Republicans' Tax Plan Will Unleash Numerous Battles

If the Republicans had merely cut all the tax rates, exploded the deficit, and let the whole thing expire in 10 years, they might have gotten it passed on a straight party line vote without too much trouble. However, they decided to make the cuts permanent, which means they needed to find revenue to offset most of the cuts. Therein lies the rub. The changes they made to the tax code to generate the new revenue are going to lead to stupendous battles in Congress as the lobbyists descend on Congress like a swarm of locusts and try to get rid of changes they don't like. Here are some of the more contentious issues:

• State taxes: While the deduction for property taxes survived (but capped at $10,000), the deduction for state and local income taxes didn't. This will hit high-tax blue states much harder than low-tax red states. The problem here is that California, New York, New Jersey, and Illinois alone have 35 Republican House members who have a big problem now. If they vote against the bill, it will fail and Republicans will be blamed next year for accomplishing nothing. But if they vote for it, their constituents' taxes will go up and Democrats will have a field day saying they raised taxes on the middle class to pay for tax cuts for the very wealthy and giant corporations. This could cost Republicans control of the House.
  
  
• Medical expenses: The deduction for medical expenses is going away. For older people with expensive chronic medical conditions, this could be a devastating hit. The AARP is sure to chime in here, as well as much of the health-care sector. Cue the ads showing grandma crying that she can't afford her medical care any more because the Republicans had this burning desire to slash corporate taxes.
  
  
• Mortgage interest: The home building and real estate industries don't like the provision that mortgage interest can be deducted only on the first $500,000 of a loan. In North Dakota, $500,000 will get you a very nice house. In San Francisco, the median home now costs $1.5 million. Expect major pushback from not only these industries, but also members of Congress from districts and states where housing is very expensive.
  
  
• Personal exemptions: Democrats are going to say that the so-called family-values party has just launched a very family-unfriendly bill because although the standard deduction would rise from $12,700 to $24,000, the per-person personal exemption of $4,050 per person will be eliminated. For a childless couple, this is a net win, but for a family with three children it is a net loss. For a family with five children, it is a big loss. An expanded child tax credit helps, but larger families are going to howl when they discover their taxes are going up.
  
  
• Alimony: Divorced people who pay alimony aren't going to like the bill, since the deduction for alimony has been axed. A fair number of members of Congress could be hit by this personally, and might not like it.
  
  
• Student loans: Students (or former students) who are paying off student loans won't be happy when they discover that the deduction for interest on student loans has been killed. Young people are notoriously bad at voting, but this provision could motivate some of them to show up at the polls in 2018.
  
  
• Charities: Increasing the standard deduction has an indirect effect on charities and churches. Fewer people are likely to itemize their deductions in the future, which means they are also likely to make fewer charitable deductions since they will have to pay 100% of the cost themselves. Churches and charities are not going to like this and will probably protest loudly.

Numerous other changes affect different people and businesses differently, depending on their circumstances. Expect many of them to fire up their spreadsheets to see how they do. In short, a large number of miscellaneous deductions have been eliminated simply to generate revenue to cover the huge tax cut for corporations. As people discover ones that affect them, they are not likely to be pleased.

Republicans are already starting to sell the bill as a middle-class tax cut, but the reality is different. Only a few thousand very wealthy families benefit from phasing out the estate tax, for example. Under current law, estates under $5.6 million aren't taxed and anyone with an estate larger than that can hardly claim to be middle class.

Another feature of the bill that is of little use to middle-class taxpayers but is of great value to Donald Trump is elimination of the alternative minimum tax. This is basically a parallel tax system, separate from the regular one, but with fewer deductions allowed. It ensures that very wealthy people pay some tax, even if they have a lot of deductions. The AMT cost Donald Trump $31 million in the one year (part of) his tax returns became public. Democrats are going to make hay claiming eliminating the estate tax and the AMT are simply giveaways to Trump personally and the Republican Party's big donors.

The bill will be marked up by the House Ways and Means Committee next week, at which time members will be allowed to submit amendments. Then the amended bill will move to the House floor. Expect many battles along the way. (V)

Half of Americans Think Trump Committed A Crime

A new WaPo/ABC poll shows that 49% of Americans think that Donald Trump has committed a crime. So far, no hard evidence of any crimes have turned up, though. Some people may be confusing the indictments of Paul Manafort and Rick Gates with something Trump did, even though they have been indicted for money laundering and other financial crimes unrelated to Trump. It is possible that many of the respondents are thinking about Trump's firing of James Comey, which could be construed as obstruction of justice.

No matter what people's reasons are, it is bad news for Trump. If a substantial fraction of the population, say, 3/4, think Trump is a crook, he will be a goner. Few Republicans will want to attach themselves to him under those circumstances. We are not there by any means yet, but special counsel Robert Mueller has barely started his job. Things could get a lot worse for the President. (V)

Trump Blames Kushner

Vanity Fair has the first inside account of the post-indictment Trump White House, and it's not a pretty picture. An already difficult place to work has become an absolute nightmare, with everyone paranoid that they could be the next target, Donald Trump spending much of his time raging at whoever the target du jour is, and, for the first time, serious consideration being given to the possibility of impeachment.

Trump & Co. would very much like to do something about the current state of affairs, but there are few good options available outside of venting on Twitter. Firing Mueller would precipitate a constitutional crisis, and pardoning the various accused would lead to huge blowback, while just letting the special counselor know that he needs to get state charges filed from here on out. Unable to come out swinging, as is his nature, Trump is reduced to finding someone to blame. And while his relatives are typically immune to his attacks, it appears that does not extend to relatives by marriage, because the target is currently on the back of first son-in-law Jared Kushner. The President's belief is that Kushner's bad advice-—specifically, his advocacy for the firings of Mike Flynn and James Comey—led to this whole mess. "Jared is the worst political adviser in the White House in modern history," Trump confidant Sam Nunberg told Vanity Fair.

There is no doubt that this line of thinking is being encouraged by Kushner enemies Steve Bannon and Roger Stone, both of whom speak to the President on a regular basis. They are also both pushing Trump very hard to appoint a special counsel of his own to look into the Russian uranium deal. The thought process is that this would create a useful distraction, while also ensnaring Mueller, since he was running the FBI when the deal was a consummated. So, it's a win-win. It's also so likely to blow up in Trump's face that Kushner would quickly lose his title as worst political adviser in history. (Z)

Clovis Is Out

Sam Clovis was Donald Trump's pick to be the top scientist at the USDA, though he has no background in the issues that department deals with, is not actually a scientist, and holds some decidedly non-mainstream "scientific" beliefs. Among those are his views that homosexuality is a choice, that climate change is not real, and that all gay folks are latent pedophiles.

None of these were, it would seem, deal-breakers when it came to his confirmation hearings that were scheduled for next week. However, his less-than-stellar vetting process when it comes to hiring people and then encouraging their bad behavior turns out to be his achilles heel. It was he who brought George Papadopoulos on board the Trump campaign, and so it is he who is directly responsible for the latest chapter in the Russiagate scandal, and so it is he who could be the next indictee. Consequently, in an entirely foreseeable turn of events, Clovis has withdrawn from consideration for the USDA post. "The political climate inside Washington has made it impossible for me to receive balanced and fair consideration for this position," he explained. His talents are not lost to the administration, however, as he will remain in his current post as senior White House advisor to the Department of Agriculture. (Z)

DNC Fires Its Top Fundraiser

The main function of the DNC and of the RNC is to raise money. The DNC hasn't been doing it very well of late, so the Democrats fired finance director Ellen Mellencamp Smith yesterday. She had been on the job only 5 months. The DNC raised $51 million through September of this year, which sounds impressive, but the RNC raised $104 million in the same 9-month period. Mellencamp Smith has previously worked for Sen. Maggie Hassan (D-NH), Sen. Al Franken (D-MN), and Rep. Ann Kuster (D-NH). No successor has been named yet. (V)

Trump Silenced on Twitter (Temporarily)

For about 11 minutes on Thursday, Donald Trump had no Twitter account. The Internet was abuzz with comments and speculation about what was going on:

If Trump's Twitter is down, does this technically mean he's no longer POTUS? I mean, it's the only part of the job he pays attention to.

— John Schindler (@20committee) November 2, 2017

Wait, Trump's twitter account has disappeared. Is this how we do coups now? https://t.co/4rL1zGXicV

— Jeet Heer (@HeerJeet) November 2, 2017

My guess: Trump's lawyers told him to delete his account, because he is in serious legal jeopardy

— David Klion (@DavidKlion) November 2, 2017

Eventually, Twitter restored the account and announced that it was suspended by a rogue employee during their last day on the job. Needless to say, Chief of Staff John Kelly is trying to find that person's phone number to figure out if this can be done again, perhaps for about 3 years this time. (Z)

Perry: Petroleum Stops Sexual Assault

Energy Secretary Rick Perry has not exactly had a reputation as a towering intellect ever since the time he forgot the name of the third cabinet department he aspired to cut as president (Hint: It's the one he now leads). His CV is not going to be helped in that regard after telling attendees at a conference about an unexpected benefit of bringing more fossil fuels to Africa:

But also from the standpoint of sexual assault, when the lights are on, when you have light that shines, the righteousness, if you will, on those types of acts. So from the standpoint of how you really affect people's lives, fossil fuels is going to play a role in that. I happen to think it's going to play a positive role.

Perry's 67, so there's still time for another presidential run if the American people won't be denied a leader with this kind of keen insight. (Z)

Northam Has a Small Lead over Gillespie

A Suffolk University poll released yesterday has Lt. Gov. Ralph Northam (D-VA) leading Ed Gillespie (R) 47% to 43% in next week's Virginia gubernatorial election. Recent polls have been all over the map, but most of them show Northam ahead, albeit by wildly varying amounts. The results could still change, though, since 17% of the independents are still undecided. (V)

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---The Votemaster and Zenger