Hy and Christopher begin this week’s program talking about the 2025 legislative session.  We kick off ruminating about over the Port of New Orleans seeking to build a container terminal in St. Bernard Parish—an issue coming up in the State House Transportation Committee on Wednesday.  The concept is deeply unpopular amongst the residemts of Violet and Chalmette, but Port Nola officials are undaunted.  The catch is that Plaquemine Parish wants to build a container port right across the river, and it’s very popular there. Plaquemine’s port authority proposed to the Port of New Orleans to become 50-50 partners in that West Bank venture. So far their plea been rejected.Then Hy and Christopher move on to one of the more controversial bills this year’s fiscal session, House Bill 609, which would impose a new stormwater fee on city properties. The fee would be regulated by the Public Service Commission, an elected body that oversees utilities around the state. The city’s Sewerage and Water Board funds its drainage operation chiefly through property taxes, but agency leaders have long said the taxes — which generate about $75 million annually — aren't enough.State Rep. Mandie Landry, D-New Orleans, discussed the bill with both the S&WB and Gov. Landry, but said she is filing it independently. S&WB Executive Director Ghassan Korban has stumped for a drainage fee but also said this week he did not ask Landry to file the bill.  “We need a functioning Sewerage and Water Board. It needs to be less political,” Landry said.  Korban pledged to this radio show that no homeowner would receive a higher fee than they are currently paying in property taxes after the homestead exemption.  Some disagree of this will ultimately be the case.Interestingly, the service fee would allow S&WB to put a fee on city buildings, nonprofits, universities, churches, and (most interestingly) the federal government.    If the bill passes in the current sessiom, the commission could enact a fee without City Council or voter approval, as the S&WB is a state agency. Landry said she’s still researching if the state can unilaterally impose the fee, but it “makes sense” to do so if possible. However, City Council President JP Morrell called the idea "completely silly," since, in his view, it violates a city charter provision designating the council as the city's sole utility regulator. “I don't know how you plan on, as a legislator, letting the PSC come into the city and begin to regulate us without getting the consent of citizens,” Morrell told the daily paper..  Since S&WB Is actually a state agency, the PSC would have primary authority, but it goes against over a 150 years of regulatory practice in the Crescent City.We talk about originalism versus textualism in the Supreme Court looming review of “birthright citizenship”.  The case might come down to the vote of Justice Amy Coney Barrett of Metairie, who cares less about original intent, and more about what the amendment actually says.Finally, Hy and Christopher ask if a “VAT is the Tariff/Deficit Answer”.Medicaid and Obamacare are both under siege thanks to a deficit situation that is (in part) because of bills coming due from the pandemic, and in part from the Republican congressional delegation’s determined to renew and expand the Trump tax cuts. At the same time, tariffs loom which are certain to boost prices by at least 15 percent, if not even higher.Republicans refuse to back down on income tax cuts, as the recently passed budget blueprint mandates, reasoning that only a continued tax regime favorable to the markets will arrest the slide into recession. Meanwhile, Democrats refuse to acknowledge that even if Congress let every 2017 tax cut expire, the nation’s entitlement programs would still run into dangerous deficits. Not without justification, they accuse the GOP of wanting to cut benefits; however, Democrats do not offer a funding plan to shore up the programs – meaning that in order to protect social security and Medicare as well as Medicaid and ACA, an alternative revenue source must be sought.Meanwhile, the tariffs threaten to raise prices on basic goods and foodstuffs. Trump argues that those revenues from those import tariffs would allow his elimination of tax on tips and perhaps even of taxes on the first $150,000 of income for married couples – as well as restoration of most State And Local Tax Deductions (SALT) – a Democratic priority since Trump’s first term.Moreover, Democrats make troubled defenders of universal open and free trade. Many progressives had suggested tariffs similar to Trump’s for the last three decades. As a political strategy, suddenly becoming the party of Trump-lite and embracing tariffs in the style of Joe Biden would not reap many political benefits. Democrats are historically the party of free trade, after all, and financially-open borders are attractive policies to their (traditional) urban and (relatively new) suburban bases.If Trump has stolen the tariff message from Democrats, it’s time for Democrats to steal a tax message from the president’s greatest in-party nemesis, Paul Ryan. Democrats should embrace a value added tax (VAT), which would allow them to support popular income tax cuts and insist on free trade with America’s allies – all while closing the deficit.A VAT is not a tariff, as imported goods are taxed equally to domestic goods for the end user, yet it exempts exports from taxation. Therefore, while the tax does raise prices, it also helps solve America’s manufacturing deficit problem, while at the same time enjoying such a broad base of taxation that a VAT raises more revenue than almost any other type of tax. It’s a sales tax on steroids.A VAT is a consumption tax assessed on the value added in each production stage of a good or service. Every business along the value chain receives a tax credit for the VAT already paid. The end consumer does not, making it a tax on final consumption. It was Andrew Yang who proposed a VAT of 10 percent to provide a $12,000 per year minimum basic income. The idea is not exactly alien to core Democratic voters.No Democrat likes sales taxes, but do they like tariffs even less? Paul Ryan had proposed replacing the corporate income tax with a VAT of 15 percent. It would have not only paid for that tax abolishment, but almost all of the 2017 tax cuts.It’s not too late. The proliferation of tariffs provides political cover for Democrats. Come to a deal on enacting the popular tax cuts and renewing the 2017 cuts, and in exchange, lower the tariff on America’s allies. A condition of the VAT could be repeal of the 1974 Trade Act which gives unilateral power to the president to levy tariffs as he sees fit. A brief window of political opportunity exists to close the deficit, cut taxes, and avert a trade war before it even happens. It’s up to a few Democrats to reach out to Mike Johnson to make a deal. Johnson has no more desire to cut Medicaid to allow the tax cuts than many Democrats, though he will if he has no choice. After all, 40 percent of the residents of his rural district received their healthcare coverage from the program.

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