JustOneMinute

Ready For Some Football!

Actually I'm getting ready for some baseball. October baseball, especially.

The Dem Debate

The WaPo wraps up the big Dem debate.

Julian Castro tried for a break-out Kamala Harris moment by going after Joe Biden and ended up with egg on his face. This won't help his bid to be someone's VP and put Texas in play but Rude, Loud and Wrong should get him a gig on MSNBC.

Beto promised to Grab All The Guns but his party won't be in-line skating behind him. Even Democrats have figured out that its a bad idea if their Presidential candidates are running on a platform that picks up votes in CA and NY but hurts them in PA, MI, WI, FL, and more. Blame the Electoral College!

Wyden's New Capital Gains Tax Scheme

Se. Wyden (D, OR) released more details (CNBC, WSJ) of his plan to revise the capital gains tax and apply it to a mark-to-market of some assets. Valuing illiquid assets and non-marketable securities is a puzzle.

Figuring out annual values is straightforward for stocks and other tradable assets but trickier for private businesses, collectibles and commercial real estate.Mr. Wyden proposes to let holders of those illiquid, nontradable assets defer their tax bill until they sell assets or transfer them through gift or death. But they would face an additional charge designed to eliminate the benefit of deferral and the plan outlines options for calculating it.

That will be simple! Does it mean the Koch Brother defers taxes until death? Presumably. I don't see how that will fly with the Dems who are holding out for an annual public flogging.

I had suggested something similar last January. Wyden has lower thresholds now than he had mooted in the past - Warren's wealth tax is meant to kick in at $50MM and Wyden had a figure in mind of $43MM. His new threshold is $10MM of assets, with exclusions of up to $2MM for a residence and $3MM for retirement accounts. So as a practical matter, the threshold will be around $15MM for most (Some tech geek renting a place in San Fran or Manhattan will cash out his IPO at age 26, pocket a bundle and have no exclusions. Bummer, but I'm over it. And the tech geek is over it, too, if he buys an excludable residence.)

I had also noted that to avoid any liquidity crunch for the taxpayer some sort of deferred payment plan would make sense. Wyden is on the same page:

The tax would also apply to built-up gains on existing assets, after a deduction for losses, potentially triggering significant tax bills for billionaires who built their fortunes over the past few decades. That would include the world’s richest person, Amazon.com Inc. founder Jeff Bezos, Mr. Wyden said in an interview Wednesday.

Levies on past gains would be payable over a to-be-determined transition period, perhaps at discounted rates. So someone who bought $20 million of stock in 1990 that is now worth $50 million would face taxes on that $30 million gain. In that sense, Mr. Wyden’s plan resembles a one-time wealth tax President Trump proposed in 1999.

Obviously none of this is happening under Trump and with a Republican Senate, but who knows what 2021 will bring? As to applying the revenue, estimated to be at least $1.5 trillion over then years, Sen. Wyden is staid and lacks the "More Free Everything!" vision of the Dem Presidential candidates. He proposes dedicating the funds to Social Security. Boring! By way of contrast Warren wants to use $700 million of her wealth tax to pay off student loans, because heaven knows young college grads need more financial assistance sent there way than, oh, struggling inner-city school kids.

Well. I think tax hikes are coming and frankly, I'm with Willie Sutton on this one - let's tax where the money is, which is lightly-if-ever taxed capital gains.

Our Gal Val, Back In The News

Valerie Plame is back in the news and drawing a downbeat Fact Check from Glenn Kessler of the WaPo.

Old times! In fact, I feel like a recovering alcoholic holding a bottle of Johnnie Walker Blue. But let me see if I can stop at two:

First, as CIA Acting General Counsel John Rizzo eventually claimed in his 2014 book, and as Bob Woodward, Andrea Mitchell and Dana Priest had reported years earlier, Plame's "outing" was just not that big a deal in terms of national security or personal danger. A Rizzo excerpt:

Secondly, what drove this investigation? Why did Special Counsel Fitzgerald look so hard at the White House yet ignore the obvious, easily detected, unconfessed leaking from Armitage (and probably Powell, and others) from State?

I say it was a mini-Deep State Coup. Democrats allied with moderate Republicans such as Comey in a DoJ revolt intended to pare back or eliminate Dick Cheney. Fitzgerald's team took it in when Richard Armitage of State admitted he leaked to Novak. It took the sleuths at the AP to obtain Armitage's appointment calendar for June 2003 and see a meeting with Woodward. Pretty heavy investigative work!

As a recap, Cheney's man at Doj, John Yoo, left the Office of Legal Counsel in June 2003 and was replaced by Jack Goldsmith. Goldsmith withdrew the OLC opinion backing enhanced interrogation and put the warrantless surveillance program under a microscope. By December the DoJ was in something like a revolt over Cheny's handling of that, which culminated in the famous Comey/Ashcroft/Card hospital room showdown in March 2004.

And during all this, the DoJ decides (Oct 2003) to take the Plame referral seriously and actually investigate the leak Rizzo laughed off. By December, Comey was appointing Fitzgerald as a Special Counsel. The target was Cheney, not Bush, not Rove and most assuredly not "the truth" about who leaked what.

BONUS (But I can quit anytime): Why did Armitage leak at all? Surely it wasn't to punish Wilson? No, it wasn't, and stop calling me Shirley. In the summer of 2003 a dispute raged about who had said what and when about Saddam's WMDs and nuclear aspirations. The gist of the 2002 National Intelligence Estimate had been made public. The CIA (with other intel groups) came down on the side of "Definitely maybe" as to whether Iraq was a nuclear threat. The State Department's INR had dissented, but that was lost in a footnote. Prophets without honor!

So when the dispute raged in June 2003 Armitage discussed with his old pals Novak and Woodward that tidbit about the CIA research effort - the CIA had cobbled together a trip to Niger that was never to going to be conclusive, sent off some retired ambassador (sponsored by his wife!) and come back with an inconclusive report. Did Armitage describe the CIA effort with the phrase "clown show"? We can only hope. But the mention of the wife's role was not meant as punishment; it was meant as a punchline.

JUST SAY NO: Don't get me started on the Tim Russert/Andrea Mitchell / David Gregory cover-up. Press Secretary Ari Fleischer testifed he leaked to reporters John Dickerson and David Gregory of NBC News, Tim Russert's underling. OK, it was Fleischer's last week on the job, he had a lot going on and he might have been wrong (Dickerson says he was, about him anyway) but... IF he leaked to Gregory there was time for Gregory to mention this to Russert, who might have then tried to confirm it in a call with Libby.

Since Libby was charged with lying about his chat with Russert (Libby said Russert mentioned WIlson's wife, Russert denied it), we can be sure that Relentless Truth Seeker Fitzgerald interviewed Gregory and nailed down his story, right?

Wrong. Dickerson says he was never formally questioned. As best I know, Gregory has never denied Fleischer's version. In retrospect, this transcript of a post-indictment Russert program reads like a hostage video, with everyone locking in their cover story. Here is Gregory:

GREGORY: And it is interesting--it's also interesting, I should just point out, that nobody called me at any point, which is unfortunately...
WILLIAMS: Apparently not.
GREGORY: ...not the point.
RUSSERT: Does anybody ever?
GREGORY: But I just wanted to note that.
RUSSERT: I've been meaning to talk to you about that.

Nobody called him, har de har. But of course, Fleiacher's testimony was that their chat was face to face, not a phone call. 

But no follow-up, again, as best I know.

I MEAN IT NOW: I am completely confident that you have seen this idea no where else, and lucky you: the issue of Valerie Plame's "covert" status hinges on the Intelligence Identities Protection Act. The gist: she would need both classified status (check) and "service abroad" in the prior five years (Fog!).

So - is "service abroad" a quick trip overseas, or a formal posting? Unlitigated! However, Ms. Plame's pension benefit gets an upward adjustment for her "overseas service" spanning "six years, one month and 29 days".

So the CIA service record certainly tracks their notion of overseas service. Was the last date within five years of her outing? We don't know, in part because Special Counsel Fitzgerald chose to hide that factoid. And why would he hide it? Hard to see including a comment on her final date of overseas service as hurting either national security or his case, especially since he offered as a substitute the assurance she had flown overseas to Jordan on CIA business within the past five years.

It makes me think that the final overseas service date for which she got credit was outside the five year time frame. One more thing we won't know, unless someone wants to ask Candidate Plame. (She'll cite national security and duck it, but try anyway!)

Our Gal Val, Back In The News

Valerie Plame is back in the news and drawing a downbeat Fact Check from Glenn Kessler of the WaPo.

Old times! In fact, I feel like a recovering alcoholic holding a bottle of Johnnie Walker Blue. But let me see if I can stop at two:

First, as CIA Acting General Counsel John Rizzo eventually claimed in his 2014 book, and as Bob Woodward, Andrea Mitchell and Dana Priest had reported years earlier, Plame's "outing" was just not that big a deal in terms of national security or personal danger. A Rizzo excerpt:

Secondly, what drove this investigation? Why did Special Counsel Fitzgerald look so hard at the White House yet ignore the obvious, easily detected, unconfessed leaking from Armitage (and probably Powell, and others) from State?

I say it was a mini-Deep State Coup. Democrats allied with moderate Republicans such as Comey in a DoJ revolt intended to pare back or eliminate Dick Cheney. Fitzgerald's team took it in when Richard Armitage of State admitted he leaked to Novak. It took the sleuths at the AP to obtain Armitage's appointment calendar for June 2003 and see a meeting with Woodward. Pretty heavy investigative work!

As a recap, Cheney's man at Doj, John Yoo, left the Office of Legal Counsel in June 2003 and was replaced by Jack Goldsmith. Goldsmith withdrew the OLC opinion backing enhanced interrogation and put the warrantless surveillance program under a microscope. By December the DoJ was in something like a revolt over Cheny's handling of that, which culminated in the famous Comey/Ashcroft/Card hospital room showdown in March 2004.

And during all this, the DoJ decides (Oct 2003) to take the Plame referral seriously and actually investigate the leak Rizzo laughed off. By December, Comey was appointing Fitzgerald as a Special Counsel. The target was Cheney, not Bush, not Rove and most assuredly not "the truth" about who leaked what.

BONUS (But I can quit anytime): Why did Armitage leak at all? Surely it wasn't to punish Wilson? No, it wasn't, and stop calling me Shirley. In the summer of 2003 a dispute raged about who had said what and when about Saddam's WMDs and nuclear aspirations. The gist of the 2002 National Intelligence Estimate had been made public. The CIA (with other intel groups) came down on the side of "Definitely maybe" as to whether Iraq was a nuclear threat. The State Department's INR had dissented, but that was lost in a footnote. Prophets without honor!

So when the dispute raged in June 2003 Armitage discussed with his old pals Novak and Woodward that tidbit about the CIA research effort - the CIA had cobbled together a trip to Niger that was never to going to be conclusive, sent off some retired ambassador (sponsored by his wife!) and come back with an inconclusive report. Did Armitage describe the CIA effort with the phrase "clown show"? We can only hope. But the mention of the wife's role was not meant as punishment; it was meant as a punchline.

Our Gal Val, Back In The News

Valerie Plame is back in the news and drawing a downbeat Fact Check from Glenn Kessler of the WaPo.

Old times! In fact, I feel like a recovering alcoholic holding a bottle of Johnnie Walker Blue. But let me see if I can stop at two:

First, as CIA Acting General Counsel John Rizzo eventually claimed in his 2014 book, and as Bob Woodward, Andrea Mitchell and Dana Priest had reported years earlier, Plame's "outing" was just not that big a deal in terms of national security or personal danger. A Rizzo excerpt:

Secondly, what drove this investigation? Why did Special Counsel Fitzgerald look so hard at the White House yet ignore the obvious, easily detected, unconfessed leaking from Armitage (and probably Powell, and others) from State?

I say it was a mini-Deep State Coup. Democrats allied with moderate Republicans such as Comey in a DoJ revolt intended to pare back or eliminate Dick Cheney. Fitzgerald's team took it in when Richard Armitage of State admitted he leaked to Novak. It took the sleuths at the AP to obtain Armitage's appointment calendar for June 2003 and see a meeting with Woodward. Pretty heavy investigative work!

As a recap, Cheney's man at Doj, John Yoo, left the Office of Legal Counsel in June 2003 and was replaced by Jack Goldsmith. Goldsmith withdrew the OLC opinion backing enhanced interrogation and put the warrantless surveillance program under a microscope. By December the DoJ was in something like a revolt over Cheny's handling of that, which culminated in the famous Comey/Ashcroft/Card hospital room showdown in March 2004.

And during all this, the DoJ decides (Oct 2003) to take the Plame referral seriously and actually investigate the leak Rizzo laughed off. By December, Comey was appointing Fitzgerald as a Special Counsel. The target was Cheney, not Bush, not Rove and most assuredly not "the truth" about who leaked what.

BONUS (But I can quit anytime): Why did Armitage leak at all? Surely it wasn't to punish Wilson? No, it wasn't, and stop calling me Shirley. In the summer of 2003 a dispute raged about who had said what and when about Saddam's WMDs and nuclear aspirations. The gist of the 2002 National Intelligence Estimate had been made public. The CIA (with other intel groups) came down on the side of "Definitely maybe" as to whether Iraq was a nuclear threat. The State Department's INR had dissented, but that was lost in a footnote. Prophets without honor!

So when the dispute raged in June 2003 Armitage discussed with his old pals Novak and Woodward that tidbit about the CIA research effort - the CIA had cobbled together a trip to Niger that was never to going to be conclusive, sent off some retired ambassador (sponsored by his wife!) and come back with an inconclusive report. Did Armitage describe the CIA effort with the phrase "clown show"? We can only hope. But the mention of the wife's role was not meant as punishment; it was meant as a punchline.

Back To Brexit

As we approach the final countdown on Brexit, here is flow chart of possible scenarios. It's the sort of thing we normally enjoy in December as the NFL PLayoffs come into focus and forty-seven teams jockey for eleventy spots.

 

Send Better Nukes!

Damn it, we can't nuke hurricanes and now we can't even nuke climate change.

The problem? US electric production is only responsible for about a quarter of US greenhouse gas emissions. Even if we went all-in on nuclear, hydropower and other renewables we'd have a lot of carbon left over in transportation, agriculture, industry, and residential/commercial. Electric heat for buildings and electric cars could shift some of the load but I don't think people will be putting nuclear powered steam generators in Manhattan to heat office buildings. Maybe!

Saturday Afternoon

The Maize and Blue blow. 24 point underdog Army is tied with Michigan with 6 minutes to play.

Make America Think Harder

I'm holding out hope for Yang-Williamson 2020. Yang may be right about increasing automation eventually leading to widespread unemployment (as per Vonnegut's 1952 "Player Piano") but it is a harder sell with unemployment at 3.7%.

Vox Unpopuli

Dylan Matthews of Vox boldly goes where no prog has gone before and learns about guns. Good effort, although I think the coverage of double action/single action was just showing off.

He does grasp the cosmetic nature of the "assault weapons" discussion, which gives me an excuse to recycle this pic of the Ruger Min-14 Tactical versus the Ruger Mini-14 Ranch. Per the proposed House Assault Weapons Ban of 2019 the Tactical is banned (per Appendix A, ifg I am following correctly); the John Wayne prop (OK, with a magazine protruding) is all aces. Fine, ban the Tactical and potential buyers will hit their gun stores with "I'm only here for the Ranch".

Does any of this change Mr. Matthews mind on anything? He does not say but let's not underestimate the power of knowledge - Leah Libresco of 538 and the WaPo surprised herself after doing some homework on gun control.

RECYCLING!

Climate Change Is The New Gay Marriage - Discuss

Politico argues that both parties are now divided on climate change: Republicans between the "What problem?" and "OK, something's happening" and the Democrats between "Something is happening and we need to get ahead of it" and the Green New Dealers "Yea, a crisis so great we must adopt every bad socialist idea ever!".

In gthe longer run the moderate Dems are going to look good (IMHO) but in 2020 Trump specifically and Republicans generally will run against AOC and Climate Madness.

DO LET ME ADD: "Moderate" Dems will eventually adopt ideas such as those promoted by Presidential candidate Andrew Yang and Go Nuclear. If the house is on fire you don't worry about water damage and whether the fire extinguisher output will stain or stink up the furniture.

Labor Day

How are you, fellow proles?

Taxing Wealth, One Way Or Another

The WSJ (MSN bootleg here) had a recent story about different Democrat plans to tax wealth:

Democrats’ Emerging Tax Idea: Look Beyond Income, Target Wealth

Lawmakers and 2020 candidates offer a range of options focused on capturing some of the trillions of dollars in assets belonging to the nation’s richest

The gist seems to be to go after unrealized capital gains:

At the end of 2017, U.S. households had $3.8 trillion in unrealized gains in stocks and investment funds, plus more in real estate, private businesses and artwork, according to the Economic Innovation Group, a nonprofit focused on bringing investment to low-income areas. Most of the value of estates over $100 million consists of unrealized gains, said a 2013 Federal Reserve study. Much has never been touched by individual income taxes and may never be.

Democrats are eager to tap that mountain of wealth to finance priorities such as expanding health-insurance coverage, combating climate change and aiding low-income households. Their ideas range from new rules on inherited assets, to a plan by Sen. Ron Wyden for annual taxes on unrealized gains, to a proposal from Sen. Elizabeth Warren’s to tax wealth itself. These come atop more conventional proposals to raise income taxes and expand estate taxes.

Ahh, well! I was talking this up myself last January.

In brief, above a high net worth threshold (eg, $50MM) impose mark-to-market accounting to end the eternal deferral of unrealized capital gains taxes. But to avoid forced sales to pay the tax bill (and to create a buffer account against possible future losses) allow deferred payment of the taxes over ten years. The deferral is similar in spirit to the estate tax rule allowing a fourteen year deferral when the main estate asset is a business but a ten year period falls within the CBO budget assessment rules.

Public securities are easily valued. Real estate and private companies (eg, Koch Industries and many tech start-ups) are routinely valued by lenders and other marker professionals. Art collections are routinely assessed by insurers or other experts. Maybe re-assessment for tax purposes are bi-annually or even less frequent, just for simplicity, but these problems are easily solved (and especially easily for me, since I'm just typing and hand-waving in my PJs.)

Sen. Ron Wyden (D) is ranking member on the Senate Finance Committee and is working on his ideas.

A similar idea was described in a 2015 paper by David Miller.