alexandria-ocasio-cortez

How Alexandria Ocasio-Cortez Won the Cohen Hearing

Too many representatives chose to bloviate instead of interrogate — except for one.

But like so many congressional hearings, the fireworks were quick to flame out. Even with the tantalizing opportunity to grill Mr. Cohen on the myriad ways his former boss most likely sought to evade the law and avoid his creditors, many members of the committee, from both parties, could not resist their usual grandstanding.

Consider the line of questioning from Alexandria Ocasio-Cortez of New York. She asked Mr. Cohen a series of specific questions about how Mr. Trump had handled insurance claims and whether he had provided accurate information to various companies. “To your knowledge,” she asked, “did Donald Trump ever provide inflated assets to an insurance company?” He had.

She asked whether Mr. Trump had tried to reduce his local taxes by undervaluing his assets. Mr. Cohen confirmed that the president had also done that. “You deflate the value of the asset and then you put in a request to the tax department for a deduction,” Mr. Cohen said, explaining the practice. These were the sort of questions, and answers, the committee was supposed to elicit. Somehow, only the newer members got the memo.

Ms. Ocasio-Cortez continued, asking, “Do you think we need to review financial statements and tax returns in order to compare them?” She pressed Mr. Cohen for the names of others who would be able to corroborate the testimony or provide documents to support the charges. In response, Mr. Cohen listed the executives

Allen Weisselberg,

Ron Lieberman and

Matthew Calamari —

names that, thanks in part to Ms. Ocasio-Cortez, we will probably hear more about in the coming months.

These questions were not random, but, rather, well thought out. Like a good prosecutor, Ms. Ocasio-Cortez was establishing the factual basis for further committee investigation. She asked one question at a time, avoided long-winded speeches on why she was asking the question, and listened carefully to his answer, which gave her the basis for a follow-up inquiry. As a result, Mr. Cohen gave specific answers about Mr. Trump’s shady practices, along with a road map for how to find out more. Mr. Cohen began his testimony calling Mr. Trump a “con man and a cheat”; In just five minutes, Ms. Ocasio-Cortez actually helped him lay out the facts to substantiate those charges.

Unfortunately, too few of her colleagues followed suit. In his testimony, Mr. Cohen claimed numerous ethical breaches and criminal acts on the part of the president, many for which Mr. Cohen himself apparently served as main actor. He spoke of illegal campaign payoffs, rigging of electoral polls, threatening people who had crossed the president, possible witness tampering, and even falsifying financial records. He spoke of conduct in and out of office that would cross even the most generous reading of ethical and legal boundaries.

All of these areas offered fruitful avenues for exploration. But instead of asking probing questions and eliciting damning evidence from Mr. Cohen, too many committee members chose to make a speech. Jeffrey Toobin of The New Yorker tweeted in frustration, “Bipartisan incompetence in the questioning at #cohen hearing. All they do is make speeches, and fail to listen to answers or follow up.” He then tweeted sample follow-up questions, hoping desperately that someone might just try. He did give credit to several members who understand the art of questioning, including Representatives Katie Hill and Jackie Speier. But it is shocking how few members actually understand the basic function of a hearing — or chose to ignore collective goals in favor of showboating.

AOC Masterfully Breaks Down How Money Affects Politics

Trump calls for unity, stands firm on wall, leaves Socialist Dems on defensive at State of Union

“An economic miracle is taking place in the United States — and the only thing that can stop it are foolish wars, politics or ridiculous partisan investigations,” Trump said, in an apparent reference to Democratic congressional probes of his administration and possibly to Special Counsel Robert Mueller’s Russia investigation. “If there is going to be peace and legislation, there cannot be war and investigation. It just doesn’t work that way.”

At the same time, the president did not back down from his insistence that Congress fund a border wall, which was at the center of a 35-day government shutdown that ended only a few weeks ago and could fuel another shutdown on Feb. 15. Tolerance for illegal immigration, Trump said, is “not compassionate,” but “cruel.” “Simply put, walls work and walls save lives,” Trump said. “So let’s work together, compromise and reach a deal that will truly make America safe.” However, top Democrats signaled that Trump’s State of the Union address did little to convince them that a legislative compromise to construct his proposed border wall is possible.

Read: Trump’s State of the Union speech

TRUMP AND AOC FEELING ‘SOCIAL’: President Trump vowed during his State of the Union address on Tuesday that “America will never be a socialist country,” in an apparent rebuke to self-described Democratic socialist Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders that drew loud cheers and a standing ovation from Republicans in the House chamber — as well as supportive applause from House Speaker Nancy Pelosi … In response, after the speech, Ocasio-Cortez told Fox News: “I thought it was great. I think he’s scared.”

The progressive firebrand pointedly did not applaud as Trump condemned human trafficking and illegal immigration in his address. In an interview later Tuesday night, Ocasio-Cortez said she was asking herself, “Is this a campaign stop or is this a State of the Union?” She is set to unveil a massive “Green New Deal” with Massachusetts Democratic Sen. Ed Markey next week.

Peggy Noonan: AOC had ‘rare bad night’ – and the rookie lawmaker responds

A Better Way to Tax the Rich

Raise the capital gains tax and treat investment earnings like ordinary income.

.. For starters, Ms. Ocasio-Cortez seems to be ignoring the burden of state and local taxes, particularly for residents of places like her hometown. For us New Yorkers, the top rate for those levies is 12.7 percent. And thanks to the 2017 Republican tax cut, it is no longer deductible, bringing her proposed top rate to 82.7 percent.

There are other, better ways to raise revenue — in particular, by increasing the tax rate on capital gains and dividends and closing loopholes.

.. At present, a beneficiary of long-term capital gains or dividends pays 23.8 percent of the profit to Washington. That’s already a good bit less than the 37 percent top rate on so-called ordinary income.

Among the justifications for taxing profits on capital at a lower rate than income from work has historically been that companies pay taxes on their profits, so taxing shareholders on their gains represents a form of double taxation.

But the 2017 tax cut legislation reduced the tax rate on corporate profits to 21 percent, from 35 percent. So if taxes on capital gains and dividends were raised by those 14 percentage points, we capitalists would be no worse off — and American companies would still be more competitive globally, the theory behind reducing the corporate tax rate.

.. Evaluating the revenue raised by any of these proposals is a murky exercise. Any big increase in tax rates would lead Americans to try to game the system by changing their behavior. Nevertheless, an expert at the Tax Policy Center told me that Ms. Ocasio-Cortez’s proposal could raise around $300 billion a year.

.. My alternative could potentially raise as much revenue, using Congressional Budget Office estimates as a guide. That’s because a significant amount of the income of the ultra-earners comes as capital gains, and because my concept would apply to all capital gains and dividends, not just income above $10 million a year.

But while raising those tax rates closer to those on ordinary income would make the system fairer, other changes would be required to prevent owners of appreciated assets from avoiding their tax obligations. For example, the United States should eliminate the provision that forgives unpaid capital gains taxes on assets held at death.

.. And there are many loopholes that could be closed in the name of greater equity. In 2016, the Obama administration provided a helpful list of candidates: They range from jettisoning the special deductions and credits that producers of fossil fuels enjoy to eliminating the notorious carried interest provision, which allows private equity managers (including me) to pay the lower capital gains rate on what is effectively ordinary income. Of course, if capital gains were taxed as ordinary income, that problem goes away.

Another fruitful area for loophole-closing is the provisions that allow many real estate guys (including President Trump) to pay little, if any tax. For example, while the 2017 tax bill eliminated the rule allowing owners of most appreciated assets to avoid tax by exchanging them for other comparable assets, that loophole was left in place for owners of real estate. So a landlord who sells one building can avoid paying capital gains taxes on the profits when he uses those profits to buy another investment property.

Proponents of huge increases in the top marginal tax rates argue that they were once even higher than 70 percent and applied to lower levels of income. Yes, the “sticker prices” in the past went up to just over 90 percent, but few people actually paid them. Instead, they took advantage of tax shelters and tax-avoidance schemes to keep their bill as low as possible.

In reality, the average percentage of income paid by Americans in the top 1 percent has remained remarkably stable over the last eight decades. I’m not opposed to a reasonable increase in the top marginal rate, but when it comes to getting the richest Americans to pay more, there are much better ideas than Ms. Ocasio-Cortez’s plan.