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Just In | The Hill 

In 2022 the Supreme Court threw away an opportunity to ameliorate the toxic polarization of America. After the unseemly gamesmanship that led to the appointments of Neil Gorsuch and Amy Coney Barrett, the new conservative majority should have looked for opportunities to, as Barrett said shortly after her confirmation, “convince you that this court is not comprised of a bunch of partisan hacks.”

Instead, it has become perhaps the most politically extreme and partisan court in American history.

I wasn’t enthusiastic about President Trump’s three appointees, but I was impressed by their intellectual quality and did not join the liberal stampede to oppose them. I hoped that they would understand the delicate position they were in and would act accordingly. I have been bitterly disappointed. 

Trump’s first secretary of defense, James Mattis, must have had similar hopes when he took that job. A few years later, he found himself saying: “Donald Trump is the first president in my lifetime who does not try to unite the American people — does not even pretend to try.” He could have been talking about today’s court.

The dramatic decision to overrule federal abortion rights is only the tip of a very large iceberg of rightwing triumphalism. The court has been so sympathetic to a libertarian philosophy that appears nowhere in the Constitution that it has devised vague new rules that constrain the federal government’s capacity to address climate change or prevent the spread of COVID-19. It has blocked efforts to guarantee voting rights. It has manipulated its own calendar in order to harm the Biden administration in ways that contrast dramatically with its earlier deference toward Trump. It deployed a distorted and dishonest pseudo-originalism to massively expand gun rights. It has even acted illegally, intervening in cases where it had no authority to do so. 

One source of my earlier hopes was Justice Samuel Alito’s 2019 opinion for the court in American Legion v. American Humanist Assn., in which the court held that the Establishment Clause was not violated by a World War I memorial cross on public land.  

Alito did not try to paper over the difficulties created by the Christian character of the symbol. He sensibly responded that “destroying or defacing the Cross that has stood undisturbed for nearly a century would not be neutral and would not further the ideals of respect and tolerance embodied in the First Amendment.”  

The decision was carefully tailored to reach only monuments “that were first established long ago.” Justice Elena Kagan, who agreed with the result, found “much to admire” in Alito’s emphasis on whether longstanding monuments, symbols and practices reflect “respect and tolerance for differing views, an honest endeavor to achieve inclusivity and nondiscrimination, and a recognition of the important role that religion plays in the lives of many Americans.”

Religious liberty is a field where equities must be balanced with some sensitivity, and here Alito showed that he could do that. He emphasized the Constitution’s aim “to foster a society in which people of all beliefs can live together harmoniously.”

That ended as soon as he had the votes to do what he liked. A prominent instance of his new approach was his opinion for the court in the abortion case Dobbs v. Women’s Health. Forced pregnancy obviously raises questions about the equality of women.  Alito casually dismissed that concern in one short paragraph, citing a preposterous 1974 decision holding that discrimination on the basis of pregnancy has nothing to do with sex discrimination — as if the subordination of women were not always about depriving them of control over their reproductive powers. It is not simply that he isn’t persuaded by the argument. He can’t even be bothered to seriously address it. We won; we have the power now; you don’t get an explanation. 

Religion is another field where the umpire now consistently roots for one side. The court deems any law that inadvertently inconveniences religious people to be discriminatory.  Alito claims to be an originalist, but he distorts history to propose a constitutional right for religious people to ignore laws they don’t like. The court has lately effectively authorized public school teachers to bully students to pray.

The Supreme Court managed in 2022 to garner the lowest public approval rating in its history. “If, over time, the court loses all connection with the public and with public sentiment, that’s a dangerous thing for a democracy,” Kagan said in July. Barrett was right that it is important for the country not to think that the court is a bunch of partisan hacks. The best way for them to keep the public from thinking that is to stop making it true.

Andrew Koppelman, John Paul Stevens Professor of Law at Northwestern University, is the author of “Burning Down the House: How Libertarian Philosophy Was Corrupted by Delusion and Greed” (St. Martin’s Press). Follow him on Twitter @AndrewKoppelman.

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Politics, Policy, Political News Top Stories 

Now that we have Donald Trump’s actual tax returns, we can see that the U.S. House Ways and Means Committee was right to fight for their production — and to release them publicly. The tax returns shed important new light on Trump’s foreign business entanglements and other conflicts of interest during his presidency, as well as on critical public policy issues like the IRS’s malfunctioning presidential audit program. The successive committee publications of its analysis, its report and the actual returns also rebut any claims that the release of the returns opens a dangerous door. On the contrary, these actions establish a valuable precedent.

Every president since Jimmy Carter has released his tax returns upon becoming a candidate for the presidency and/or during his term. For years Donald Trump delayed disclosure of his tax returns, and now we can guess at least part of the reason why. His questionable tax practices and conflicts of interest in office were substantial, and he was a less successful businessman than he claimed: For two of the four years of his presidency he paid little or no taxes as a result of the chronic losses and massive deductions he reported.

Because Trump broke with the standard practice of presidential candidates and presidents of releasing their returns, until now we’ve had to rely on a series of partial disclosures to understand his financial situation. First, we got smaller leaks from the press, followed by the New York Times’s major reveal of Trump’s tax returns through 2017. Then on December 21, we got the House Ways and Means Committee’s summary of his tax returns for 2015-20 and the accompanying report on the IRS’s audit program. Now we have the returns themselves.

In each of these successive waves we’ve learned more of the information we should have had all along. Take, for example, the details we have garnered about Trump’s foreign business entanglements. The tax returns reveal that Trump had foreign bank accounts between 2015 and 2020. Certain of these accounts had previously been reported, such as a bank account in China between 2015 and 2017, which reportedly is connected to Trump International Hotels Management’s business promotion in China.

But the returns show so much more, including a staggering array of other foreign financial touchpoints including in Azerbaijan, Brazil, Canada, the Dominican Republic, Georgia, Grenada, India, Indonesia, Ireland, Israel, Mexico, Panama, the Philippines, Puerto Rico, Qatar, South Korea, St. Maarten, St. Vincent, Turkey, the United Arab Emirates and the United Kingdom.

We have never seen anything like it with an American president. Beyond shedding light on potential foreign policy conflicts spanning the globe, this kind of information is vitally important for legal reasons, as two of us explained for POLITICO six years ago. From the very beginning of Trump’s administration there was reason for concern regarding his compliance with the Foreign Emoluments Clause of the Constitution, which prohibits any person holding a position of trust with the United States government from receiving any profits and benefits — i.e. emoluments — from foreign governments. Not every foreign financial contact is an emolument of course and not every emolument is a bribe. But the Founders weren’t taking any chances. Those kinds of payments are prohibited for federal officials at all levels, and Congress, the public and the press are entitled to full transparency so we can fully understand Trump’s financial ties in other nations for ourselves. The newly released returns of course do not itemize payments or other benefits from foreign governments as such, but the web of foreign entanglements they reveal heighten such concerns.

Then there is the problem of Trump’s meager, and at times nonexistent, tax payments. We now know that Trump paid very little in federal income taxes in the first and last years of his presidency, claiming huge losses. Trump carried forward a $105 million loss on his 2015 return, $73 million in 2016, $45 million in 2017 and $23 million in 2018. This is peculiar given the fact that Trump ran for the presidency claiming to be a successful businessman and billionaire. He told the IRS a different story, reducing his tax bill to almost nothing. The problem is both that his claimed “losses” year after year are suspicious and that he appears to have been dishonest about his losses when he was running.

Trump also claimed interest from loans to his children, which is an oft-used trick to disguise gifts. This is reminiscent of a ploy used by Trump’s father Fred Trump to transfer money to his children, the subject of a blockbuster New York Times investigation in 2018.

The recently revealed returns also raise questions about the very large charitable deductions Trump claimed for possibly unfounded conservation easements, large cash contributions and other challenged practices.

All of this takes us back to a practice referred to by British economists in the 1970’s as tax “avoision” — blurring the lines between legal but ethically dubious tax avoidance strategies and illegal tax evasion. It’s bad enough for Fred Trump to have done it and gotten away with it, but at least Fred Trump was not president. This is hardly the standard of tax compliance we would expect of the president, particularly when just about every tax bill signed by any president closes some tax loopholes and opens other new ones. A president who secretly exploits tax loopholes to his own advantage should not be proposing, lobbying through Congress, and signing into law, legislation that determines how much tax the rest of us pay.

Trump’s returns also reinforce concerns about both tax and business fraud. The Trump Organization already has been convicted criminally on 17 counts of state tax fraud in New York, in which the prosecution handily convinced a unanimous jury that Trump and his company “cultivated a culture of fraud and deception.” Another fraud trial brought by the New York attorney general’s office is on the way, this one civil in nature. The returns buttress the New York attorney general’s central theory of liability: That Trump and his business entities allegedly engaged in years of financial fraud, such as utilizing the dubious conservation easements the tax materials document.

Trump’s tax and business liabilities were relevant to the American people understanding him — and still are now that he is a candidate again (assuming he is not disqualified). Americans are entitled to know about Trump’s taxes so we can evaluate his trustworthiness, his conflicts of interest and his tax policies. Instead, we had been left in the dark until the disclosure of Trump’s returns.

Finally, there is the question of the IRS’s policy of conducting what was supposed to have been a mandatory audit of the president’s tax returns. That was a bad joke under the Trump administration. The IRS opened only one “mandatory” audit during Trump’s presidency — for his 2016 tax return. That audit did not occur until the fall of 2019. That should perhaps come as no surprise, given that it is none other than the president who appoints, and has the power to fire, the commissioner of the IRS. By contrast Trump’s predecessor Barack Obama was audited every year as was Trump’s successor, Joe Biden.

All of this is why the argument that releasing Trump’s taxes is an unprecedented invasion of privacy fails. Americans have a right to know, and the House Committee had the legal right to release Trump’s tax returns: the combination of those two rights justifies the decision to release them. So too does the committee’s report on the failure of the presidential audit program. As we are currently seeing with the Jan. 6 Committee transcript releases, it is customary to back up Congressional reports with the underlying data. Here the evidence that establishes why audits were so badly needed is the tax returns themselves.

Now Americans need to decide what to do with them, and with a man who was probably the most conflicted — and now, we know, undertaxed — president in modern American history.

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Just In | The Hill 

Sen. Amy Klobuchar (D-Minn.) and Rep. Mike Gallagher (R-Wis.) on Sunday voiced support for legislation to increase regulations on Big Tech, expressing their concerns on NBC’s “Meet the Press.” 

Klobuchar, who has served as the chairwoman of the Subcommittee on Competition Policy, Antitrust, and Consumer Rights, said Big Tech is “so powerful” that even bipartisan legislation that passes through the Senate Judiciary Committee can vanish because companies step in. 

Klobuchar had pushed for an end-of-year bill to require Big Tech to pay news outlets for the media content they distribute on their platforms, but she said Facebook and Google stepped in to lobby and block the bill. 

“We had such strong support for this bill, but these guys just make a few calls,” she said. 

Klobuchar said a similar law passed in Australia despite the companies’ objections, and their systems are better as a result. 

She said Section 230 of the Communications Decency Act, which protects social media platforms from responsibility for the content that users post online, is “archaic” and needs to be replaced. She said companies should be considered publishers, which would open them up to greater scrutiny for their content. 

“Let’s just start facing the fact and stop pretending that they’re some little company in a garage,” she said. 

Gallagher said he is somewhat concerned that repealing Section 230 could lead to greater censorship because platforms might proactively kick users off if they are afraid of facing lawsuits over their content, but greater transparency around the platforms’ algorithms is necessary. 

He said data portability should be mandated across platforms to allow people to take their network to any platform that has what they consider the best content moderation policies and transparency. He said he would be interested in speaking with Klobuchar about her ideas for the best way for Congress to act on the issue. 

Gallagher said Congress should focus on consumer protection and do a better job communicating information about the terms of conditions that users must agree to for the platforms so they can understand them. 

“When it comes to our kids, the government can’t raise your kids, can’t protect your kids for you. I have two young daughters. It’s my responsibility to raise them into healthy adults. But there are certain sensible things we can do in order to create a healthier social media ecosystem,” he said.

​Sunday Talk Shows, Amy Klobuchar, big tech, Mike Gallagher, Section 230, social media companies Read More 

Politics, Policy, Political News Top Stories 

The House Ways and Means Committee just released to the public six years of personal tax returns for former President Donald Trump. Trump could have released those returns when he was first a candidate, or as president, or when he recently announced his third candidacy.

His excuse for withholding his personal tax returns from public scrutiny — that he could not release them because they were under audit — is patently false. There is absolutely no law, rule or policy that precluded Trump from releasing his own tax returns, whether or not they were under audit. He simply chose not to do so. His excuse was a lie.

Breaking with significant norms of American politics was — and is — routine for Trump. So is lying. The fact that previous candidates and presidents have released their personal returns seemed not to matter to him. Trump took a chance that his voters would neither care nor punish him for ignoring this tradition. He turned out to be right about that, at least the first time around.

Last Friday, the House Ways and Means Committee did what Trump refused to do: It released his personal tax returns. I think that was a mistake. The committee certainly had a valid reason to obtain and examine Trump’s returns. No quarrel there. But did they have a valid reason to publish his returns? I don’t think so.

The committee noted that it:

[S]ought the return information and tax returns of the former President to investigate how the IRS’s mandatory audit program operated under the stress of a President who maintained financial interests in hundreds of related entities and reportedly was under audit every single year.

So, the committee’s focus was properly the IRS’ mandatory audit program. That program was established in 1977. Wisely, it took the onus off individual IRS employees to determine whether they “should” audit a president’s returns. That could be tricky, because the IRS is part of the executive branch, which is led by a president. To insulate the audit and the auditors from politics, the IRS manual transformed the “should” question into a “must” requirement: Since 1977, it provides that the “[i]ndividual income tax returns for the President and Vice President are subject to mandatory examinations.”

The committee learned that during Trump’s term in office, he filed five personal income tax returns with the IRS, all of which should have been subject to the mandatory audit program. But the committee found that three of the five returns — for calendar years 2017, 2018, and 2019 — “were not selected for examination until after [Trump] left office and only the 2016 tax return was subject to a mandatory examination.”

Oddly, the committee also noted that “the IRS sent a letter to [Trump] notifying him that his … 2015 return was selected for examination on April 3, 2019, which is the date the [committee] sent the initial request to the IRS for [Trump’s] … tax returns.” That does not seem to be a coincidence.

Why did the IRS fail to abide its own — nearly half-century old — policy? This was one of the major questions raised in the committee’s report. Perhaps the IRS failed because Trump’s returns were inordinately complex. Perhaps, relatedly, it failed because the IRS did not have sufficient resources to audit a complex return. Perhaps, and this is surmise, it was something more nefarious.

The committee report recommends ways to fix the structural failures at the IRS, going forward. That seems valuable. And that strikes me as a sufficient reason to obtain and examine Trump’s returns. For instance, the committee could not know how difficult it might be for the IRS to audit Trump’s returns if it did not know how complex they were, in the first place.

But publication of his returns is different. How does publication advance the otherwise valuable findings of the committee? Couldn’t the committee highlight the IRS’ failures in a report and keep Trump’s returns private? I believe so. Stated another way, what is the connection between the valid concerns raised by the committee — the deficiencies in the mandatory audit program they identified at the IRS — and the committee’s decision to make public Trump’s returns? None, that I see.

I am not, to put it mildly, a Trump fan so my next words may seem odd, but here goes: The committee’s decision to publish the returns was unfair to Trump. So why do I worry about being unfair to Trump? Because principles of fairness should matter to all of us, all the time, and apply to all of us, all the time, even if they do not matter to Trump.

Trump strikes me as a bad person. In many ways, he is not very different than many of the people I encountered as a federal prosecutor. He is greedy, dishonest, self-centered, narcissistic and reckless. But all the people we prosecuted deserved to be treated fairly for legal, ethical and moral reasons, and they deserved to be treated fairly all the time, whether or not we liked them. We cannot reserve fair treatment for people we like and unfair treatment for people we dislike. That would be a death spiral for our judicial system and for our democracy.

The committee did good work uncovering IRS deficiencies. Those deficiencies need to be fixed. But control of the House of Representatives — and its Ways and Means Committee — will soon switch to a different party. That party may find it politically expedient to obtain and publish the personal tax returns of people they do not like. And, the committee will have the power to do that. Perhaps the new House majority will surprise me and demonstrate restraint. Or, perhaps, they will try to “get even.” Time will tell, but we should all fear the latter.

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Just In | The Hill 

Bank of America’s chief economist warned on Sunday that 2023 would be a “difficult” one for Americans due to economic factors that he predicted could trigger a recession.

When asked by CBS’ Margaret Brennan on “Face the Nation” to give a forecast on the economy this year, Michael Gapen said he agreed with the notion that it could look and feel worse.

“I think we’re in a situation where the risk of recession is high, may not be a deep and prolonged one. But we’re in a situation where the economy has recovered very rapidly from- from COVID, and it’s come with a lot of inflation,” Gapen said. “We may be able to avoid it, but I would agree that the outlook by most people who sit in the position that I do think 2023 could be a difficult year for the U.S.”

Gapen cited interest rate hikes by the Federal Reserve in its attempt to slow inflation.

“More often than not, when we’re tightening policy, pushing interest rates higher to slow down the domestic economy and bring down inflationary pressures, that often means we get a period of higher unemployment rates, and what would be characterized as a recession,” Gaper explained.

But Gapen said it’s also possible to avoid a recession or be in one that doesn’t last long.

“In the past, we have been able to raise rates, cool inflation, without pushing the economy into a recession. In the mid 1990s we were able to do it. It’s just that the path to that is very tricky and sometimes involves a little more luck than it does skill,” Gapen said.

Gaper also said the U.S. economy is most likely past peak inflation, and the year-over-year inflation rate should continue to lower as it began doing late last year, but would take a while to take effect.

“The trajectory is a more favorable one. It will probably take two to three years to get inflation back down to levels that we knew prior to the pandemic,” he said.

​Sunday Talk Shows, inflation, Michael Gaper, Recession Read More