Thought for the Day

[broncofan]

The Supreme Court eventually ruled that Bakke had been discriminated against, but that the policy of the University of California was legal.
http://www.nybooks.com/articles/1977...e-has-no-case/

http://teachers.dadeschools.net/jzoe...aeed90-36.html

Thank you for the excellent article by Dworkin as well as providing the case I was thinking of. I kept this sentence of yours because this is the sticking point for some people. Affirmative action breaks the mold of other civil rights statutes in that it allows decision-makers to actively consider race. The closest thing to affirmative action occurs in the employment context, where there are cases called "disparate impact cases". These cases challenge hiring criteria when the criteria have the effect but not the intent to discriminate and are not justified by business necessity.

Affirmative action in some sense is in this spirit because it attempts to address the inter-generational effects of racism, even where those effects are no longer intentionally sought. But of course affirmative action is a more aggressive tack. And since it literally allows race to be considered a factor by decision-makers it has always been hotly debated and controversial, as positive discrimination unintentionally leads to exclusion in a finite pool of applicants.

The context of Sessions' decision to direct government resources towards ending affirmative action is that our civil rights laws have always been enforced with an eye to the many great injustices inflicted on African-Americans; including slavery, lynchings, and Jim Crow. To this day, there are inequities in the way drug laws have been enforced and there continues to be an attempt by legislators to suppress the votes of minorities. The Justice Department under Sessions has not shown any real zeal in addressing these issues and instead wants to focus on policies that have been implemented to help groups that are underrepresented in certain professions. I think it's highly suspect and confirms people's fears about Sessions.

[Stavros]

Dworkin was a Professor of Law and as such gives an analytical argument based on the law, but as he is also at pains to point out, this is the law responding to discrimination that was not accidental but deliberate, just as the first gun control laws were introduced after the Civil War when some White Americans believed freed slaves who had acquired arms during the war would go on the rampage after it; and when the first law to restrict immigration in the late 19th century was directed specifically at the Chinese who were accused of being dope peddlers destroying the fabric of American society through the Opium Dens they owned and controlled-as if the Chinese in America did nothing else.

What I recall from the Bakke case at the time and after was a survey which claimed that Affirmative Action and 'reverse discrimination' policies that were introduced in higher education and employment had actually benefited women more than any other social group, the point being that the policies that acknowledged a deliberate obstruction of opportunity when reversed did create a more diverse workforce and student cohort, but the concept of 'diversity and inclusion' to the alt-right is code for the Communist Manifesto, and if there is one thing America has rejected it is Communism.

This policy has Bannon written all over it, probably Sessions too, a deep and abiding resentment that the USA has become 'too diverse' with Obama as the perfect symbol of decay rather than progress: White American mother, African father, Hawaii born, a trio of problems for those for whom America belongs to White Christians. There is a refusal to accept that discrimination has been deliberate, not accidental, an amazing proposition for Sessions, born in, of all places, Selma Alabama, unless one suspects he lives with a nostalgia for the South of his childhood when everyone knew their place and did not try to get above themselves, a bleak moment when atrophy rather than progress was the norm of everyday life, as if the Civil War had never changed a thing.

Once again it is not just resentment at Obama that shapes this Administration, but the festering rage at the Civil Rights achievements of the 1960s, to be first written off as Political Correctness and a 'left-wing conspiracy', and in the long term reversed. Voter suppression, strict limits to the availability of abortion and family planning, the gradual erosion of environmental regulations, the removal of transgendered from the armed services -one by one you can place a tick next to the achievements which the alt-right consider to be failures to be eliminated. The one issue that has worked its way into the alt-right psyche which has yet to be attacked, is welfare, a policy area as complex as health care, but one that the alt-right would like to take an axe to, soon.

Yet it also appears to be the case that across the USA states and services simply ignore what the President says -California continues with its own climate change strategy, the armed forces ignore the decision to dismiss the transgendered from the services, border officials do or do not comply with instructions to limit entry to the USA, and health care provision is broadly the same as it was on the 1st of January 2017. At some point I assume many of these reversals of policy must be debated in Congress, which suggests there is a lot left to play for, and more torment to follow, without knowing who will win, and who will lose.

[filghy2]

According to a recent survey, a majority of Republican voters would support postponing the 2020 elections in response to claims about voter fraud. https://www.vox.com/policy-and-polit...elections-poll

I'm not sure whether this is even legally possible, and there has been criticism that the wording of the question may have influenced the results, but it's still disturbing that so many people could be persuaded to support such a fundamentally undemocratic step based on completely unsubstantiated claims.

[Stavros]

I agree, and one example of complex taxation that will probably be immune from reform, is provided by the real estate taxes that are far more generous to the owners of Casinos than to home owners, and are the tax breaks that reside in terms like 'depreciation', 'net operating loss', Chapter 11 Bankruptcy declarations -all of which and more, explain how someone can invest other people's money in casinos, lose nearly a billion $$ in a year, and walk away without any liabilities. A good perspective here from the NYT
https://www.nytimes.com/interactive/...ns-losses.html

[hippifried]

According to a recent survey, a majority of Republican voters would support postponing the 2020 elections in response to claims about voter fraud. https://www.vox.com/policy-and-polit...elections-poll

I'm not sure whether this is even legally possible, and there has been criticism that the wording of the question may have influenced the results, but it's still disturbing that so many people could be persuaded to support such a fundamentally undemocratic step based on completely unsubstantiated claims.

Lincoln suspended habeas corpus during the southern rebellion, but he couldn't stop the 1864 election.

To gain the arbitrary power to suspend elections would require a Constitutional amendment. Good luck with that. Who gets the power? Congress? Which chamber gets to Initiate the process? The term-limited executive branch? Gonna institute a clause that would repeal and reinstate the amendment in accordance with which party is in power? Oh well... Let's just decide everything on Twitter.

[sukumvit boy]

I agree, and one example of complex taxation that will probably be immune from reform, is provided by the real estate taxes that are far more generous to the owners of Casinos than to home owners, and are the tax breaks that reside in terms like 'depreciation', 'net operating loss', Chapter 11 Bankruptcy declarations -all of which and more, explain how someone can invest other people's money in casinos, lose nearly a billion $$ in a year, and walk away without any liabilities. A good perspective here from the NYT
https://www.nytimes.com/interactive/...ns-losses.html

I think that is an example of what economists call "rent seeking" which I have been reading about in Nobel Laureate economist Joseph Stiglitz's excellent book ;"The Price of Inequality:How Today's Divided Society Endangers Our Future".
Seeking to increase one's share of existing wealth without creating new wealth or contributing to society or the economy.
http://en.wikipedia.org/wiki/Rent-seeking

http://www.amazon.com/Price-Inequali.../dp/B007MKCQ30

[sukumvit boy]

More on Trump's "extractive economics"
http://alexandreafonso.me/2017/02/19...like-business/

http://www.nytimes.com/2016/09/18/ny...al-estate.html

[broncofan]

A few of the provisions in that article would be tough to get rid of. For instance, depreciation is a real business expense and the reason a business owner should get to claim it and a homeowner shouldn't is because personal consumption is non-deductible. On the other hand, the amount that an asset wears out is a cost of doing business and the schedule on which it's deducted is at least related to diminution in value through use, though sometimes accelerated depreciation schedules are meant to provide a slight subsidy to property owners by allowing them to claim more depreciation in earlier years. Even though the amount of total depreciation ends up being the same over the life of the asset on an accelerated schedule, there is a time value of money benefit for getting to deduct more early.

On the other hand, the provision where real estate businesses can pay a capital gain tax when they profit but then get to claim ordinary loss for losses allows them to win in both directions. It's a concession to the industry that's probably related to lobbying. The like kind exchanges are also a concession to the industry as they violate the realization principle which says that when someone has liquidated an asset there's an accounting and they realize profits and are liable for taxes. The deferral of taxes through like kind exchanges is probably substantial.

The ability to avoid paying taxes on discharge of indebtedness is also a concession. If you borrow 200 million dollars and only pay back 100 million dollars, you have a gain of 100 million in discharge of indebtedness income. Sometimes forcing someone to recognize this as income provides a disincentive for them to renegotiate a debt with lenders. But I'm sure the subsidy is far greater than it has to be because the real estate industry has an effective lobby.

Carry forward of losses is probably important so that the annual accounting period does not distort the effects of transactions. If all of the expenses occur in one year and the revenue in another, the annual accounting period would not offset the gain by the loss. But to allow such losses to be carried forward as long as they are is also unreasonable.

As a final point I want to point out that when you hear Donald Trump say that he had a carry forward loss of 916 million dollars because of depreciation he is full of shit. There is no way to have a tax loss that large without at least some of it reflecting a real economic loss. Everyone who owns real estate as their business has depreciation expenses but they do not by themselves put someone in the red on paper unless they had some genuine business setbacks, as Trump famously did. He would rather seem like a manipulative genius than a mediocre businessman.

[broncofan]

A few of the provisions in that article would be tough to get rid of.

Sorry I'm talking about nyt article. I think the best view is that for some of these deductions there's a nub of an idea there that is taken much further than it has to be...I don't want to suggest alternatives but there is a large middle ground.

[Stavros]

Broncofan -to save space I have not quoted your longer post above.
From what you say, and I appreciate the quality of your argument, a businessman President who has benefited from tax breaks is not about to propose tax reforms that would make them harder to claim. Although I understand the principle of depreciation, it is a generous way of using one person's money to subsidize another's 'wear and tear' but I can think of people who fuss over their car to the extent that the vehicle is as good as new ten years after they bought it, including the engine; and I guess only the tyres will have been regularly changed. To claim depreciation on a building before any of its residents have boiled a kettle is aesthetic to say the least.

And, while I agree that lobbying skills may have been a key factor in the various sweetheart deals that were made, is it not also the case that New York City needed these tax breaks and incentives in order to revive its financial base following the slide into bankruptcy in the 1960s? I am not an expert on the city, that is obvious, but I recall the various tax issues which led residents and commercial enterprises to leave NYC for New Jersey and how that decline in city revenue meshed with street crime to give the city a feeling of decadence and decline that may also have given it that famous 'edge', but was not financially good for anyone who lived there. I just wonder if these various tax breaks and incentives helped to revive the financial base of NYC and that this was in the long term positive for the City.

On the one hand perhaps, because on the other hand I have read about the need to overhaul the subway system and city transportation generally that average consumer and commuters complain about, so that while in the general sense New York may have moved from near bankruptcy in 1967 to towers of gold in 2017, I wonder if this speaks to the 1% problem in that only a few have been genuine beneficiaries. Should money made from these spectacular real estate developments have been used to improve the infrastructure of the city? Or is it the case the money isn't there from these developments because the tax revenues to fund subway reform were surrendered in sweetheart real estate deals? The argument in favour of taxes is that the city authority uses them (or should be using them) for precisely those things like city transport, refuse collection, street lighting and so on, that a city needs regardless of cost and profit because they are a service.