We fail to appreciate the depth of thought that has gone into House Speaker Paul Ryan’s bill repealing and replacing the Affordable Care Act, which may be brought to a vote today if there are enough Republican votes to pass it.
Well, not the original, pre-amendment bill, which would reduce the number of Americans with health insurance by 24 million and cut taxes on the wealthiest Americans by nearly half a trillion dollars over the next decade.
No, what’s elevated the bill to the forefront of contemporary physics is an amendment pushed by House Ways and Means Committee Chair Kevin Brady, a Texas Republican. Ryan’s original legislation repealed the 3.8 percent tax that Obamacare imposed on capital gains, dividend, and interest income for individuals with annual incomes of $200,00 or higher, or families with annual incomes of $250,000 or more, which Obamacare’s authors put into the legislation to help fund the ACA subsidies and Medicaid expansion. In the original Ryan bill, the repeal of this tax was to take place in 2018. As now augmented by Brady’s amendment, the bill makes that tax cut retroactive to January 1 of this year—taking effect, that is, nearly three months ago.
Why the rush to repeal? As The Wall Street Journal reported, Republicans “say the 2017 repeal date would encourage investors to avoid waiting to make decisions. Without the change, some people would sit on unrealized gains for months as they wait for the capital-gains rate to go lower.” (Later this year, a Republican bill to lower the capital gains tax rate even further will come before Congress.)
Before we get to the more intellectually challenging issue of how a tax cut announced in March can increase investment during the preceding January and February, let us devote just one paragraph (this one) to the more prosaic general idea that lowering the capital gains tax rate increases investment and jobs at all. In brief, it no longer does, if it ever did. As University of Chicago economist Simcha Barkai recently demonstrated, since 1984 the share of corporate revenues going both to wages and capital investment has declined by more than 6 percent apiece, while the share going to un-reinvested profit—chiefly, to share buybacks and dividends—has increased by more than 13 percent. In today’s America, it turns out, tax cuts on investment income don’t reward investors for creating jobs—they actually reward them even though investors' demands for payouts now come at the expense of jobs and corporations’ capacity to create them.
But I digress. Where the Brady-backed amendment enters the realm of high and speculative physics is in its treatment of time. By moving the date of the Ryan bill’s repeal of the ACA investment tax to three months ago, and by arguing that this will “encourage investors” to go ahead and invest, the Brady amendment can mean one of only two things. The first is that the argument for it is deceptive. That’s because the stated raison d’etre for the cut, namely to increase investment, cannot be achieved retroactively. Any reduction in taxes on income derived from investments during 2017’s first 91 days—the number of days between the time the tax cut would take effect and the first day it became public knowledge—cannot possibly be said to have increased investment during those 91 days. Making the tax cut retroactive, under this interpretation, is simply a give-away to the rich that cannot possibly increase investment over a time period that’s already come and gone. But it sure as hell can make wealthy investors cuddle up even more lovingly with Brady, Ryan, and their peers when Republicans come knocking for more campaign contributions.
But not wishing to think ill of our elected representatives, we are compelled to consider the alternative explanation of making this tax cut retroactive—one in which retroactivity will, indeed, create higher rates of investment during the past several months and simultaneously preserve the honor of Brady, Ryan, et al. This second explanation is simply this: Under the AHCA, as now amended, time moves backward.
Improbable, you say? Impossible? That’s not what leading physicists think. “Whether through Newton’s gravitation, Maxwell’s electrodynamics, Einstein’s special and general relativity or quantum mechanics, all the equations that best describe our universe work perfectly if time flows forward or backward,” Scientific American’s physics editor Lee Billings has written.
And work by physicists from Oxford, the University of New Brunswick, and the Perimeter Institute for Theoretical Physics, published in Physical Review Letters, (which, for all we know, Brady and Ryan read avidly) posits a “mirror universe” to ours, where time does indeed move backward. In an interview with Quartz, one of the paper’s authors argued “that for any confined system of particles—a self-contained universe such as our own, for example—gravity will create a point when the distance between particles is minimal. When the particles then expand outwards, they do so in two different temporal directions. Oxford physicist Julian Barbour and his colleagues created a simplified 1,000 particle point model of the universe showing this dual expansion, with gravity creating structure in both directions.”
“Time is not something that pre-exists,” Barbour said. “The direction and flow of time we have to deduce from what’s happening in the universe. When we look at it that way, it’s natural to say that time begins at that central point and flows away in opposite directions.”
Or, as Barbour and his colleagues put it in the summation to their Physical Review Letters article:
It is widely believed that special initial conditions must be imposed on any time-symmetric law if its solutions are to exhibit behavior of any kind that defines an “arrow of time.” We show that this is not so. The simplest nontrivial time-symmetric law that can be used to model a dynamically closed universe is the Newtonian N-body problem with vanishing total energy and angular momentum. Because of special properties of this system (likely to be shared by any law of the Universe), its typical solutions all divide at a uniquely defined point into two halves. In each, a well-defined measure of shape complexity fluctuates but grows irreversibly between rising bounds from that point. Structures that store dynamical information are created as the complexity grows and act as “records.” Each solution can be viewed as having a single past and two distinct futures emerging from it. Any internal observer must be in one half of the solution and will only be aware of the records of one branch and deduce a unique past and future direction from inspection of the available records.
Anyone reading the amended AHCA must surely see the influence of this time flexibility looming large over Ryan’s and Brady’s thinking. It clearly illuminates how amending the bill in mid-March can actually increase investment during the preceding January and February, and pleasantly dispels any notion that the authors are simply pandering to rich campaign contributors by conferring still-greater riches upon them.