Monthly Archives: October 2021

Democrats Need to Fix Their Tax Plan

The Build Back Better plan should incorporate a better tax plan than the one currently proposed.  It should:

  • Increase the progressive income tax rates for all higher-income individuals;
  • Increase the rate for capital gains tax;
  • Change the estate tax laws to eliminate the stepped-up basis provision which allows wealthy families to avoid capital gains tax;
  • Eliminate the carried interest tax break for hedge fund executives and other very wealthy individuals.

 All of these tax proposals were listed by former Democratic Secretary of the Treasury Larry Summers on the Bloomberg Wall Street Week television program on Friday night October 29.  These are all tax ideas that have been discussed for years.  There are tons of studies about how they would work, how much federal income they would produce, etc.  The enormous reconstruction of the American economy envisioned by the Build Back Better plan would be an ideal time to pass at least a few of these well-studied tax proposals.  The current idea of a “billionaires tax” taking assets from extremely wealthy individuals, rather than taxing their income, is untested, unstudied, and perhaps unconstitutional. 

The following is a link to the Larry Summers interview:

Colin Powell and Me

The closest I came to interacting personally with Colin Powell was when he was Chairman of the Joint Chiefs of Staff.  I was working at the State Department on the Missile Technology Control Regime (MCR).  One of the MTCR issues was whether we should invite the old Soviet Union to join the MTCR.  There was an MTCR annual meeting coming up, at which we had to decide what the US position was: to invite or not to invite.  Assistant Secretary of State Richard Clarke called a number of interagency meetings to attempt to get agreement on a US position, but without success.  We needed consensus, and invariably one agency or another would prevent reaching consensus.  Usually one of the dissenting agencies was from the Pentagon or CIA.  There were two representatives from the Pentagon, one from the military side, the Joint Chiefs, and one from the civilian side, the Pentagon’s mini–State Department. 

As the meeting got closer, it became more and more urgent to agree on a US position on whether to invite the Soviets or not.  I ended up writing at least one memo, maybe more, from Secretary of State Jim Baker to General Powell.  Powell (more likely one of his aides) wrote back to Baker but did not agree.  That was the end of my correspondence with General Powell through Secretary Baker. 

Since we could not agree through the interagency process, we referred the matter to the National Security Council.  The NSC staffer for the Soviet Union was Condoleezza Rice.  We sent a memo to the White House offering President George H.W. Bush two options: invite the Soviets or not.  Attached to the memo were two draft instruction telegrams for the MTCR meeting which the White House would send, depending on which box President Bush checked.  Days passed without any decision by the White House.  Finally we had to go to the meeting in Ottawa with no instructions on what to do.  Around midnight, just before the meeting the next morning we got a call from the US embassy in Ottawa saying our delegation had a classified “niact immediate” telegram from the White House that we had to come to the embassy to read.  When we read it, it was neither of the telegrams we had prepared; it said neither yes nor no.  It was almost as if the White House had taken half of the paragraphs from the draft saying, “invite them,” and half from the draft saying, “don’t invite them.” 

Early that morning we called Assistant Secretary Clarke to ask advice.  He said, “invite them,” which we did.  There was agreement at the international meeting to invite them, unlike our inability to get agreement within the US government.  After the meeting, when we got back to Washington, we were told that President Bush had decided (who knows when) that he did not want to invite the Soviets.  So, we had to go back and tell all the other countries that were members of the MTCR that we had changed our minds, and did not want to invite the Soviets, which we did, and we moved on.  The MTCR survived and still exists and operates. 

I could never find out during the interagency process why it was so difficult to get agreement.  I think have learned years later, mainly through the movie “Charlie Wilson’s War,” that it was related to the US clandestine support for Afghans who were fighting the Soviets in Afghanistan.  The CIA was supplying small Stinger anti-aircraft missiles to the Afghan resistance, while the Soviets were supplying large Scud missiles to their Afghan supporters.  Because they were large enough to carry a nuclear warhead, the Scuds were covered by the MTCR, and if the Soviets had become members, it would have been a violation of the agreement to transfer them to the Afghans.  Because they were smaller, the Stinger missiles were not covered by the MTCR.  Perhaps the people above my pay grade were worried that the Soviets would see our attempt to get them to join the MTCR as a trick to stop the Scud transfers, and it might have prompted some type of retaliation from the Soviets, perhaps a stronger effort to stop our supply of Stingers. 

Brooks: Immigration and Multi-Culturalism

In his recent column, David Brooks praises diversity and multi-culturalism as the saviors of the American nation. He writes:

Wednesday night I had the chance to walk around Lower Manhattan where my ancestors immigrated and built new lives, and to talk with some more recent immigrants whose experiences were similar to my family’s, though separated by decades and origins.

I thought about what a large role humiliation has played in American history: The pogroms and the Holocaust that terrorized Jews and sent them fleeing. The degrading poverty of the Irish famine. The religious persecution of the Puritans. The horror of the slave ships and bondage. The dehumanizing treatment of asylum seekers on the southern border. Give me your “wretched refuse,” Emma Lazarus wrote. Very few grandees came here bathed in adoration.

David Brooks, New York Times

I think Brooks l;oses sight of the importance of the unifying contrubution of the relatively rich, priviliged “Founding Fathers” whobroke with England and wrote the Constitution. They had similar cultural heritages from Western Europe. These ideas served America well for 200 years. I think Brooks recognizes the value of their contribution, even if he does not mention it in this column.