Biden Tax-Increase Agenda Revived as Democrats Win Senate
Georgia victories give president-elect a chance to implement policies that had looked dead
WASHINGTON—Democratic control of the Senate gives President-elect Joe Biden a much stronger chance of raising taxes on corporations and high-income households.
Until this week’s Georgia runoff elections, Mr. Biden’s plans for tax increases were running into solid opposition from the Republican-controlled Senate. But now, Democrats will hold the White House, Senate and House simultaneously for the first time in more than a decade, and they are poised to use that power.
During his presidential campaign, Mr. Biden proposed raising taxes on corporations, estates and high-income households, reversing key parts of the 2017 tax cuts passed by Republicans and reprising policies that the Obama administration couldn’t get through Congress. Democrats had spent the time between November’s election and this week’s runoffs looking at bipartisan compromises and examining what the administration could do unilaterally.
Now, some of Mr. Biden’s ideas are much more likely to become law, said Steve Wamhoff of the progressive Institute on Taxation and Economic Policy, who said that the president-elect’s plans are less far-reaching than some Democratic alternatives and are broadly popular with the public.
“The issue was always, could Democrats get something on the floor? And the answer to that is now clearly ‘yes,’” Mr. Wamhoff said. “Biden did win after campaigning on raising taxes on corporations and raising taxes on the rich.”
Even so, Democrats face a series of tough challenges to turn those proposals into law with narrow legislative margins, a weak economy and a still-raging pandemic. The results might look quite different from the campaign-trail outlines, and the slim majorities may yield less than the $3 trillion in tax increases that Mr. Biden sought.
The Senate will be divided 50-50, and Democrats will have Kamala Harris breaking ties as vice president. That means they can’t lose a single vote, pushing them to look for policies that unite progressives eager to address income inequality and moderates worried about the effects of tax increases on the economic recovery. The same dynamic holds in the House, where Democrats have a slim margin.
“One vote is a pretty narrow majority,” said Mark Mazur, a former Obama administration official who is now director of the Tax Policy Center, a Washington research group. “It’s going to be a matter of persuading people. But at least you have a chance.”
Mr. Biden has said repeatedly—and reiterated Wednesday—that he wants to work with Republicans. But unlike other policy areas, tax changes can pass with a simple majority of senators, instead of the 60-vote majority often needed for most other legislation. Democrats will face pressure from their base to deliver.
The likely result: Up to $2 trillion worth of tax increases over the next decade, says Donald Schneider, an economist and former House Republican aide at advisory firm Cornerstone Macro. That is shy of what Mr. Biden proposed but still a significant bump in federal revenue to pay for new programs and targeted tax cuts and far beyond what could happen if Republicans had held the Senate.
“It makes an enormous difference,” said Republican economist Douglas Holtz-Eakin, a former director of the Congressional Budget Office.
Democrats may attempt to mesh these longer-term plans with their efforts to provide tax cuts and other economic relief during the coronavirus pandemic. Sen. Chuck Schumer (D., N.Y.), who is poised to be majority leader, said Wednesday that one of the party’s first moves would be to authorize the $2,000 stimulus payments that were blocked in the waning days of last year.
During the presidential campaign, Mr. Biden proposed more than $3 trillion of tax increases over a decade to raise revenue to pay for some of his spending plans, according to the Tax Policy Center. That includes initiatives on the environment and health care.
For corporations, he would raise the tax rate to 28% from 21%, impose a minimum tax on companies with lower effective tax rates and increase taxes on U.S. companies’ foreign earnings.
Households making more than $400,000 would see their tax rates go up under the Biden plan, and he would raise the top rate to 39.6% from 37%. He would also limit deductions and raise payroll taxes for that group, though his proposed payroll-tax changes may not qualify for the fast-track rules to avoid a Senate filibuster.
He would also change how assets are taxed at death. Currently, people who die with unrealized gains don’t have to pay capital-gains taxes, and their heirs only have to pay on gains after the original owner’s death. Mr. Biden would apply capital-gains taxes to those increased asset values at death. The highest-income households would pay capital-gains rates roughly equal to those for ordinary income.
Sen. Ron Wyden (D., Ore.), the likely Finance Committee chairman, has a different approach to the same issue, calling for annual taxes on unrealized gains. Democrats may end up going with a more modest capital-gains tax rate increase instead, Mr. Schneider said.
Mr. Biden also proposed some targeted tax cuts. Notably, he called for expanding the child tax credit to $3,000 from $2,000, adding $600 for young children and making those payments monthly instead of once a year in tax refunds. He also proposed tax credits for caregivers, renters and first-time home buyers.
House and Senate Democrats also back those child tax credit expansions. And Rep. Richard Neal (D., Mass.), chairman of the House Ways and Means Committee, has been preparing to advance infrastructure legislation and changes to encourage retirement savings, both areas that could be bipartisan but could also move as part of Democrats’ efforts.
Democrats may also try to cut some taxes for high-income constituents by repealing the $10,000 limit on state and local tax deductions. That is important to Mr. Schumer and lawmakers from high-tax states such as New York and New Jersey. But other Democrats, including progressives and those from states without income taxes, may object.
Democrats will have to choose which tax policies to pursue first. They will grapple with the complicated design questions to put details to the campaign rhetoric. They will have to figure out when any new taxes should take effect—retroactively for this year or prospectively as the economy recovers.
They will do all of this amid a global pandemic in a situation where any member’s absence or illness can change the balance of power.
“In both houses of Congress, it’s going to be so tight as to defy description, and everything has the chance to fall apart,” Mr. Holtz-Eakin said.
Democrats likely won’t wait until the economy is on surer footing to pass their tax increases, though they may delay the start dates of those policies until 2022, Mr. Schneider said.
“You have an opportunity to legislate,” he said. “You’re going to do it.”
Millions set to benefit from leasehold property reforms
Owners of properties in England could save ‘tens of thousands’ on the cost of extending leases
Millions of leasehold homeowners will be given the right to extend their leases to 990 years with zero ground rents under major government reforms to English property law.
Robert Jenrick, housing secretary, announced plans on Thursday to bring forward legislation to tackle “cumbersome bureaucracy and additional, unnecessary and unfair expenses” affecting up to 4.5m leasehold owners.
The leasehold system, which has its legal roots in feudal England, has become a source of growing contention as property owners have faced high ground rents and punitive costs for extending a lease or buying out a freehold.
Freeholders may increase ground rents without offering any benefit to leaseholders, which can lead to difficulties when the home is sold. Some developers of leasehold homes resold the rights to collect the ground rents to investors, on terms where rents would double at regular intervals.
“Today’s changes will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder,” the government said.
Under the current law, leaseholders of houses can only extend their lease once for 50 years with a ground rent, but leaseholders of flats can extend as often as they wish at a zero ground rent for 90 years. The plans mean both house and flat owners will be able to extend their lease to 990 years — and an online calculator will give leaseholders an idea of the costs of buying their freehold or extending their lease.
Mark Hayward of Propertymark, which represents estate agents and letting agents, said: “The issue of escalating ground rent on leasehold homes has been a long-term scandal which has left many owners trapped and unable to sell their houses. This new legislation will go a long way to help thousands of homeowners caught in a leasehold trap.”
The government said the reform could save leaseholders tens of thousands of pounds in costs.
The reforms include recommendations made last year by the Law Commission in a report on leasehold law in England and Wales. One is that commonhold could be made the standard alternative to leasehold, allowing flat owners to own their properties on a freehold basis and give them the right to joint ownership and management of a block of flats.
To do this, the government will create a “commonhold council” of leasehold groups, industry and government to prepare people for “the widespread take-up of commonhold”.
The practice of adding “marriage value” to the costs of lease extension or freehold purchase is also to be abolished. If a lease has less than 80 years to run, landlords can currently ask leaseholders to pay 50 per cent of the expected uplift in the property value, on the grounds that the leasehold and freehold interests are worth more when held by one party than when held separately in the hands of a leaseholder and landlord.
The government will determine the calculation of costs, rather than leave it to a negotiation between leaseholder and landlord.
Legislation on ground rents is planned for this parliamentary session, with further legislation on commonhold expected “in due course”. Kerry Glanville, partner at law firm Cripps Pemberton Greenish, said that the government’s decision to make space in a crowded legislative calendar showed its determination to press ahead with leasehold reform. “Clearly the government has got the bit between its teeth on this.”
As a result, though, many leaseholders considering a lease extension or freehold purchase are more likely to wait. “Those contemplating making a claim may put it off until they see the details of the legislation,” Ms Glanville said.
Natasha Rees, partner at law firm Forsters, said: “Given that significant changes will be required to what is very complex legislation, it is likely to take at least a year before [the proposed reform] happens. In the meantime, leaseholders are likely to bide their time.”
The government said it would also extend the restrictions on ground rent to new retirement homes. Mr Hayward of Propertymark welcomed the move, since retirement homeowners often failed to understand the impact of “event fees” — chargeable on events such as selling or subletting — on the costs of owning their home.
The retirement home sector attacked the proposals, arguing the decision would push up purchase prices to fund the extensive communal areas required in retirement developments.
Spencer J McCarthy, chief executive of Churchill Retirement Living, said he was disappointed that the government had reversed an earlier recommendation to give the retirement housing sector an exemption from the ground rent ban.
“At a time when our business already faces a mountain of challenges to continue keeping people safe from Covid-19, this abrupt last-minute change of heart from government will seriously impact our ability to provide older people across the country with the specialist housing they need.”
UK’s biggest nightclub operator sold for £10m
Deltic chief says business was worth £80m before pandemic pushed it into administration
Deltic, the UK’s largest nightclub operator, was bought by the Scandinavian nightlife group Rekom for just £10m, roughly an eighth of its pre-pandemic value after it came close to running out of cash as a result of the coronavirus crisis.
According to an administrator’s report published on Thursday, Deltic had £896,400 in cash but faced rent and tax arrears of £17m and was burning through about £1m a month with all of its 52 sites closed.
Rekom was one of four bidders for the company, which included the private equity group Greybull, the bar operator Shoreditch Bar Group and Deltic’s existing shareholders. The takeover was confirmed in December.
Peter Marks, Deltic’s chief executive, said it had been a “crazy situation where we had a business that was worth £80m that was sold for £10m”.
The business, which operates popular student clubs such as Pryzm and Atik, put itself up for sale in October after missing out on the majority of government support packages available during the pandemic due to its size and balance sheet.
The nightclub sector and licensed sexual entertainment venues are the only two industries that have been permanently closed under government mandate since lockdowns were imposed in March.
Due to the restrictions Deltic had only been able to reopen 10 per cent of its total floor space, which it ran as bars rather than nightclubs. It had already cut 1,000 jobs before going into administration.
Rekom, which operates 137 sites across Denmark, Finland and Norway, has agreed to take on 42 of Deltic’s nightclubs and the majority of its 1,466 employees, with 155 now facing redundancy due to the closure of 10 sites.
As well as paying £10m for Deltic, it will also have to fund losses of about £700,000 a month while nightclubs are closed.
Adam Falbert, Rekom’s chief executive, said at the time of the sale that the company had been “looking at the UK market for the past few years as part of our ambition to become one of the largest pan-European nightlife groups”.
“When the opportunity came to take over a strong and well-run group like Deltic, it was a question of finding the right set-up to make it happen,” he added.
Mr Marks said that after the integration with Rekom, the group would start looking at expanding through acquisitions thanks to the financial backing of Rekom’s majority shareholder, the Danish private equity firm Catacap.
Before the pandemic, Deltic had been undergoing a strategic overhaul after its new drinking, dining and club brand Eden failed to gain traction with customers.
According to the most recent accounts available, for the year ending February 2019, underlying earnings before interest, tax, depreciation and amortisation declined roughly 30 per cent to £11.1m on turnover of £101.8m.
Deltic’s administration was overseen by the consultancy group BDO who took fees of £275,000.
Gapping down
In reaction to earnings/guidance:
- BBBY -13.3%, THTX -4.2%, LNDC -3.7%, REVG -2.6%, RGP -2%, LNN -1.7%
Other news:
- DBVT -11.3% (changes U.S. reporting status and final approval of global restructuring process)
- PLYA -7.1% (prices 35 mln shares of common stock by co and selling shareholders at $5.00 per share)
- MPW -4.8% (to acquire £800 mln in behavioral hospitals; also prices offering of 32 mln shares of common stock at $20.05 per share)
- DMTK -4.6% (prices offering of 4,237,288 shares of its common stock at $29.50 per share)
- HARP -4.5% (prices offering of 5,882,352 shares of its common stock at $17.00 per share)
- ADC -3.1% (prices offering of 3 mln shares of common stock for gross proceeds of approximately $195 mln)
- INN -3% (launches convertible notes offering)
- RGNX -2.4% (stock offering)
- BLNK -1.9% (files for 5 mln share offering; also files for mixed securities shelf offering)
- NEO -1.8% (prices offering of 4,081,632 shares of its common stock at $49.00 per share and $300 mln of 0.25% convertible senior notes due 2028)
- VNE -1.7% (updates outlook)
- AR -1.1% (prices 31.4 million shares of its common stock at $6.35/share to certain holders of its 4.25% Convertible Senior Notes due 2026)
- ARGX -1.1% (ZLAB and ARGX announce collaboration for efgartigimod in Greater China)
Analyst comments:
- MMM -1.3% (downgraded to Underperform from Neutral at BofA Securities)
- SPWH -1.1% (downgraded to Neutral from Outperform at Credit Suisse)
- WEN -0.9% (downgraded to Perform from Outperform at Oppenheimer)
- RACE -0.7% (downgraded to Neutral from Buy at Citigroup)
- KTOS -0.7% (downgraded to Hold from Buy at Jefferies)
Gapping up
In reaction to earnings/guidance:
- HIMX +9.3%, ANGO +4.2%, WBA +3.4%, STZ +3.3%, COLL +1.7%
Other news:
- OXFD +27.1% (to be acquired by PerkinElmer (PKI) for $22.00 per share in cash)
- PLUG +23.1% (to form partnership with SK Group to accelerate hydrogen as energy source in Asian markets; SK Group will make a $1.5 bln investment in PLUG)
- CVAC +15.1% (Bayer AG and CureVac to collaborate on COVID-19 vaccine candidate CVnCoV)
- DTIL +7.6% (announces closing of in vivo gene editing collaboration and license agreement with Eli Lilly and Company (LLY))
- PRSP +7.4% (Veritas Capital discloses 11.7% stake)
- TEN +7% (Carl Ichan discloses 14.99% stake)
- NIU +6.8% (reports Q4 e-scooter sales increased 40.9%)
- ALDX +5.8% (announces positive top-line symptom and sign results from run-in cohort of phase 3 tranquility trial in dry eye disease)
- AFMD +5.1% (provides pipeline and business update; Continued progress for AFM13 and AFM24 clinical studies)
- GLYC +4.9% (announced APL-106 has been granted Breakthrough Therapy Designation from the China NMPA Center for Drug Evaluation for the treatment of relapsed/refractory acute myeloid leukemia)
- AMRN +3.9% (update ahead of JP Morgan conference)
- KZIA +3.6% (announces that the GBM AGILE pivotal study (NCT03970447) has commenced recruitment to the paxalisib arm)
- KALA +3.5% (announced the launch of EYSUVIS 0.25% for the short-term (up to two weeks) treatment of the signs and symptoms of dry eye disease)
- WBA +3.4% (to accelerate pace and scale of VillageMD rollout)
- AQST +3.4% (provides business update; Multiple clinical trials demonstrate that AQST-108 can consistently deliver epinephrine)
- GBIO +3.1% (prices offering of 8 mln shares of common stock at $24.50 per share)
- ALC +2.7% (launches AcrySof IQ Vivity)
- ALNY +2.1% (reports positive topline results from HELIOS-A phase 3 study of vutrisiran in patients with hATTR amyloidosis with polyneuropathy; met primary and all secondary endpoints at 9 months)
- CHMA +1.9% (provides corporate update and previews expected 2021 milestones)
- CI +1.6% (initiates dividend of $1.00/sh)
- EDUC +1.4% (reports Dec revenue)
- GNL +1.3% (announces that it collected 97% of the original cash rent due for the fourth quarter of 2020 as of January 6, 2021)
- MELI +1.3% (has entered into privately negotiated transactions to repurchase approximately $440 mln principal amount of its outstanding 2.00% convertible senior notes due 2028)
- USB +1.2% (to acquire Debt Servicing client portfolio of MUFG Union Bank)
- TMUS +1% (provides Q4 operating metrics), .
Analyst comments:
- MOS +3.6% (upgraded to Overweight from Neutral at JP Morgan)
- TSLA +3% (upgraded to Sector Perform from Underperform at RBC Capital Mkts)
- JPM +2.2% (upgraded to Buy from Neutral at BofA Securities)
- FL +2.1% (upgraded to Outperform from Market Perform at Cowen)
- WFC +1.9% (upgraded to Buy from Hold at Jefferies)
- ANET +1.4% (upgraded to Buy from Neutral at Rosenblatt)
- CS +1.3% (upgraded to Overweight from Neutral at JP Morgan)
- MCD +1.2% ( upgraded to Outperform from Perform at Oppenheimer)
Banks Still Have Cards to Play in Payments Race
JPMorgan Chase’s deal for a loyalty and rewards business is the latest example of payment providers betting on the payment itself being just a part of the value chain
With people traveling less and spending more on digital platforms, banks with big credit-card units may have lost some relative luster with investors. But they still have cards to play.
JPMorgan Chase JPM 4.70% recently acquired the global loyalty division of cxLoyalty Group Holdings. That business serves credit-card rewards programs and helps connect them to a number of ways that rewards can be used.
The move suggests in part that JPMorgan Chase sees travel and cards continuing a long-running association, and the deal includes travel services. Americans may have started using different cards or scrambled to find other uses for points in 2020, and lenders have responded by upping rewards for activities such as grocery shopping and streaming. But many firms are betting that a pent-up desire for escape still exists, and spenders will be eager to use points as much as ever once more movement is feasible.
The deal is also notable for coming during the emergence of many technology players in payments and rewards. PayPal has been beefing up its platform that gives its users ways to use their card points, and investing in other inducements to shop, such as the digital coupon-clipping service Honey. Meanwhile, part of the buy-now-pay-later platform Afterpay’s success is that shoppers can find merchants through Afterpay, rather than just the other way around. The company said this week that referrals to partner merchants this holiday season more than doubled versus the prior year through its Shop Directory service. Afterpay also has a rewards program for users related to on-time payments.
A risk of this emerging payments ecosystem to card issuers is that they become somewhat secondary to the e-commerce value chain. Even if people will be traveling again, they might be shopping for that travel quite differently. By buying a rewards company, JPMorgan Chase can have a broader role, with a two-sided platform connecting customers to a wider network of merchants and ways to use rewards.
The pandemic has shaken up spending and travel, and investors have bet that digital upstarts will be big winners. JPMorgan Chase’s deal is a reminder that the card giants won’t stay in lockdown.
Early premarket gappers
- Gapping up:
- PLUG +21.4%, CVAC +16.3%, EDUC +10.4%, VKTX +9.9%, PRSP +7.4%, HIMX +7.2%, KZIA +5.8%, AMRN +4.7%, HELE +3.2%, ALC +2.5%, NIU +2.5%, WBA +2.3%, CHMA +1.9%, TEN +1.8%, COLL +1.7%, USAS +1.5%, TMUS +1.4%, GNL +1.3%
- Gapping down:
- DBVT -11.6%, BBBY -10.6%, DMTK -8.9%, PLYA -8.7%, HARP -6.9%, RGP -6.2%, INN -5.5%, SAR -4.1%, MPW -4%, LNDC -3.7%, RGNX -2.4%, VNE -2.3%, BLNK -2.1%, ADC -1.8%, AR -1.6%, SGMO -1.5%
Early premarket gappers
- Gapping up:
- PLUG +21.4%, CVAC +16.3%, EDUC +10.4%, VKTX +9.9%, PRSP +7.4%, HIMX +7.2%, KZIA +5.8%, AMRN +4.7%, HELE +3.2%, ALC +2.5%, NIU +2.5%, WBA +2.3%, CHMA +1.9%, TEN +1.8%, COLL +1.7%, USAS +1.5%, TMUS +1.4%, GNL +1.3%
- Gapping down:
- DBVT -11.6%, BBBY -10.6%, DMTK -8.9%, PLYA -8.7%, HARP -6.9%, RGP -6.2%, INN -5.5%, SAR -4.1%, MPW -4%, LNDC -3.7%, RGNX -2.4%, VNE -2.3%, BLNK -2.1%, ADC -1.8%, AR -1.6%, SGMO -1.5%
What is sovereignty?
Brexiters have got the autonomy they craved, but what exactly is it good for?
So it got done. Brexit was consummated at the start of the year, with Britain leaving not just the EU (that happened in January 2020) but also the EU’s customs union, its single market, a number of other areas of co-operation, and most of the legal obligations and entitlements that went with them. (There are still some past bills due and, of course, Northern Ireland continues to follow many EU rules in return for better market access and a no-friction land border.)
For a lot of Brexit supporters, this amounted to the UK regaining its sovereignty, even if at an economic cost (though most of them think there wasn’t any). Which makes this a good time to leave the economics aside and ask the deeper question of what sovereignty is. To judge whether sovereignty ought to — or even needs to — be traded off against the economic and political benefits of being part of a continental free movement area, we had better have a sense of what is valuable about it, and of how, if at all, that value is enhanced by leaving the EU. And to be able to spell that out, we, in turn, need a good definition of sovereignty.
For the headiest Brexit supporters, what is at stake is nothing less than “freedom”. But there are few things Britons are now freer to do than before, and quite a few they are less free to do. And freedom is not incompatible with legal constraints. Individuals are not less free just because they live under a system of binding laws; if the laws are any good at all, people are freer — they can do more things they want and are less threatened by those who would stop them — than they would be in conditions of lawlessness.
It is better to see sovereignty as autonomy — the ability to make decisions on one’s own — after all, the one thing the UK has acquired since the start of the year is greater space to make laws unilaterally (less so for Northern Ireland). That is just what the word autonomy means: “setting laws for oneself”. Give it a moment’s thought, and it is clear that even though autonomy and freedom are related, one can be more autonomous but less free — if you get to decide unilaterally among fewer options — and one can gain more freedom by giving up autonomy. The latter is, of course, the reason why all other EU member states remain members: they can achieve more of what they want for themselves by making decisions together. The same can be said for sovereignty and power — all but the biggest states can have more power if they decide things together.
Anyone is free to prefer autonomy to either effective freedom or power to achieve substantive outcomes. For the New Year’s Eve edition of the Financial Times, I wrote about how Britain’s relationship with the single market traces the British Conservative party’s changing view of that trade-off: the single market is what it is in large part thanks to Margaret Thatcher.
But honest does not mean well-reasoned. The notion of sovereignty that drives Euroscepticism in Britain is a peculiarly absolutist one. It is also peculiarly British, dating back to Thomas Hobbes’s Leviathan. It sees the autonomy of the state as something that can neither be shared nor divided — state power must be concentrated in a single point or it is not sovereign at all. The view commonly held elsewhere that sovereignty can be “pooled” to be exercised more efficiently is philosophically rejected by British Eurosceptics not just of the right but the “Lexit” proponents of the left.
But this way of thinking about sovereignty makes the concept a poor guide to political choices. The first implication is that if sovereignty does not allow for degrees, it is hard to know where to stop. Any legally binding limit is incompatible with this sort of sovereignty. The EU-UK trade deal, which Brexiters laud for restoring sovereignty, for example, prevents the UK from choosing its tariffs on imports from the EU. And it is not just international treaties. Domestically, too, it is hard to see how this sort of sovereignty could be shared or spread, so it would seem to rule out devolution, as well as the separation of powers. And it is incompatible with a written constitution and the notion of inviolable individual rights, which define the limits of state power (since on this view of sovereignty there can be no such limits).
One has to admit that when the current UK governing party intimates it does not want the executive to be constrained by judicial review of whether it is acting lawfully — or even by a parliament that disagrees with it! — it is at least being consistent. But the logical destination of this line of reasoning is very far removed from popular sovereignty or individual people taking back control of their lives.
The second awkward implication is that a view of sovereignty that requires it to be concentrated and undivided cannot by itself say anything about where sovereignty (and over what) should be located. Why should there be unitary sovereignty over the UK, rather than undivided sovereignty over Scotland residing in Edinburgh and over England in London? Or going the other way, why should there not be unitary, undivided sovereignty over all of Europe (or the whole world)? Indeed, the sovereignty purism is at least as compatible with a pan-European super-state than with European nation-states, especially since these have less realistic alternative to entering into treaty commitments with one another than a continental superstate would need to do. And why should sovereignty over Northern Ireland be part of sovereignty over Great Britain rather than of that over the Republic of Ireland? One can advocate a Hobbesian view of sovereignty — but that view gives no reason to think that that sovereignty should be lodged in the UK nation-state. If its logic points towards anything, it is surely an all-powerful global state — the ultimate undivided sovereignty.
Eurosceptic sovereigntists, in other words, must reach for arguments beyond sovereignty itself to make it support their Euroscepticism. But what could those arguments be? They could be instrumental — about what sovereignty allows you to do. But the inconvenient fact is that pooled decision-making (and indeed the separation of powers domestically) makes for better outcomes. Or they could be intrinsic — that unconstrained autonomy is the highest good no matter what. But the notion that we should cherish the ability to do what we want whenever we want it, but not the ability to enter into binding long-term commitments with others, is a world view suitable only for adolescents (and not really even for them). It is utterly unconvincing, yet the closest, it seems, the UK prime minister and his allies have to a governing philosophy.