The US Political Scene: Ideological purity comes back to bite the GOP - by Linda Killian

Amid the postmortem over everything that went wrong with the Republican health reform effort, we shouldn’t overlook the role of the system that elects members of Congress. It not only contributed to the massive failure, it is also predictive of what we will see from the Republican Congress moving forward.

Only about 15% of all congressional districts (about 50) are truly competitive. Most representatives come from heavily gerrymandered districts drawn to favor one party over the other by politicians interested in self-preservation and party dominance.

Partisan gerrymandering is largely responsible for the election of the House Freedom Caucus and its outsize influence on Republican health reform legislation. These hard-line conservatives revel in bucking House leadership and are in line with Tea Party ideology.Because of the lopsided tilt of their districts, they need only appeal to a narrow group of voters to get elected — a reality which has pulled Congress and the Republican Party far to the right, out of step with a majority of Americans.

Until recently President Trump seemed to be governing the same way, appealing only to the voters he considers his base.  At his February news conference, he dismissed citizens who defended the Affordable Care Act at Republican town halls this way: “They’re not the Republican people that the representatives are representing.”

As the White House and House Speaker Paul Ryan made ever more concessions on health care to try to win the votes of recalcitrant Freedom Caucus members, they wound up losing more centrist members who represent more diverse constituencies and are interested in actually governing rather than simply saying no.

One moderate who opposed the GOP plan was Pennsylvania Republican Charlie Dent. On NBC's Meet the Press last weekend, Dent confirmed a New York Times report that during a White House meeting on health reform, Trump angrily told Dent he was “destroying the Republican Party” and “was going to take down tax reform.”

You can certainly argue over which of the two men is destroying the GOP, but Trump was referring to Medicaid cuts that would produce savings to finance tax cuts Republicans plan for the wealthy. This reverse Robin Hood act doesn’t sit well with GOP centrists like Dent or with the voters who elected him.

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Downtown Abbey Economy: Why the US needs tax reform to avoid a 'Downton Abbey' economy - by Lawrence Summers

The United States may be on course to becoming a "Downton Abbey" economy. There are valid causes for concern about inequality: sharp increases in the share of income going to the top 1% of earners, a rising share of income going to profits, stagnant real wages and a rising gap between productivity growth and growth in median family incomes.

 A generation ago, it could have been asserted that the economy's overall growth rate was the dominant determinant of growth in middle-class incomes and progress in reducing poverty. This is no longer a plausible claim.

Issues associated with an increasingly unequal distribution of economic rewards are likely to stay long after cyclical conditions have normalised and budget deficits have been addressed. Those who condemn President Obama's concern about inequality as "tearing down the wealthy" and un-American populism have, to put it politely, limited historical perspective. Consider some past presidential rhetoric.

Franklin Roosevelt said of the financial industry in his first inaugural address: "Practices of the unscrupulous money changers stand indicted in the court of public opinion … they know only the rules of a generation of self-seekers … and when there is no vision the people perish." In 1936, Roosevelt asserted that "we had to struggle with the old enemies of peace – business and financial monopoly, speculation, reckless banking …

They are unanimous in their hate for me, and I welcome their hatred."

Harry Truman observed: "The Wall Street reactionaries are not satisfied with being rich … They want a return of the Wall Street economic dictatorship." John Kennedy, dismayed by a steel price increase, was quoted cursing the executives. Richard Nixon announced in 1973 that he had "ordered the Internal Revenue Service to begin immediately a thoroughgoing audit of the books of companies which raised their prices more than 1.5% above the January ceiling".

Bill Clinton complained during his first presidential campaign that "America is evolving a new social order, more unequal, more divided, more impenetrable to those who seek to get ahead. Although America's rich got richer … the country did not … the stock market tripled but wages went down."

Meanwhile, the ratio of corporate tax collections to the market value of US corporations is near a record low, thanks to various loopholes. And the estate tax can be substantially avoided by those prepared to plan and seek sophisticated advice. Closing loopholes that only the wealthy can enjoy would enable targeted tax measures such as the earned-income tax credit to raise the incomes of the poor and middle class more than dollar for dollar by incentivising working and saving.

It is ironic that those who profess the most enthusiasm for market forces are least enthusiastic about curbing tax benefits for the wealthy. Sooner or later, inequality will be addressed. Much better that it be done by letting market forces operate and then working to improve the result than by seeking to thwart their operation.

Read more: Why the US needs tax reform to avoid a 'Downton Abbey' economy | Business | Guardian Weekly

France: French PM announces plan to simplify tax system

French Prime Minister Jean-Marc Ayrault said on Monday he wanted to simplify the tax system, announcing a consultation process with the aim of proposing a broad tax reform to parliament by 2015.

The Socialist government has suffered criticism over tax increases introduced to shore up public finances, with business leaders saying an excessively complex and costly system is driving away investors.

"I think the time has come for a transparent overhaul of our tax system," Mr Ayrault told Les Echos business daily. "The objective is to come up with rules that are fairer, more efficient and easier to understand." "This overhaul will obviously require in-depth dialogue. I will meet all social partners in the coming days," he said, referring to business groups and labour unions.

Frustration over tax and unemployment stuck at 11 per cent, have dragged President Francois Hollande's approval rating to 20 percent, the lowest score for a postwar president, an Ifop poll showed.

A planned tax on heavy road transport provoked violent protests in western France where demonstrators torched toll gates, leading Mr Hollande to suspend the policy.

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