Daily Archives: 12 February 2016

Overbearing, or Justice-Seeking?

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The Federal Department of Justice thinks Ferguson, MO, should make changes in the way it polices itself, and in the main, Ferguson agreed. That’s where the rub is, that “in the main” part.

An agreement was tentatively negotiated between Ferguson and DoJ on what those changes should be, but when it got to the City Council, the Council wanted some changes before they’d sign off. Vanita Gupta, Acting Assistant Attorney General for the Civil Rights Division, said that DoJ would take

necessary legal actions to ensure that Ferguson’s policing and court practices comply with the Constitution and relevant federal laws.

The Ferguson City Council has attempted to unilaterally amend the negotiated agreement.

Of course, Gupta knows better. Nothing was agreed until the city actually agreed—which is what the City Council was discussing when, on its review of the offered settlement, it decided some changes were desirable. The Council, for instance, is concerned about whether it can afford the settlement. Among other things:

The council also wants Justice to cap federal monitoring fees the city must pay at $1 million….

Another concern is how this settlement would affect adjacent government entities. One change requested by the Council was an explicit statement that

the agreement will not apply to any other governmental entity that might take over duties currently provided by Ferguson. That means, for example, that St Louis County would not be beholden to the agreement if it takes over policing in Ferguson.

Because, for instance,

St Louis County police spokesman Brian Schellman said if the county were ever asked to take over policing in Ferguson, “we would consider the implications of the consent decree before entering into such an agreement.”

DoJ’s response? Since you didn’t sit down, shut up, and do what you were told to do, we’re suing you to implement our agreement diktat. The suit was filed the day after the Council voted to ask for these few amendments. No negotiation. Suit.

Attorney General Loretta Lynch said Ferguson’s decision to reject the deal left the Justice Department no choice except to file a civil-rights lawsuit.

Of course, Lynch knows better, too. The Council’s request for changes is not at all a rejection of the deal. In the first place, no deal can exist until it’s agreed by both parties, not dictated by one to the other. In the second place, a request for changes is an implicit agreement to the basic offer, else there’d be nothing to change.

Then Lynch made this entirely disingenuous statement:

The residents of Ferguson have waited nearly a year for the city to adopt an agreement that would protect their rights and keep them safe. … They have waited decades for justice. They should not be forced to wait any longer.

And yet, rather than negotiating these few changes to a reasonably quick resolution, Lynch now seeks years more delay while her DoJ sues to impose her will. This reaction is nothing more than an egotistical, self-aggrandizing move by Lynch and Gupta. Worse, it represents, regardless of the merits of the tentative agreement or of the requested changes, nothing but an overbearing power grab by the Federal government.

Business Taxes

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Richard Rubin, of The Wall Street Journal, thinks reforming these is not a straightforward proposition. To an extent, he’s right, as business and personal income taxes have become increasingly intertwined with each successive tax reform since Reagan.

The links between corporate and individual taxation inevitably lock policy makers in intractable disputes about popular deductions and the question that divides the parties most bitterly: is the US collecting enough money from wealthy individuals?

But this entangling, or more correctly, the concern about the entangling, simply overcomplexifies the problem.

It’s an easy thing to do conceptually, if political will is lacking, to reform business taxes. Keep in mind a single, core fact: businesses don’t pay very much of their tax bills already. Business taxes are just another cost center, whose value in large part is paid by the business’ customers in the form of higher prices that are set to recover, at the least, a significant fraction of that cost. Customers pay much of those business taxes.

The framing provides the answer. Cut through the Gordian business/personal income tax knot by eliminating the business tax altogether. This, aside from eliminating the tax pass-along to already taxed individuals, also eliminates disputes about popular deductions, credits, and so on: they go away with the taxes.

This also removes the non sequitur of whether business taxes are hitting the wealthy sufficiently. That question becomes focused on the personal taxes where it belongs and thereby brought into sharper relief.