WEDNESDAY, OCTOBER 27 , 2021. THE WASHINGTON POST EZ RE A25
I
t’s the worst possible time to buy a
car, but events recently forced my
family to do it. I r egret the shudder-
inducing premium we paid to get
our hands on a little piece of CarMax’s
pandemic-depleted inventory. But I also
regret having to buy now because I’d
hoped we could hold on to our old
vehicle long enough to make our next
purchase electric.
Once an electric vehicle skeptic, I
gradually came around as the technol-
ogy matured, and automakers got seri-
ous about electrifying their lineups. A
big order from Hertz boosted Tesla’s
market capitalization above $1 trillion
Monday. Governments are also behind
this push; President Biden wants EVs to
make up half of all U.S. car sales by 2030,
up from about 2 percent now.
There’s a lot to like about an all-
e lectric future. EVs are cleaner, obvious-
ly. They’re quieter, too. And, of course,
they reduce our dependence on a c om-
modity currently soaring in price.
Then there are the personal benefits:
On average, electric vehicles accelerate
faster, cost less to maintain and fuel
more cheaply (at least, if you charge at
home) than cars with internal combus-
tion engines. Plus, my husband and I are
nearly the ideal case for an electric car:
urbanites who drive fairly frequently,
but not very far, so we don’t need to
worry much about range.
And yet, we did not buy an electric car
for two reasons: the cost of the vehicles,
and our inability to figure out where the
heck we’d charge it.
Even with tax credits, and even with
lower costs for fuel and maintenance,
EVs still seem pricey compared with
their internal-combustion counterparts.
That’s a problem that I hope will be
solved in coming years, as mass produc-
tion generates cost efficiencies. But at
the moment, there’s often still a s ignifi-
cant premium for going green.
Yet with all the other benefits, we
might have been willing to pay extra,
except for one major problem: Like
many people who live in dense, walkable
neighborhoods, we park our car on the
street, leaving us nowhere to charge it.
Okay, not literally nowhere; we could
have paid to get an outlet installed in
front of our rowhouse, and hoped we’d
be able to find a spot out front often
enough to keep the car powered. Or we
could have planned our weeks around
finding public charging stations where
we could regularly top up. But both
seemed rather speculative for such a
major investment, and in the case of
public chargers, quite inconvenient.
Road trips also posed a quandary — if we
did want to go more than a couple
hundred miles, how long would we have
to stop just to recharge the battery?
(Answer: It varies by model and charger,
but can run from 30 minutes, in the best
case, to hours.)
We’re not alone in having this prob-
lem, says Loren McDonald, a consultant
working on EVs and EV-charging
p rojects. He told me th at 35 to 40 per-
cent of households lack access to easy
charging, and ironically the problem is
greatest among the people who other-
wise should be the natural market for
electric vehicles: urbanite apartment-
dwellers.
As for road trips, McDonald calls
them the “noose around the neck of
electric vehicles.”
Neither problem is insoluble. There
are still plenty of garage owners able to
install a relatively inexpensive charging
station that can power up their vehicle
overnight. As those folks shift toward
electric vehicles, it will become more
economical for stores and other public
places to install charging stations where
you can pay by the kilowatt while you’re
inside. Apartment managers will also
presumably face pressure to install
chargers in their garages or risk losing
tenants.
But that still leaves the street parkers
with a problem that local governments
and utilities will probably need to solve
for us. And there’s no guarantee that any
of it will happen on the ambitious
timetables suggested by automakers
and the president, unless all levels of
government work to provide a push.
I’m not just talking about the billions
the administration has proposed to
spend building charging stations, which
is at best a down payment. We also need
to make grid upgrades, and rationalize
the patchwork of state and local regula-
tions and utility rules that take time and
money to navigate. Chris Nelder, who
used to work in the carbon-free mobility
practice at the Rocky Mountain Insti-
tute, and now runs a p odcast called “The
Energy Transition Show,” told me, “Be-
cause this process is so complicated and
so messy, we found that developers
would act ually have to develop 2.5 sites
to get one through.”
That’s a problem the market can’t
solve, no matter how cheap or attractive
electric vehicles become. Nor is it likely
to be solved entirely by farsighted local
governments and utilities voluntarily
preparing themselves for the future long
before it arrives. It will take uniform
state and federal standards, and prob-
ably some financial assistance, to clear
the roadblocks that currently stand
between millions of Americans and our
first electric car.MEGAN MCARDLEI’m no longer
an EV skeptic,
but I still
didn’t buy one
F
acebook chief executive Mark
Zuckerberg is a perfect target for
people who are angry about the
perversion of democracy in our
open society. He’s rich, arrogant and
seemingly unrepentant. But I fear he is
becoming a scapegoat for deeper prob-
lems with the Internet itself.
The Facebook frenzy is accelerating
this week, as 17 news organizations join
the document dive that started with whis-
tleblower Frances Haugen’s revelations
to the Wall Street Journal. Some of what’s
being revealed is genuinely outrageous,
such as Facebook’s accommodation of
dictators overseas, and its dissemination
of information abroad by human traffick-
ers, drug cartels and other illegal actors.
But before Congress rushes to create a
new Department of Algorithm Review, I
suggest we recall Walt Kelly’s comment in
his comic strip, “Pogo,” to wit: “We have
met the enemy, and he is us.” In so many
instances of disinformation about
p olitics, vaccines or anything else, the
problem is often a bottom-up viral spread
of dangerous information by social media
users. The information might be toxic,
but it usually isn’t illegal — and in t he
United States we have a First Amend-
ment that protects speech, even the nasti-
er v ersions.
Beyond Facebook, I have a deeper
worry. The Internet was created with an
idealistic dream: The global propagation
of open information would expand hu-
man freedom and democracy. As the
world became flat and citizens were em-
powered, authoritarian rulers would be-
come weaker. Alas, it hasn’t worked out
that way. The paradox of the Internet is
that it has enabled greater control by
authoritarians and fueled greater disor-
der in open democracies.
Americans who are anguished about
former president Donald Trump keep
looking for a villain to blame (other than
Trump himself and his movement). After
the 2016 presidential campaign, investi-
gators hunted a conspiracy driven by
Russia. Now, there’s a s imilar fixation on
Facebook as the root of our political
dysfunction. If only Trumpism were as
easy to explain as a Moscow or Facebook
plot! But the veins of rage , le ft and right,
were there to exploit, politically and fi-
nancially, well before Trump.
Thomas Rid, author of “Active Mea-
sures,” an authoritative 2020 study of
disinformation, notes the meme that
Zuckerberg is a malevolent machine.
“Many cannot resist the temptation to
blame some of the worst ills of our time
on this company and its aloof CEO,” he
noted in an email message this week.
“The more accurate insight is so hard
and so taboo that many of us dare not say
it out loud,” Rid continued. “Is it Facebook
or the Internet that is bringing out the
worst in us? Is the Internet merely reveal-
ing and amplifying what the old media
gatekeepers kept in check? Is there a
point where too much ‘democratizing’ of
information will lead to a closing of our
societies?”
Alex Stamos, a former chief of security
for Facebook and now director of the
Stanford Internet Observatory, notes that
the very openness of the Internet is part
of today’s problem. Once, media gate-
keepers limited what was disseminated.
“Now, you get a vast buffet that has some
healthy foods, and also some heroin, and
a lot of people take heroin,” he explained
in an interview.
Social media was supposed to be an
open ecosystem. But as people find their
niches and preferences, they create
closed loops for themselves. “Facebook is
designed to deliver to users information
that they like, from people that they like,
in rapid fashion,” argues Clint Watts, a
former FBI agent and leading authority
on disinformation.
Stamos helped lead a d etailed study of
misinformation in the 2020 election, con-
ducted by the Election Integrity Partner-
ship. The inquiry examined how false
information was spread. Often it started
with small incidents, reported from the
bottom up, that were then disseminated
by a relatively small number of “repeat
spreaders,” who would retweet or other-
wise amplify the lie.
The answer, says Stamos, is to increase
“friction” on the Internet, so that it’s
harder for these lies to become viral. That
means limiting retweets and shares —
rather than trying to police the informa-
tion itself. “I don’t want Facebook to try to
fix American politics,” Stamos argues,
and he’s right. A hypothetical govern-
ment social media agency shouldn’t try to
fix our politics, either. That’s a r oad to
tyranny.
Congress should rewrite some of the
rules that bound the Internet. For exam-
ple, Section 230 of the Communications
Decency Act should be amended so that
social media companies can be sued if
they design algorithms that propagate
false information. But total repeal of
Section 230 would be a mistake, because
it would encourage endless defamation
litigation and discourage platforms from
carrying true stories that are critical of
the rich and powerful.
Here’s the awkward truth: Regulation
of social media ultimately is on us — the
users. We have to teach ourselves, our
children and our “friends” to monitor
content and weed out what’s false and
hateful. In the end, we’ll get the Internet
we deserve.DAVID IGNATIUST he Internet’s
problems run
deeper than
just Facebook
W
hat is Tesla worth?
The electric vehicle pio-
neer’s stock price has been
rising like a billionaire’s
rocket ship, and on Oct. 25, Tesla en-
tered the rarefied orbit of trillion-dollar
companies. Chief executive Elon Musk
reached the summit of world wealth
thanks to his company shares, with a
fortune valued at some $289 billion.
That number is emblematic of the
staggering fortunes that Democratic
budget makers now seek to tax. A
proposal from Senate Finance Chair-
man Ron Wyden (D-Ore.) would place
an annual levy on the appreciation of
billionaire assets. Currently, gains in
the stock market and on other assets
are not taxed until the asset is sold.
You won’t catch me shedding a tear if
Musk’s tax bill goes up. But Wyden may
be opening the world’s largest can of
worms. And he should call his bill the
Tax Lawyer Full Employment Act.
Taxing appreciation of assets — capi-
tal gains — has until now been pretty
straightforward. A share of stock, or a
piece of real estate, or a work of art is
purchased and sometime later is sold.
The seller pays tax on the difference.
Assigning a value to the asset is simple:
It is worth the price agreed to by the
seller and the buyer.
The problem, according to Wyden
and others, is that some people are so
rich they never have to sell their assets,
and thus never pay the tax. For the IRS
to tax their unrealized gains, the agency
must assign values to assets that aren’t
on the market.
Sticking with Musk as an example:
He has surely gained from his success
with Tesla — but how much? The stockprice isn’t the only way to value the
company. Many investors would say a
company is worth some multiple of its
annual revenue or profit. Tesla’s stock
trades at more than 300 times its an-
nual profit; b y comparison, Apple, the
original trillion-dollar U.S. company,
trades at roughly 30 times earnings.
Yet another way of pricing a compa-
ny is to add up its assets: buildings,
equipment, furniture, patents, custom-
er relationships, the value of the brand,
etc. Then subtract outstanding debt.
Tesla is mighty in some of those catego-
ries but tiny in others. Overall, it’s not
strong enough to earn an investment-
grade bond rating.
History teaches that, over time, the
gap between the stock market value of
Tesla and the other modes of valuing
the company will narrow. Either Tesla’s
earnings will grow into its stock price
or its stock price will shrink toward its
earnings. Look at Amazon, which
traced a similar straight-up trajectory;
its ratio of stock price to earnings has
narrowed to around 60 — still highly
bullish, but down from the ionosphere.
(Amazon founder Jeff Bezos owns The
Post.)
Under the Wyden plan, Musk could
owe billions based on speculative “prof-
its” that exist only on paper. That kind
of tax bill is likely to change billionaire
behavior — but how?
One concern is that we’ll see fewer
exciting companies entering the public
markets. Privately held businesses have
no published share price, so the IRS
will have to value them based on more
conservative methods. Whom will that
hurt? Not the rich and certainly not the
super-rich. They have the wherewithalto invest in private companies.
The people who’ll get hurt if the
Teslas and Alphabets and Amazons of
the future spend their go-go years in
private hands are the mom-and-pop
investors who can’t access private mar-
kets. Their nest eggs largely track the
public stock markets, which in turn
derive much of their lift from the froth
churned up by a few high-flyers.
Valuing companies, furthermore,
will be child’s play compared with valu-
ing less-liquid assets. Yachts, mansions,
vintage cars and so on produce nothing
beyond personal satisfaction, so they
cannot be valued as productive compa-
nies are. Their dollar appreciation de-
pends solely on whether some other
rich person wants them enough to pay
more for them.
Having a billionaire president re-
cently was educational. America
learned just how fluid a great fortune
can be. “My net worth fluctuates, and it
goes up and down with markets and
with attitudes and with feelings, even
my own feelings,” Donald Trump once
explained. Gaming the value of illiquid
assets will be a new and very busy legal
industry if the Wyden tax becomes real.
The so-called wealth tax has been
tried in other countries, and it never
lives up to its promises. France quickly
abandoned its wealth-tax experiment
due to lackluster revenue and unfore-
seen consequences.
Wyden and the Democrats aren’t
wrong to want to pay rather than bor-
row for new federal spending. But this
proposed tax feels like lashing out at
easy targets. Unfortunately, those tar-
gets — precisely because they are so
rich — are the hardest ones to hit.DAVID VON DREHLEThe billionaire tax isn’t
without its complications
ODD ANDERSEN/AGENCE FRANCE-PRESSE/GETTY IMAGES
Tesla CEO Elon Musk in Gruenheide, Germany, in September 2020.near-term high-water mark of progres-
sive power in Washington, with Republi-
cans early favorites to regain control of
the House in 2022.
In fairness to Biden, this is not the
outcome he would have preferred. It may
even have been inevitable once Republi-
cans refused to engage on his Build Back
Better plans, leaving Democrats with
only the narrow legislative path of recon-
ciliation in a 50-50 Senate.
That set up a two-senator squeeze on
the White House: Sen. Joe Manchin III
(D-W.Va.) said no to spending more than
$1.5 trillion, reducing the rationale for
higher revenue; and Sen. Kyrsten Sinema
(D-Ariz.) objected to higher rates on indi-
viduals or businesses, ruling out Biden’s
promised options for raising the money.
To be sure, total repeal of the Trump tax
cuts would not have offset the $3.5 tril-
lion in spending Democrats initially pro-
posed, which is why their plans called for
savings from negotiated drug discounts
in Medicare — also about to be lobbied to
death.
Still, Biden boxed himself in by promis-
ing that he would not raise taxes on
households earning less than $400,000
— i.e., 98.2 percent of the population.
This was a concession to political reali-
ty: Democrats rely on support from
u pper-middle-class suburbanites in high-
tax blue states.
It w as at o dds with fiscal reality, how-
ever, which is that transforming the
U.S. social safety net and energy economy
would probably require taxing more than
just a handful of wealthy individuals and
corporations.
Making matters worse, Democrats —
in deference to that same blue-state sub-
urban base — are still considering a
partial repeal of the one provision in the
Trump bill that did hit upper-incomeI
n June 2020, presumptive Democrat-
ic presidential nominee Joe Biden
addressed a gathering of his party’s
wealthy donors. “I’m going to get rid
of the bulk of Trump’s $2 trillion tax cut,”
he told them, knowing this was not neces-
sarily welcome news to such an audience.
The 2017 tax law, President Donald
Trump’s signature domestic policy, gave
disproportionate benefits to corpora-
tions and high-income households. Biden
promised to raise an estimated $4 trillion
over 10 years by boosting the same busi-
ness and individual tax rates Trump and a
Republican Congress had slashed.
Now it is October 2021, Biden is presi-
dent — and he may be about to oversee
the perpetuation of the Trump tax cuts, or
most of them.
That’s the stunning implication of the
latest reports on talks between his White
House and the Democratic Senate, which
indicate that a final Build Back Better bill
might include no change to the tax rates
in the 2017 law. Not the 21 percent corpo-
rate rate. Not the top 23.8 percent rate on
capital gains. And not the top 37 percent
rate on individual income.
Instead, what’s under consideration is
a bill that relies heavily on such specula-
tive “pay-fors” as improved tax enforce-
ment, along with a 15 percent minimum
tax on large corporations ($148 billion
over 10 years) and a tax on a few billion-
aires’ unrealized capital gains (perhaps
$250 billion, depending on details and
implementation).
In the process, Biden’s promise that the
bill, whatever its price tag, will not add “a
dime” to the national debt is looking
much iffier.
And it could be years before Democrats
get another shot at a b road tax overhaul.
Their current tenuous hold on the House,
Senate and White House represents afolks: the $10,000 cap on the deduction
for state and local taxes paid. Depending
on how it’s done, this regressive move
could cost the Treasury tens of billions
per year.
Perhaps the negotiations will produce
new sources of revenue at the last minute.
On Tuesday, Democrats were said to be
considering a 3 percent surcharge on
$5 million dollar-plus annual incomes as
an alternative to the billionaire tax. This
is a $127 billion i tem (over 10 years)
borrowed from a broader bill, approved
in September by the House Ways and
Means Committee, that actually would
have repealed much of the Trump tax cut.
Yet even that proposal retained the
capital gains break known as “stepped-up
basis,” a boon to those who give, and
receive, inherited wealth. Biden specifi-
cally warned his donors in June 2020 that
he would get rid of it, but rural Demo-
crats’ concerns about the impact on
f amily-owned farmland carried the day.
In economics, “revealed preference”
refers to the difference between what
consumers say they want and what they
really do want, as shown by how they
choose to spend limited resources.
Biden’s oft-repeated, folksier formulation
is “show me your budget, and I’ll tell you
what you value.”
If present trends continue, a Demo-
cratic-controlled Washington will reveal
these preferences: a permanent 21 per-
cent corporate tax; a minor boost, at best,
to tax-system equity; time-limited,
scaled-back health-care and family leave
support; and a grab bag of green energy
subsidies. The bill may be “paid for” only
in the same gimmicky sense as the pend-
ing bipartisan infrastructure bill, with its
“pension smoothing” and oil stockpile
sales. Who voted for that in 2020? Who
would have?CHARLES LANEOn taxes, the Democrats’ plan
looks a lot like the Trump plan