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No New Taxes (A Policy Process Failure Analysis)

Regardless of who wins in 2016, you will not see a major change in U.S. tax policy.

Period.*

At the absolute earliest, the next time you will see a change in U.S. tax policy is in 2020, and even that is highly unlikely.  2025 would be a better bet, but still not good; the 2020 census will put some energy behind redistricting but probably not enough.

This is due to structural reasons.

First, let’s get election nonsense out of the way… the President has virtually **no** authority when it comes to changing tax structure in any practical sense whatsoever.   Folks in the general populace believe that the President has authority in tax law.

They almost entirely don’t, except in a negative sense (they can veto a tax proposal, and they can approve a tax proposal).

Now, to be clear, the President can craft whatever sort of tax legislation they want, and they typically do at least once a year… but all tax law originates in the House of Representatives under the Constitution. [1]

If you want to start the process to have a substantive change in U.S. tax law there is one and only one way to do it, and it has *nothing* to do with who sits in the Oval Office and *everything* to do with who holds the House of Representatives.

Because whoever holds the House of Representatives controls the Ways and Means Committee [2] and nothing else matters if you don’t hold Ways and Means.

Without a vote by the Ways and Means Committee, proposed tax legislation does not go forward.

(Sure, you also need a majority in the Senate, and a President who is willing to eventually sign the thing.  Of course.  Those are the second and third step in the process, however, not the first.  The President actually signing the legislation is almost certainly anti-climactic, even if the President is the one that set the table with the initial proposal.)

You can hold all nine judges on the Supreme Court, and the Presidency, and the Senate, and a chunk of the House… but if you don’t control the House outright (or have enough moderates of either party in the House, more on that in a second), you can’t control who sits on Ways and Means.

If you don’t have Ways and Means, you WILL NOT get tax policy changes… well, not unless you can hold something hostage to the House of Representatives to get them to force Ways and Means to pass your proposal out of committee, but that’s a tricky political proposition.  It also requires you to hold onto something that the folks on Ways and Means *want* more than stopping your proposal from going forward.  For those who have not been paying attention, in today’s GOP this is a nonstarter. (They’ve already shown a complete giddiness at shooting their own hostages, let alone a willingness.  Ted Cruz is the second runner up in the GOP primary at this date and he’s already shut down the government once!)

Sorry, I digress.

The GOP holds an *eight* member majority on Ways and Means, currently.

There will be NO change in U.S. tax law until 2025 at the earliest, because the Democrats are not going to take back the house in 2016… and they probably won’t be able to take it back in 2018 either (because Democrats don’t turn out for midterm elections and both parties have been complicit in gerrymandering most of the states).

It’s possible but unlikely that you could get it done in 2020, if there’s a wave election for (D) seats… but if you don’t get it then, 2022 is again an off-year, so the next-most-likely slot is 2024.

At which point the House will have to have “changing tax law” as its highest priority in order for it even to pass before 2025, let alone be enacted.

That’s assuming that the Democrats spend the next eight years pounding out a serious ground game in state legislatures and/or governor races and/or using ballot initiatives to take Congressional redistricting out of the hands of the parties.

So let’s talk about that.

Of the 50 states, 37 of them have direct state legislature control over their congressional district lines, and in another 5, the legislature has pretty broad input.  Only five states (CA, WA, ID, AZ, and NJ) have independent commissions to draw congressional lines [3]

If you want to do this… well, you’re not talking about political revolution time.  Exactly and precisely the opposite, actually.

Why?

Because redistricting to lower party advantages in congressional races by design must produce districts where it is harder for hard-partisans to win.  That means fewer candidates like Bernie Sanders, overall.  Not more of them.  No Democratic Socialist revolution, but the precise opposite.

You’re going to have to produce a good number of median voter districts in the otherwise currently hugely bipolar districts in each state.

That means fewer R+15 districts, but it also means fewer D+21 districts, as well.  There are pretty obvious Prisoner’s Dilemma reasons why sitting legislators of both parties are reluctant to do this, it’s why the California Democratic Party was against the independent commission law in California along with the California Republican Party.

So it’s a hard slog, and it’s entirely outside the wheelhouse of everyone who is the most partisan and the most likely to vote… because you’ve got to shoot down the likelihood of getting your most favored candidates in order to shoot down the likelihood of getting your least favored candidates.  Ideologically speaking, “Let’s make America the squishy middle again!” is not a rallying cry that is going to get thousands of folks all riled up at a political rally.

But that’s what you need to do.

Let’s look at Georgia, for example.  Georgia has 14 Congressional Districts.  Of the 14 of them, only four can be reasonably construed as median voter districts and two of those aren’t even particularly balanced (one D+9, two R+9, and one D+4 district).  All remaining 10 districts are heavily sorted R or D, big double digits.  Almost all of the Democrats in the entire state are crammed into the 4th and 5th Congressional Districts.  Georgia districts have been drawn that way since 2013.  Georgia can redraw its congressional districts by a simple majority of its legislature, but it is only really required to do so after a Census year when/if apportionment changes [4].

The result of their current districting scheme?

33% of Georgia’s state legislature are Democrats, 30% of their state senate are Democrats… but less than 29% of their Congressional representatives are Democrats [4].

Alabama is far worse, with every Congressional seat a high-teens to high-twenties advantage for either party.  Result?  The Democrats hold 33-of-105 state house seats (31%) and 8 of 35 state senate seats (just under 23%)… but one Democrat (from a D+20 seat) and six Republicans in the House of Representatives (14%). [5]

I could go on, and on, and on. [6]

If you want a political revolution, the time to start is now, but you won’t see a payoff likely for another decade.

You need to get out the vote in your local and state elections.  You need to convince people that they matter.  A third of Georgia’s population identifies as each party, with independents taking the last third (roughly), but the folks that turn out to vote favor the GOP candidate.

You need better ground game.

The place to start is your state legislature race.

Not the 2016 Presidential election.

[1] https://www.treasury.gov/resource-center/faqs/Taxes/Pages/writing.aspx
[2] https://en.wikipedia.org/wiki/United_States_House_Committee_on_Ways_and_Means
[3] http://redistricting.lls.edu/who.php
[4] https://ballotpedia.org/Redistricting_in_Georgia
[5] https://ballotpedia.org/Redistricting_in_Alabama
[6] https://en.wikipedia.org/wiki/Political_party_strength_in_U.S._state

* One possible counter: if Trump wins, and the GOP get a filibuster-proof majority in the Senate, of course, the House could pass a tax package over the minority Dems and the Senate could ram it past the minority party and Trump could sign it.

Honestly, the likelihood of the Senate going that hard red is low enough that I regard this as a non-operational scenario. But it’s possible.Image by John-Morgan


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Patrick is a mid-40 year old geek with an undergraduate degree in mathematics and a master's degree in Information Systems. Nothing he says here has anything to do with the official position of his employer or any other institution. ...more →

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50 thoughts on “No New Taxes (A Policy Process Failure Analysis)

  1. Woot, no more taxes! Wait…ACA that’s a tax, before it wasn’t then it was, then not, but now is….

    Dammit! That’s how’ll they’ll screw me again.

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      • Gruber said that the law was written in such a way to get it through CBO review. Funny how one part of gov’t calls it a tax and one part doesn’t.

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        • CBO review is all about not causing new deficits, isn’t it?
          Politicians can call it not a tax, while the Law People call it “really a tax”.
          Doesn’t bother me, really.
          Is Social Security a tax? (I think it’s been ruled to be insurance, legally, which is why people who follow religions that disallow insurance can refuse to pay it — so long as they also refuse to take it)

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          • I don’t know what the law has “decided” on SS. It’s fundamentally a transfer system. It used to be called “old age insurance” but it’s clearly not “Insurance” in the vein of the rest of our insurance-car, home/renter, umbrella, health, etc.

            As to the CBO it provides analyst of legislation which “includes projections on the effect on national debt and cost estimates for legislation”. So designing a bill that can be scored favorably eases it’s passage. You know, just more deception in the process. I don’t know about you but I expect my employees to tell me the truth. I know, I expect so much.

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            • Right. Pay-as-you-go public pension. Always has been, no matter what else anyone might call it. But as FDR said, you can’t pass a PAYGO public pension in the US, so it has to be described as a savings plan, or an insurance plan, or anything except what it is.

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              • Every now and then some group like the Heritage Foundation or American Enterprise Institute or something will churn out a “study” showing that the federal government spends like 70% of its budget on welfare and isn’t that scandalous.
                Of course this is accomplished by lumping in SS and Medicare with food stamps.

                But it’s done below the fold, after the jump, because they don’t want to advertise that most of their target audience puts food on the table thanks to SS, and can only wheel themselves to Tea Party rallies using their Medicare scooter.

                It’s a peculiar tic for a large swath of people that “taxpayer money” is what goes to shiftless losers but what I get each month from the US Treasury is a rightful share of what I have earned. Why, heck, it’s practically a paycheck!

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                • I don’t know, here’s one of those posts from AEI: https://www.aei.org/publication/us-second-biggest-welfare-state-world-whos/

                  It’s kind of like you say, except the whole point of the post is that America has a giant welfare state and yet most of it goes to benefitting the relatively wealthy as opposed to the poor. From the post:

                  As far as direct social spending goes, the US spends a greater share on the upper-middle class than countries such as Australia, Canada, Sweden, and Norway…

                  I read this as a criticism of the welfare state on the grounds that it does too little benefit to the poor. I have no interest in defending Heritage, but your characterization if AEI is quite off.

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    • “Woot, no more taxes! Wait…ACA that’s a tax”

      Ah, the pithy comment. Was expecting this farther down the thread.

      A reminder:

      PPACA passed the House in 2009, when the Democrats has a majority that they likely won’t have again until 2024 at the earliest.

      It passed the Senate in 2009 because Franken finally got his seat, and the Democrats could close it out without any Republican support, 60-39… using a Senate super majority that they probably won’t get again until… well, 2020 at the earliest.

      It was signed by a Democratic President, which we may not get again in 2016 with the inter-party arguments that folks are tossing around.

      And then, after all of that, requiring a lot of moons to be aligned and in place, it could very easily have been tossed out entirely on a 5-4 vote by SCOTUS. John Roberts switching was the only thing that saved it.

      That’s four major failure points. At any of them, a very small change was all that was necessary to make it not happen. Indeed, you’ve seen a lot of fairly liberal-friendly law (the Voting Rights Act, gun regulation, and McCain-Feingold all spring to mind as pretty major cases) all of which were passed with some level of bipartisanship get partially or fully *undone* in the last decade and a half just because of the then-current makeup of SCOTUS.

      Right now, the GOP holds one of those four points by a massive majority, and still has its grip on half of one of the other ones because it’s refusing to allow a SCOTUS appointment. The second one they might lose, the first one they most assuredly will not.

      Again, between now and 2024.

      So, no… no new taxes. And no new big tax cuts, likely, either.

      Everyone who is offering a political platform that promises either of those things, or promises something that would require either of those things to happen, is offering vaporware.

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  2. All this is true and it’s a lot of cold water. I’m wondering what it’s being thrown at though? Bernie supporters?

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    • Well, if Bernie is making promises that will be impossible to keep, folks should kinda figure / know that don’t you think?

      But I think it also applies to HRC and Trump. IIRC Trump has made noises about taxes, and frankly, I assume Hillary has too.

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      • Mmm Hillary’s been pretty restrained on what she’s promising to do. Trump and Bernie sure but then again Bernie’s answer to everything is revolution.

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    • This kind of cold water should be thrown at everyone who makes the mistake of pinning legislative hopes on presidential elections. The number of people who I’ve heard on the radio excitedly exclaiming that this presidential election is the most important EVAR! is starting to get annoyingly high.

      It isn’t important, at best, it’s very, very interesting, in the Chinese curse kind of way.

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        • I’m still stumped as to why it is so interesting, though. I listened to a bloggingheads episode earlier today that made a bunch of comparisons to the 1968 race, but if you look at the objective state of the country that seems crazy. What do we have today to break apart the political consensus in the way that 68 reflected the height of the Vietnam War, the civil rights movement, the beginning of the nationwide crime wave that peaked in the early 90’s, etc etc etc. I just don’t understand what’s making people look for more radical solutions this cycle.

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          • Back in ’68, the other guys were Morally wrong But they were still the “loyal opposition,” and no one questioned that they at least had the country’s best interests at heart even if they were terribly misguided.

            Today, Partisan press sources (yes, yes, BSDI) portraying the other party as the “enemy,” and every policy proposal of the “good guys” as absolutely and imminently necessary to protect against an existential threat.

            It’s not true, of course, but it sells advertising space.

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            • , Most of the time I whole heartedly agree with you but the majority of the people I knew and was friends with in 68 never once thought that Nixon had anything in his mind other than how to gain and keep power. Thirty thousand dead Americans and almost a million dead Vietnamese later pretty much proves my point.
              I think it is best to stay away from absolutes when writing.

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      • Oscar,
        That’s not how the powers that be are playing this election.
        If it was truly unimportant, they wouldn’t be using all their chips.
        Is something due to happen in the next four to eight years?
        Perhaps, I certainly couldn’t say.
        But there’s definitely indications pointing that way.

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      • “This kind of cold water should be thrown at everyone who makes the mistake of pinning legislative hopes on presidential elections.”

        This.

        That’s who this is aimed at. Right now a lot of that water splashes on Bernie supporters, because his policy platform is the one that is hugely dependent upon a major change in tax policy, but it applies to everybody who is thinking that the Presidency is a place for them to pin all their hopes and dreams.

        This Presidential election is about two things: appointing Supreme Court justices and keeping the federal government from utterly imploding. That’s it.

        That first bit is pretty important for your long-term policy goals, on either side of the equation, don’t get me wrong.

        But getting SCOTUS judges planted in place doesn’t pay off for more than a half-decade, because SCOTUS is reactive. You need to have someone challenge a law (which sometimes requires actually passing the law in the first place) and then wind its way all the way through the court system until it gets there.

        Whoever wins this Presidential election isn’t going to do much, most likely. But whoever wins in 2024 is going to owe this President quite a bit for setting the SCOTUS table.

        Assuming that between now and 2024 either party gets its head out of its ass. The Democrats need to get the House back, which means eight years of dumping all of your Hope and Change at the state electoral structure. The GOP needs to actually jettison enough of its bonkers platform bits to become a national party again and win at the major election cycle level.

        The Democrats actually have a much easier task, there. They don’t have to undergo transformative change. They just need to actually… work. At politicking. At the non-Presidential level.

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        • Also, with regard to SCOTUS, you have to have a Senate willing to pass your nominee. A hostile senate means you might have to offer up a judge who is less of a sure bet, and more of a swing vote.

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          • “Also, with regard to SCOTUS, you have to have a Senate willing to pass your nominee. A hostile senate means you might have to offer up a judge who is less of a sure bet, and more of a swing vote.”

            This cannot be overstated, and that swing bit might be a little wider than you want to think about.

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        • This Presidential election is about two things: appointing Supreme Court justices and keeping the federal government from utterly imploding. That’s it.

          Well, there’s also foreign policy.

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        • “This Presidential election is about two things: appointing Supreme Court justices and keeping the federal government from utterly imploding”

          So who should I vote for to keep the fedgov from imploding?

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    • Yeah, I’m wondering the same thing; on the Right, the Norquist lobby is the lobby for the Donor faction. It is ripe for The Donald to pillage… show republican rank and file congressmen how to win without the Donors? Well, voting yourself the Treasury… that’s a sellable future.

      That Trump put forward a bog-standard (Republican) Tax plan is in my estimation an example of his not fully understanding what he hath wrought. Come the general, it is not impossible he will revisit this.

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  3. Overall this post illustrates to me at least, how we are in a period of shifting tides.

    The Reagan coalition has run out of gas, the DLC Third Way centrism which tried to accommodate it is unpopular.
    The Obama coalition is still together, but needs to outlive his administration to become settled. It isn’t powerful enough to become a national movement like the New Deal or Reaganism, so we are at a stalemate, until something shifts and gives power to a new coalition.

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  4. [T]he President has virtually **no** authority when it comes to changing tax structure in any practical sense whatsoever. … [She] almost entirely do[es]n’t, except in a negative sense ([she] can veto a tax proposal, and [she] can approve a tax proposal). Now, to be clear, the President can craft whatever sort of tax legislation [she] want[s], and [Presidents] typically do at least once a year… but all tax law originates in the House of Representatives under the Constitution.

    The Treasury Department is correct as a matter of formal Constitutional structure and process. But this minimizes the fact that the President holds a unique, powerful, and influential position with the swirling maelstrom of day-to-day politics. When the President advocates a change in the law and finds a friendly Congresscritter to introduce it, she puts the force and power of the Oval Office behind that bill. She gets to appeal to the people as a whole, directly, and she commands an audience to whom she can aim that appeal in a way and to an extent beyond the reach of any Member of the House and any Senator. The bully pulpit renders a President very well capable of pressuring Congress, claiming a mandate of the people as a whole, to consider and approve her proposal.

    Now, a President needs to be both popular and persuasive to do this successfully. She also needs to have the energy and interest in investing her political capital in the venture. She needs to wheel and deal behind the scenes, rolling logs and trading horses and counting noses like a legislator. But she’s not just a legislator. She’s the head of state and the focus of political attention.

    So let’s not minimize the fact that the President holds great informal political power. She can’t change tax law on her own, but she can — if she closes — do a great deal more than deliver a state of the Union address and put ink in the veto pen to get the ball rolling.

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    • This is true, but it requires you to be more than just popular and persuasive.

      You have to be popular, but your persuasiveness has to have actual incentives behind it. And what we have seen since 2008 is that the GOP largely does not give a shit about general, country-wide, non-voter based public opinion polls. Their message to themselves has created a themselves that is immune to anything other than specific, district-level, high propensity primary voters.

      Mitch McConnell demonstrably does not care that ignoring his job is likely going to cost his party seats in the Senate. Why should he care? The GOP isn’t going to get 60 and neither are the Democrats and the American public have demonstrated that they don’t sufficiently pay attention to hold folks other than the President accountable for federal politics. The fact that the GOP has cast aside all pretense at (actually doing what their goddamn job is) as anything they care about has *gained* them support in specific, district-level, high propensity (and in our gerrymandered world, partisan) primary voters.

      That’s how they’ve gotten *more* control over Georgia and Alabama and Colorado and a dozen other states.

      So the only way for the President’s bully pulpit to matter is if the President is popular enough with the specific, district-level, high propensity voter that when the President makes impassioned speeches the folks in the Congresscritter’s district who listen and write letters are writing letters that say, “Listen to that guy”. Right now, that’s not what those letter say, they say, “Stand firm against that guy!”

      If you want to change that, you need to change R+15 to R+4. And that means changing D+22 to D+7.

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  5. This is of course why if Berniecrats really want a revolution they need do what the Goldwaterites did – start running in school board, county commission, and state legislative races.

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    • But local elections don’t get your name on the front page of every national paper, etc. They aren’t sexy.

      Sure it’s where 90% of the work gets done, but they don’t advertise your personal brand they way a national election does.

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      • Oh, sure. I’m totally with you on this. Ironically, you agree with the folks over at LGM that part of the issue with the Left is they don’t seem to have the gumption to get involved in the nitty gritty of actually building a political movement. They want to run one guy who will magically fix everything.

        I mean, say this for the Socialist’s in Seattle – they at least did the work to get somebody on the City Council and endorse other more left-leaning candidates that happened to be Democrat’s in various city council races.

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        • dailykos has been busy building a political movement for like ten years now.
          I can put a name and date to plenty of people they’ve gotten elected.
          Grassroots, and people they can find who the locals like.

          It’s not quite a “political movement” — it’s a people-first movement, which involves embracing the idea that “all politics is local” first and foremost.

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  6. Once again a shining example of the absolute awfulness that is the government created by the constitution.

    It is beyond terrible.

    Look at Canada. They have a system where the people get what they want good and hard.

    So when Harper is in charge his priorities tend to happen.

    Now that Trudeau is his priorities tend to happen.

    Limited ability to sabotage agenda of party in power means they own their results and actually get to try what they were elected to do.

    Aka their system functions. We are about to see over a decade of divided government unless Trump manages to be so bad GOP loses the house.

    Which would mean we get a brief 2 year reprieve from divided government before mid-terms take us right back.

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    • Look at Canada. They have a system where the people get what they want good and hard.

      You seem to be stuck in a democratic fundamentalist mindset. The people want this, therefore it should be implemented. So you see a system deliberately set up to make it difficult to make changes with a narrow majority, and see you it as flawed. But there’s a lot to be said for stability, and a system that requires a broader consensus to make major policy changes.

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      • That lovely stability that leads to underfunding lead abatement, blocks most action to handle climate change, inability to pass budgets or fill critical positions in government.

        It is so great that we are staring at GOP presidential nominee Donald Trump.

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