Editorials and Opinions

David Post • May 3, 2012

The Top 10 list of why the debt ceiling debate was a big joke (and this is no joke):

1. The train wreck in Washington, disguised as the debt ceiling debate, was only about posturing and how much should be cut. But no one debated what should be cut. The what is hard to find. How much spending did Congress really cut? $21 billion in 2012. And $42 billion in 2013. Not even a blip. Where is the other $900 billion going to come from? Much of it is expectations of defense cuts as the wars in Iraq and Afghanistan wind down which should happen anyway. After all, those wars are 10 years old. They should be over 10 years from now.

2. A $1 trillion tax cut last December – the extension of the Bush tax cuts for two years – took a couple days and led to a lot of bipartisan congratulatory back slapping and talk of a new era of cooperation.

3. A $1 trillion spending cut – actually $917 billion – took months of bitter acrimony, almost led to a national default, worldwide angst, and exposed the most dysfunctional government on the planet.

4. Congress agreed to raise the debt ceiling by $917 billion only if accompanied by $917 billion in budget cuts. That sounds like any additional spending must equal the budget cuts. The difference is that the debt ceiling increase covers eight or nine months while the budget cuts are spread out over 10 years. The entire debate was not about spending cuts. It was about marketing and branding for the next Presidential election.

5. This Congress acted more like a parliamentary government with four large political factions: Tea Party Republicans on the far right, moderate Republicans, moderate Democrats, and far left Democrats. Usually, the moderate middle is large enough to cut a deal. This time, the Tea Party and the far left were large enough to cause a logjam, and ironically, for different reasons, effectively joined forces refusing to compromise. They were like war time allies who fight together because, “The enemy of your enemy is my ally.”

6. Sarah Palin popularized bridges in Alaska. This year, just before the debt ceiling debate, Tea Party members in Minnesota, South Carolina, Wisconsin, and Mississippi quietly sought and received federal money for bridge construction and repair in the name of “economic development” (formerly called earmarks or pork), cashed their checks, and then began blasting Washington for “out of control government spending” and opposing an increase in the debt ceiling. Washington is the only city in the world where you can reward yourself by publicly criticizing what you do.

7. In 2001, the US spent $200 billion interest on $6 trillion in debt. In 2011, the US will spend only $200 billion interest on $14 trillion in debt because interest rates are lower. A mere 1% increase in interest rates could cost more than $100 billion per year. When the smoke clears, the cuts might only cover the increased interest cost.

8. Is the debt ceiling to become a political football from this time forward? Are Congress and the President destined to spend half of every year fighting over increases in the debt ceiling? Will there be payback when a Republican is in the White House?

9. Keynesian economics said that government spending can create growth. It worked in the Great Depression and lessened the pain in other recessions. Congress just did the opposite. It reduced government spending on the theory that less spending will create growth. Does that mean that the economy grows both when the government spends more and when the government spends less?

10. Oh Boy! ANOTHER new commission to figure out how to reduce the deficit. How will this budget commission – what, number 17? – be different? It has “triggers” that will implement “across the board cuts” if the commission can’t agree on an overall plan to cut another $1.5 trillion. What’s higher? Congress’ 14% approval rating or the percentage who think this commission will find the magic answers?

11. Health care costs have more than doubled over the past 10 years and are projected to double over the next 10 years. The government pays 50% of the national health care bill already. 80 million baby boomers are standing in line to join Social Security and Medicare over the next 20 years. If Congress cannot agree on an approach to a budget until hours before a potential calamity, how can it plan a budget ten or twenty years in advance?

OK, that was 11, not 10. Regardless of your political stripes, this is scary, isn’t it?

Robert Devaney •

Ami Stewart, who worked as a sales representative for the Washington Star, told the Randolph sisters at Little Caledonia, a famed home goods store on Wisconsin Avenue, of her plans to begin a community newspaper. They encouraged her, and the Georgetowner was born on the fabric table of that shop, publishing its Volume 1, Number 1, on Oct. 7, 1954.

The newspaper grew with its news and profiles of a quieter time and homespun ads of retail along Wisconsin Avenue and M Street. It is a delight to look at the archives and interesting to see the story, written before the 1960 election season, on an N Street resident who was planning a run for president: John F. Kennedy.

Stewart ran the Georgetowner until the mid-1970s when she moved to a nursing home. Her assistant editor since the late ’60s had been David Roffman, another transplant from the Midwest to D.C., who helped her along with others like Richard McCooey of 1789 Restaurant who sent meals to her home.

The newspaper office was at the corner of 28th and M Streets above Chi Chi’s Poodle Parlor (the space is now Das Ethiopian Restaurant, the former Zed’s). The Georgetowner moved from there to what was Crumpet’s in 1200 block of Wisconsin Avenue and then across the street above Swensen’s Ice Cream. Over the years, the newspaper has occupied space in Hamilton Court (31st Street) and Georgetown Court (Prospect Street). That’s called getting to know your neighborhood.

Roffman took over upon Stewart’s passing and gave the newspaper his own flare, especially during the go-go 1980s. He swept the streets with an elephant vac, getting his picture in a national publication, and called for Georgetown to secede from D.C. more than once. The crew of writers and sales reps included his brother Randy Roffman. Then arriving from California, writer Gary Tischler remains with the paper and is considered central to its heart and soul.

Here is how Tischler described his old friend, Roffman, who was given the lifetime achievement award in 2010 by the Georgetown Business Association, where he was once its president:

“Small community newspapers are tricky businesses — they’re usually free, they depend on the kindness of local businesses to provide advertising revenue, they reflect and report on and are reflective of the community they serve. With all due respect to other such publications in this city, no other paper is so associated with place than the Georgetowner. And it’s fair to say that Roffman, when he owned and published the paper, reflected the community in all of its facets.

“He wasn’t just a publisher, and his efforts weren’t only about stories, scoops, ads, deadlines and headlines. He was the village’s biggest cheerleader and booster, acting as if Georgetown were a particular lovely, elegant lady who needed to be helped across the street. He sometimes acted as if she were a party girl, to be sure, but that was part of the times. Roffman would do stuff — he hosted parties, fund-raisers, publicized charity events (at good old, reliable Nathans), promoted festivals (the annual Francis Scott Key day), institutions (the Georgetown Senior Center was a particular favorite) and events (Volta Park Day). He got involved — he went to ANC Meetings and CAG meetings, not just to report on them, but to speak at them and make himself heard. . . . In the pages of Roffman’s Georgetowner, the neighborhood became full bodied — it was the sleepy village and the noisy night time, it was contemporary and historic all at once. It was a classy place, but it was also democratic.”

Today, owner and publisher Sonya Bernhardt, also with Midwest connections, has entered her 13th year at the helm of the newspaper which is now part of the Georgetown Media Group. She publishes the Georgetowner and the Downtowner, runs the business side, directs the group’s presence on the web and social media and staff and interns. Her passions include the community as well as promotion of small and local businesses. She is also an avid fundraiser for various causes including research for cancer cures. With the newspaper, she is committed to the Georgetown House Tour, the Senior Center, Living in Pink, Volta Park Day and Francis Scott Key Park, to name a few local charities.

Here is her take on the media product: “Our publication reflects the Georgetown lifestyle, focusing on the arts, history, real estate, education, dining, health, fashion and philanthropy. With a print circulation of 40,000, the Georgetowner is mailed to all Georgetown residents and businesses and has a thriving website. The newspapers’ distribution covers parts of D.C., Maryland and Virginia.”

The endlessly energetic Bernhardt has put her mark on the newspaper whose “influence far exceeds its size,” and taken it firmly into the 21st century. A portrait of founder Ami Stewart hangs above her office mantle. And, yes, the office is on Potomac Street, next to Dean & Deluca; it’s been there for the last 10 years.

Deklan •

When I signed up for a PR/Marketing & Studio Art degree, I knew that I’d either become a master marketer or a starving artist. Which is all the more reason why I should get behind the Occupy Wall Street protests, but I just can’t. You see, when the housing market collapsed my company went down with it, I was left stuck in Pensacola, Fla. with no home, no job, and no hope of starting over. So I did what any self-respecting artist would do… I sold everything and went on tour.

I traveled mostly around the South East. Altanta, New Orleans, Chicago, Washington D.C., Pensacola twice and then finally I ended up in the Destin area of Florida. I was in my late 20’s with a degree and a skill-set and I would sell my talents to whoever would pay for them. If I wasn’t taking pictures of performing artists and rock bands I was working one-on-one with small business owners developing cost effective marketing strategies or orchestrating elaborate art parties as fundraisers for non-profits.

The biggest obstacle was my network. It’s true that it’s not what you know it’s who you know. After leaving seven years of networking in Pensacola, I found myself starting over again in Destin. Things were going great at first. The tourism market was the strongest it had been in years and I was living on the beach managing a seafood market in the morning and working as a food artist at night for a trendy restaurant, all the while shooting anyone I could with a camera in my free time…and then came the oil spill.

Fast forward through three months of “WTF do I do now?” I managed to work out a deal with the COO of a franchise based in the D.C. area. In exchange for watching the house, taking care of the cats, helping her pack, and some admin/office work I could stay rent-free for six months until she relocated to Colorado. I had six months to start over….again.

One year later, after spending the first six months barely surviving on $10/hour (through a staffing agency), I secured a full-time position as the Creative Director and Executive Assistant to a prominent D.C. psychotherapist and lecturer. Come December, my boss will retire to Florida and I’ll be looking for another similar position. My resume is exquisite, my references are mind-blowing, yet I’m confident that it will still take months to find a perfect match. In the meantime, instead of collecting unemployment, you’ll find me hustlin’ somewhere; selling art, doing photoshoots, writing for various D.C. papers and mags and organizing more art parties.

Whatever happened to that entrepreneurial character that America used to be so proud of? In the panhandle of Florida—where the rednecks and the private money meet on the shores of paradise—there are hundreds of independently owned businesses. I should also add that the commercial rent on the seafood market I used to manage is less than the rent for my studio in Mt. Pleasant.

Taking into account that prices in D.C. are much higher than Florida and that the majority of people who seem to own any of the shops that we visit on a daily basis (coffee shops, dry cleaning, grocery, gas, food/restaurant) are all immigrants, I’m left confused on a level I can’t really even put into words. Explain to me how an immigrant couple can immigrate to the United States, open and operate a business (often unable to communicate efficiently in English), have enough money to feed themselves and their families, and yet there are thousands of home-grown Americans losing their homes, their savings, and their minds?

I understand that not everyone can just create a business out of scratch and make it be successful, but many of us could. And in doing so, we could hire those who can’t do it all on their own. I understand the OWS argument. But if you want them to stop trashing your money, then stop giving it to them! Vote better. Raise your voices in opposition to fraud. But if you’re upset that you can’t “find” a job, then maybe you should take a page from the book of Starving Artists and find better way to create your own income rather than waiting for someone else to give it to you.

Deklan is a writer and photographer living in D.C. by way of the BP oil spill.

Sonya Bernhardt •

I often say this is not only the nation’s capital, but the fundraising capital of the world. With every advocacy group and association represented in some capacity here, it may at times be difficult to garner recognition for each individual cause. But some causes and people have touched our hearts more than others. For me, one such person Michele Conley, founder of Living in Pink. Michele, a two-time breast cancer survivor, mother of five, successful business owner, health enthusiast and advocate for cancer research, generated $50,000 for Georgetown University Hospital through Living in Pink. I feel privileged to be a part of this noble contribution to combat a disease that has affected so many of us in this day and age. Thank you, Michele.

Gary Tischler •

The weekly scramble that is the Republican Party’s race to the presidential candidate nomination is as muddled as ever, with yet another new face leading in at least one poll.

That would be Herman Cain, the African American pizza company executive, who leads the NBC News/Wall Street Journal poll with a nifty 27 percent of Republican voters favoring his candidacy. Mitt Romney, steady as a shy but relentless suitor, was at 23 percent, although he led in another poll.
What all this means is anybody’s guess, so I’ll take one: even though the first primary (Florida, can you believe it?) isn’t until Jan. 31, and the Iowa Caucus and New Hampshire primary, the traditional bellwethers of any presidential political season, are even further off, is it possible to think that the race is already over?

Mind you, there’s only been a few debates, a handful of round-table discussions, a couple of straw votes and likely some undisclosed arguments in an Iowa cornfield. But much has happened, most of it not pretty. Some people never showed up, others dropped out, some jumped in and got toasted and others, like Newt Gingrich, plugged on, unmindful that nobody was talking about them, let alone casting them any sort of vote.

This GOP presidential nomination race isn’t so much a competition as it is a circus or reality show, resembling the old Abbott and Costello routine “Who’s On First?”

Well, who is on first this week? Cain and his 9-9-9 plan for reinventing the tax code appear to have caught fire in certain quarters, but is he really on first, and can he round the bases as the first semi-serious national African American Republican candidate of any sort? 

So who’s on first? Well, for just a little while it was good old Rick Perry, who had never lost at anything in his political life, being a three-term governor of Texas. He was largely credited for the miracle in Texas, which, it is often asserted, sailed through the Great Recession almost unscathed thanks to conservative economic policies. He also OK’d a record number of executions. Perry, seeing Michele Bachmann win the Iowa straw poll followed by Ron Paul, and thinking he was at least as smart as his predecessor, probably figured he could take the whole enchilada, being a big, strapping fellow from Texas who looked like a guy that could lead a country, by God—and a prayer meeting too.

On his way to mortal combat with Mitt Romney, Perry tripped on a rock that hadn’t been quite painted over enough to hide the “N” word it sported on a piece of his property. Perry got caught in a messy routine of having to perpetually explain whatever he said the night before, like a sailor coming back from shore leave.

So now Perry is a fading, a distant third, and his taillights are fading from view.

So, who’s on first? Well, how about Sarah Palin? Palin understands that first base is a lonely place, an exposed area where people will take pot shots at you.  Better to wait for the next season of “Dancing with the Stars,” or pontificate at Tea Party rallies, or have nasty books written about you. Or write one yourself and sing a few rounds of “Money, Money, Money.”

How about Chris Christie, a tea party favorite and the governor of New Jersey, rich in charisma and a few extra pounds. You wish. People in the media practically cried when he finally said a final and resounding “No,” even after GOP stalwarts effectively got on their knees and begged him to run. Christie said it was not his time. But it just might be time for him to be a vice-president—and therefore president in waiting—given his grand and gushing endorsement of Romney.

How about Mr. Pawlenty, the early dropout. Now I imagine he wishes he hadn’t.

There are, of course, others: Ron Paul, who actually says more outrageous things than Rick Perry, but nobody complains because, truthfully, nobody cares. There is also Rick Santorum, a social and every-other-kind-of conservative who somehow comes across as a whiner.

There’s Bachmann and her zealots and her straw poll win in Iowa, which lasted for all the time it took Perry to make up his mind to run. There is John Huntsman, the second Mormon in the race and former governor of Utah. But then he said that he might be happy to take the VP spot on a Bachmann ticket. That’s not going to happen. I mean the Bachmann ticket.

What’s most notable about this race is who decided not to run: the budget whiz kid Paul Ryan; the aforementioned Chris Christie; Mike Huckabee, the very Christian right former governor of Arkansas who ran nobly in the last competition; Bobby Jindal, a GOP star for one shining moment until he gave a rebuttal address to a State of the Union speech by Obama; Palin, of course.

There is also Virginia’s rising star governor Bob McDowell; the hot, hot, tea party senator from Florida, Marco Rubio; and, lest we forget, Donald Trump, who Trumped himself before voters had the chance.

To end the baseball analogy: game over. Romney has been there before and appears to have won the race simply because nobody has really been able to knock him off his steady-as-he-goes performances in the debates. He’s a terrific debater, mildly humorous, not too mean but mean enough, good with the Obama knocks, a business man who knows something about economics, (so much that Perry practically conceded his smarts). He’s a guy who looks presidential—whatever that means—unruffled and unperturbed. He was governor of Massachusetts, and how many Republicans can say that, or even want to? He passed a version of a health care bill that much resembles Obama’s, the one that’s headed straight for the Supreme Court. When a Christian Evangelist preacher called Mormonism a cult, it gained sympathy for Romney.

Tea Party stalwarts don’t like Romney, which may yet be a problem. The Tea Party is a little like the Georgetowner slogan, “It’s influence far exceeds its size,” but not in a good way.

In any poll, Romney is by far the only GOP candidate who looks like he could win the general election and beat Obama. He’s close enough—two percentage points—to take a swipe at the president.

The questions remains: why not get rid of the primaries altogether this year and have the election early. The suspense is killing us.

Deklan •

In the battle over gay marriage and equality, the question everyone has an answer for but nobody can agree on is the Bible’s view on homosexuality. According to author Jonathan Dudley, we’ll never agree on an answer to that question because our interpretations of the Bible are founded on preexisting values and beliefs. Failure to acknowledge this fact has led many evangelical Christians to abuse the Bible in their war against homosexuality, abortion, evolution and environmentalism, the four topics Dudley talks about in his book, Broken Words: The Abuse Of Faith And Science In American Politics.

In his book, Dudley challenges many of the cases that Christians use against these issues. Wanting to get a better understanding of his argument that “opponents of gay marriage aren’t defending the Bible’s values, they’re using the Bible to defend their own,” I called Jonathan personally to better understand his view that although he believes gay marriage will ultimately win, it won’t win by arguing over what the Bible says.

D: You were raised an evangelical Christian and you went to Yale Divinity school, so what’s your position on gay marriage?

J: I definitely do support gay marriage. Those making arguments against it based on the Bible have assumptions about how the Bible works that aren’t true, with the idea that the Bible requires humans to adopt one position or another. What people think the Bible requires them to do reflects the beliefs they bring to the Bible…Humans should interpret the Bible guided by principles such as Augustine’s idea that if an interpretation of the Bible doesn’t promote love for other people then it’s not the right interpretation.

D: What do you believe the Bible ultimately says about homosexuality and to what degree should we interpret it versus follow it word for word?

J: We have to interpret it…I don’t think it’s even possible to not interpret it and just “take it for what it says.” When people say they’re doing that, they are just hiding the fact that what they think it “says” is actually an interpretation.

People on both sides—liberal or conservative—bring values and bring theology to the Bible that has a determining impact on how they read it. That fact itself undermines objections to gay marriage that say the Bible requires me to oppose it. It’s actually the Bible filtered through your values that requires you to do that. Of course, it also undermines arguments for gay marriage that the Bible requires us to accept it.

D: With so many lines drawn in the sand, will we ever meet on a middle ground?

J: I don’t think there will be a middle ground that we come to on the topic of gay-marriage but I do think the liberal side of this debate will ultimately win, at least in the broader American culture. People in my generation that were raised Evangelical are increasingly coming to support gay rights.

The Evangelical community tends to lag behind the broader culture on social issues, whether we’re talking the civil rights movement or feminism or environmentalism, which is unfortunate. It’s not really a progressive moral force, it’s something that holds the culture back and then changes its mind after the culture moves forward, apologizing all the while for holding things back, and I do think that will happen in many segments of the Evangelical community on gay marriage as well. In fact, it already is happening.

D: When does standing up for one’s religion become bullying?

J: I think a lot of conservative Evangelicals feel like they’ve been treated unfairly because they would say, “We don’t hate gay people, but there are moral rules and the loving thing to do is to hold people accountable to moral rules, not to just dismiss them.” If you honestly think that someone’s going to go to Hell for being in a homosexual relationship, then it does make sense, that the loving thing to do would be to try to prevent them from being in that relationship.

The problem with that is “love” is usually defined in the minds of Evangelicals as just –we have this given set of rules, we’re not gonna question that, we’re just gonna enforce it. But sometimes “love” means reevaluating the rules themselves in light of new evidence or arguments or experiences.

D: What can you tell gays about God’s love without making them feel persecuted?8

J: It would be a message that God loves you and that your sexual orientation is not evil. And that any reading of the Bible that projects a condemnation of your sexuality onto God is not motivated by love but by unacknowledged and (usually) unconscious prejudice.

D: What’s your message to the Christian community?

J: Christians need to be more attentive to how their preexisting values shape their interpretation of the Bible, whether it’s on homosexuality or the other topics I talk about in my book, like abortion or evolution, and stop pretending they’re “just taking the Bible for what it says.”

D: What’s your message to the Gay community?

J: Gay people who may be tempted to believe that God really does condemn their sexuality should realized that throughout history, rules that are portrayed as God’s Will have quite frequently been reflections of human prejudice…What a community takes to be moral rules can reflect prejudice and…submitting to those rules is ultimately submitting to the prejudice that formed those rules…So I would just say, don’t feel that submitting to the perspectives of conservative Christian leaders on what the Bible says about homosexuality is equivalent to submitting to the will of God.

Gary Tischler •

There’s a class war going on.

It’s not being waged where you might think it is—in presidential primary debates, or on the streets of Occupied America.

It’s being waged in movie theaters where the nearly century-old debate about who wrote Shakespeare’s plays is being engaged anew in trash-epic director Roland Emmerich’s “Anonymous,” whose subject and hero is one Edward De Vere, the 17th Earl of Oxford, who’s being presented as the aristocratic author of the plays most, if not all of us, believe to have been written by William Shakespeare, the Bard of Avon.

Shakespeare, in the movie, is a buffoonish, ambitious, drunken actor who declares himself to be the author of the plays. There’s also a lot of historical political intrigue centered around royal succession, Queen Elizabeth and the like.

I’m not here to argue the merits of the film, or the status of Mr. Emmerich as a director. He apparently sincerely believes that Oxford was indeed the author of the plays.

Good for him. He’s not the first person to think so. The authorship debate around Shakespeare’s plays has been debated for centuries, and the Oxford candidacy has attracted Supreme Court judges, learned scholars and not-so-learned scholars.

That’s where class comes in. The basic contention is that Shakespeare—with a minor education – was a would-be-actor from a small town who could not possibly have written the plays he did. He would be required to have an immense amount of knowledge, a superior education, an understanding of the ways of courts and geography.

That he probably didn’t—as is often pointed out he made big mistakes in geography and history. Here’s what Shakespeare did have a major understanding of—the human heart and mind, the psychology of being human. Just about all the plots are borrowed from other sources, including other plays, or ancient Roman texts, the bible, English history books. Shakespeare’s genius—that’s what it was—lies in his understanding of human nature, and his poetic abilities, his invention of free verse, his knowledge about how to put a play together.

A lot of the debate about authorship—the Queen herself, Francis Bacon, rival playwright Ben Johnson, have been held up as candidates—centers around a kind of intellectual snobbishness, an unwillingness to accept the idea that Shakespeare—a commoner, or son of the lower middle class at best, could be the greatest author who ever lived. If Oxford was the author, he hid it well. Trouble is that Shakespeare, too, hid himself, in some ways. Little, or not enough, is known about his life, although what we do know suggests that he was a man of the theater, a professional who kept books, ran a company, managed to know enough about the upper classes to become a favorite playwright of the queen.

Someone recently suggested to me that I can’t stand the idea that Shakespeare’s works might have been written by an aristocrat, by a member of the ruling class of England. I can stand the idea. What I can’t stand is the idea that the plays and the sonnets and the characters MUST have been written and created by an aristocrat.

The very definition of artistic genius is its mystery—it does not zero in on class, societal standing, education per se, or any other MUST factor other than it exists and it flowers in a particular person. Shrinks no doubt have had their say on this matter.

The plays of course contain many royal, aristocratic types—generals, kings and queens, lords and dukes and duchesses, even a few small business men and Shakespeare gave them speech that was understood by everyone. But he also created, to name one, Falstaff, a full-bodied man both vile and lecherous, outsized and full of bombast, a man who was more of a father to a prince than the king himself. He was the salt, and mud, and beer of the earth. It’s doubtful that Oxford would have imagined such a man, let alone hung out in bars with him. Aristocrats may have gone to the theater, but they did not admit going to the dogs.

I’m going to see the movie. Emmerich, if nothing else, makes movies that aren’t usually boring except when it’s “Godzilla” filmed entirely in grey rain, or so it seemed. His movies—“Independence Day”, “The Day After Tomorrow” and “The Patriot” among them are not exercises in nuance, and I don’t expect “Anonymous” to be that either.

David Post •

Tax reform is like birthdays. They come around every year with the promises of money and gifts.
The current flavor of the week is 9-9-9; a plain pizza with no toppings.

Herman Cain, the former CEO of Godfather’s Pizza, proposed this catch phrase as his idea for tax reform, and it vaulted him to the top of the polls of Republican presidential candidates.

His proposal is to toss out the entire tax code, repeal the 16th Amendment and replace it with a simple new system that reduces the personal income tax rate to 9 percent, reduces the corporate tax rate to 9 percent, and imposes a new 9 percent sales tax on all “new” goods.

Like all new and bold ideas, it has pros and cons. But, like our nation’s problems, they are not simple.
Reforming the tax code is different than eliminating the 16th Amendment. Beginning with the Civil War, Congress adopted several income tax laws which touched only the rich and usually expired after the need – usually a war – passed.

When Congress passed a peacetime income tax in 1894, the Supreme Court declared it unconstitutional because it was not a “direct” tax requiring each state to pay its share based on its population. For example, suppose the federal government needed $100 million and California had 10 percent of the population. It would then owe $10 million, and if California had 1 million people, each person would owe $10 which clearly could not work. The 16th Amendment, passed in 1913, fixed that, and thus began the taxation of income and what are now millions of words of law and regulations.
All tax systems have three common elements: a taxpayer, a tax rate, and a tax base. For example, individuals and corporations are income taxpayers while partnerships and non-profits are not and pay no tax.

Tax rates are easy. Just move them up or down.

The big trouble lies in defining the tax base, that is, what the taxpayer pays tax on. Mr. Cain defines individual income as “gross income minus charitable deductions” though gross income doesn’t include capital gains. His idea is to exchange sacred cows such as the mortgage interest deduction and the exemptions for children for a lower rate.

Mr. Cain’s definition of business income is gross income minus purchases from U.S.-located businesses, capital investment, and net exports. So, if Ford builds a car and uses parts that it manufactures overseas, those parts aren’t deductible, but if it exports the car, that is deductible as is the cost of the new plant that will last 40 years.

Sales taxes are regressive, so lower income taxpayers will pay more tax and higher income taxpayers will pay less. Mr. Cain argues that it may not penalize lower income people since this tax only applies to “new” goods. They can avoid the tax by buying “used” goods. Move over Walmart. Here comes Goodwill. Every new car and new house will cost 9 percent more, so those industries may be mired in the doldrums for another decade. Accountants will surely have plenty of work keeping track of all this.

But, since Mr. Cain proposes eliminating the IRS, the calculations would be completely voluntary anyway.

To be fair, Mr. Cain’s underlying theory has serous merit because he is trying to wring tax incentives out of tax policy so that taxpayers make economic decisions without weighing tax consequences.
The U.S. tax code has become a vehicle for encouraging certain economic activities and discouraging others. Because the tax base is net income rather than gross income, taxpayers are rewarded with lower taxes by reducing net income. At the same time, taxpayers have little incentive to decrease gross income.

The most popular income reduction “loophole” is the home mortgage deduction. Theoretically, it encourages people to buy houses, but a larger percentage of people own homes Canada and Germany which have no mortgage interest tax incentive (and no lobbyists to protect it).

Corporate incentives are enormous. Last year, GE earned billions and paid no tax. In 2010, U.S. corporations generated about $30 trillion in revenues and paid $227 billion in tax, or less than 1 percent of total revenues. In other words, a 1 percent gross receipts tax would raise more revenue than the byzantine game of computing net income. A gross receipts tax would also dramatically reduce complexity and the cost of compliance. States, for example, spend substantially less collecting sales tax than they do collecting income tax.

Sales taxes, the source of most state government revenues, rarely impact consumer behavior. As much as consumers enjoy tax-free weekends and buying online to save sales tax, few go to the store and think, “I’m not going to buy that because the sales tax is too high.”

Mr. Cain knows that our tax code looks like pizza all the way. So, flawed as his idea is, and it is by no means simple, he knows how consumers behave and may be on the right track.

Georgetowner •

By John Fenzel

On Wednesday, Dec. 7, Joseph E. Robert Jr., one of the Washington area’s great philanthropists, passed away after a battle with Glioblastoma, a form of brain cancer that also afflicted Senator Edward Kennedy. News of Robert’s death quickly spread throughout Washington’s circles in quiet, almost reverential tones among the many who knew him.

At Cafe Milano, Steve Delonga pointed at the table against the wall where Robert frequently dined. “Joe was a fighter, a businessman, and friend who left an enduring legacy. He was always busy, always grateful, and always surrounded by people. But across the room, he would see you, smile, and give you a ‘thumbs-up’ sign.”

Robert grew up in a Catholic, middle class family in Silver Spring, Md. And yet in 1970, his penchant for fistfights and ill-advised pranks at St. John’s College High School nearly caused him to drop out altogether. An accomplished athlete, Robert won a regional kickboxing championship in 1973. That same year, while attending Mount Saint Mary’s College, he came forcefully to the aid of a dog being abused, and was promptly expelled for fighting. “While college didn’t exactly work out for Joe,” a high school friend recalled, “the dog he saved stayed with him. That was pretty typical—Joe didn’t stop at ‘rescue.’”

“He always focused on the end game and didn’t get distracted by the tactics involved in getting there,” Michela English, the president and CEO of Robert’s foundation, Fight For Children, said. “He was even more passionate about his charitable causes than business.”

In 1981, Robert began canvassing banks to loan him money to purchase distressed real estate. Most turned him away.

“It was a hard sell, because it was the beginning of the S&L Crisis,” Yankel Ginzburg said. “When conventional wisdom was to stay out of the market, Joe had a different idea.”

Robert ultimately convinced Riggs Bank to agree to the loan.

His first condominiums were in the Beltsville, Md. area. “Joe would come by in person to pick up the rent checks,” Pamela Ginzburg, one of his first tenants, remembered. “He was involved in all aspects of his business. He had an unrivaled work ethic, and he never forgot his first tenants.”

In 1989, when the S&L crisis was at a critical stage, Congress appropriated billions to create the Resolution Trust Corporation. Recognizing an opportunity, Robert formed a parallel association to ensure a role for the private sector.

Several years later, Robert had begun a private equity real estate fund business that ultimately became known as JER Partners, managing assets around the world worth nearly $30 billion.

In 1990, channeling his love for boxing and his desire to help children, Robert started “Fight Night” to help disadvantaged youth. Leveraging his close personal friendships with Quincy Jones, Lionel Richie, Billy Dee Williams and others, Robert grew his Fight Night and the annual charity event came to attract world renowned boxers to the Washington Hilton Hotel and Towers. Boxing legends like Sugar Ray Leonard, Gerry Cooney, Roberto Duran and Joe Frazier could often be seen ringside with Robert—along with city mayors, Joint Chiefs of Staff, business leaders, and Hollywood celebrities.

The Fight Night event was a formal “men-only” event. Later, Robert began a separate “sister” women-only venue to fight domestic violence called “Knock Out Abuse” at the Ritz-Carlton in Washington. A tradition soon developed for the “Fight Night” men and the “Knock Out Abuse” ladies to convene immediately after the festivities.

“Fight Night” continues to be the premier event for Robert’s signature cause, “Fight For Children,” a foundation he established to improve education and health care opportunities for low income children in Washington, D.C. Since he founded the organization, Fight For Children has directly raised $100 million.

“He didn’t just write checks. He got personally involved so he could really make a difference,” English, said. “No matter how hard we have all tried to prepare for his passing, it is still very difficult to believe that he is no longer with us. It’s not an overstatement to say that tens of thousands of kids in D.C. are better off because of Joe.”

For those who knew him well, Joe Robert’s authenticity was a defining trait. As the chairman of Business Executives for National Security, he once left a White House luncheon for a visiting Chinese president early, so he could read to his son’s kindergarten class. “He had a great sense of humor and never took himself or anyone else too seriously,” English said.

Joe Robert will always be a hero to his family, his friends and to the children who benefited from his generous leadership and positive vision. In his final hours, Robert reportedly could not speak to those who came to see him at his home. “So he smiled and gave everyone a ‘thumbs up’ sign instead,” a close friend said.

John Fenzel is an Army Special Forces Officer stationed in Washington, D.C. [gallery ids="100426,114107,114125,114117" nav="thumbs"]