The Morning Jolt

Economy & Business

Congressional Republicans’ Tax Plan Isn’t Great For Trump Suburbanites

Making the click-through worthwhile: How one aspect of the GOP tax plan could accidentally sock it to a group of Trump voters, a reviled figure prepares to return to American society, several NFL teams announce they’ll stand for the anthem going forward, and what 80s sitcoms can teach us about the American founding.

The Tax Hike Coming to Trump Voters in Blue States

Get ready for an epic fight on taxes in Congress that won’t necessarily break along partisan lines, but along state lines.

You’re going to hear a lot of scoffing from Republicans that the places where taxpayers use the state and local tax deduction the most are deep blue places like New York and Westchester counties in New York State and Marin and San Francisco counties in California. Some on the right will ask why they should care about hitting the wealthiest, and often most liberal, places in the country with a giant tax increase. They’ll argue, with some justification, that this amounts to a federal subsidy for high-taxing states, and shields big-spending state and local governments from the full consequences of their appetite for tax increases.

But fans of this move are probably going to want to avoid confronting the fact that it would also hit the suburbs that supported Trump in those blue states hard, too. It’s not just Nancy Pelosi and the folks on Billionaire’s Row in San Francisco who deduct their state and local taxes.

The Tax Foundation calculated which counties’ taxpayers deduct their state and local taxes the most by taking 2014 returns, adding up the total of all of the deductions for state and local taxes, and dividing by the number of returns filed. They created a really cool interactive map with the data. In a lot of ways, it looks like a familiar red/blue map of the presidential vote by county. East coast urban counties take a lot of state and local deductions, and rural parts of the country do not. This is because urban counties usually have high property and local taxes, and more rural red counties usually have lower taxes.

But just because Trump lost states like New York and New Jersey doesn’t mean he didn’t win any places in those states. The county that ranks ninth in the nation in deductions for state and local taxes is Morris County, New Jersey, with $11,440. Trump won that county, 49 percent to 45 percent. Not too far from there is Monmouth County, where Trump won, 52 percent to 43 percent. The average return there deducts $9,105.

Trump lost his home state of New York overall by a wide margin, but won several counties in the suburbs of New York City. He won Suffolk County on Long Island 51 percent to 46 percent; the average taxpayer there deducts $8,096. He won Putnam County, north of the city, 55 percent to 39 percent. The average Putman taxpayer deducts even more, $8,855. Trump narrowly won Frederick County, Maryland; residents there average $5,729.

Unsurprisingly, Republicans from these parts of the country hate this idea.

Congressman Peter King (R., N.Y.), who represents part of Long Island, says he is on board with the GOP’s philosophy of eliminating tax breaks and cutting rates, right up to the point where it thwacks his constituents and their ability to subtract $12,000 annual property-tax bills from their federal income.

“I am a Jack Kemp Republican,” he said in a recent interview. “I believe in supply-side economics. I’m all for that. But again, this has a unique hit on Long Island.”

In the weeks leading up to the White House’s announcement, Mr. King, New York Democrats and business groups had been urging Republican leaders in Congress to back off their proposal to repeal the deduction. Instead, the administration—in which the president and his two top economic advisers are high-income residents of blue states—chose repeal.

Yes, the overall tax rates are going to go down, but a lot of these taxpayers are going to see their level of taxable income go up by a couple thousand dollars, eating up a big chunk of whatever reduction the other cuts give them. Are Republicans sure they want one of the first major legislative accomplishments of the Trump era to be a giant tax hike on suburbanites in coastal states?

Look Who’s Back, at the Worst Possible Time

Ugh. The country is angry, divided, tense, full of suspicion and accusations about racism, police misconduct, lack of accountability, a legal system that is tied in knots by opaque thinking of jurors, and a sense that football players have insufficient respect for the challenging lives of those in law enforcement.

How could this possibly get any worse? Oh, that’s right, O.J. Simpson is getting out of prison.

CBS News has a new poll:

Looking back, most Americans today think that O.J. Simpson is guilty of the 1994 murders of Nicole Brown Simpson and Ron Goldman. 71 percent think so, a slight increase from the 67 percent who thought so in October 1995, when the jury came back with a not guilty verdict.

A large majority of white Americans thought then, and still think today, that O.J. Simpson is guilty of the murders. There has been a shift in the perspective of black Americans however. While 69 percent of blacks said that O.J. Simpson was innocent in 1995, today black Americans are evenly divided.

CBS glides over one of the more fascinating aspects of the poll. When asked whether the 1995 trial was mostly decided on the merits of the case, or mostly decided by factors of race, 41 percent of whites and 39 percent of blacks think it was on the merits. But 37 percent of whites and 44 percent of blacks think it was decided by race. I interpret that as blacks being slightly more willing to say that the jurors let Simpson off the hook because of his race than whites are.

What Does an NFL Player Have to See in Order to Stand Again?

During last night’s Thursday Night Football game, all of the Green Bay Packers and all of the Chicago Bears stood and locked arms. Meanwhile, over in Pittsburgh:

After facing backlash about standing in the tunnel during the national anthem last Sunday, Steelers center Maurkice Pouncey says the team will stand this Sunday.

“I promise you one thing, this week we will all be standing out there for the national anthem. Trust me,” Pouncey said Wednesday.

Pouncey says he expects the entire team to be on the field for the anthem.

“As far as I know it’s 100 percent participation,” Pouncey told reporters. “We love this country. It’s America. We know there are injustice in this world, but to me, personally, football is football and that’s what we need to approach it as.”

The Denver Broncos also announced they will stand for the anthem Sunday.

A question I’d like asked of NFL players who continue to choose to kneel for the national anthem: What would you need to see to make you decide to stand again?

If you’re taking a knee because you feel like America has fallen short of living up to the values it proclaims . . .  well, it’s only done that every day since July 4, 1776, and it will probably do that every day until the Second Coming. We’re a flawed nation because we’re full of human beings, and human beings are flawed. We will always have some lawmaker taking bribes, we will always have some cop somewhere abusing his power, some citizen committing a crime against another, someone demonizing another group of people. There is no heaven on this earth, and you cannot measure the quality of your country against heaven.

What Winston Churchill said about democracy feels like a good way of describing the country as a whole: “No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time. . . . ” The United States of America is really flawed, but we’ll choose our flaws against other countries’ flaws any day of the week.

Those of us who stand aren’t saying that the country is perfect. The song doesn’t say that the country is perfect. Oddly, it ends on a question, almost a challenge: “O say does that star-spangled banner yet wave, O’er the land of the free and the home of the brave?” In other words, is that flag still flying (yes) and is the country it flies over still the land of the free and the home of the brave? The answer, throughout our history has been, generally yes, although maybe not quite free enough, and perhaps not brave enough.

Everybody who stands for the anthem can probably point to some aspect of American life that really disappoints or angers them. Individuals and groups within this country can be materialistic, shallow, ignorant, lazy, spoiled, selfish, abusive . . .  but those flaws aren’t what define us as a whole. The vast majority of us stand because we love and honor our country despite its flaws.

Is that perspective too much to ask of an NFL player?

ADDENDA:  I know I promised a new edition of our pop culture podcast that hasn’t been posted yet; our production team is dealing with issues that cannot be postponed. The archives are still there, so you can put together your own “best of” show.

In yesterday’s Three Martini Lunch, Greg illustrated a point about the Declaration of Independence by citing an old episode of the NBC sitcom Family Ties. Today we have to see if we can make a point about judicial restraint by citing Night Court.

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