Poverty & Wealth

How a Widely Beloved Tax Deduction Really Just Benefits the Well-Off and Exacerbates Inequality

National opinion polls show a majority of Americans support the mortgage interest deduction. Yet because of the way this tax subsidy is structured most U.S. homeowners receive very little benefit from it.

(AP Photo/Gene J. Puskar)
(AP Photo/Gene J. Puskar) This May 2, 2012, photo, shows a new home under construction in Bridgeville, Pennsylvania. A nyone who is concerned about the country’s growing inequality crisis should be pushing for reform of the feature of the U.S. tax code known as the mortgage interest deduction. Not only does this wasteful tax subsidy primarily benefit the richest Americans, it also costs the U.S. Treasury between $70 and $100 billion annually in revenue, making it the third largest deduction on the books. National opinion polls indicate that between 60 and 90 percent of Americans support the mortgage interest deduction (MID), which allows taxpayers to deduct interest on $1.1 million in mortgages on primary residences, vacation homes and even yachts. And yet because of the way this tax subsidy is structured most U.S. homeowners receive very little if any benefit from it. Indeed, in its current form, the MID’s biggest beneficiaries are the real estate industry and its wealthiest...

What Judges Know: The Fault for Underfunded Pensions Lies With Politicians, Not Workers

We can’t count on politicians to stick to their word. It’s promising that judges are forcing them to.

(AP Photo/Mel Evans)
(AP Photo/Mel Evans) Union members carry protest signs as they march outside the Mercer County Criminal Courthouse before arguments Wednesday, June 25, 2014, in Trenton, N.J., over New Jersey Gov. Chris Christie's plan to use pension payments to balance the budget. Public employee unions on Wednesday tell the court the current budget has unspent funds that could go toward pensions. A dvocates of gutting public pensions are running into the same wall over and over again. From California to Illinois to New Jersey and beyond, pension gutting efforts are being overturned by judges who recognize that breaking promises to workers isn’t just regrettable, it’s illegal. Pension opponents castigate the courts as the enemy while conveniently ignoring why legal protections exist in the first place—to protect public employees from politicians who spent years playing politics with their retirement savings. For decades, elected officials across the country skipped pension payments, often while...

The Government Program That's Equipping Police Like an Occupying Military Force

A chilling index from the Institute for Southern Studies.

(AP Photo/St. Louis Post-Dispatch, J.B. Forbes)
(AP Photo/St. Louis Post-Dispatch, J.B. Forbes) Protesters raise their hands in front of police atop an armored vehicle in Ferguson, Missouri, on Wednesday, Aug. 13, 2014. This index was originally published by Facing South , a website of the Institute for Southern Studies. ( Click here to subscribe to their newsletter.) Year in which Congress initially authorized the Defense Department to give excess arms and ammunition to law enforcement agencies for counter-drug activities, leading to the creation of what's come to be known as the 1033 program: 1990 Number of law enforcement agencies the program has given equipment to: more than 17,000 Percent of U.S. states with agencies participating in the program: 100 (Photo from the Richland County Sheriff's Department website.) Sheriff Leon Lott of Richland County, South Carolina and members of his department's Special Response Team with the military vehicle they call "The Peacemaker." Value of military equipment the program has transferred...

Listen: Affirmative Action 'Race or Place' Debate on SiriusXM's 'Make It Plain'

The Prospect's ongoing discussion on how to save affirmative action takes to the airwaves with a spirited discussion between Sheryll Cashin and Richard Rothstein.

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Scroll down for audio. When Prospect contributing writer Richard Rothstein penned a critical review of Sheryll Cashin's book, Place Not Race: A New Vision of Opportunity in America (Beacon) , it touched off a debate between the principals in an exchange of letters on The American Prospect website. Mark Thompson, host of the SiriusXM Progress show, Make It Plain , invited the rivals to take their debate live on the August 5 edition of the program. In her book, Cashin argues for a new approach to affirmative action in college admissions, one that gives primacy to circumstances other than race, including family wealth, proximity of the family home to high-poverty areas, and other measures of need. Thompson was joined in moderating the debate by Prospect Senior Editor Adele Stan, who appears on the program on Tuesday nights. Richard Rothstein Richard Rothstein is a Prospect contributing editor, a research associate at the Economic Policy Institute, and senior fellow at the Chief Justice...

Surprise! North Carolina Cuts to Jobless Benefits Did Not Help Workers

Republican leaders argued that rolling back unemployment benefits would increase employment in the Tar Heel State. Nice try.

AP Photo/Allen G. Breed
(AP Photo/Allen G. Breed) Julie Banner, right, chats with Rebekah Lowe outside the state unemployment office in Cary, North Carolina, on Thursday, Jan. 8, 2009. This article and accompanying interactive chart were first published at the website of the Economic Policy Institute . U nemployment insurance (UI) is a vital part of America’s social safety net, providing benefits to eligible workers who have lost a job through no fault of their own. The system is jointly funded by federal and state payroll taxes, but within broad guidelines from the Department of Labor, states have considerable flexibility in deciding benefit eligibility, how much and for how long beneficiaries are paid, as well as the tax structure for funding the state portion of the program. While most states offer a maximum of twenty-six weeks of UI benefits, the historic magnitude and duration of unemployment brought on by the Great Recession prompted Congress to implement federal extensions of unemployment benefits,...

Thirsty Detroiters Demand End to Water Shut-Offs

Surrounded by the Great Lakes, home to 20 percent of the world’s fresh water, Detroit faces a crisis that is not only paradoxical; it’s complicated.

AP Photo/Detroit News, David Coates
(AP Photo/Detroit News, David Coates) Protesters march over the controversial water shut-offs Friday, July 18, 2014, in Detroit, Michigan. UPDATE: On Thursday, August 7, Mayor Mike Duggan announced a ten-point plan to address the water department's much despised shut-off policy. I n Michigan’s largest city, a water crisis has been raging for months. Since spring, 17,000 city residents have had their water shut off by the Detroit Water and Sewerage Department (DWSD) for unpaid water bills. Now living in unsanitary conditions, citizens in homes without running water can’t even flush a toilet. Deemed by public health officials to be living in inadequate conditions, many parents in homes without water are sending their children to live with family or friends for fear of losing their sons and daughters to Child Protection Services . For the elderly and the ill, lack of home access to water can be fatal. Last week, after weeks of negative news coverage, Detroit Emergency Manager Kevyn Orr...

Cold Porridge For Regular People: The Myth of the Goldilocks Economy

This article originally appeared at The Huffington Post . T he economy grew at an impressive rate of four percent in the second quarter of this year, according to a government report released on Wednesday. But the stock market promptly tanked. The Dow lost more than 317 points Thursday and another 70 points Friday. What gives? Financial markets like it when the economy grows fast enough to signal that the recovery is continuing—but not so fast that labor markets might tighten and workers get more bargaining power to get raises. Markets also worry that if the economy grows too fast, the Federal Reserve might pull back from its policy of low interest rates. Not to worry, brave investors. The Labor Department weighed in with a report on Friday, revealing that the economy added only 208,000 more jobs in July, down from the June performance. The number of long-term unemployed was basically unchanged. Likewise the rate of labor-force participation. And the percentage of people employed...

Liberal Heroes Miss the Mark in Today's Times Columns

(AP Photo/ Francisco Seco)
New York Times columnist Charles Blow sure blew one this morning and, for good measure, so did Paul Krugman—our two most reliably liberal and intelligent columnists! Blow’s subject was the do-nothing Congress. Ordinarily thoughtful and original, this time Blow fell into the media cliché of assigning symmetrical partisan blame for Congressional inaction, as if the two parties were equally culpable. The piece was full of Blow’s signature: accurate statistics. This Congress has passed only 108 pieces of substantive legislation, the lowest in decades, he reports. It was in session an average of only 28 hours a week. Citing the usual cause of “polarization,” Blow indignantly concluded: “Legislating is only a hobby for members of this Congress. Their full time job is raising hell, raising money and lowering the bar of acceptable behavior.” Excuse me, but the problem is not “Congress.” One party—the Democratic Party— behaves quite normally, seeking to do the public’s business. The other...

Affirmative Action, Race or Class: An Exchange

Should universities shift their recruitment focus away from race and onto poor neighborhoods?

AP Photo/Susan Walsh
T o the Editor: I wish to respond to Richard Rothstein’s critical review of my book, Place, Not Race , in your magazine. While I appreciate that he concludes that the book is “worth reading” and that my proposals are possibly even a “wise” response to the political and legal assault on affirmative action, I believe he mischaracterizes my argument in ways that would be misleading to anyone who doesn’t bother to read the book. Rothstein insists throughout the review that I focus exclusively on low-income African-Americans while ignoring middle class ones. That is not true. As I argue in the book, only about 30 percent of black children live in middle class neighborhoods and not all of these children are poor. As Rothstein himself points out, proximity to poverty is a common, lived experience for African American families of varying incomes. If universities were to follow my proposal of giving special consideration to any high achiever that lives in a neighborhood or goes to a school...

Hillary for Liberals: A Conversation With Walter Shapiro

AP Photo/Randy Snyder
AP Photo/Justin Hayworth Campaign buttons are ready for distribution at an Iowa kickoff event for the national Ready for Hillary group led by Craig Smith, senior adviser to the Ready for Hillary group, in Des Moines, Iowa, Saturday, Jan. 25, 2014. Ready for Hillary is a so-called super PAC building a national network to benefit Clinton if she decides to seek the presidency in 2016. The gathering of Iowa Democrats included the state chairs of both Clinton and President Barack Obama's 2008 campaigns. A s a reporter and columnist for Time , Newsweek , the Washington Post , USA Today , Esquire , Salon , and other publications, Walter Shapiro has covered nine presidential elections and the nation’s politics for four decades. He is currently a fellow at the Brennan Center for Justice at New York University and a lecturer in political science at Yale while he finishes a book about his great-uncle, a vaudevillian and con man who once swindled Hitler. Shapiro is also an accomplished Hillary-...

There Is No Border Crisis: There Are Frightened Children, Fleeing Death

America’s response to child refugees from Central America is downright shameful.

AP Photo/Eric Gay
AP Photo/Eric Gay In this June 25, 2014 file photo, a group of immigrants from Honduras and El Salvador who crossed the U.S.-Mexico border illegally are stopped in Granjeno, Texas. Tackling what he has called a humanitarian crisis, President Barack Obama on Tuesday, July 8, 2014 asked Congress for $3.7 billion to cope with a tide of minors from Central America who are crossing the U.S. border, causing a political firestorm in Washington. This article originally appeared at BillMoyers.com , the website of the Moyers & Company television program. T hose seething with so much rage and xenophobia that they’d hurl ugly epithets in the faces of children fleeing bloody violence in Central America bring shame to the whole nation. But the response of mainstream America hasn’t been much better. The media’s characterization of what’s going on at our southern border as a “crisis,” politicians pointing fingers at one another and Washington’s refusal to provide the resources necessary to care...

Go Ahead, Bash My City: I Can Take It

Here's the real Cleveland joke: the utter dissonance of the GOP celebrating its platform of inequality in this working-class, majority-black, decidedly Blue city, where Republican attempts to suppress minority votes pose a regular problem.

AP Photo/Mark Duncan
AP Photo/Mark Duncan The Progressive Field scoreboard welcomes back LeBron James, during a baseball game between the Chicago White Sox and the Cleveland Indians on Friday, July 11, 2014, in Cleveland. James announced earlier in the day he would return to play for the Cleveland Cavaliers after four years in Miami. L ast week was a big week for Cleveland, Ohio. Two big wins were handed the jewel of Northeast Ohio, when LeBron James and GOP leaders chose Cleveland to be the site of hoped-for future victories. Cleveland, of course, can’t make national attention without attracting the requisite Cleveland jokes. D.C. journalists made snarky complaints about having to spend time in a city where people are nice and Budweisers cost less than $7. Most of these writers, surely, have not spent time in Cleveland . They’ve just heard the jokes. As Yakov Smirnoff said, “In U.S. you make fun of Cleveland. In Russia, we make fun of Cleveland.” The Cleveland Joke has existed for decades, and in the end...

This Is What Happened When I Took the MTA Bus to Pick Up Food Stamps

A response to a much-chattered-about article by an upper-middle-class white woman who was appalled to find herself judged when she applied for food stamps.

5 Towns Jewish times
M r. Brown folded his large hands and gleamed at me with a placid smile. Then, suddenly, he said, “You have to work!“ His tone was that of a father scolding an errant teenager. “If we give you money, you have to work!” I managed the seething anger brought on by this exchange, and compounded by the hunger I felt after having waited a few hours for my turn at this encounter, not to mention the set of events that led up to me applying for the Supplemental Nutrition Assistance Plan (SNAP, a.k.a. food stamps) and Temporary Assistance for Needy Families (TANF). “I have a job,” I managed to say, “it’s part-time and I’m actively looking for a full time job.” I pointed to the printed e-mails of interview appointments, job applications and cover letters. He waved away my evidence and continued down his checklist. I could tell that he gave this speech regularly and had no interest in a rebuttal. I slumped down in the chair, defeated, feeling solidarity with the woman who was escorted out of the...

Minimum Wage For Tipped Workers Hasn’t Increased Since the Fall of the Soviet Union

A new report from the Economic Policy Institute shows the ravages of an artificially depressed wage on food servers and other workers.

Newscast Limited via AP Images
This article originally appeared at the website of the Moyers & Company television program. I n 1991, the US invaded Iraq for the first time. That year, the Soviet Union would dissolve into 15 independent states. Emma Roberts was born. Dances with Wolves won the Oscar for Best Picture, and Bryan Adams’ “Everything I Do, I Do It For You” topped Billboard’s chart as the year’s top hit. It also marked the last time that the federal minimum wage for tipped workers was increased—by a whopping four cents, from $2.09 per hour to $2.13. At the time, the minimum for tipped workers was half of the overall floor of $4.25. Today, it stands at just 29 percent of the regular minimum wage (which, at $7.25 per hour, is already well below its real peak value of $10.71 in 1968). On Thursday, Sylvia Allegretto and David Cooper released a report for the Economic Policy Institute detailing who these workers are, how many of them are struggling to make ends meet, and debunking a few common myths about...

Justice Samuel Alito's Deep Roots in the American Right

He's the most pro-corporate jurist on the Supreme Court. So decisions that grant companies religious rights or take aim at labor unions come quite naturally to him.

AP Photo/Manuel Balce Ceneta
AP Photo/Manuel Balce Ceneta) U.S. Supreme Court Associate Justice Samuel Alito Jr., delivers his remarks during a Federalist Society dinner gathering, Thursday, Nov. 16, 2006, in Washington. This article originally appeared at The Huffington Post . S upreme Court Justice Samuel Alito ended this Supreme Court session with a bang, writing the majority opinion in two cases that gave for-profit corporations the right to make religious liberty claims to evade government regulation, and set the stage for the fulfillment of a central goal of the right-wing political movement: the destruction of public employee unions. Neither of the decisions was particularly surprising. Samuel Alito is the single most pro-corporate Justice on the most pro-business Court since the New Deal. Still, Alito's one-two punch was another extraordinary milestone for the strategists who have been working for the past 40 years to put business firmly in the driver's seat of American politics. Many would suggest that...

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