After the Amtrak Crash: Finding the Money to Fix Our Infrastructure
The Amtrak derailment in Philadelphia that left six people dead and dozens more injured has already prompted calls for increased infrastructure spending. "This one is a wake-up call," New York City Mayor Bill de Blasio said Wednesday on MSNBC’s Morning Joe. "We have got to get serious about investing in infrastructure."
There have been other wake-up calls before, and the dire need for infrastructure renewal isn’t news. Yet, as Politico’s Kathryn A. Wolfe reported, the deadly crash occurred just as a House panel was set to mark up a bill that would cut Amtrak’s funding for 2016 to $1.13 billion, or about $250 million less than the railroad service typically gets. (To be fair, it’s also not clear at this point what caused the horrific Amtrak derailment and whether infrastructure problems played a part or not — and the number of rail accidents each year has actually fallen significantly since 2006, according to Federal Railroad Administration data.)
Related: At Least 6 Die in Philadelphia Train Derailment, Scores Hurt
Even before the Amtrak tragedy, though, de Blasio and Oklahoma City Mayor Mick Cornett, a Republican, along with some two dozen other mayors were scheduled to travel to Washington, D.C. today to press Congress for a long-term renewal of the federal transportation authorization bill. The current funding law is set to expire May 31.
Pretty much everyone agrees that it’s well past time for the country to repair and rebuild its dangerously dated bridges, roads, railways, water mains and other critical infrastructure. The hold-up has always been over how to fund it.
Here’s one suggestion: The U.S. has spent some $110 billion on rebuilding Afghanistan, including billions that can’t be accounted for or that the inspector general has found have been wasted. That’s a drop in the bucket compared to the trillions in domestic infrastructure spending that some have called for. Still, clamping down on that waste in Afghanistan, and on other money being frittered away, might allow for some spending to be redirected to other necessary and more productive needs, like domestic infrastructure.
That’s not to suggest we must entirely abandon nation building abroad in order to rebuild this country. It’s just to point out that Congress should be able to find the money to address our national priorities, something it has miserably failed to do of late.
Big Ad Buys to Push Tax Reform
Two conservative groups are spending millions to promote an overhaul of the tax code.
The American Action Network announced Thursday that it will spend $2 million on a new TV ad featuring a Midwestern mom who says her family is “living paycheck to paycheck” and that a middle class tax cut would give them “piece of mind.” The ad will air in 28 congressional districts currently held by Republicans. Americans for Prosperity, backed by the Koch brothers, will spend $4.5 million on ads that promote tax reform while criticizing three red-state Democratic senators -- Claire McCaskill (MO), Tammy Baldwin (WI) and Joe Donnelly (IN).
Some States Will See Dramatic Obamacare Price Hikes in 2018
Premiums for Affordable Care Act policies are set to rocket higher in many places in 2018. Many of the rates for next year won't be made public until November, but The New York Times found that Georgia has already approved increases of up to 57.5 percent, while the average rate in Florida will jump by about 45 percent and the average in New Mexico will climb by 30 percent. Minnesota, on the other hand, announced this week that a new state reinsurance program has helped stabilize rates and price changes for individual plans in the state will range from a decrease of 38 percent to an increase of 3 percent.
Confusion stemming from the White House and Congress, including uncertainty about whether the Trump administration will continue to make cost-sharing payments to insurers, is largely driving the increases. Keep in mind, though, that about 85 percent of people who buy insurance through Obamacare exchanges won’t feel the price hikes because their plans are subsidized — but the federal government will have to shell out more for those subsidies.
A Tax Reform 'Game Changer'?
The National Association of Home Builders says it's open to changes to the mortgage-interest deduction — a major policy shift that could have significant implications for the Trump administration's proposed tax reform, Politico's Lorraine Woellert reports. The break benefiting homebuyers was preserved as part of the tax framework released last week, but the reform plan also calls for increasing the standard deduction, a shift that would make the mortgage interest deduction less valuable. The National Association of Realtors last week criticized the administration's plan, even though it left the mortgage tax break in place. "This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions," the group's president said.
Warren Buffett: Eliminating the Estate Tax Would Be a ‘Terrible Mistake’
The world’s second-wealthiest man is worth about $75 billion, but he isn’t worried about the government taking a bite out of his estate after he’s gone. In fact, Buffett thinks the estate tax, which applies to just a few thousand estates a year, is a reasonable way to allocate resources, especially in a society in which the rich have gotten much richer over the last few decades. Buffett’s main concern is the emergence of “dynastic wealth” that “goes totally against what built this country, what this country stands for.” In an interview Tuesday, Buffett criticized the latest GOP proposal to get rid of the estate tax: "If they pass the bill they're talking about, I could leave $75 billion to a bunch of children and grandchildren and great-grandchildren. And if I left it to 35 of them, they'd each have a couple billion dollars ... Is that a great way to allocate resources in the United States?” (CNBC)
Treasury Pulls a Paper That Contradicts Mnuchin’s Corporate Tax Argument
The Treasury Department has taken down from its website a 2012 analysis that found that business owners and shareholders — not workers — bear most of the burden of corporate taxes. The findings of the report run counter to the argument Treasury Secretary Steven Mnuchin has been making in selling the benefits of a reduction in the corporate tax rate. The Trump administration’s tax reform framework calls for dropping the corporate rate from 35 percent to 20 percent.
The 2012 report from the Office of Tax Analysis found that “workers pay 18 percent of the corporate tax while owners of capital pay 82 percent” — figures that are “in line with many economists’ views and close to estimates from the nonpartisan Joint Committee on Taxation and Congressional Budget Office,” according to The Wall Street Journal.
A Treasury spokeswoman told the Journal: “The paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis.”
Jason Furman, who was chairman of President Obama’s Council of Economic Advisors, tweeted that the goal of the technical paper series that included the removed study “was to be more transparent about the methodology Treasury used for its modeling and analysis.”
Treasury website has 40+ yrs of Tax Working & Technical Papers. This is the only one removed https://t.co/QzLTSHderk https://t.co/MFZRd7HoFQ
— Jason Furman (@jasonfurman) September 29, 2017