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My Lieberman Problem -- And Ours

Like Josh Marshall and others, I have strong and deeply conflicted feelings about Ned Lamont’s challenge to Senator Lieberman. I have a lot of residual respect for Lieberman, which goes way back. And I mean way back: As I often note, Lieberman is probably the first politician I was aware of when I was a little kid. When I was about seven years old, my view of politics could probably be summed up as Nixon=bad/Lieberman=good.

This was when he was a State Senator representing New Haven, following the last great anti-war rebellion in the Connecticut Democratic Party. In 1970, incumbent U.S. Senator Thomas Dodd - hawkish, pro-war, and ill - withdrew from the race for the Democratic nomination when it was apparent that he would lose to anti-war candidate Joe Duffey, but then later reentered the race as an independent. Meanwhile, Lieberman, who with Duffey had founded the anti-war Caucus of Connecticut Democrats, was riding the same wave to unseat the State Senate Majority Leader in a primary. Helping to run both the Lieberman and Duffey campaigns were a lovey-dovey pair of idealistic Yale law students named Rodham and Clinton.

Later I didn’t pay much attention to Lieberman as he ran and lost campaigns for Lieutenant Governor and Congress. He seemed to be one of those ‘70s reformers who just couldn’t stop running. By the time he was elected Attorney General of Connecticut (where he pioneered the role of activist A.G. that Elliott Spitzer has perfected) I had moved out of the state. But later, when I worked in the Senate, I often worked closely with Lieberman and his staff - he and Bill Bradley often shared idiosyncratic positions, such as support for school vouchers, as well as less idiosyncratic but highly complicated interests, such as improving child support enforcement. In most such dealings between Senate offices, staff as well as the Senators, even when they agree, are always subtly jockeying for credit, for a visible leadership role on the issue, or for a place in front of the camera. Even though Lieberman had written a book about child support enforcement, based on his efforts to fix the system in Connecticut, and knew more about it than any other Senator (and surely more than I did), he contentedly played a supporting role. And it always seemed apparent from everyone who worked with him that he was simply a better human being (kinder, more respectful) to those around him than 99% of politicians.

Lieberman’s positions on various issues never really bothered me. I don’t need elected officials to exactly match my issue positions, which often change anyway. And in some cases, I shared his positions. I found his sanctimonious tone grating, his obsession with popular media distasteful and misdirected (as in, you might have more credibility on this if you didn’t suck up to “the I-Man” - Don Imus -- two mornings a week), but they would never be enough to make me think that if I lived in Connecticut, I wouldn’t vote for him. While my family and family friends developed a deep distaste for Lieberman, I would simply repeat the reminder, drilled into my head by own friends in the Lieberman camp, that his voting record really isn’t that different from Senator Dodd’s. And it isn’t.

Josh Marshall suggested recently that his greatest misgiving about Lieberman was his weirdly persistent refusal last year to get off the fence on Social Security privatization, as if he was waiting for some bipartisan deal that he could courageously join. “Perhaps he’s just out of step with the parliamentary turn of recent American politics,” Josh suggests. By which he means that, despite the Medicare drug bill, the energy bill, and the abundance of evidence to the contrary, Lieberman still thinks that he can deal in good faith with the Republicans. True, Lieberman doesn’t seem to really understand the current power structure, but he’s hardly alone in that. It took a couple of whippings before Ted Kennedy understood it. I’ve argued that everyone had better reckon with the fact that the era of bipartisan coalitions is dead, but I think there are downsides to that change and I don’t blame Lieberman for trying. Nor, in the end, did he cause any harm by his misreading of the Social Security game.

Nor is it fatal to me in itself that Lieberman supported the war and opposes withdrawal on a timetable. I voted twice in 2004 for Senators who had voted for the war, and I have no cosmic certainty at this point about what the right answer is. I’d vote for withdrawal on a timetable, but not without doubts. Maybe Biden’s right, maybe Levin and Reed, maybe Murtha. Because the risks are so uncertain, this is the hardest question to answer, and for myself, I find I can’t categorically dismiss anyone’s answer or insist that every Democrat toe one line.

So I ought to be a Lieberman “dead-ender.” I’ve respected him for 30-some years, I don’t mind his idiosyncratic positions, I don’t demand party loyalty, and I don’t insist on any particular position on how to end the war. But I’m not. Because something happened to Lieberman, and it’s more than his position on the war. It is not, as John Dickerson wrote on Slate this week that he “symbolizes” all the other Democrats who voted for the war or won’t take a firm stand. Above all else, it’s simply his self-righteous anger, his hostility to those who differ. He alone among Democrats seem to think that opponents of the war are not just mistaken, but will cause us to lose. (Just as he alone can continue to describe the choice in the war as “winning” or “losing,” as if “winning” were somehow still possible, as opposed to salvaging a bad situation.) He alone would say something like, “”We criticize the commander-in-chief at our own peril.” And he alone would suggest, as he did to David Broder, that Democrats who criticized Bush on the war were acting from "partisan interest" while he was thinking of "the national interest." He alone seems more focused on what he sees as the errors of the war’s opponents than those who launched the war. As Michael Tomasky said of Peter Beinart’s New Republic position on the Iraq War, it was not so much that they supported the war as that they “opposed the opposers.”

It seems to me that Lieberman is following the path, quite literally, of the neo-conservatives - not the Rumsfeldian nationalists who incorrectly wear that label now, but the original neo-cons of the 1960s, driven to the right above all by their irritation at the left, often based on domestic politics. (Hence the title of this post, an allusion to one of the most famous original documents of the neocons, Norman Podhoretz’s 1967 essay, “My Negro Problem - And Ours”.)

Is that enough of a reason to oppose Lieberman? Sure, because it’s a huge error on one of the most fundamental questions of our time. It’s an error not of policy or of political loyalty, but of attitude. And it is not an error that I see others making. I heard Ed Kilgore today, on a bloggingHeads sequence, argue that if “the bloggers” come for Lieberman today, tomorrow they’ll go after Steny Hoyer or Hillary Clinton. I can’t speak for everyone, but while I have disagreements with Clinton and probably Hoyer, I’ve never heard them say things as deeply offensive to my sense of what democracy and patriotism requires as I’ve heard from Lieberman recently.

Nor do I accept the argument that if Lamont wins, it represents a “purge” or shows that “there’s no place in the Democratic Party” for Lieberman. I value competitive elections. Lieberman’s not guaranteed a fourth term in the Senate. Ned Lamont’s reasonably well qualified, certainly as qualified as, say, Paul Wellstone was. If Connecticut Democrats want a Senator who had the right position on the war, or at least doesn’t treat those who did have the right position with contempt, they are entitled to it.

Finally, as to the possibility that Lieberman would run as an independent - well, in the David Broder column mentioned above, he noted Lieberman’s admiration for the great Connecticut Democratic boss and DNC chair, John Bailey, and Bailey’s skill at engineering nominations and avoiding primaries. He should not forget what Bailey said of Senator Thomas Dodd’s decision to run as an independent in 1970: "...any action like this can’t help but hurt the party.”

(I’m grateful to the author who writes as “Genghis Conn” on the Connecticut Local Politics blog for a well-sourced account of the 1970 campaigns.)

Posted by Mark Schmitt on June 24, 2006 | Permalink | Comments (16)

The Completely Incorrect History of the Democratic Party

I know we’re done with the Peter Beinart book club, and the poor guy is getting picked on a lot this week. But I can’t resist, and as President Bush said after teasing a legally blind reporter for wearing sunglasses, `I needle you guys out of affection." (The bully’s excuse, doubly vicious because so plainly untrue, and forces the victim to be courteous.) I wouldn’t say that I needle Beinart out of affection -- I don’t know him well, but I admire him for trying to produce something of substance out of the admission that he was wrong about Iraq -- but out of frustration with the fact that he so often seems to start off o.k. and then gets things so spectacularly wrong.

So here’s his latest. In a defense of the Clinton Administration (which I’m totally comfortable with, by the way, having seen myself recently described as a "Clinton Democrat" and not flinching) Beinart gives the following thumbnail history of the Democratic Party in the 1970s:

In reality, the Democratic Party didn’t lose the confidence of its convictions when Clinton became president; it lost them when he was in graduate school. From Harry Truman through Lyndon Johnson, Democrats stood for three basic things: enlightened anti-communism, an expanding welfare state, and racial integration.

Between 1968 and 1972, under pressure from Vietnam and racial conflict, two of those three collapsed. By 1972, George McGovern was urging the virtual abandonment of anticommunism and advocating racial quotas. Then, in 1976, Democrats nominated a relative economic conservative, Jimmy Carter, who showed little interest in extending Johnson’s Great Society largesse. And, poof--there went principle number three.

In The Good Fight, it’s not quite so clear that this is how he would sum up the history, but Wow! Let’s take that second paragraph one point at a time:

By 1972, George McGovern was urging the virtual abandonment of anticommunism,

Um, don’t know what you’re talking about here. McGovern was opposed to the Vietnam War, which was a war against communism. But the "enlightened" anti-communist liberals also opposed that war. To say that opposing the Vietnam is tantamount to "virtual abandonment of anticommunism" is the same as arguing that opposing the Iraq war is a virtual abandonment of opposition to terrorism. Since Beinart is not now willing to make either argument, he cannot keep baiting McGovern as insufficiently anti-communist, in the same way that he cannot continue to bait Iraq war opponents (among whom he now counts himself) for being insufficiently anti-terrorist. Although he makes a good rhetorical effort to do so.

and advocating racial quotas

o.k., the point here seems to be that the Truman-through-Johnson Democrats stood for "racial integration," whereas McGovern abandoned that principle by "advocating racial quotas." That assumes that affirmative action is somehow antithetical to integration,rather than a means to achieve it. But even if you accept that quotas are antithetical to the older ideal of race-blind integration, it seems worth noting that actual racial quotas were introduced into American political life by President Richard M. Nixon, who as it happens was McGovern’s Republican opponent in 1972.

(It’s possible that Beinart is referring to something much more arcane here, namely the internal reforms in the Democratic Party nominating process, implemented by a commission McGovern chaired. Those reforms included some criteria to ensure sufficient numbers of women and minorities were delegates to the convention, which was an important move given that southern states still produced all-white delegations. Beinart follows a traditional neo-conservative argument -- first advanced by Jeanne Kirkpatrick -- that the McGovern-Fraser reforms led to a fragmentation of the New Deal Democratic coalition into identity group politics. But if this is Beinart’s point, and even if he and Jeanne Kirkpatrick are right, it is bizarre to call it an "abandoment" of racial integration. At worst, it was an excessive commitment to integration. And it is also an event of very minor significance, except in the worldview of the neo-cons.)

in 1976, Democrats nominated a relative economic conservative, Jimmy Carter, who showed little interest in extending Johnson’s Great Society largesse. And, poof--there went principle number three

I’ll assume he means principle number two, "an expanding welfare state." I suppose this is a version of the argument that if only that most reckless of big spenders, Saint Scoop, had been elected president in 1976, all would be well. There are a lot of reasons the Carter presidency failed; not spending money on social programs wasn’t one of them. This was the era of CETA, after all. (The big public jobs program, which paid for my last summer in high school.) Carter didn’t have the sway over Congress that LBJ had, and both fiscal and economic circumstances were very different. Nor is "expanding welfare state" (that is, spending) a principle in itself -- expanding economic security is.

And that point Beinart immediately concedes, when it comes to Clinton:

If Clinton convinced Americans that government action could be moral, he also convinced them that it could be responsible. By reducing the budget deficit, he helped restore the Democratic Party’s reputation for economic stewardship, which had been gravely damaged under Carter. And, by using market mechanisms to achieve traditional liberal goals, he found ways to fight poverty in an environment where large new programs were politically impossible.

Yes! I think that’s basically right. But celebrating Clinton as an economic conservative is the complete opposite of arguing that Carter’s mistake was that he was an economic conservative who didn’t launch big programs the way LBJ did.

I have no gripe with Beinart’s rehabiliation of Clinton. I was never very critical of Clinton, and now that we really understand just how vicious the right-wing machine is, we have to appreciate that he did not have the freedom of movement that LBJ had, and that he made almost as much as could be made of his severely constrained political circumstances. It should be possible to make that case without trashing a couple decades of well-meaning, serious liberals -- as committed to anti-communism, racial fairness and broadly shared economic security as their elders -- who just happened to lack the policial skills of an LBJ or Clinton.

Posted by Mark Schmitt on June 16, 2006 | Permalink | Comments (15)

Mr. Rove is Ready for His Close-Up

Now that Karl Rove"has his reputation back," what’s he going to do with the rest of his life? Here’s what he did last night:

MANCHESTER, New Hampshire, June 12 (Reuters) - Republicans should campaign on U.S. economic strength and the war in Iraq as they gear up for the November election, President George W. Bush’s political adviser Karl Rove urged on Monday.

"We have the strongest economy of any major industrialized country in the world," Rove told about 400 Republicans at a fund-raising dinner in New Hampshire...

Party officials estimate the fundraiser brought in $60,000. expected to help pay legal bills for a Republican scandal over a phone-jamming scheme designed to keep New Hampshire Democrats from voting in a 2002 election.

The case led to the conviction of three Republican party officials and seriously squeezed the state party’s finances....

Political consultant Rich Killion, who paid $250 to meet Rove...People who attended just to listen to Rove paid $100 each.

Now I’m sure plenty of people here will be appropriately outraged by the fact that an official paid by taxpayers is out there raising money for a felon’s legal fees.

But I’m too busy laughing at the shabbiness of the whole thing. $60,000?? Whoever heard of a Republican fund-raiser that produced $60,000? Aren’t we missing some zeroes here? $60,000 is the price of the car you drive to the Republican fund-raiser in. Not to mention, it’s not even a down-payment on the $3 million in legal fees stemming from the case.

And what’s Rove’s time worth these days? Shaking hands for $250? Isn’t this like the end of a "Behind the Music" or E! True Hollywood Story, where the celebrity gamely tries to make a comeback, playing small clubs or shaking hands for money at conventions of fans of his long-cancelled show?

Posted by Mark Schmitt on June 13, 2006 | Permalink | Comments (4)

The Myth of "Scoop"

I was late in posting to the TPMCafe "Book Club" on Peter Beinart’s The Good Fight, and all the good points were already taken -- especially in the vigorous comments sections. My post was long, and I think a little tortured in the effort to give Beinart a fair reading (judging from the comments, some of which seemed to have missed my point entirely), but I made one specific point which should have been my only point. I’ll post that section here, the whole post can be found at this link.


There are perhaps several bits of Beinart’s history that I’m tempted to challenge, but I’ll pick on just one of them here because it’s been bugging me for years. It’s a fairly small thing, just a few pages in the book, but it is an essential pivot point for the argument and, frankly, for the New Republic view of the world. And that is the counterfactual proposition that if only, if only Henry M. “Scoop” Jackson had been the Democratic presidential nominee in 1972 or 1976, all would be right with the world.

This is an essential myth to many of the liberal hawks, to the neocons when they still considered themselves Democrats, and to some extent to the predecessors of the Democratic Leadership Council. (the Schachtmanite Committee for a Democratic Majority). And it’s central to Beinart’s argument. But it’s not just wrong, it’s ridiculous. If I went around arguing that if only Bill Bradley, who I worked for, had been the Democratic nominee in 2000, the world would be better, I might - in some unprovable sense - be correct, but people would still laugh at me. Because he didn’t get many votes. (And that was only six years ago, not 30.) Scoop Jackson wasn’t robbed of a nomination that was rightly his, or shot to death after winning the California primary. He just didn’t get many votes. He fell completely flat in 1972. And in 1976, he botched the tactics, unwisely skipping Iowa and New Hampshire and so by the time he won two primaries, Jimmy Carter had already consolidated the support of conservative Democrats while the liberals were split. Scoop Jackson’s not the great lost hope; he’s merely one of about two dozen capable, non-brilliant Senators since 1972 who saw a president in the mirror each morning, but couldn’t persuade anyone else to see the same thing. Would he have won those elections, if nominated? Who knows? Nor was Jackson some sort of foreign-policy visionary. He was a classic Western New Dealer (the really, really big spenders), who also happened to represent the biggest defense contractor of his era. The unsustainability of his pork-barrel “Guns AND Butter” policy would have tripped him up in the 1970s as surely as it did LBJ in the 1960s. If there is a deeper legacy that Jackson represents, it is uniformly a despicable one, in the form of people like Richard Perle and Paul Wolfowitz who used him as a vehicle for their emerging theories, and if their later careers are an indication of what a Jacksonian America would have been like, then we should be thankful he was a dud as a candidate. His dud candidacy deserves no more attention than those of Lloyd Bentsen, John Glenn, Fritz Hollings, and many others.

Posted by Mark Schmitt on June 13, 2006 | Permalink | Comments (3)

Inhofe, "American Exceptionalism," and the Wackiness of the Academic Right

Yes, Senator James Inhofe ("I’m very proud that in the entire recorded history of our family, there has never been...any kind of homosexual relationship") is a sick and moronic bigot. Bill Bennett is a crude embarassment, mostly to himself.

But all their repulsive, and obsessive arguments against gay marriage, such as this from Inhofe -- "Now, stop and think. What’s going to be the results of this? The results are going to be that it’s going to be a very expensive thing, all these kids, many of them are going to be ending up on welfare" -- are to be found, dressed up in fancy-pants pseudo-Alisdair MacIntyre language, in this document, the Princeton Principles on Marriage, released recently.

The signatories to this document include such respectable conservatives as Jean Bethke Elshtain (Chicago), Robert George (of Princeton, not the young New York Post editorialist), Mary Ann Glendon (Harvard Law), Leon Kass (Chicago), Jeremy Rabkin (Cornell) and the legendary Mr. James Q. Wilson.

On reading this, my first reaction was that if the academic left can be a little wacky and irresponsible, the academic right is wacky and despicable.

The most specific of their arguments against gay marriage -- which is only one of the "Principles," but obviously they chose to release it to coincide with the debate -- is that marriage equals monogamy and gay marriage "would likely corrode marital norms of sexual fidelity, since gay marriage advocates and gay couples tend to downplay the importance of sexual fidelity in their definition of marriage." In other words, when gay people make a lifetime vow, they probably don’t really mean it because, well, you know how those gays are.

They do have other arguments, some rooted in plain-old ugly sexism, such as that children can’t be properly raised by parents of the same gender because men are hard-wired for discipline and women hard-wired for nurture. As to whether a child might not be better off with two nurturers or two disciplinarians than cycling through foster homes, they don’t say. And after they explain that, maybe they can tell me why if I’m such a natural disciplinarian, I can’t get my daughter to drink her milk in the morning and cave, while my wife can.

There’s an interesting point in the last section of the document, though, which goes to the definition of the phrase "American Exceptionalism" that we’ve been hearing a lot recently. A couple weeks ago, I attended a forum at the Hudson Institute with a star-studded panel of conservatives arguing, basically, that conservatives had deep philosophical ideas ("foundations") whereas liberals had none. But the panel was hardly about conservatism at all; with some exceptions, it was devoted to a lengthy exegesis of how liberals or "the left" don’t believe this or that. We don’t believe in the Declaration of Independence, one speaker (a signatory to the Princeton Principles) declared, and above all, over and over, I heard that we don’t believe in "American Exceptionalism."

Now I happen to think I believe in American Exceptionalism. I believe that it matters that this is the first and only country founded on an idea and an ideal, of equality and justice. As an American, I believe we have a distinctive role in the world, a distinctive obligation, some of which is inherent and some of which is derived from our postwar and post-Cold War status. I think this country’s great -- though not that whatever it does is automatically great just because it’s America. So I listened to all this and thought, "I don’t know what these people are talking about."

Now the last section of the Princeton Principles is entitled, "American Exceptionalism and the Way Forward." What does that have to do with gay marriage? Evidently, it goes something like this: While the rest of the Western world is loosening the bonds of marriage, we Americans "are the only country with a "Marriage Movement." "The great task for American exceptionalism in our generation," they write, "is to sustain and energize this movement for the renewal of marriage." If the rest of the world zigs, exceptionalism means we zag.

And of course, you can see where one would go with this, segregation in the past and the death penalty today are also examples of American exceptionalism, if it is defined simply as things that make us different from the rest of the developed world. Is that in itself justification for them?

I won’t go too far with this argument, because it’s silly -- they really don’t want to go there. All this about "American Exceptionalism" is just fancy dressing for an argument that’s as crude and ugly as Mr. Inhofe’s.

Posted by Mark Schmitt on June 7, 2006 | Permalink | Comments (10)

Western Delusions

A continually surprising phenomenon in American politics is the deep-belief -- not even a lie, because they really do believe -- among right-wingers in the West that government has nothing to do with their prosperity.

Via Wonkette, I came across this wonderful quote from the governor of Idaho, in a story in the Guardian about those weird wild places where they still like George W. Bush, in this case Boise.

Governor Jim Risch tells Oliver Burkemann of the Guardian:

"Here in Idaho, we couldn’t understand how people could sit around on the kerbs waiting for the federal government to come and do something. We had a dam break in 1976, but we didn’t whine about it. We got out our backhoes and we rebuilt the roads and replanted the fields and got on with our lives. That’s the culture here. Not waiting for the federal government to bring you drinking water. In Idaho there would have been entrepreneurs selling the drinking water."

That’s truly a quote to savor. Because if you ever read Cadillac Desert (one of the finest books about American politics ever written) you surely remember  what Risch is referring to: the collapse of the Teton Dam on the Snake River as it was being filled for the first time on June 5, 1976. (Wow, actually exactly 30 years ago to this day -- I just noticed that.)

The dam was built despite concerns about its safety as well as environmental impact. That’s because Idaho politicians of both parties -- pushed by a small number of ranchers and farmers -- insisted it be built. Idahoans didn’t build it, though. The Federal Government -- the Interior Department’s Bureau of Reclamation -- built the dam at a cost of about $100 million.

In other words, what they do in Idaho is exactly "waiting for the federal government to bring you drinking water." (And especially irrigation water.)

And when the dam collapsed, there were no entrepreneurs taking care of business. There was the federal government. If you’re interested in the details, see the "Aftermath" section in this official history for some of the hundreds of millions spent by taxpayers in other states for disaster relief and for rebuilding the inefficient irrigation systems wiped out by the flood. And then, as the official history puts it:

President [Ford] decided the government had a moral responsibility to pay restitution to the flood victims. Within a week after the disaster, President Ford requested a $200 million appropriation for initial payments for damages, without assigning responsibility for Teton Dam’s failure. The appropriation was attached to the annual Public Works Appropriation Bill then working its way through Congress. ...Reclamation set up claims offices in Rexburg, Idaho Falls, and Blackfoot. Disaster victims filed over 4,800 claims by January 4, 1977, totalling $194 million. The Federal government paid 3,813 of those claims, $93.5 million, by that date. Originally scheduled to end in July 1978, the Claims Program continued into the 1980s. The number of claims reached 7,884 by December 31, 1982, and totalled $517,213,045.76. At the end of the Claims Program in January 1987, the Federal government paid 7,563 claims a total of $322,034,250.44.

(It’s interesting to compare this with the Katrina response, incidentally. Here almost 4,000 claims were paid within six months of the disaster.)

One thing the government did right was to reject political pressure from the same group of wealthy ranchers and farmers to rebuild the dam.

To an amazing degree, Western and sunbelt conservatism is built on the risible delusion that the federal government never did a damn thing for them and they made it on their own, a delusion that they nurture in their air-conditioned, hot-tub-equipped country clubs in a land that could barely support human existence if it were not for the federal government. Frankly, I think this has something to do also with the current congressional scandal. Duke Cunningham, Mitchell Wade, Brent Wilkes, Dusty Foggo, Duncan Hunter, Bill Lowery and several of the other characters at the center of the current political scandal are all products of the corrupt oligarchy of San Diego. There’s is a city built entirely on defense spending, and yet they still believe that they are hardy entrepreneurs making it on their own without help from anybody. And somehow I think this delusion helps them believe that stealing from government as just another form of private enterprise.

Posted by Mark Schmitt on June 5, 2006 | Permalink | Comments (11)

The AMT Is Neither a Flat Tax Nor a Fair Tax

Robert H. Nelson had an op-ed in yesterday’s Washington Post making the case for leaving the Alternative Minimum Tax unchanged, so that it becomes a de facto “flat tax.” (Nelson is the author of one of the most fascinating books about economics I’ve ever read (part of), but also a fellow at the much-in-the-news-lately Competitive Enterprise Institute, best known for defending poor CO2 against its enemies, foreign and domestic, and their fellow-travelers.)

There have been several other comments on the op-ed, and I almost let it go, but there’s more to say, because I worry that this is where we’re going: Republicans will argue that there’s no need for tax increases because revenues are going to go up naturally, and even in a progressive way (as the AMT, which is not indexed to inflation, swallows more of the middle class). I suspect that Democrats will also be tempted by the idea that it might be possible to avoid an actual political fight over raising revenues and let the AMT - which seems somehow “fairer” - work its magic.

Kevin Drum and Ezra Klein both picked on Nelson for his assertion that “There is wide agreement among economists on the benefits of a federal "flat tax" on income that would apply a uniform rate to every taxpayer and eliminate most current deductions and tax credits,” noting correctly that there is a big difference between a single-rate tax - on which there is not wide agreement and which in fact would not be fair - and a broad definition of income, thus eliminating many deductions and credits, on which there is somewhat wider agreement.

The problem with the ATM is that it is neither! It is not a flat tax, since what it does is graft two additional rates onto the existing five-rate system, and those two rates have altogether different rules associated with their definition of income. They are “flat” in that they are not marginal rates - once you trigger the AMT, you pay 26% or 28% on all your income, rather than 10% on the first $15,000, 33% on income over $188,000, etc. as in the regular system. But grafted onto the existing system, the AMT doesn’t make it flatter, it creates more complex marginal rates.

The AMT is also not good at eliminating loopholes or defining income more broadly. Let’s let the geniuses of the Tax Policy Center explain why:

The AMT is poorly targeted. Although originally intended to curb tax sheltering, the AMT raises less than 5 percent of its revenue from anti-sheltering provisions, such as accelerated deprecation or oil depletion allowances. In 2010, only about 1 percent of AMT taxpayers will be subject to the tax due to anti-sheltering rules. A key reason why the AMT does not target shelters very well is that the preferential treatment for capital gains-the lynchpin of most individual tax shelters-is not curtailed by the AMT.

That last point is especially important: The big problem in the tax code right now - the uber-loophole - is the differential treatment of capital gains and dividend income, that is, income from investments rather than from work. They’re still protected, because the. As the AMT expands, it will expand this differential, as those who get their income from work will be affected and those who get more of it from investments are not. A middle-income working taxpayer in a higher-tax state will be hit by the AMT much sooner than someone living off the earnings of a trust fund and making more money, while lazing around a mansion in Miami Beach smoking cigars. (I use Miami partly because the AMT cuts out the deduction for state and local taxes, which is why it’s sometimes called a “Blue State Tax.” There’s a case for eliminating the deductibility of state and local taxes, but no logic for allowing it in the AMT and not the regular tax code.)

Letting the AMT take over the tax code is a really bad, dangerous idea. In the years ahead, there will be no alternative except to face up to the need to raise taxes and make the choices about the fairest way to do that.

Posted by Mark Schmitt on June 2, 2006 | Permalink | Comments (5)