Planet Money: Relocation Incentives: Kansas City vs Kansas City

When Amazon announced the locations for its second headquarters, it ended months of cities and states courting the tech giant with eye-popping tax incentives. A bunch of you wrote us and asked: Why are all these places offering this rich company huge tax breaks? Isn’t Amazon rich enough? Does it make a difference?

Back in 2016, we did an episode about this exact question. We found some answers along a narrow stretch of road that divides Kansas from Missouri. Here it is, with a little update.

The Bannon Revolution

Bannon’s grand ambitions should inspire the same soul-deadening déjà vu, the existential exhaustion, with which Bill Murray’s weatherman greeted every morning in Punxsutawney, Penn. They should bring to mind both Friedrich Nietzsche’s idea of eternal recurrence and his warning that if you stare deep into the abyss, it stares into you.

.. What Bannon is promising is what the Tea Party actually delivered, in a past recent enough to still feel like the present: a dramatic ideological shake-up, an end to D.C. business-as-usual, and the elevation of new leaders with a sweeping vision for a new G.O.P.

.. The ideological shake-up took the form of paper promises, not successful legislation. The end to D.C. business-as-usual just created a new normal of brinkmanship and gridlock. And when the Tea Party’s leaders — Ted Cruz and Rand Paul, above all — reached out to claim their party’s presidential nomination, they found themselves steamrolled by a candidate who scorned all their limited-government ideas and offered, well, Trumpism instead.

.. when it comes to governance, Trumpism turns to have two fatal weaknesses:

  1. the dearth of Trumpists among elected Republicans, and
  2. the total policy incapacity of Trump himself.

So having failed in his appointed role as Trump whisperer and White House brain, Bannon has decided to do the Tea Party insurgency thing all over again, except this time with his

  • nationalist-populist cocktail instead of the
  • last round’s notional libertarianism.

.. Maybe the Tea Party was a dead end, but some Trumpist primary candidates will finally produce a Republican Party capable of doing something with its power.

.. His professed nationalism, with its promise of infrastructure projects and antitrust actions and maybe even tax hikes on the rich, is potentially more popular than the Tea Party vision ..

.. But this imaginative exercise collapses when you look at Bannon’s own record and the candidates he’s recruiting.

.. At the White House, Bannon did not manage to inject much heterodoxy into any part of the same old, same old Republican agenda. But he did encourage the president to pick racialized fights at every chance.
.. his new grass-roots populism promises to be more of the same:
  • a notional commitment to some nebulous new agenda,
  • with white-identity politics and the
  • fear of liberalism supplying the real cultural-political cement.
.. Especially because the would-be senators he’s recruiting are a mix of cynics and fanatics who seem to share no coherent vision, just a common mix of ambition and resentment.
.. if you believe figures like Roy Moore and Erik Prince are going to succeed where Trump is obviously failing, I have some affidavits attesting to Harvey Weinstein’s innocence to sell you.
.. He and his allies are the latest group to recognize the void at the heart of the contemporary Republican Party, the vacuum that somebody, somehow needs to fill.
  • .. The activists and enforcers of the Tea Party era tried with a libertarian style of populism.
  • Paul Ryan tried with his warmed-over Jack Kempism.
  • My friends the “reform conservatives” tried with blueprints for tax credits and wage subsidies.

.. now they, too, need to reckon with a reality that has confounded every kind of Republican reformer since Barack Obama was elected: Our politics are probably too polarized, our legislative branch too gridlocked, and the conservative movement too dysfunctional and self-destructive to build a new agenda from the backbenches of Congress up, or even from the House speaker or Senate majority leader’s office.

.. Our system isn’t really all that republican anymore; it’s imperial, and even an incompetent emperor like Trump is unlikely to restore the legislative branch to its former influence. So if you want to remake the Republican Party as something other than a shambolic repository for anti-liberalism, the only way it’s likely to happen is from the top down —

  1. with the election of an effective, policy-oriented conservative president (which Donald Trump is not),
  2. surrounded by people who understand the ways of power (which Bannon, for all his bluster, didn’t) and
  3. prepared to both negotiate with Democrats and bend his own party to his will.

.. I would not be wasting my time trying to elect a few cranks and gadflies who will make Mitch McConnell’s life more difficult.

Instead I would be looking for the thing that too many people deceived themselves into believing Trump might be, and that Bannonite populism for all its potential strength now lacks: a leader.

AEI: Improving Health and Health Care: An Agenda for Reform

Those Americans without access to employer coverage should be given a refundable, age-adjusted tax credit that is set roughly equal to the average tax break for an employer plan.

.. This rule would protect persons with preexisting conditions from being charged more, or denied coverage, based on their health status so long as they have not experienced long breaks in insurance enrollment

.. States could also boost insurance enrollment by assigning persons who are eligible for the tax credits but have failed to pick an insurance policy to a default insurance plan. The upfront deductibles for these insurance plans would be set as necessary to ensure the premiums for enrollment would be equal to the federal tax credit, thus ensuring no additional premium would be required from a person assigned to a default plan.

.. Reform of Medicaid must start with changing how the federal government pays for its share of total cost. The program should be divided into its two distinct subparts, one for able-bodied adults and their children and the other for the disabled and elderly.

.. Medicare’s rules for paying hospitals, physicians, and other service providers heavily influence how care is delivered to all patients, not just Medicare enrollees. The program would improve if there were fewer regulations and more emphasis on market-based reforms. The starting point should be conversion of the program, on a prospective basis, to a premium support model

.. HSAs should be a central component of health care in the United States. The accounts provide strong incentives for their owners to seek the best value for their health care purchases, and they provide a ready vehicle for providing additional protection against high medical expenses.

.. A comprehensive reform plan should also reform the health insurance benefit for federal employees so that it operates like a defined contribution program.

Principles for Reform

  1. Citizens, not government, should control health care.
  2. Government subsidies should come in the form of defined contribution payments.
  3. Move power and control from the federal government to individuals, families, and states.
  4. Suppliers of medical services must have more freedom to innovate and provide better services to patients and consumers.
  5. Reform must improve the federal fiscal outlook by reducing long-term health obligations.

The Limbaugh Health Care Reform Plan

Because I don’t think it really has anything to do with health care. I think it’s just the redistribution of wealth, the power.

.. Well, what do you think liberalism is, in part? About making these people feel good about the messes that they’ve made, all because they care and they have great compassion. And they’re great at using other people’s money, which is what Medicaid and Medicare are, to take care of people and keep ’em away from you. If put everyone on Medicaid and Medicare then you can assume they’re gonna have health care, problem solved. You don’t have to hear them complain anymore, you don’t see ’em, you don’t run into ’em.

.. it seems simple to fix this. Just use a little common sense, trust the free market, get the players that have made the mess out of the way

.. Trump is probably finding out just how deeply intertwined the tentacles of this are throughout our society.

.. And what happens when you remove one tentacle? Yeah. And then you find six more pop up that you didn’t know were there. That nobody knew were there, is how deeply embedded some of this stuff is.

.. Providing health care for people with preexisting conditions is the equivalent of selling somebody a homeowner’s policy for a hundred dollars while the fire is burning their house down. It just doesn’t happen, yet in health care we’re doing it. And it screws up all of the actuarials. It screws up all the calculations, it screws up all the numbers, it screws everything up.

.. I’m just saying that once you include people with preexisting conditions in the pool with everybody else and then you go get premiums based on that, it’s not gonna work. You just can’t do it because you’re not talking insurance on preexisting conditions; you’re talking welfare. And nobody in Washington has the guts to eliminate coverage for preexisting conditions.

.. I have no desire to run anybody else’s life. I don’t care whether somebody can run theirs or not; that’s their responsibility and their problem.

.. I do not live under any illusions that I should tell everybody how to live.

.. My health care reform plan is real simple. For everybody who can, and we would have to have a very, very honest assessment of that, you buy your own. You can either get it from your employer as part of your deal there, or you don’t and you go out and make your own deal. You’ll be able to make your own deal because the government’s not involved and there are insurance companies all over this country selling health insurance, and they’re competing with one another

.. “But Mr. Limbaugh, Mr. Limbaugh, what about the people that can’t afford it?”

.. Well, what’s made it different today than the way it was then? And I would argue it’s a bunch of people dipping their hands in it and being involved in it who are not in the business. Trying to buy votes with it, trying to insure and secure power with it and trying to basically tell people, “You know what? You don’t have to be responsible. We’ll do that for you. Just vote for us.”

.. if it’s this bad, how in the world can the people in charge of it not know it’s this bad? If it is this bad, then why do the Republicans want to hand power back to the Democrats? Why do the Republicans want to hurt Trump’s base?

.. this bill makes it illegal to check an enrollee’s immigration status. You ask why would they do that? Well, well, we’re talking about the open borders crowd. We’re talking about a party that’s been telling us for the last 10 years they don’t think they will ever become a political majority without paying homage to Hispanics.

.. They’ll hire actors to portray these old people and indigents who’ve been left behind. That’s just what they do.

.. to compare subsidies and tax credits is purposefully misleading, and you can’t compare the value. They each have different political values and so forth, but tax credits end up — that’s money you get a credit for on your tax, you don’t pay as much, so that leaves you with more money to spend theoretically shopping for a better deal on health care. Subsidies just help you pay for something. You never see the subsidy, somebody else writes the check or sends the money or what have you.

.. one of the new CEOs, it was either General Motors or Ford took over and after about six weeks this guy said, “I thought I was getting in the business to make and sell cars. I didn’t know I was getting into the health care business.”

Because his job, the number one cost at his automobile manufacturing company was health care for his employees.

.. make it single payer, where nobody worries about cost except they theoretically do as they ration and deny certain people, but in reality they don’

.. If employers are going to be given tax credits for the health insurance they buy for their employees, why shouldn’t individuals get it? Why shouldn’t it become a deductible item?

.. Tax credits end up you having a little bit more money in your back pocket, which, if we’re gonna start applying degrees of conservatism, that’s a pretty conservative thing to do, have a policy where people get to keep more of their money in this.

.. So how can the Democrats complain about tax credits for the self-employed? Poets, painters, and that’s who Pelosi talked about. Free from job lock so you can become a poet, so you could become a painter.

.. Job lock, as though everybody was locked in a job they didn’t want because they needed the health care. So Obamacare was gonna come along and free you from all that.

.. people like Obama, Hillary, they love subsidies because it makes you dependent. You never see the money.

Why Paul Ryan needs Donald Trump so badly

This proposal was crafted trying to thread a needle between two competing corners of the House GOP Conference: the far-right blockade and a much larger, less vocal crowd from states where their governors accepted the expanded Medicaid provision in the 2010 ACA.

Some Freedom Caucus folks have been strenuously opposed to the proposed tax credits for purchasing insurance, saying it’s a new form of entitlement, and many want to more quickly phase out the Medicaid expansion

.. If Trump ever fully leans into this legislation, giving it the full-forced endorsement that he’s proven capable of on other issues, Ryan and House GOP leaders believe that the conservative opposition will dissolve quickly.

.. not once but twice he said he wouldn’t sign any bill that “didn’t take care of our people.”

.. Some politicians let bygones be bygones if they win ([Chuck] Schumer is very much like this; he wins, there’s no grudge held, it’s water under the bridge). Trump strikes me as someone who holds grudges, but I’m not certain.

.. But if this disintegrates, if there’s no repeal of Obamacare, it’s bad, very bad, for both men – and what it does to their relationship for the next few years.

.. most House Republicans are more afraid of not approving a bill to repeal Obamacare, any bill to repeal Obamacare, regardless of its fate in the Senate, than to simply do nothing.

.. The way the districts are drawn, the way the funding mechanisms of campaigns now work, the activism of the two bases of the parties – it all pushes members to the extreme.  They now act almost entirely at the behest of their base rather than what they believe is the right thing for the country.

.. McConnell has to come up with his own bill that will tilt more friendly to the [Rob]Portman/[Shelley Moore] Capito crowd, which might upset Ted Cruz and Mike Lee but I’m still not certain that in the end Cruz is willing to be the guy who blocks Donald Trump’s first big initiative.
..  I think the two worst character traits in today’s Congress are fear and contentment.
.. You just have to be willing to work hard, willing to go home as much as possible to explain yourself and to run a really disciplined, well-funded campaign if you get a primary. Folks like Lamar Alexander, Lindsey Graham, Tom Cole, Jack Reed, Frank Pallone — these are are all people who’ve done more than their fair share of bipartisan deals in the Senate and House. Some have faced down tough primary elections.

They’re all still here. 

.. The “contentment” character trait is that too many lawmakers are content with what they have: a tiny fiefdom. They’d rather not rock the boat because that means they might have to work really hard to win re-election.

.. The biggest change that I’ve seen over those years is the shrinking number of leaders on Capitol Hill; not the actual elected leaders, but the men and women in the rank-and-file who commanded the policy brigade and through the sheer force of their character made themselves players. They weren’t afraid and they weren’t content. 

Death and Tax Cuts

And after all that inveighing against the evils of Obamacare, it turns out that they’ve got nothing.

Instead, they’re talking about freedom — which these days is the real refuge of scoundrels.

.. Jason Chaffetz insisted that the public outcry is just “a paid attempt to bully and intimidate”; Sean Spicer, the White House press secretary, calls all anti-Trump demonstrations a “very paid, AstroTurf-type movement.”

.. flat tax credits, unrelated to income, that could be applied to the purchase of insurance.

These credits would be obviously inadequate for the lower- and even middle-income families that gained coverage under Obamacare, so it would cause a huge surge in the number of uninsured. Meanwhile, the affluent would receive a nice windfall. Funny how that seems to happen in every plan Mr. Ryan proposes.

.. This week, perhaps realizing how flat his effort fell, he began tweeting about freedom, which he defined as “the ability to buy what you want to fit what you need.”

.. Any plan that makes essential care available to everyone has to involve some restriction of choice.

.. Suppose you want to make insurance available to people with pre-existing conditions. You can’t just forbid insurance companies to discriminate based on medical history; if you do that, healthy people won’t sign up until they get sick.

.. It means that workers don’t have to fear that quitting a job with a large company will mean loss of health coverage, and that entrepreneurs don’t have to fear striking out on their own. It means that those 20 million people who gained coverage don’t have to fear financial ruin if they get sick — or unnecessary death if they can’t afford treatment. For there is no real question that Obamacare is saving tens of thousands of lives every year.

.. mainly they hate Obamacare for two reasons: It demonstrates that the government can make people’s lives better, and it’s paid for in large part with taxes on the wealthy. Their overriding goal is to make those taxes go away. And if getting those taxes cut means that quite a few people end up dying, remember: freedom!