Poverty & Wealth

The New Freedom Riders

A multiracial group of young people are fighting to end the NYPD's stop-and-frisk program.

(Flickr/Tim Drivas)
Two things struck William Rivera about the 30 protesters who, after an hour of chanting and speechifying to cameras, cops, and the curious, were now marching deeper into the Bronx on an overcast January afternoon. The first was that somebody was finally speaking out against the New York Police Department’s stop-and-frisk policy, a tactic in which officers pat down and question people on the street without a warrant. The second was that a lot of those somebodies were white. “Hell, yeah, I’m surprised that white people come out here fighting for us,” says Rivera, 24. Police, he says, stop him three or four times a week, and he now automatically assumes the “shirt up” position whenever officers cross his path. “I know it’s not normal or right that I accept that, but it’s how we have to live,” Rivera says of his South Bronx neighborhood, where talking back to cops, he adds, is not an option. “Maybe if the government or the police see their own people helping out, maybe they’ll pull back...

Republican Haves and Have Nots

(AP Photo/Charles Krupa)
Republicans have reached their 1984. I don’t mean this in the Orwellian sense, though Republicans have more than their share of Orwellian impulses. Rather, I mean that the kind of divisions that have characterized Democratic presidential primaries since the 1984 contest between Walter Mondale and Gary Hart have now popped up in GOP primaries as well: This year, Republicans are dividing along lines of class. According to data compiled by the Wall Street Journal , in all the states that have voted thus far, Mitt Romney has won 46 percent of the counties with incomes higher than the statewide median , and just 15 percent of those with incomes beneath the statewide median. Rick Santorum, by contrast, has won 39 percent of the counties with higher income, and 46 percent of those with lower income. These numbers—a product of the kind of residential-sorting-by-class that Charles Murray documents in his new book, “ Coming Apart ”—reinforce exit polling that shows Romney’s strongest supporters...

No Such Thing as an Arizona Free Lunch

(Flickr/USDAgov)
Subsidized school lunches always seemed like a government program most people could get behind. The federal program gives food to low-income children. Giving food to children who live in poverty—hard to argue with that idea. In 2010, I was covering a state legislative race out in East Texas. A Tea Party candidate explained to me that free school lunches are bad for society, because were it not for the government program, parents would provide food for their kids on their own. If the kids still couldn't get food, then he believed churches and charities should pick up the slack, rather than the government. But sadly for my Tea Party friend, in Texas, free lunches may be one of the few federal programs that hasn't stirred up too much controversy. Nationally, however, there's been no shortage of criticism of the program, particularly last year as Congress considered a proposal that would make meals more nutritious. The legislative fight soon became about which agriculture sectors had the...

Hidden Gems in the Mortgage Deal

AP Photo/Paul Sakuma
In the end, as at the start, Thursday’s deal between five big banks, the Department of Justice, and the attorneys general of 49 states came down to New York, the center of mortgage securitization and securities misrepresentation, and California, the center of mortgage mis-origination. Those states’ attorneys general—New York’s Eric Schneiderman and California’s Kamala Harris, both progressive Democrats elected in 2010—weren’t about the give the banks a pass. Which is why it wasn’t until two a.m. Thursday that the deal was finalized. Schneiderman’s chief concern was to preserve and enhance his and other law enforcement agencies’ ability to investigate the banks. Harris’s foremost interest was to secure the best deal for the hundreds of thousands of California homeowners who were struggling to make the payments on their devalued homes. Together, they compelled the banks and the Obama administration to come up with a better deal than the one that the banks and the Justice Department had...

Greece's Desperate Measures

A budget agreement reduces the minimum wage and cuts pensions.

(AP Photo/Thanassis Stavrakis)
After days of intense negotiations during which its membership in the eurozone seemed to hang by a thread, Greece finally reached an agreement today on the measures that will accompany the new loan package from its European partners and the International Monetary Fund. The measures agreed on are draconian. They include a 22 percent cut in the monthly minimum wage, reducing earnings from 751 euros to 586 euros per month. For people under 25, it will be even lower, down to 511 euros, and any increase before 2016 is ruled out. In addition, further reductions to the minimum wage may take place in July. Meanwhile, all automatic wage increases that are included in collective-bargaining agreements will be frozen until unemployment falls below 10 percent (it is currently at 20.9 percent). Employers are also considerably strengthened in their bargaining position vis-à-vis the unions through changes in arbitration regulations and a contraction of the time period (from six to three months)...

Sam Brownback's Anti-Poor Agenda

Flickr/VictoryNH
The GOP presidential primary has offered some odd debates on who cares about the "very poor" and whether there should be a "safety net" or a "trampoline" to help people get out of poverty. Meanwhile, in Kansas, it seems Governor Sam Brownback is hoping to dig a bigger hole for the poor fall into. Between his tax plans and his approaches to school funding, Brownback's agenda overtly boosts the wealthy and makes things harder for the poor. While many liberals speculate this to be a secret goal, Brownback is hardly making a secret of his agenda. Currently, the Kansas Legislature is examining Brownback's plan to redesign education funding. The plan removes extra dollars for students who are more expensive to educate —those who must learn English or come from challenging backgrounds. Instead of providing funding based on the actual costs of education, Kansas would allow counties to raise property taxes and keep the revenue. That's great for wealthy districts with high property values and...

What It Feels Like to Be Poor

Katherine Boo chronicles the intimate realities of poverty in an Indian slum.

Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity. By Katherine Boo, Random House, 256 pages, $27.00 I n 2004, shortly after winning a MacArthur genius grant for her reporting on poverty as a New Yorker staff writer, an audibly nervous Katherine Boo told an NPR interviewer, “If I have any gifts at all, one of them is invisibility.” She was talking about a quality of her work: the way she strives to witness her subjects’ lives so intimately it can seem as if the subjects don’t know she’s observing them. Boo’s byline itself hasn’t appeared in the magazine since 2009. From November 2007 until last March, she was in Annawadi, a slum near the Mumbai airport. Her tightly woven first book about a core of that neighborhood’s struggling residents, Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity , offers a rebuke to official reports and dry statistics on the global poor. “Annawadi sat two hundred yards off the Sahar Airport Road,” Boo writes...

Mitt Romney: Liberal Economist

(Flickr/Gage Skidmore)
Say you’re a presidential candidate shifting to the general election after your place as the party's nominee seems firmly settled. The entire logic of your candidacy has been built on business experience as the answer to an economic downturn, and you plan to assail the community-organizer president for not understanding how the private sector works. A high rate of unemployment is your friend. Voters will be dissatisfied enough with the general state of their lives that you should easily waltz past the incumbent president without having to do the tricky work of laying out your own vision for the country. Except, after a year of laying the groundwork for this sort of campaign, the economy slowly begins to recover. Things are certainly not in good shape, but the trend lines are beginning to move in the right direction and people are once again hopeful. That's the unenviable situation Mitt Romney has found himself. He is on the verge of dismissing his Republican opponents, and a string of...

Help Wanted Again

AP Photo/Amy Sancetta
The latest jobs report was a welcome surprise . Jobs increased in January by 243,000, cutting the unemployment rate to 8.3 percent. The question remains: Is this a blip, or has the economy turned a corner? Earlier in the week, the Congressional Budget Report put out a more pessimistic report, showing unemployment rising to 8.9 percent by the final quarter of this year (which happens to include Election Day), and peaking at 9.2 percent in early 2013. According to the CBO, we won’t return to pre-recession employment levels until 2019. Why the grim picture? CBO assumes more budget cutting, as the Bush tax cuts sunset, the deficit keeps declining, and there is no further offsetting stimulus. Though the short-term jobs numbers have been above expectations for both December and January, there is no assurance that this good news will continue in the absence of additional stimulus. And the risk remains of either a spike in the price of oil, as a byproduct of the escalating conflict with Iran...

It Pays to Be Rich

Flickr/Yeshe
There's not a single state in the country in which the rich pay a higher percentage of their income in state (though not federal) taxes than the poor. According to a state-by-state scorecard from the Corporation for Enterprise Development (CFED), only Washington, D.C. has an equal tax burden for its wealthiest and poorest citizens. The CFED scorecard looks at income taxes, property taxes and consumption taxes to determine its percentages, and the results are clear. For instance, if you're in the poorest 20 percent of Washington state, you pay almost 7 times as much in state taxes as the top 1 percent. In fact, Washington taxes its poor at the highest rate in the country while its wealthiest residents have one of the lowest rates. It's the most extreme example of the difference in tax burdens between the rich and the poor, but it's hardly alone. In Wyoming, Nevada, South Dakota and Florida, the bottom quintile pays at least five times as much as the top 1 percent. But the "Assets and...

Beyond the Buffett Rule

AP Photo/Pablo Martinez Monsivais
AP Photo/Pablo Martinez Monsivais Debbie Bosanek, left, assistant to billionaire investor Warren Buffet, inspired the so-called Buffett Rule to tax income from investments at higher rates. Imagine you didn't know anything about President Barack Obama's potential opponents, and someone asked how Obama would do facing a former private-equity baron who made a fortune buying and selling companies, sometimes ruthlessly so. Also, this candidate hasn't held a job in five years, yet he still manages to "earn" around $20 million a year, on which he pays less in taxes than most Americans who work for a living. At a time when the country has become concerned about increasing inequality and the lack of opportunities for Americans who don't start life at the top, that candidate would seem like just about the ideal opponent. And it wouldn't hurt if that candidate were also stiff and robotic and had gone through so many changes of position in his political career that it was apparent to all that he...

By Any Other Measure

Relying on GDP to calculate economic progress ignores social and environmental realities.

The 2011 fourth quarter GDP numbers released today show a 2.8 percent growth in economic activity, due in part to the increase in spending around the holidays. But, what do GDP numbers really show? A new report from Demos, Beyond GDP , looks at the flaws in our dependence on GDP as the sole measure of progress and highlights important economic and social measures that are not captured by GDP. GDP calculates the total monetary value of goods and services produced domestically in a given period. At the time it was developed at the end of the Great Depression, it was meant to be used as a tool to help policymakers gauge the success of economic recovery measures. At no time was it meant to be a tool for measuring economic, let alone social, progress. Fast forward several decades and GDP has become the go to measure for determining economic and societal well-being, even though it is not equipped to offer an accurate reflection of either. To paraphrase Robert F. Kennedy in a speech he made...

What's the Matter with Kansas, Tax Edition

While around the country, many Republican primary voters are up in arms that Mitt Romney only paid about 13 percent of his income in taxes last year, in Kansas, Governor Sam Brownback is pushing a proposal that would not only benefit wealthy Kansans but raise taxes on the state's poorest residents. A new report released yesterday argues that the plan will benefit some large corporations but fail to create jobs. The plan gets rid of a number of tax deductions—including those for home mortgages and charitable giving. It also takes away the earned-income tax credit and food-sales tax rebate. As the AP noted last week: According to the Department of Revenue's own figures, the only class of taxpayers that would see an increase in its aggregate income tax burden would be the one with people whose incomes are $25,000 or less, while the largest percentage cut would go to the group with incomes exceeding $250,000. As a group, the lowest-income taxpayers actually get a net payment from the...

Capital Games

AP Photo/Haraz N. Ghanbari
Mitt Romney has now disclosed that he paid only 14.5 percent of his reported income in federal income taxes in 2010. That’s no surprise. My group, Citizens for Tax Justice, predicted as much last fall, based on Romney’s previous disclosure that almost all of his 2010 income came from capital gains and dividends taxed at the low 15 percent top rate. Newt Gingrich insists that this is not fair. Touting his own “flat tax” proposal on January 17, Newt said, “I think we ought to rename our flat tax, we have a 15 percent flat tax, so this would be the ‘Mitt Romney flat tax.’ All Americans would pay the rate Mitt Romney paid. I think it’s terrific.” Putting aside the fact that Newt’s preposterous flat tax would slash federal revenues by $18 trillion over the next decade, there’s another noteworthy flaw in his argument. Gingrich’s actual “flat tax” proposal would cut Romney’s tax rate to zero (because it exempts all investment income from tax). With the two leading Republican presidential...

The Scarlet Tax Return

AP Photo
Mitt Romney’s newly released tax returns, showing that he paid taxes in 2010 at a rate of just 13.9 percent on income of $21.6 million, should provide ammunition for President Barack Obama’s newly rediscovered populism. Obama is on record supporting a “Buffett Rule,” that the boss should pay at least the same tax rate as the help. In the watered down economic dialogue of 2012, a flat tax rate rather pitifully passes for the progressive position. Not so long ago, progressives were of the view that the more money you made, the higher your rate should be. The tax schedule should be, well, progressive. The original presidential sponsor of this concept was that Bolshevik, Theodore Roosevelt. That view of progressive taxation was widely held and was public policy in America, until the supply-side revolution of the Reagan era and its claim that lower taxes on dividends, interest, and capital gains would reward, and hence promote, investment and growth. Unfortunately for the theory, taxes,...

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