A More Sustainable Tax and Revenue Structure

If you have been reading the initial prongs of the “We’re Better Than This” platform on climate change, health care, and infrastructure, you may already be skeptical of how we are going to pay for this and make it work. Have no fear, we can do it, and now is a good time to turn to the tax/revenue and regulation/government accountability prongs of the platform.

We are right to be on guard when new tax or revenue proposals are pitched to fund new programs, and to do so we need to be able to make the case that it is a fair and effective way to make things better. On that note, I offer two theme songs for this prong, Taxman by The Beatles and Carnival World by Jimmy Buffett.

For starters, the bulk of the costs for “We’re Better Than This” health care plan can be funded by realigning how we spend current resources; remember, we spend twice as much as other advanced countries on health care without the attendant payoff in health outcomes. Similarly, the new carbon tax in the environmental platform could provide the primary funding for the infrastructure plan.

That said, we already were running big deficits before the pandemic and the revenue gap has only widened, and more strategic and efficient spending alone is not going to cut it. While the solution to our budget challenges is not simply to jack up rates on the wealthy as some on the left have proposed, we should remember we had strong economic growth in the 1980’s and 1990’s with higher top-end tax rates and significantly lower budget deficits than we have today.

Three more targeted approaches can raise more revenue in a way in a fair and efficient manner for all.

Treat all income equally: One of the core problems with the current tax system is that many types of income that wealthier Americans are most likely to receive are taxed at lower rates than the “paycheck income” income that most of us receive.

Capital gains are the biggest example of this, and while there were policy reasons for originally treating this and some other forms of personal income differently, the net effect over time has been to drive further income inequality and give many wealthy Americans a huge tax break simply by virtue of how they made their money. We should gradually phase in over the next several years a new system that treats all income the same for taxation purposes. It will more fairly and efficiently raise more revenue for the government without making big changes to rates.

Replace the estate tax with an inheritance tax: The estate tax has long polled badly among all Americans even though only about 1% actually are subject to it. A better way to tax unearned revenue received by wealthy Americans would be an inheritance tax that only applies when people receive inheritances above a high threshold (let’s say $2 million for starters). When the inheritance is a family farm or business, this tax could be deferred for as long as they own and operate the business.

A national sales or consumption tax: A modest sales tax at the federal level could raise a lot of revenue that often goes untaxed today, and in a naturally progressive way. The more you buy the more you pay. I recognize that Americans at all income levels would pay this one, and, like the carbon tax, it can be regressive without other changes like lowering overall tax rates for poor and middle-class Americans. We can do that though and still raise significantly more revenue overall in a fair and efficient manner for all.

These three changes would put us on a path to solving our revenue challenges. To sell them though, we need to both sell the benefit of the programs and services being funded as well as the accountability for those programs and services being efficient and effective. More on that in the next prong of the platform.

A Forward-Looking Infrastructure Plan

Even before the pandemic and associated social and economic fallout, we were long overdue for a national infrastructure plan, and it is heartening to see that this is a shared priority of the new Administration and leaders in both parties of Congress. Done right, a modern infrastructure plan can create jobs and investment throughout the country in an equitable way, strike a real blow for the environment and the fight against climate change, and set us up for stronger economic growth for years to come.

I offer two songs for inspiration here, the classic Build me up Buttercup by The Foundations and Bruce Springsteen’s Working on the Highway. The core elements of my broad-based plan follow below, focusing on “traditional” infrastructure projects as well as key investments for the 21st century that prioritize equitable treatment for disadvantaged urban communities and rural America, and account for what we have learned from the pandemic.

Universal broadband access: I start here because in many ways this already is the highway of the future, and that only has become clearer since the pandemic. Making broadband fully available to low-income, disadvantaged, and rural communities is critical to fighting inequality, increasing opportunity, and bolstering the environment.

Roads, bridges, rail and air: We are long overdue for investing in these traditional infrastructure functions, and we should do it in a way that looks ahead too.

  • For roads and bridges, that means including GPS and making them driverless and electrical transit friendly.
  • For the airspace, we need to speed up the upgrade of the “flight grid” that air traffic control uses to coordinate flights. This will increase efficiency for all players and help the environment by significantly reducing unnecessary fuel usage.  
  • For rail, I have a more radical suggestion. Unlike the interstate highways and airspace, the rails are owned by a patchwork of private freight companies and public transit entities, with no central mechanism to make them work fairly and efficiently together. We should use eminent domain to make the rails part of the national infrastructure to maintain and regulate them uniformly on par with our other major transit modes. We can then lease the rails back to both private operators and public transit agencies (including Amtrak), which can pay for the investment and free up the market to better serve both freight and passenger rail transit needs.
  • With the same level of priority as highways in rural communities, we need to invest in public transit in metro areas, which in the past has often gotten short shrift compared to roads.
  • And lastly in this category, we need to invest in projects like the CREATE program in Chicago that enable roads and rails to work efficiently together. Like the other steps above, this will do wonders for both efficiency and the environment.

A 21st century power grid: Modernizing our power grid nationwide so that it can seamlessly utilize traditional and “green” sources of power will make the system more efficient, resilient, secure, and environmentally friendly throughout the country.

The Post Office: 2020 reminded us that the Post Office remains a critical part of our nation’s infrastructure. We should recognize that by treating it as a core national asset, properly investing in and modernizing its traditional functions while adding features that can connect people to other key government services (e.g., Zoom kiosks, voting drop box sites). We already have this nationwide network of postal locations, and we should fully utilize them as a public service.

Public buildings and systems: The pandemic has underscored the need to invest in federal, state, and local government buildings and systems so that the courts and other key government functions have state-of-the-art energy and air filtration systems and have full remote access capability.  

Incentivizing private investment: As with public buildings, we should use this opportunity to subsidize businesses, building owners, and homeowners to upgrade to state-of-the-art energy and air filtration systems.

Trees, national parks, and related: We cannot forget our critical environmental infrastructure here, for all of the public health and public enjoyment reasons as well as the essential role they play in preserving the environment and fighting climate change.

Public health: Last and most definitely not least, if we learned anything from 2020, it is that our public health infrastructure is critical to all of us wherever we are. It should receive that level of priority in the larger infrastructure efforts.

Those are the core elements of the “We’re Better Than This” infrastructure plan. While there is no doubt this will be involve many, many billions of up- front costs, few other investments can have this kind of payoff in both immediate and long-term economic impact while also bringing incalculable benefits in the critical fight against climate change.

Marking a Day That Should Live in Infamy

I paused the “We’re Better Than This” platform series yesterday in recognition of the seditious insurrection that will forever mark January 6, 2021. After order was thankfully restored, Congress sent a resounding message by returning to the business of certifying the election last night.

There will be a lot to unpack from yesterday’s events in the coming days and weeks, including accountability for the President and other “leaders” who incited the attemped coup and every treasonous individual who participated in it. The same goes for the police response and lack of preparation in securing the Capitol in advance, and the stark differences in the police response yesterday compared to the protests and riots we saw last year. As we do that, we should never forget there were some truly heroic actions by many police officers on the front lines yesterday.

We will see if this was finally the wakeup call to the Republican Party to look in the mirror and decide if they want to return to being the party of Lincoln or continue down this dangerous path. There already have been some promising signs on that front over the past 24 hours, and it will be interesting to watch how that develops in the coming weeks.

As we confront the sobering issues that led to yesterday’s events, the best way we can respond going forward to this or any other attack on our institutions is to lead by example and show we will not be cowed from going about the important work of our country. Congress sent that message last night (and into early this morning) even as some individual members continued to disgrace themselves. We all have that same power to lead by example in our own actions.

On that note, the “We’re Better Than This” platform series will resume tomorrow. And with props to Richard Milne on WXRT earlier today, I’ll stay true to form and end this post with a song recommendation: America by Simon & Garfunkel.

A Better Health Care System for All

America spends about twice as much on our health care system today as other wealthy nations, yet we do not see better health outcomes and have alarming inequality in access to care. That has all been laid bare during the pandemic, and if this status quo isn’t a call to action for change, I don’t know what is.

I have a classic song and a great book to set the theme for this prong of the “We’re Better Than This” platform: Doctor My Eyes by Jackson Browne is the song, and the book is Being Mortal by Atul Gawande.

The first step to a better system is to change the default scenario when someone does not have health insurance through their employer or one of the government programs. Unless someone uses the “Obamacare” marketplace to find a plan, that default today is no coverage, which is the reality for millions of Americans today. That not only is bad for their health, it is bad for our community health (the pandemic being a stark example) and becomes a hidden tax on the rest of us when we end up paying for inefficient emergency care for people with more serious medical issues that have gone untreated.

We should change that default to people having a new public option for coverage that is paid for through their taxes. (More on the source for the payments next week in the tax and revenue prong of this platform). My proposed new system would give everyone a tax credit (say $6,000 per individual) that rises with the rate of inflation; people could use the credit to buy individual coverage or their employers could use it to provide that coverage, but otherwise people would automatically have the public coverage option.

We then could set some broad limits on the types of plans that could be offered in the private marketplace, starting with a requirement that only modest copays or deductibles would be permitted, offering additional bonus payments for plans that have good overall health outcomes for their participants, and meting out financial penalties for plans that have particularly bad outcomes. Market forces could then go to work to encourage plans to offer the most efficient care to reach good health outcomes.

For the public option, rather than paying “fee for service” that rewards more care rather than better outcomes, the government plans would pay set amounts to health networks to cover all care and would be permitted to negotiate drug prices too. Additional subsidies could ensure care is available for rural and underserved populations. And as with the private market plans, there could be additional bonus payments to the health networks for good health outcomes, who could offer “nudge” payments to patients to encourage them to adopt healthy lifestyles and follow preventative care recommendations.

Both the public and private plans would cover mental health, vision, and dental care on an equal basis as well, as we know these are critical to overall good health.

Medicare could remain a distinct program, but it should follow the same principles to make it more cost-effective and predictable for both patients and providers.

The VA could work similarly as well, with VA hospitals focusing on unique needs and medical issues for those who have served our country but veterans also getting the same option everyone else would have to get private coverage for their other medical needs.  

Sound like pie in the sky that we could afford all this? Remember, we already are spending twice as much on our system as other wealthy countries, including an outsize share on administrative costs driven by the overly complex and balkanized current system.

While there would be new costs that would require some new revenue, the administrative savings alone would pay for much of the tab. Administrative employees now handling those tasks could shift to being care coordinators who help make sure people are following up on preventive care and treatment regimens, which also would lower costs.

Stopping the current practice of rewarding unnecessary care is another big area of savings here, bigger than we might imagine if we start rewarding good health outcomes instead. And finally, we can save significant amounts if we follow a “death with dignity’ approach for people who already are terminally ill rather than using (and paying for) extraordinary measures in all instances without a showing of improved health and wellbeing.

A supplemental insurance market could offer optional coverage for discretionary, experimental, and/or extraordinary care expenses. And nonprofit and charity providers could focus on research and providing experimental care.

I recognize this would be a huge amount of change in the market, and I recommend phasing it in gradually over a period of several years so the market has time to adjust. But there is no doubt we can and must do better for the amount we are spending on our health care system with so much inequality, as other countries already are showing us.

We’re Better Than This–Climate Change and the Environment

With all the pressing issues facing our country, the issues of climate change and the environment are the first prong of the “We’re Better Than This” platform because if we don’t address them head on right now, it will soon be too late. The good news is there is a lot we can do to turn the tide on this front in a way that not only leaves the world better for our children and grandchildren, it will make the world better right now.

I’ve got three classic songs–Big Yellow Taxi by Joni Mitchell, After the Gold Rush by Neil Young and Fall on Me by R.E.M—and a great book, The Sixth Extinction: An Unnatural History by Elizabeth Kolbert, to set the stage here. The songs all remain remarkably prescient many years later, and Kolbert’s book—which reads like an adventure story—vividly illustrates the impact humans are having on our environment and points the way towards solutions we all should get behind.

Yes, it is a daunting challenge, but there are a number of concrete steps we can take to turn the tide here.

For starters, we should try to further encourage market solutions to these issues wherever we can. The market already is starting to reward “going green,” and the least intrusive way we can accelerate that trend is by gradually phasing in a carbon tax that prices environmental costs into the market and thereby encourages conservation and greener alternatives.

We also can use government funding and other government programs to encourage good environmental behavior, what Michael Bloomberg aptly refers to as a “whole government approach.” It is reassuring that President-elect Biden already has expressed a commitment to pursuing this approach. Just two of many examples on this front include using farm subsidies to promote green practices—big agriculture is a big contributor to global warming today—and prioritizing the environment in trade deals and in our international leadership (i.e., the opposite of what we’ve seen the past four years on this front).

Making the environment central to new and future infrastructure plans is another key element. While I will have more to say about that in the infrastructure portion of the platform later this week, key examples include modernizing the electrical grid, investing in broadband to reduce unnecessary travel, and testing out new technologies like carbon capture.

And lastly, we should continue to use regulation to gradually push governments and the market towards greener behavior (e.g., raising fuel economy standards in vehicles) and to protect key ecological assets like the Great Lakes and endangered plants and species.  

There is no one size fits all solution here, but so many things we can do to accelerate the many good efforts already underway throughout the country and the rest of the world and set the stage for a greener future that benefits all Americans.

We’re Better Than This

That is the Raging Moderate’s platform for moving our divided country forward.

While we are sure to see more drama in the closing weeks of the current Administration, we can find hope in the fact that the Center in America not only has held, it looks to be more empowered than ever with the experience of 2020 and the new Congress so closely split between the parties (whatever happens in Georgia this week). That gives us a real opportunity right now to make our country a fairer and better place for everyone by meeting in the middle.

The platform will be a mix of substance and style, which will be equally important to ultimately getting it done.

On the substance side, each day for the next 17 days will cover the key prongs of the platform, starting with the environment tomorrow and culminating with a closing post on inauguration day for the new Administration. The central issues of racial justice and support for rural America will be covered throughout the series, as they are critical to the success of every prong of the agenda. And some of the general principles that will guide each of the recommendations include:

  • Harnessing market forces to solve problems as much as practicable, recognizing that for many issues the market alone is not the answer.
  • Using the lightest hand possible to achieve the stated policy goals when we implement programs and regulate, with the principles of behavioral economics as a guide.
  • Recognizing that facts and science matter.  
  • Accountability, Accountability, Accountability.

While I expect there will be at least one thing just about everyone will not agree with in this platform, I believe every one of these proposals could command a solid majority of Americans. It will require inspired leadership in Congress to move past the vocal minorities who dominate each of our major political parties, but coming off a year like 2020, we may never have a better chance to do so.

Going back to the roots of this blog, I’ll use music whenever I can to find a good theme song, and sometimes a good book recommendation too. As Jon Meacham and Tim McGraw nicely documented in Songs of America: Patriotism, Protest, and the Music That Made a Nation, music has played a big part in our country’s political journey from the start, and whatever you think of the substance of the platform as your read on, I promise some good music!

The overall musical theme for the “We’re Better Than This” platform?

It is tempting to go with Stuck in the Middle With You by Stealers Wheel, because as we sadly have seen quite a bit of late, there are definitely a lot of clowns to the left and jokers to the right. But when we tune out those extremes, what we mostly see are people coming to the issues of the day from very different perspectives based on often widely varying life experiences.

And that’s where the style side comes in and will be essential to moving forward. Us and them narratives and gotcha tactics are not going to get us anywhere except further polarization. We can only move past the division that plagues our country by appealing to our shared values and our better selves. As a wise person recently put it, we need to give the gift of the benefit of the doubt to people who disagree with us.

The fundamental shared American values that drive this agenda include:

  • Leaving the world in a better place than we found it for those who follow us
  • Equality of opportunity for everyone
  • Liberty and justice for all
  • America as a nation of immigrants, and a beacon of freedom and hope in the world

I am not naïve here, we need to accept that the extremes on both sides are not suddenly going to become interested in meeting in the middle. However, they are the minority, and there is great potential to find common ground with the majority of the country who, while they may lean left or right on some or all issues, are closer to the middle than those vocal extremes who continue to have outsized voices in the media and social media narratives.

So the song I’m going to go with for the overall theme is the song that was the launch theme for this blog: the Rolling Stones classic, You can’t always get what you want. We are in this together, and we can do this. Onward and upward, and stay tuned for the details of the platform in the coming days.

The Books of 2020, and Recos for your 2021 Reading List

Happy New Year! The Raging Moderate is back after a long hiatus where the day job has been getting writing priority.

Starting tomorrow, I’m going to be running a “Presidential Platform” series leading up to the inauguration of President Biden later this month covering a broad range of issues of the day. The Center thankfully has held, and we have a real opportunity right now to make our country a fairer and better place for everyone by meeting in the middle. Stay tuned.

In the meantime, for all of the countless reasons to happily put 2020 behind us, one personal success last year was a good year of reading. I had set out at this time last year to read 20 books over the course of 2020, and I ended up doing it two better (the shutdowns helped A LOT). The full list follows below, and three books stood out to me as great food for thought for a better 2021 if you have not already read them.

And the winners are…

Station Eleven, by Emily St. John Mandel

  • Reading a book about a pandemic during a pandemic? Sounds like a Geico commercial I know, and I also read a compelling one in the nonfiction category–“The Great Influenza” by John Barry–that easily could have made this top three too.
  • Station Eleven is a story of resilience and hope after a fictional pandemic that makes Covid-19 pale in comparison, and just a great read.

The Defender: How the Legendary Black Newspaper Changed America, by Ethan Michaeli

  • An essential history of journalism, of Chicago, and of the long, uneven, and still unfulfilled quest for racial justice. And as the title says, the Defender had an incredible impact far beyond our borders by speaking truth to power and bringing a critical perspective that was missing or shut out from the mainstream media of the day.
  • This is a big book but well worth the commitment, and it could not be more timely right now with our nation’s overdue reckoning with racial injustice.

The Sixth Extinction: An Unnatural History, by Elizabeth Kolbert

  • Speaking of timely, this Pulitzer winner from a few years ago reads like an adventure story as it teaches important lessons about history, science, and the environment.
  • This book only cemented why climate change and the environment need to be at the top of the priority list for the new Administration, and another great read.

The full list

Those were the highlights, but all of the books on my 2020 list were really good. As you get ready to buy your next book, whether one of these or not, please support your local independent bookstores!

As John Warner, a/k/a the Biblioracle, said so well, indie bookstores are critical to the entire ecosystem of books. If you can’t get there in person, you can support them by making Bookshop.org your first choice when going online. And if you can’t find it there, Powell’s Books is another good option, as is Barnes & Noble as it transitions to more of a community bookstore model. Whatever you do, no matter how much you may like Amazon for other purposes, you will be a better citizen of the book universe by using these other channels when you buy books.

And here’s the full list, now organized by a few overarching categories but originally chosen and read in a far more random order. Only a handful were new this year, lots of justifiably famous writers who consistently turn out great books, and just one author appears on here twice–Attica Locke. I had read one of her others a couple of years ago and already am looking forward to reading her new one this year. Check her out if you haven’t already, and “Bluebird, Bluebird” would be a great one to start with.

Chicago history good and bad, and all great reads

Boss, Mike Royko

The Defender: How the Legendary Black Newspaper Changed America, Ethan Michaeli

The Mirage, Zay Smith and Pam Zekman*

Monsters: The 1985 Chicago Bears and the Wild Heart of Football, Rich Cohen

Where’s Mine, Charles Kocoras

* This is out of print now but I was able to get it with no trouble from the Chicago Public Library and well worth the trip to get it!

Other great history reads

The Great Influenza: The Story of the Deadliest Pandemic in History, John M. Barry

The Library Book, Susan Orlean

Say Nothing: A True Story of Murder and Memory in Northern Ireland, Patrick Radden Keefe

Thought-provoking reads on big issues of our day

Remarkable Retail: How to Win & Keep Customers in the Age of Digital Disruption, Steve Dennis

The Sixth Extinction: An Unnatural History, Elizabeth Kolbert

Uncomfortable Conversations with a Black Man, Emmanuel Acho

Provocative page-turners

Bluebird, Bluebird, Attica Locke

Britt-Marie Was Here, Fredrik Backman

The Cutting Season, Attica Locke

Drama City, George Pelecanos

The Girl Who Lived Twice, David Lagercrantz

The Guardians, John Grisham

The Last Trial, Scott Turow

Leave the World Behind, Rumaan Alam

Mystic River, Dennis Lehane

Station Eleven, Emily St. John Mandel

The Underground Railroad, Colson Whitehead

A Modern Day Easter Tale

(This is a mildly updated, second annual version of this post, and I think it may be even more timely this year).

Imagine that a scruffy looking guy shows up on the scene preaching the values of peace, love, and looking out for the poor, the sick, and the vulnerable among us. He calls himself Abdul of Damascus, and we learn he is a refugee who recently managed to make his way to the U.S. with his family after fleeing persecution and terror in Syria.

Abdul has an engaging and charismatic manner about him and walks the proverbial walk on his values every day. He speaks truth to power and openly challenges the establishment whenever he thinks they are falling short of living up to these core values. And he finds a lot of material to work with there.

While he speaks of God, he suggests we need to challenge the established religions, noting that they do not always live up to these core values in their policies and practices. In particular, he believes we should be forgiving and judge others by what kind of people they are in their hearts; not by what they look like, where they are from, how much money they have, their sexuality, or their past mistakes.

People are quickly attracted to Abdul’s positive messages of hope, equality and a shared responsibility for helping the less fortunate. The next thing you know, he is an internet and social media sensation, and people everywhere are starting to challenge the status quo.

Where would the story go from here?

I obviously made up this story, and I know that my fictional Abdul would never be mistaken for a moderate (raging or otherwise). As we start this Easter week though, I tried to imagine what the story of Jesus might look like in our modern world, and consider whether our society’s response would be different if it happened today.

XTC, a great band who made my top ten list of musical inspirations for another one of their classics when I kicked off this blog, explored a similar theme in their ‘90’s hit, The Ballad of Peter Pumpkinhead. If you have not heard that song in awhile, I encourage you to take a few minutes to click this link and listen to it as you read this.

If you know the song, you know Mr. Pumpkinhead met a similar fate to Jesus in the end. While it is hard to imagine a modern day Jesus literally would be nailed to a cross today, it is not so hard to imagine he would find himself in danger. As a refugee and “outsider” who looks and acts differently than most of us and espouses views that fundamentally challenge how we are living our lives—both individually and collectively through our governing bodies—there is little doubt that many would instinctively view him as a threat.

While chances are we will never be faced with this scenario, there are two things we all can take away from this whether or not we are celebrating Easter this week: to be more empathetic towards people who arrive at our borders fleeing persecution and terror, and to be more tolerant of people who don’t look or act like us or always share our same views.  So many of the divisions in our country today are being exacerbated by people retreating to their own echo chambers, tuning out opposing viewpoints, and demonizing those who do not agree with them.

While there of course are much larger lessons from the story of Easter than these empathy and “tolerance” takeaways, we all have the power to carry them out and it would make our world a much better place.

 

Stop Messing With Time!

Here we go again, our semi-annual rite of modern stupidity also known as Daylight Saving Time. Increased risks of heart attacks and accidents and disruption of sleep patterns are just the most prominent ill effects, and for what?

The Raging Moderate is back.  I’ve been doing a lot of extra writing  since last summer for the 70th Anniversary of The Chicago Bar Foundation, and this weekend was just the jolt I needed to get back in business here. Continue reading

Our American Land

Last year around this time on Sirius’s E Street Radio, they were counting down Bruce Springsteen’s top ten most patriotic songs based on a poll of their listeners.

Springsteen fans know that patriotism in Bruce’s world of song does not mean reflexively saluting the symbols of our country–it means celebrating our heritage and ideals and challenging us to live up to those ideals when we too often are failing to do so.

While Bruce has given us many good songs to choose from in this vein, the hands down winner in that listener poll was an inspired choice: American Land. If you haven’t listened to that song in awhile or seen the video, doing so would be a great addition to your 4th of July celebration this week. Continue reading