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Pelosi and Schumer Demand Tax Cuts for the Rich
Funny thing about American politics: In campaigns, we fight the culture war, but in government, we fight about nickels and dimes. It is a political truism that most people really don’t give the furry crack of a rat’s patootie about whether the top federal income-tax rate is 37 percent or 39.2 percent. What people really get excited about is abortion or gun-control or transgender toilet etiquette and other issues that thrive weedily in cultural fissures.
There is a good reason most people do not get that excited about the top federal income-tax rate. A large proportion of Americans — just under half, in fact — pay no federal income tax at all. Unlike those expansive Nordic welfare states that our friends on the left claim to admire so intensely, the U.S. system of federal tax rates is radically progressive, relieving much of the middle class and practically all of the lower-income classes of all or practically all of the federal income-tax burden. And the number of Americans who have to worry about the top rate is even smaller: For a married couple, the top rate kicks in north of $600,000 a year, a sum earned by only about 8 percent of U.S. households. Add an extra $100,000 or so, and you are down to 1 percent.
But minority groups, even very small minority groups, can have an outsized influence on politics, especially if they are wealthy minority groups. Bitch and moan about inequality all you like, the disproportionate influence of the wealthy on political policy is generally a good thing, because the wealthy are (slightly) less authoritarian than the poor. As the economist Bryan Caplan (“Why Is Democracy Tolerable?”) wrote in 2012:
Before I studied public opinion, I often wondered, “Why are democracies’ policies so bad?” After I studied public opinion, I started asking myself the opposite question: “Why aren’t democracies’ policies even worse?” The median American is no Nazi, but he is a moderate national socialist — statist to the core on both economic and social policy. Given public opinion, the policies of First World democracies are surprisingly libertarian.
Compared to the wealthy, Professor Caplan finds, the poor are “much more anti-gay. They’re much less opposed to restricting free speech to fight terrorism.” Professor Caplan finds that while there are not very many points of radical divergence in opinion between the affluent and the non-affluent, in those instances where there is a marked disagreement, the affluent are more likely to prevail.
Which is why Nancy Pelosi and Chuck Schumer are getting ready to go to bat for tax cuts for the rich, their No. 1 domestic priority in the post-Trump/post-McConnell future they believe will be arriving in January. Green New Deal? Free false teeth for impoverished grandmas? Oh, pipe down, peons! Bob Weinstein has bills to pay!
In a very amusing New York Times column by two Brookings nerds, Richard V. Reeves and Christopher Pulliam, the question is raised:
The election is a referendum not only on the moral failings of President Trump, Democrats argue, but on the economic fissures of the new economy. It is a fight, Mr. Biden says, on behalf of “the young people who have known only an America of rising inequity and shrinking opportunity.”
Why on earth, then, are Democrats fighting — and fighting hard — for a $137 billion tax cut for the richest Americans? Mr. Biden, Nancy Pelosi and Charles Schumer don’t agree on everything, but on this specific issue they speak with one voice: the $10,000 cap on deductions for state and local tax (better known as the SALT deduction) must go.
Limiting the deductibility of state and local taxes (SALT) amounted to a big tax increase on rich progressives in high-tax jurisdictions such as New York City and San Francisco, the political homes of Senator Schumer and Speaker Pelosi, respectively. For years, this provided the limousine-liberal set with a much-needed economic palliative against the pain of living under the rapacious and incompetent governments of New York, California, New Jersey, Connecticut, etc. It was a have-your-cake-and-eat-it-too arrangement: The grubby little miscreants in Sacramento and Albany were happy with the jack, and the high-income constituents they milk like a particularly docile if snappily dressed herd of dairy cattle hardly felt any pain thanks to the federal tax analgesic.
With the SALT deduction severely limited, a lot of rich Democrats took a hit. Some of them even packed up and left for more plutocrat-friendly jurisdictions such as Florida, dumping assets in the high-tax states: Bob Weinstein sold his Greenwich home, taking a 15 percent haircut off the asking price, dumped his Upper West Side townhouse at no profit, and sold his magnificent spread stretching across the 16th and 17th floors at the Beresford. The Weinstein family has had problems bigger than taxes in recent years, but they aren’t the only ones reducing their footprints or entirely getting out of New York City and New York State, out of Connecticut, out of New Jersey, and out of California.
This has been felt especially keenly in New York, which, thanks to its own radically progressive tax code, relies on a tiny fraction of its taxpayers to fund a large share of state and local government. As of 2016, taxpayers earning more than $700,000 a year — the cutoff point for the hated 1 percent — were paying 43 percent of New York City income taxes and the majority of New York State income taxes, according to state data analyzed by the Empire Center. And some of those whales left for Florida, Texas, Nevada, etc. Governor Andrew Cuomo warned that the lost revenue from millionaire tax refugees might force cuts in state spending or — angels and ministers of grace defend us! — higher taxes on the middle class. But, as the Wall Street Journal put it, Governor Cuomo, like his progressive colleagues around the country, did nothing to reform New York’s own tax policies. Instead, he simply raged that the federal government’s unusually intelligent decision to cease subsidizing these policies was “diabolical.” From the Journal’s editorial board:
During his 2010 campaign, Mr. Cuomo promised to let New York’s tax surcharge on millionaires expire. But he has extended it again and again and now wants to renew it through 2024 because he says the state needs the money. Meantime, he warns that a wealth exodus could force spending cuts for education and higher taxes on middle-income earners.
All of this was inevitable, as we and others warned. Yet rather than propose to make the state’s tax burden more competitive, Mr. Cuomo rages against a tax reform that has helped the overall U.S. economy, even in New York. Perhaps now that he’s found Art Laffer on the road to Albany, he’ll think anew.
Properly understood, Schumer and Pelosi are not responding to the demands of a tiny minority of high-income taxpayers — they are responding to the demands of an even tinier minority of Democratic governors and mayors: Governor Cuomo, Mayor Bill de Blasio, Gavin Newsom in California, Mayor Eric Garcetti in Los Angeles, etc., along with federal officeholders such as Senator Kamala Harris, who depend upon those great overflowing slop buckets of campaign cash coming out of Hollywood, Silicon Valley, and Wall Street.
Sometimes, a small minority (or the Smallest Minority!) deserves to prevail. Sometimes, it’s just a bunch of champagne socialists trying to sneak out of happy hour without paying their tabs.
Words about Words
For some people, the BBC is the standard for English pronunciation. It is not the standard for English composition, e.g.:
It is a piece of what is now called “event” cinema, an immersive experience to stimulate all the senses, which it does, from Ludwig Göransson’s throbbing Wagnerian score to visual effects company DNEG’s eye-boggling CGI.
Hyperbole and cliché both have legitimate uses, but you should be careful about letting your prose degenerate into contextually stupid stock phrases such as “all the senses.” Christopher Nolan’s Tenet is by most accounts a very good film, but as a film it is capable of stimulating, by my count, two senses: “DNEG’s eye-boggling CGI” for the eyes, Göransson and that throbbing Wagnerian stuff for the ears. I would not be surprised if somewhere in some Las Vegas–area basement a team of Russian computer scientists were working feverishly to discover a way to permit video to stimulate the rest of the senses, probably in the employ of some off-the-books porn-industry think-tank. But, for now, a movie not only fails to “stimulate all the senses” but fails even to stimulate the majority of the senses.
From Andrew C. McCarthy:
The charge is contained in a criminal information. That is a form of formal allegation the Justice Department uses when a defendant agrees to waive indictment (i.e., forego his right to have the grand jury find probable cause to charge a crime). It is often, but by no means always, used in connection with a defendant who is pleading guilty under a cooperation agreement.
When I was a deputy managing editor at National Review, I spent a fair amount of time editing my friend Andy McCarthy, who remains my friend in spite of that painful experience. To briefly revisit it: To take a pass on something is to forgo it; to forego something is to go before it. As in: “In the foregoing sentences, I chose to forgo cheap self-referential usage humor.”
In case you are wondering, the forego in the past tense is forewent.
Send your language questions to TheTuesday@NationalReview.Com
Home and Away
On the Liberty University mess:
The tragedy of Jerry Falwell Jr. is that he turned out to be exactly the putz many people expected him to be.
But even amid all the horrifying comedy — whatever is going on with the Falwells and that Miami “pool boy” — there is real tragedy.
The principal tragedy is institutional.
Jerry Falwell Jr. and Liberty University present a textbook example of American institutional decline. As the political analyst Yuval Levin has argued at length in his 2020 book “A Time To Build,” many critical American institutions are failing because they have been hijacked by the personal ambitions of their leaders.
The full article is available in the New York Post. It is the sort of thing you’ll enjoy if you enjoy that sort of thing.
You can buy my forthcoming book, Big White Ghetto: Dead Broke, Stone-Cold Stupid, and High on Rage in the Dank Wooly Wilds of the ‘Real America,’ here. It is full of adjectives.
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I’m not saying it necessarily means anything, but the week’s headlines are the sort of thing that your editor would take out of a satire as being too on-the-nose:
CNN: “A gender reveal sparked a wildfire in California that’s grown to 7,000 acres.” Fireworks apparently are à la mode at such events.
New York Times: “At Least 4 Boats Sink During ‘Trump Boat Parade’ in Texas, Officials Say.” What happened? “Too many variables” to say, says a sheriff’s spokesman bearing the Harry Potter–worthy name Kristen Dark. (Slytherin, obviously.) She adds: “We had an exceptional number of boats on the lake today. When they all started moving at the same time, it generated significant waves.” Nothing more dangerous than a stampeding herd of independent thinkers, or a fleet of them.
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