in order to reduce taxes by $200,000? Why deplete those huge cash reserves by $800,000 if the equipment isn’t needed because there’s no one to purchase the goods it makes or the services it provides? Talk about voodoo economics.

In the meantime, officers of existing corporations eagerly awaiting even more of a tax reduction cash windfall have made it clear that they have no intention of raising wages or hiring more workers. According to a variety of reports, including this one from Bloomberg, many companies plan to “turn over most gains from proposed corporate tax cuts to their shareholders.” Those shareholders, for the most part, are not going to rush out and increase demand for the goods and services being sold by businesses. There are too few of them, they already have what they want and need, and they will do what they did last time, stash the cash overseas and then complain that they don’t have enough and need more tax cuts. Addiction is a difficult thing.

The proposed tax legislation will not do what its supporters claim it will do. How do I know this? Similar legislation didn’t work the last time around, and the time before that, and so on. Sometimes, yes, there is a momentary glimmer of success, followed by a deep and nation-wrecking economic crash. The bigger the tax cuts, the worse the outcome, not unlike the adage, the higher one climbs, the harder the fall.

If America wants to reinvigorate its economy, it needs tax cuts for the consumer class. It needs restoration of reasonable wealth and income disparities. It needs demand-side economic policies, not another entry in the parade of supply-side, trickle-down nonsense. But America won’t get this so long as it is under the thumb of the oligarchy that benefits from the falsehoods that are sold to a gullible populace that keeps voting for people who keep doing them harm.

Reader Morris sent me a link to a four-and-one-half-year-old, but still relevant, article on sleep. Written by Michael J. Breus, the article explores the need for both the right quantity and the right quality of sleep. I must confess, though I do well most nights, sometimes the quantity is diminished because I get caught up in something that I am researching or writing, usually family history material.

Morris asked me, “What role does sleep play in law school performance?” The answer is easy. “The correct quantity and quality of sleep is essential for doing well in law school, just as it is for pretty much everything else.”

Several years ago, in A Tax Question: So What Do You Do With Your Time? I discussed time budgeting for law students, an issue I have discussed with law students for decades and that in recent years has moved into the spotlight as law schools adjust curricula. I pointed out that sleeping, eating, and hygiene require 10 hours a day. Most of that belongs to sleeping.

When exam time rolls around, sleep matters more than the cramming in which many students engage. Often, alerted by a concern that there is one issue or topic with which they are not comfortable, students will stay up late trying to perfect that issue or topic, even though they’re in excellent shape for the other 150 issues in the course. What happens is that the lack of sleep causes their ability to deal with many of those other 150 issues to diminish.

When I was a student, one of my professors told me that the best thing to do the evening before an exam was to go to the movies, and then return home to sleep. He and I talked often, and so although some of my classmates were appalled to learn what I said to my professor, in the context of our many conversations, it fit. I said to him, “What they say about you is true. You are nuts.” He laughed, and said, “Just wait until you are teaching. You’ll see what I mean.” At the time of this exchange, during my second year, it had already been decided, by myself and by more than a few of the faculty, that I was destined for a law school teaching career.

And, yes, he was quite correct. During the last class in each course, I give that advice to all my students. I tell them the story that I described in the preceding paragraph. I mention that from time to time I notice articles explaining not only the need for sleep the night before an exam but why and how sleep helps memory, reasoning, and other brain functions. The movie portion of the advice matters because it gives the brain time to assimilate, rest, and reorganize, not unlike the recovery time needed when working out in the gym.

Of course, there is a time and place for sleep. It is not wise to schedule sleep during class meeting times.

It’s been a while since I wrote about a book. I recently finished reading a book that I purchased a few months ago, thirteen years after it was published. I do that more often than one might guess. It’s not just a book thing. I tend to “discover” television series long after their first runs.

I bought this book not only because of its title, but because previews indicated that it was packed with genealogical charts. Unlike many of the genealogy books I purchase, which focus on one or another of my thousands of ancestral families, this one focused on individuals and families that I did not think were among my ancestors. I was correct. But, because they share ancestors with me, they are cousins of some deep degree.

The book was written by George L. Williams, and is titled Papal Genealogy: The Families and Descendants of the Popes. Yes, there are popes with descendants. There are popes whose nephews became popes. The percentage of cardinals whose father, grandfather, uncle, or great-uncle was a pope is astounding. Years ago, when I was in sixth grade and organizing a pastoral library, I came across a book that contained a biography, and mosaic, portrait, or photo, of each pope. I was permitted to read it. I cannot remember its title, nor have I been able to find it, but my interest in papal history dimmed from time to time but was never extinguished.

The Williams book is an eye-opener. It not only is a study in genealogy and family history, it offers interesting insights into papal politics, particularly medieval and Renaissance era events. It offers lessons useful for today’s problems, as it explores how royalty, nobility, and bankers controlled life and enriched themselves at the expense of everyone else. It describes how these families fought one another, politically and militarily, as they sought to overpower each other.

In some ways, the book is a difficult read, because the marriages between individuals in each of the several dozen families who dominated the Papacy created tangled webs that are challenging to envision. Williams, though, does a magnificent job of portraying these relationships in those charts that had caught my eye. I was not disppointed.

When I was reading the book and thinking about writing a blog post about it, I considered putting together a trivia quiz. Then I decided not to spoil anyone’s fun. What I can guarantee is that, at least every other page, there was a startling revelation. Most were not in that book I was permitted to read many years ago. That’s not surprising.

Not too long ago, one of this blog’s readers, Morris, directed my attention to this Tax Court case, and asked, “Is this one of the shortest opinions in tax court history?” My answer is, “I don’t know.” The process of examining every Tax Court case to see if there is a shorter one would be time-consuming, though perhaps a program could be written to automate the process. It has been tagged as “The Shortest Tax Court Opinion I’ve Seen” by Russ Fox.

The opinion in the case, Godsey v. Comr., T.C. Memo 2017-214, consists of an introduction, findings of fact, and the “opinion.” The introduction consists of a one-sentence paragraph containing 23 words. The findings of fact consist of one paragraph containing four sentences, and a total of 106 words. The opinion portion consists of three paragraphs, one containing two sentences and the other two each containing one sentence. The opinion portion contains 150 words, many of which are citations to other authorities and closing “boilerplate” language.

Perhaps there is a shorter Tax Court opinion. I doubt it, but it’s possible. What I don’t doubt is that there is no Tax Court opinion as short as the shortest opinion issued by the United States Supreme Court. In United States v. Barker, 15 U.S. 395 (1817), Chief Justice Marshall issued a 12-word opinion, but because the second six words consisted of “boilerplate” language, most commentators claim that it is a 6-word opinion.

There are instances in which judges do not issue written opinions but rule from the bench. It would not surprise me that, somewhere, sometime, a judge looked at one of the parties and said, “You lose.” It can’t get much shorter than that.

There’s a meme floating around on facebook, and perhaps elsewhere, that challenges people to “Name one thing that you learned in highschool [sic]… that you’ve never used in your adult life.”

Someone replied, “I’ve learned way more on my own than I ever did in school.”

Two thoughts ran through my brain. One, anyone who has children will be asked to help them as they traverse high school, and surely what was learned will be useful. The other, which is far more important, is that the most important thing one learns in high school is to learn how to learn. Yes, some of the bits of information that are learned end up not being used, or being made obsolete by scientific, technological, and social changes. But when someone claims to have learned on his or her own, that person might be forgetting that they would not have been able to learn unless they had learned to learn.

When I look back on my high school education, I realize the two most important things that I learned was how to learn and how to think. Those two go together. It’s difficult to learn without being able to think. Learning well requires thinking well. We need to learn how to learn and think. Unfortunately, some people never learn.

For as long as I’ve been writing this blog, I’ve been sharing a Thanksgiving post to express my gratitude for a variety of people, events, and things. Aside from 2008, when I did not post and I don’t have any recollection of why or how that happened, I’ve dedicated a post on or around Thanksgiving. I started in 2004, with Giving Thanks, and continued in 2005 with A Tax Thanksgiving, in 2006 with Giving Thanks, Again, in 2007 with Actio Gratiarum, in 2009 with Gratias Vectigalibus, in 2010 with Being Thankful for User Fees and Taxes, in 2011 with Two Short Words, Thank You, in 2012 with A Thanksgiving Litany, in 2013 with “Don’t Forget to Say Thank-You”, in 2014 with Giving Thanks: “No, Thank YOU!” , in 2015 with Thanks Again!, and in 2016 with Thankfully Repetitive.

As I stated the past four years, “I have presented litanies, bursts of Latin, descriptions of events and experiences for which I have been thankful, names of people and groups for whom I have appreciation, and situations for which I have offered gratitude. Together, these separate lists become a long catalog, and as I have done in previous years, I will do a lawyerly thing and incorporate them by reference. Why? Because I continue to be thankful for past blessings, and because some of those appreciated things continue even to this day.” When I re-read those lists, I realized that the people, events, and things for which I am appreciative are far from obsolete.

So once again I will look back at the past twelve months, and remember the people, events, and things for whom and for which I give thanks. If some of these seem repetitive, they are, for there are gifts in life that keep on giving:

• I am thankful for my grandson’s willingness to engage in facetime chats, though I think he is about ready to surpass me in the ability to engage all the features of an iPhone.
  
• I am thankful for my congregation’s new Director of Music Ministries, who in a just a few months has taught me, and others, all sorts of things about music and singing that have been a blessing.
  
• I am thankful that they let me ring the narthex bell.
  
• I am thankful for having had the opportunity to continue teaching law courses.
  
• I am thankful that the year of transitioning into what is misleadingly called retirement is behind me.
  
• I am thankful for the help people have provided as I continued to add information to the many genealogy databases I maintain.
  
• I am thankful for people being willing to read the things I write.
  
• I am thankful that the township installed speed limit and watch children signs on my street.

Ten years ago, in Giving Thanks, Again, I shared my Thanksgiving advice. I liked it so much that I repeated it again, in 2009 in Gratias Vectigalibus, yet again in 2013 in “Don’t Forget to Say Thank-You”, still again in 2014 in Giving Thanks: “No, Thank YOU!” , even yet again in 2015 in Thanks Again!, and even still again in Thankfully Repetitive. For me, it does not lose its impact:

Have a Happy Thanksgiving. Set aside the hustle and bustle of life. Meet up with people who matter to you. Share your stories. Enjoy a good meal. Tell jokes. Sing. Laugh. Watch a parade or a football game, or both, or many. Pitch in. Carve the turkey. Wash some dishes. Help a little kid cut a piece of pie. Go outside and take a deep breath. Stare at the sky for a minute. Listen for the birds. Count the stars. Then go back inside and have seconds or thirds. Record the day in memory, so that you can retrieve it in several months when you need some strength.

I am thankful to have the opportunity to share those words yet again.

For years I have been arguing that tax cuts for the wealthy are not as beneficial for the economy and the economic well-being of all Americans as are tax cuts for the non-wealthy. Those cuts would permit vast numbers of Americans to purchase goods and services, thus requiring the providers of goods and services to hire more workers.

But the Senate, frozen into the disproven theory that cutting taxes for the wealthy is the way to go, is taking the position that perhaps tax cuts for the wealthy and for corporations, many of which are drowning in cash stored overseas, is an even better way to revive the American economy. Of course, those members of Congress who remain devoted to this theory are far more devoted to the funds pouring in from the campaign donors, who are the beneficiaries of the legislation, then they are to educating themselves with respect to economic reality. They haven’t yet learned that when theory meets reality, reality wins.

But it’s worse. Not only are the wealthy and corporations looking at years of reduced taxes, the rest of America is facing two paths. One, an immediate tax increase that remains in effect for year after year. The other, a tiny tax cut followed a few years later by tax increases that not only wipe out the tax cuts but increase taxes compared to what they are under current law. This isn’t my conclusion. It’s the conclusion of the Joint Committee on Finance, found in its report, Distribution Effects Of The Chairman's Modification To The Chairman's Mark Of The "Tax Cuts And Jobs Act," Scheduled For Markup By The Committee On Finance On November 16, 2017. Yes, it’s a bunch of numbers. But look closely at the minus signs that represent tax cuts, and where and when they disappear and tax increases show up.

To top it off, the report doesn’t even take into account the automatic cuts in Medicare and other programs required to satisfy budget constraints that the Congress doesn’t appear to be ready to dismiss. It surely fits with the plan to eliminate or privatize Medicare, Social Security, national defense, and everything else so that eventually the oligarchy owns everything.

By the time people realize what is happening, it will be too late. What a wonderful legacy the ignorant, enabling the evil, are constructing for the world.

Occasionally readers contact me to ask why I dislike wealthy people. I explain that I don’t dislike them, I simply think they don’t need any more tax cuts. Readers ask me why I describe the wealthy as a monolithic group. I admit that in the interest of making sentences readable, I don’t qualify the term wealthy with long phrases each time I use it. The context of my language should make it clear that it’s the wealthy who oppose paying taxes whose opinions are the target of my criticism and whose legislative and political machinations are the object of my derision. In other words, there are wealthy individuals who have sufficient understanding of economics to have concluded that the supply-side, trickle-down bill of goods that has been foisted on the American people is a crock of nonsense.

Recently, this perspective was reinforced when, according to this report more than 400 wealthy Americans signed a letter recommending to the Congress that it raise, rather than lower, taxes on millionaires and billionaires. They decried actions that would increase inequality, surely because they understand that, in the long run, inequality growth means everyone will lose, and that includes the wealthy. Put another way, they understand that the key to national financial well-being is demand-side economics. In other words, give the so-called job creators a reason to create jobs, that is, to meet demand.

Reading the names of those who signed the letter caused me to wonder whether the views of a wealthy person depend on whether that person created their own wealth or inherited it. Considering that more of the signers seemed to belong to the first group, it is possible, and logical, that those who started out poor or merely comfortable spent enough of their lives experiencing struggle, or at least economic limitation, and spent enough time surrounded by others in the same situation, to appreciate the intrinsic value of those who are not wealthy but whose demand for goods and services fuels the economy. They understand, therefore, the need for those folks to have sufficient economic wherewithal to make those purchases. On the other hand, those born into wealth, who spend their entire lives unaware of life without opulence, who circulate among others with wealth, and who isolate themselves from everyone else, are far more likely to lack the understanding of how valuable not-so-wealthy people are to the economic well-being of the wealthy. Of course, there are those among this latter group who, for one reason or another, realize this fact of economic life and become philanthropists, perhaps patterning after a parent or grandparent, or perhaps having had some sort of Damascus moment. But many do not, as they succumb to selfishness and greed, overcome by an addiction to money triggered by a deep insecurity that they will never have enough money to insure that they will not end up, as some did in 1929, on what they see as the wrong side of the tracks.

I applaud these individuals for having the courage to speak out. I doubt, though, that their words will have any positive effect on the wealthy individuals whose mantra is “more, more, more,” nor on the members of Congress who are so subservient to their campaign donors that they cannot realize they are in dysfunctional relationships with those persons. I fear that fixing this mess will require some sort of intervention. That is not a pleasant thought.

Several days ago, Benjy Sarlin, in They’ve Got Issues. Here’s Who Is Mad About the GOP Tax Plan, demonstrated that just about everyone is unhappy with “the GOP Tax Plan.” Context and timing suggest that it’s the House plan that is being examined, though much the same can be said about the Senate tax plan.

Sarlin focuses on eight aspects of the House plan that have encountered significant opposition. That opposition, in many instances, is more than polite commentary and borders on deep anger and even rage. Here is a summary of the people who are annoyed, upset, angry, or enraged about one or more of the proposals in the legislation: liberals, Senator Susan Collins, anti-tax conservatives, liberal groups, Senator Marco Rubio, deficit hawks, unions, Republicans from blue states, the AARP, home builders, realtors, graduate students, Ivy League universities, and teachers unions. That’s a short list. One could add those who believe in separation of church and state, the pro choice movement, environmentalists, some small business owners, many middle-class families, and others.

It is said that the best compromise is one that makes everyone angry, or at least, one that everyone finds objectionable in one way or another. There is some truth to this perspective. If everyone finds the compromise perfect, then no one is completely pleased with it. The problem with the Republican tax plans, in both the House and Senate, is that there are some people who are jumping with joy at the prospect of the plan being enacted.

The primary challenge to crafting effective tax reform is that tax reform requires the elimination of tax breaks. Giving up a tax break is unpalatable to the taxpayers who benefit from it, unless something is received in return. In theory, giving up a tax break in exchange for lower tax rates should, if the numbers play out appropriately, seal the deal. The problem with the Republican tax plans is that not everyone is being asked to give up their tax breaks, even though they are getting the benefit of lower tax rates and other offsets.

So the more important question is this: Who is NOT angry about the Republican tax plans? The list begins with owners of carried interests, corporations, multinational investors, and individuals worth more than $5 million. There are others. This so-called “tax reform” is nothing more than a shifting of even more wealth and income from the peasants, artisans, small business owners, and middle class to the oligarchy. It’s the oligarchy that can afford to buy Congress and direct it to enact laws that increase the wealth and power of the puppet-masters. As one member of Congress explained, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” I wonder if he salutes or bows when he is given orders from the oligarchy.

Of course almost everyone is annoyed, upset, angry, or enraged when they examine the Republican “tax reform” hoax. What should matter is the collective identities of these individuals. Almost all of them have something in common that should bridge the divides fracturing the nation. They’re not members of, apologists for, or puppets of, the oligarchy. This entire sordid episode tells America quite a bit about its sickness, and what needs to be done to cure it. Failure to administer and take the required medicine will be fatal.

For decades, drafters of federal tax legislation have created names for the tax bills that are introduced in Congress. Most bills don’t make it out of committee, but a few are enacted. That’s when the name enters into the permanent tax legislation roll call.

Once upon a time, the names of most federal tax statutes were informative. For example, the Foreign Investors Tax Act of 1966 enacted and amended provisions affecting the tax treatment of non-citizens investing in United States assets. The Federal Tax Lien Act of 1966 revised the provisions dealing with federal tax liens. Of course, sometimes the name wasn’t very informative. For example, the Revenue Act of 1971 dealt with tax provisions, but that name did not reveal much of anything about the provisions it contained, other than they involved revenue and, logically, tax.

Very early in my tax career, I was in Washington, D.C., working on assorted tax legislation and Treasury regulations when along came the Tax Reduction and Simplification Act of 1977. Some people laughed, and some called me a cynic, when I tagged it as “legislation that neither reduces nor simplifies taxes.” Over time, increasing numbers of tax bills were given names designed to sell the product rather than provide information. So we were gifted with legislation such as The Middle Class Tax Relief and Job Creation Act of 2012 and the The Tax Increase Prevention Act of 2014. If those Congressional gifts did what their package label claimed, why would more legislation advertised as necessary to do the same thing be required?

So the latest offering is the Tax Cuts and Jobs Act. Will it cut taxes? It will, for some people. But there will be tens of millions of people whose federal income taxes will increase because of what’s in the Tax Cuts and Jobs Act. Perhaps truth-in-advertising ought to be required. The bill should be renamed the Tax Cuts for Our Friends, Tax Hikes for Those We Dislike, Perhaps Some Jobs for the Compliant, and Lots of Layoffs Act.

It appears that increasing numbers of Americans are looking beyond packaging and inspecting the contents, or trying on shoes and clothing, before purchasing merchandise. The same approach has its benefits when it comes to deciding whether to support or oppose legislation. It’s not the name that counts. It’s what’s inside. Check it out. See if it fits. You might be surprised.

Earlier this week, a letter to the editor appeared in the Philadelphia Inquirer. I cannot find it on line, and I have searched from time to time over several days. The letter is short:

I don’t understand the oft-repeated notion that only conservatives and Republicans want tax cuts. I am neither and I would love to see my taxes go down. So, Congress and President Trump, please do pass the largest tax cuts in U.S. history. But please also continue to fund vital government services and programs, and please don’t add to our national debt. Stefan Keller, Huntingdon, Pa.

So how does Congress cut taxes, continue to spend, and not increase national debt? Even if the current situation was one of balance, with revenues equaling expenditures, cutting taxes without increasing debt and without decreasing expenditures is arithmetically impossible.

The key to this mystery of arithmetic is the definition of the word “vital.” It is possible to avoid adding to the national debt by cutting expenditures in the same amount by which taxes are cut. The proposals on the table would require cutting much more than whatever constitutes “non-vital” expenditures. Though some might disagree, most Americans would consider as vital the portions of expenditures paying for defense, Medicare, social security, interest on the debt, interstate highway safety, protection against disease, and other expenses necessary for the health and safety of Americans. The only way to enact a huge tax cut without increasing national debt is to take an axe to Medicare, social security, defense spending, safety, and similar vital functions. There are people, though, who think that Social Security and Medicare should be cut, with the revenues from the taxes enacted to fund those programs being diverted to make up for the revenue shortfall caused by cutting taxes for the impoverished upper class.

There is no way of knowing if the letter writer is among the unfortunate millions whose taxes will be increased in order to offset some of the cost of dishing out tax breaks to the starving millionaires and billionaires of this nation. If he does suffer a tax increase, I have no doubt he will be unhappy, if not distressed and disappointed. He’ll end up with no tax cut, a larger national debt, and cuts in services that are vital to him.

Of course everyone likes tax cuts. Everyone prefers to live in a world with no taxes, where everything is free. Toss in perfect health, and no losses by one’s favorite teams, and paradise on earth would be close at hand. It doesn’t work that way, unfortunately. Yes, we could have a tax-free world, but it would be a high-price world, with money flowing freely into the pockets of the oligarchs who hold a monopoly on everything. Taxes are the price paid for freedom. The anti-tax crowd thinks that the absence of taxation is the equivalent of freedom, but it’s quite the opposite. Being constrained by taxes and government regulation is a far less horrible fate than being held hostage by private sector high prices and no mechanism with which to oust the tyrants.

So, Mr. Keller, though it would be nice to live in a world with reduced taxes, unreduced spending, and national debt eliminated or held in check, it’s no more possible than finding trees on which money grows. If you find one, let me know.

Years ago, a practicing tax attorney told me he didn’t pay attention to legislative proposals until they were about ready to be signed. He explained that there are so many proposals it’s too difficult to keep up with all of them. That’s true, and that’s why in practice I’d notice proposals, but once a bill came out of the Ways and Means Committee I gave it attention. As a blogger, I pay attention to all proposals, ever on the hunt for silly, absurd, outrageous, and unwise ideas. And when a major bill gets attention from Ways and Means, it makes sense to look at it even before it is sent to the House floor.

Though Ways and Means bills can be amended, and often are adjusted when taken into conference committee with the Senate, it is important to pay attention for several reasons. If something in the bill is disadvantageous to one’s clients, it makes sense to alert clients so they can decide if they want to lobby or otherwise take action. It also makes sense to give clients a chance to change plans if something in the bill looks as though it might be enacted and the proposed effective date gives some leeway to do so. It also makes sense to let one’s brain begin thinking about how planning and compliance decisions will be made in the shadow of newly enacted legislation that is on the horizon.

One of the things some people are doing with the current proposal is comparing the impact on their own tax situations. It’s not enough to think in terms of generalities, though I do see many articles being written along those lines. At some point there will be web sites that permit people to enter data and compare the outcome under current law and under the current proposal. As the proposal changes, and as the Senate cranks out its own legislation, these comparison tools will change. It takes time to program these tools, so be patient.

Anecdotally, more than a few people have told me that their federal income taxes will go UP under the House proposal. And none of these people are wealthy. They’re not even close to being wealthy. It could be that people who have estimated that their federal income taxes will go DOWN are unlikely to share that news because they are wary of encountering someone who’s not getting a tax reduction.

The lesson is clear. Before buying into the “everyone gets a tax cut” promise, do the math. Work the numbers. Decide which list you are on.

Those interested in tax law and tax policy are digging through the recently released House bill that proposes to amend the Internal Revenue Code and trying to figure out how, if at all, it will increase or decrease their own taxes or the tax burden on various segments of Americans. In the meantime, below most radars tax law administration continues. A recent Philadelphia Inquirer story demonstrates this reality.

A man working for Catholic Social Services in Philadelphia was able to access the names, dates of birth, and social security numbers of foster children under the care and supervision of his employer. He then sold that information to a group of tax return preparers who used it to generate dependency exemption deductions on tax returns. For each bundle of information, he was paid roughly $200 to $300. He sold the information for 321 children. The fraudulent deductions created with the stolen information were used on 283 tax returns, and generated significant refunds, with a total of $1.2 million in undeserved refunds being paid by the IRS.

The story broke three years ago when he entered a guilty plea to a long list of charges, but I didn’t notice it at the time. It did not get wide coverage, and certainly did not make headlines. Seven other individuals also were arrested and charged, and five of them were tax preparers working for the owner of a tax preparation company. He, too, was charged. The eighth person pleaded guilty four years ago, but details of her sentencing were sealed.

The social worker who stole the identities was sentenced last week to a prison term of two and a half years. The charges included aggravated identity theft, conspiracy, wire fraud, and aiding and abetting the preparation of false federal income tax returns.

It is this sort of behavior that undermines tax systems. By “this sort of behavior,” I include not only these rather obvious misdeeds but also the more sophisticated schemes that are much more difficult to detect. Every year hundreds of billions of dollars in taxes are evaded. That puts a higher burden on those who comply. In some instances, they are subjected to higher taxes. In some instances, they suffer the consequences of reduced services. Yet for some reason, there are people who, instead of being annoyed, upset, or even enraged that their financial position is being harmed by this sort of behavior, say nothing. Others even praise and admire those who appear, at least initially, to have struck a blow against taxation. In the meantime, many of them are looking for financial relief by the enactment of legislation. That’s a big tax thing. Yet so long as people ignore the law that the legislation enacts, the effectiveness of the legislation is undermined. One taxpayer stealing some identities and filing some false tax returns is a little tax thing when viewed against the backdrop of the entire tax system. Yet how many of the taxpayers whose federal income tax liabilities increase if and when the proposed legislation is enacted will resort to the same sort of behavior? What effect will that have on the tax system? It’s the little tax things, taken together, that often are bigger than the big tax thing.

Almost every savvy economist, and others, have figured out that the Republican tax plan will add at least a trillion dollars to the federal budget deficit, something that Republicans would not have tolerated before they shifted to a philosophy of enriching the rich with tax cuts. Rather than explaining why they are willing to do what they once opposed, Republicans are defending their actions by claiming that cutting taxes, and thus cutting revenue, won’t enlarge the deficit. How can that happen?

According to this Bloomberg report, Republican legislator Rob Portman shared his opinion that cutting taxes will decrease the deficit because “it’s going to get the economy moving.” Why does Portman think this is the case? He didn’t say, but it’s easy to figure out. When George W. Bush was president, and this same “tax cuts increase revenue” theory was being used to enact tax legislation that put the nation on a path to the economic meltdown of a decade ago, Portman was directing the White House Office of Management and Budget. So it’s obvious that Portman has been schooled in, and is an acolyte of, the disproven trickle-down supply-side economics approach that doesn’t work. So why, despite its failure, does Portman and his comrades continue to advance this theory? There are several reasons.

It is difficult to let go of long-held beliefs. It is easier to deny facts than to make changes in order to adapt to reality. It is difficult to say no when those who want to hear the word “yes” hold economic and political power and exercise it in self-serving ways. It is pretty much impossible to get elected nowadays without support from very wealthy benefactors, and there is an expectation that they will be repaid.

Plowing money into the hands of those who already have more than enough of it will not get the economy moving. Why? If the wealthy cannot move the economy with what they now have, they’re not going to move it with even more money. They will stash some of the cash abroad as they did at the turn of the century, and the rest will go into the next version of the bad investment scheme.

What moves the economy is consumer spending and consumer investment. Ninety-nine percent of consumers are not in the top one percent. The Republican tax plan does little, if nothing, for the ninety-nine percent. Worse, it actually increases federal tax liability for more than a few members of the ever-shrinking middle class. If all of the tax cuts were directed to low and middle income individuals, in fairly modest amounts, not only would it cost far less than a trillion or more dollars, it will get the economy moving. But that won’t happen? Why? Because no one in the low and middle income brackets has the financial power to put someone into office.

This plan did not work last time around. It will not work this time around. Like last time around, it will appear to work, for a short while. Then its effects will kick in. And who will be in the best economic position to weather the storm? Sadly, many of those who will be hurt most seriously are strong supporters of what is being touted as something other than what it is, namely, a repeat failure.

Back in late June, in Another One of Those Non-Arithmetic Tax Questions: What Is a Sport?, I described a dispute taking place in Europe that focused on the question of “what is a sport?” for purposes of applying the value-added tax on competition entry fees. I explained:

The value-added tax does not apply to fees paid to enter sports competitions. The English Bridge Union paid the tax on tournament entry fees, and sought a refund. British tax authorities refused, arguing that bridge is not a sport. So the dispute has reached the European Court of Justice, whose top advisor concluded that bridge indeed is a sport. Though not binding, the opinions of the advisor usually are followed by the court.

When the court handed down its decision a few days ago, it demonstrated why the adverb “usually” was necessary in the last quoted sentence. According to this report, the court concluded that “bridge, which is characterized by a physical element that appears to be negligible, is not covered by the concept of ‘sport.’” The English Bridge Union expressed disappointment with the result, arguing that bridge incorporates many attributes found in typically recognized sports, such as organized competition, training, and exertion.” Using those characteristics, one could conclude that law students participating in moot court competitions are engaged in sports. I’ve never asked the students if they perceive themselves as athletes when they are arguing in front of moot court judges.

Oddly, some European Union countries treat bridge as a sport because, in accordance with European Union law, a competition is treated as a sport if it provides benefits to physical or mental well being. Yet other European Union countries reached the opposite conclusion. The decision by the European Court of Justice will probably cause that first group of nations to change their position.

Using “provides benefits to physical or mental well being” as a test for whether an activity is a sport is unwise. Remembering that activities qualifying as a sport are exempt from the value added tax, that test would sweep almost all activity into the definition of a sport. Does bridge provide mental well being? Apparently. So, too, do listening to music, watching movies, and doing crossword puzzles. So if those and similar activities were conducted in a competitive environment, they would qualify for the tax exemption.

What puzzles me is why the drafters of the value added tax legislation did not take time to craft a practical definition of sport that would eliminate the need to debate the matter, and that would preclude the current situation of different member nations reaching different conclusions. But sometimes legislators think that “everyone knows” what a word means, when, in reality, almost every word can generate a debate about its meaning. Would a formal debate about the meaning of the word “sport” in the value added tax statutes qualify as a sport?

I concluded Another One of Those Non-Arithmetic Tax Questions: What Is a Sport? with these words:

About a year ago, Newsweek published an article focusing on the definition of sport, in the context of the Olympics, and coverage of activities by ESPN, an acronym that includes “S” for “Sports.” As one might expect, people disagreed on whether particular activities qualified as a sport. Among those described as generating controversy were auto racing, cheerleading, cheese-rolling, chess, cup-stacking, ferret-legging, golf, hot dog eating, poker, spelling bees, video games (“esports”), and wife-carrying.

Perhaps arguing about taxes is a sport.

. And perhaps if I entered MauledAgain into a blog competition, I’d be engaging in a sport. Not that it matters, because the European Union value added tax isn’t applicable, but then I could call myself an athlete. Or something like that.