In “The Fight Over ‘Impeachment Lite’ ” Mr. Blow says as politics, House Republicans’ threat to sue the president may work best for Democrats. Prof. Krugman, in “Corporate Artful Dodgers,” takes a look at a loophole so big whole companies can slip through. Here’s Mr. Blow:
Rather than getting on with the country’s business and focusing solely on can’t-wait issues before they jet out of town this weekend — like the unfinished bill to fix veterans’ health care and the stalled bill to deal with the humanitarian crisis of Central American children arriving at the border — House Republicans are gearing up for a grand maneuver: an apparently unprecedented move by the House to sue the president over his use of executive orders.
Talk about misplaced priorities.
But this isn’t about the public’s priorities, not even close. This is about base-voter activation; this is about midterm turnout. The president’s most ardent opposition wants more punishing actions taken. There is an insatiable vengeance-lust for the haughty president who refuses to bend under pressure or fold under duress.
He must be brought to heel. He must be chastened. He must be broken. So, House Republicans are throwing the red meat into the cage.
Even Paul Ryan, fresh off his “Opportunity Grant” move to address poverty in this country — a plan that the Center on Budget and Policy Priorities said “would likely increase poverty and hardship” rather than decrease it — said Friday that he would vote for the measure to sue the president.
I’m not sure Ryan is aware that people making less than $30,000 a year voted for President Obama nearly two to one over his opponents in 2008 and 2012. Low-income people are President Obama’s people. You can’t make a show of supposedly extending them a hand one day and use that hand to take a slap at their political hero the next. Or maybe you can, if your sense of cognitive dissonance is strong enough.
The White House is returning in kind, picking up the language of the most extreme among the far right to invoke the word “impeachment.”
Dan Pfeiffer, the Obama administration senior adviser, said Friday, “I think Speaker Boehner, by going down the path of this lawsuit, has opened the door to impeachment sometime in the future.”
It should be noted that most senior Republican leaders are not clamoring for impeachment — and John Boehner has flatly ruled it out, for now — but the idea that a lawsuit is akin to “impeachment lite” is one Democrats would love to take hold for the same reason that the lawsuit exists in the first place: politics.
But the concept isn’t completely without underpinning. In a recent Los Angeles Times article titled “Why Experts See Little Hope for G.O.P. Plan to Sue Obama Over Law’s Delay,” David G. Savage pointed out: “While the Constitution does not authorize the legislative branch to sue the president, it says the House of Representatives may vote on articles of impeachment if it believes the president has committed ‘high crimes and misdemeanors.’ If Republicans believe Obama has broken the law, impeachment is the appropriate vehicle, analysts say.”
Adding an unprecedented legal maneuver to a long list of what Democrats view as extraordinary slights against this particular president is likely to excite a liberal base in dire need of excitement.
As a report by the Pew Research Center for the People and the Press pointed out: “Barack Obama is as powerful a motivating factor for Republican voters as he was in 2010: about half (51 percent) of those who say they will vote Republican this fall consider their vote as a vote ‘against’ Obama, little changed from June 2010 (52 percent). And Obama has become a less positive factor for Democrats — 36 percent of those who plan to vote for the Democrat in their district view their vote as being ‘for’ Obama, down from 44 percent four years ago.”
But the anti-Obama Republican lawsuit could change all that.
A CNN/ORC poll released Friday found that while 45 percent of respondents said they believed the president had gone too far in expanding the power of the presidency and the executive branch, 52 percent believed that he “has been about right” or “has not gone far enough.”
For comparison, in 2006, the sixth year of the George W. Bush administration, 48 percent believed that he had gone too far, while just as many thought he was about right or hadn’t gone far enough.
Furthermore, only 41 percent of Americans believe House Republicans should sue the president, as opposed to 57 percent who believe they shouldn’t.
And if you believe that the lawsuit is simply, as some have called it, “impeachment lite,” the public truly has no appetite for that. Respondents in the CNN/ORC poll opposed impeachment by nearly two to one.
This may all be political theater, but in this act Democrats appear to have the most compelling lines.
Now here’s Prof. Krugman:
In recent decisions, the conservative majority on the Supreme Court has made clear its view that corporations are people, with all the attendant rights. They are entitled to free speech, which in their case means spending lots of money to bend the political process to their ends. They are entitled to religious beliefs, including those that mean denying benefits to their workers. Up next, the right to bear arms?
There is, however, one big difference between corporate persons and the likes of you and me: On current trends, we’re heading toward a world in which only the human people pay taxes.
We’re not quite there yet: The federal government still gets a tenth of its revenue from corporate profits taxation. But it used to get a lot more — a third of revenue came from profits taxes in the early 1950s, a quarter or more well into the 1960s. Part of the decline since then reflects a fall in the tax rate, but mainly it reflects ever-more-aggressive corporate tax avoidance — avoidance that politicians have done little to prevent.
Which brings us to the tax-avoidance strategy du jour: “inversion.” This refers to a legal maneuver in which a company declares that its U.S. operations are owned by its foreign subsidiary, not the other way around, and uses this role reversal to shift reported profits out of American jurisdiction to someplace with a lower tax rate.
The most important thing to understand about inversion is that it does not in any meaningful sense involve American business “moving overseas.” Consider the case of Walgreen, the giant drugstore chain that, according to multiple reports, is on the verge of making itself legally Swiss. If the plan goes through, nothing about the business will change; your local pharmacy won’t close and reopen in Zurich. It will be a purely paper transaction — but it will deprive the U.S. government of several billion dollars in revenue that you, the taxpayer, will have to make up one way or another.
Does this mean President Obama is wrong to describe companies engaging in inversion as “corporate deserters”? Not really — they’re shirking their civic duty, and it doesn’t matter whether they literally move abroad or not. But apologists for inversion, who tend to claim that high taxes are driving businesses out of America, are indeed talking nonsense. These businesses aren’t moving production or jobs overseas — and they’re still earning their profits right here in the U.S.A. All they’re doing is dodging taxes on those profits.
And Congress could crack down on this tax dodge — it’s already illegal for a company to claim that its legal domicile is someplace where it has little real business, and tightening the criteria for declaring a company non-American could block many of the inversions now taking place. So is there any reason not to stop this gratuitous loss of revenue? No.
Opponents of a crackdown on inversion typically argue that instead of closing loopholes we should reform the whole system by which we tax profits, and maybe stop taxing profits altogether. They also tend to argue that taxing corporate profits hurts investment and job creation. But these are very bad arguments against ending the practice of inversion.
First of all, there are some good reasons to tax profits. In general, U.S. taxes favor unearned income from capital over earned income from wages; the corporate tax helps redress this imbalance. We could, in principle, maintain taxes on unearned income if we offset cuts in corporate taxes with substantially higher tax rates on income from capital gains and dividends — but this would be an imperfect fix, and in any case, given the state of our politics, this just isn’t going to happen.
Furthermore, ending profits taxation would greatly increase the power of corporate executives. Is this really something we want to do?
As for reforming the system: Yes, that would be a good idea. But the case for eventual reform basically has nothing to do with the case for closing the inversion loophole right now. After all, there are big debates about the shape of reform, debates that would take years to resolve even if we didn’t have a Republican Party that reliably opposes anything the president proposes, even if it was something Republicans were for just a few years ago. Why let corporations avoid paying their fair share for years, while we wait for the logjam to break?
Finally, none of this has anything to do with investment and job creation. If and when Walgreen changes its “citizenship,” it will get to keep more of its profits — but it will have no incentive to invest those extra profits in its U.S. operations.
So this should be easy. By all means let’s have a debate about how and how much to tax profits. Meanwhile, however, let’s close this outrageous loophole.
And because of earlier effups, FYWP.