Should the US Senate be changed?

In the wake of the 2016 Presidential election and Trump's appointment of not one but two justices to the Supreme Court some people are arguing that the Senate and Electoral College have outlived their usefulness if indeed they ever had utility and should be utterly transformed if not eliminated.

Usually this takes the form of a resident of a high population state which normally tilts Democratic (think New York, California) scornfully bringing up a low population state which usually tilts Republican (think Wyoming, South Dakota, Montana) and arguing that it's not fair that the residents of the high population and often richer state have the same Senate representation as those dumb rubes in the low population state. Inevitably the person making this argument will reference the fact that Clinton won the popular vote in the 2016 Presidential election and thus conclude we need to change our political system to give more power to the majority.

We have a political system that has separated powers between the federal government and the states and further split power among separate elements of the federal government and placed limits on what the federal government can do. The idea was and is that the best protection against tyranny would be that no one element of government could grab all the power to itself. Some would argue that this hasn't worked. They would say that since at least the end of WW2 the power and authority of the Federal government has grown into the Leviathan we see today. But people differ on whether this is a good or bad thing. If you think that you're part of or will be part of a permanent majority then you might want the Federal government to have all the power you think it needs and then some. You might want to crush your enemies, drive them before you, and smile at the lamentations of their women. Remaking the Senate into an institution that better reflects majority rule would be an important step.

Alabama U.S. Senate Election

Sometime after 8 PM EST tonight we should know if Alabama voters have decided to send Democratic former prosecutor Doug Jones or Republican former judge Roy Moore to the U.S. Senate. As you may have heard Moore has been accused of molesting and pursuing young women below the age of eighteen, including some as young as fourteen. Even in Alabama, fourteen is under the age of consent. However for all sorts of current and historical  reasons, Democrats are so politically toxic among the majority of Alabama voters, that even with seemingly credible accusations of pedophilia Moore is still in the race, though it is closer than he would like. After a brief pause in Republican support to see if Judge Moore's campaign imploded, the RNC and President Trump have apparently decided that Moore has a good chance to win. They've thrown their support behind him. Democrats would obviously like to reduce the Republican margin of control in the Senate but likely wouldn't be overly upset if Moore won. Democrats would attempt to label Republicans the harassment or pedophilia party. They would play this up in the midterm elections and/or attempt to shame Republicans into removing Moore from the Senate. 

The problem with this strategy is that (1) it's unclear as to whether Republicans have any shame on this issue and (2) political tribalism has reached such levels that many people in both major parties no longer really care what their guy/gal did. They only care about stopping THEM from reaching their goals.

The Nov 4 Election US Senate: Democratic Disaster or Republican Rout?

According to Nate Silver's  538 forecast it appears that the Democrats are due for a solid thumping in the elections this Tuesday. The forecast currently predicts a 68.3% chance of Republicans winning the Senate. Most other forecasts I've seen suggest that it's a done deal that the Republicans keep the House and possibly even extend their majority there. A lot of the Republican likely electorate is said to be mad as hell and ready to grab the nearest baseball bat and (figuratively) beat the doggie doo out of any Democratic elected officials that they can find. Conservatives and perhaps Republicans are allegedly fired up to vote against the entire Democratic agenda. This could be why so many Democratic Senatorial candidates have done their best to keep President Obama at arm's length, with some even going to far as to refuse to confirm they voted for the man. Possibly having gotten all they can get out of the "war on women" rhetoric, the Democrats could be belatedly realizing that men also vote.  
Tuesday’s results, Mr. McInturff added, would tell “whether it is possible that the single-minded focus that most Democratic candidates attached to the ‘war on women’ meant they never conveyed an economic and jobs message that might have led a higher chunk of the persuadable male vote to vote Democrat.”

Republicans increasingly make that argument that Democrats miscalculated in their zeal to galvanize women who otherwise would not vote in a midterm election. Democrats counter that Republicans use the phrase “Republicans’ war on women” more than Democrats to stoke a backlash among older and married women who reject partisan, feminist-sounding rhetoric and lean Republican. Ms. Greenberg said Republicans were “deliberately misconstruing” Democrats’ legitimate attacks. Yet she and other Democratic strategists complain their party has not effectively espoused a broader economic agenda, when women tell pollsters their top concern is jobs and the economy.
However, worried Democrats should know that the early voting numbers from some contested Senate races appear to be from younger and nonwhite voters who did not vote in 2010. Such people tend to lean Democratic.So there could be an unpleasant surprise for some Republicans. It depends on who shows up. I think that the Republicans will take the Senate. We will have a very interesting next two years. This election cycle was fascinating because President Obama, despite his popularity with some elements of the Democratic base, was sufficiently toxic with independents, Republicans, and Democratic leaning independents that almost no Democratic Senate candidate wanted to be seen with him, possibly causing an enthusiasm gap. Additionally some races could be a test of Hillary Clinton's or former President Clinton's coattails. We shall see.

So what's your call?

Will the Democrats lose the Senate?

If so what does this mean for the final two years of the Obama Presidency?

Fight Over Online Sales Taxes: Marketplace Fairness Act

Occasionally I might or might not purchase items from Amazon and other online retailers. When I file my tax returns the State of Michigan insists that I give it a listing of online purchases and estimate and provide the sales tax I then owe to the state. Now it takes more than a bit of chutzpah to bogart your way into a private transaction that neither involved you nor took place in your jurisdiction and then claim that the actual parties to that transaction owe you a cut and need to let you wet your beak, or else. But that's how states tend to behave when there's money at stake.

For obvious reasons I won't discuss my answers to my state's nosy little questionnaire. But in general some higher sales tax states and "brick and mortar" retailers aren't pleased with the explosion in online sales. Apparently some of my fellow true blue Americans don't see the point of paying taxes to their state for transactions in which that the state had no role. Even excessively honest people tend to get amnesia about the $1500 or so they spent online last year without paying sales tax. Retailers who aren't primarily online get annoyed with people using their stores as a showroom or to price check for items they intend to purchase online. Some consumers visit a bookstore or electronics shop with no intention of purchasing anything therein. All they're doing is getting a hands on experience before ordering elsewhere. This makes some retailers rather peeved, as you might imagine. They have less money to kick up to their mob captain, state.

Some people have come up with a solution. That is a solution from their point of view, not necessarily mine. This solution will of course require you to pay more taxes. It's only fair right? I mean why should some states go without what they view as their tax revenue just because some consumers have decided it's better to order things online on occasion.

Legislation that would empower states to tax online purchases cleared a key hurdle in the Senate on Monday after winning an enthusiastic endorsement from President Obama. 

Senators advanced the bill in 74-20 procedural vote on Monday evening, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill..

Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Macy’s, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes. But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshalling its users in a massive campaign to kill it.

The Securities Industry and Financial Markets Association and the Financial Services Roundtable said the measure could pave the way for financial transaction taxes on the state level, an idea that Wall Street and its supporters fiercely oppose.  “It’s important for Congress to explore all the possible outcomes and costs of the proposal, especially the impact on consumers,” Scott Talbott, the senior vice president of public policy for the Roundtable, said in a statement...The Marketplace Fairness Act would empower states to tax out-of-state online retailers, but would exempt small businesses that earn less than $1 million annually. 

Under current law, states can only collect sales taxes from retailers that have a physical presence in their state. People who order items online from another state are supposed to declare the purchases on their tax forms, but few do. The proposal has the support of a host of governors, including Republicans Chris Christie of New Jersey, Rick Snyder of Michigan and Bob McDonnell of Virginia. Passage of the bill could bring billions of dollars in new revenue to state governments. The bill has split the tech industry, pitting eBay against the retail giant Amazon. 

In email to eBay users, eBay CEO John Donahoe argued that the bill would “penalize small online businesses,” urging the site’s millions of users to contact their members of Congress and voice opposition.The company is lobbying for Congress to increase the small-business exemption from $1 million to $10 million.  Donahoe also took a shot at Amazon, a key supporter of the legislation. “Amazon, for example, has fought harder than any other company to require all businesses to collect sales taxes online, while also seeking special tax benefits as it expands its warehouses throughout the country. It’s bad tax policy,” Donahoe wrote....

LINK
So as you can see some of this is a case of the elephants fighting and the grass getting trampled. I don't think that Wall Street cares about whether I pay the proper use tax on books or cd's I order online. But Wall Street is very concerned about states attempting to put financial transaction taxes on services that take place in cyberspace. For example California, which has a political class much friendlier to higher taxes than some other jurisdictions, might decide that every transaction which takes place between consumers in California and bankers or financial service companies based in say New York, is now subject to a California tax.

This sort of backdoor tax was disallowed in a 1992 Supreme Court ruling in which North Dakota attempted to tax Quill Corporation, a business which had no sales force, retail outlet or other physical location in the state. Amazingly North Dakota tried to argue that Quill's floppy disks and sales flyers were physically located in the state and therefore so was Quill. The Court rejected this line of reasoning but evidently said that Congress could change the law if it wanted to do so. And now it looks like Congress wants to do so.

I think this is a bad idea and also unfair. If you're a business who is only physically located in one state why in the world should you have to figure out the tax policies of 49 other states, and various counties, cities, townships and territories. That's expensive. Additionally this new online tax proposal would seem to discriminate between online purchasers and physical purchasers. There are states who do not have sales taxes or have different sales taxes than my state. That's their right. If I happen to drive across the border to purchase goods or services that's my business and my right to do so. My money doesn't automatically belong to my state or the businesses that reside within. If I order something online from a state with no sales tax like New Hampshire my state wants to be able to track that transaction and get its cut. But if I drive to New Hampshire and purchase something my state is just out of luck? Does that makes sense? Or is Michigan also going to try to put GPS on my car to track down any such trips? 

If the states feel that their tax structure is no longer feasible because of a change in consumer behavior then they are free to do things more efficiently OR raise other taxes on businesses or individuals within their state. I don't think states should be able to compel other businesses or other states to adopt their tax policy on "their" citizens. I think all this law would do, if passed, would be to squeeze out smaller businesses. It's not coincidental that Amazon is in support. Amazon just happens to be selling new tax policy software and has already negotiated tax exemptions for itself. Or maybe I'm just being selfish. Maybe I'm just opposed to paying my "fair" sales taxes on goods I hypothetically order online...

What's your take?