Poverty & Wealth

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,...

Atlas Slugged

A lthough Newt Gingrich has dominated the headlines since Saturday night, what happened in the South Carolina primary is less about Gingrich’s rise than it is about Mitt Romney’s fall. The right's determination to find anyone other than Romney—illustrated over the last eight months by the hot flashes of support for Michele Bachmann, Rick Perry, and Herman Cain—has become desperate to the point that evangelicals supported a twice-divorced man who, by the account of one of his discarded spouses, aspired to manage a small harem. Moreover, they’re so frantic to be rid of Romney that they implicitly sanctioned Gingrich’s attacks against the former Massachusetts governor's personal financial gain. Thus the front-runner founders on the very finances that provided his candidacy a rationale. But Romney’s problem isn’t how much money he has. His problem is how he made it, how he’s kept it, and how come he won’t talk about it. If Romney’s campaign for the presidency should collapse, the...

99 Problems But This Ain't One

The special treatment Beyoncé received when she gave birth may have made the headlines, but real economic injustice gets noticed far less often.

Judging when to use tabloid stories as teaching moments on issues regarding race, gender, and class isn’t always easy. Sometimes the connection is clear, as when bloggers and activists used the Chris Brown/Rihanna blowup to raise awareness about domestic violence. Other times, a point can’t be found, no matter how hard one may try. The scandal surrounding Jay-Z and Beyoncé’s baby, recently born at at Lenox Hill Hospital in New York City, is a classic example of this sort of overreach. For those who may not know, soon after Beyoncé gave birth to Blue Ivy Carter, there was a rush of tabloid and then mainstream-media stories quoting parents who were furious about the security measures the hospital took, which included clearing out the wing the couple stayed in, covering cameras, and dispatching guards for their protection. The parents’ complaints—which were given wide airing at sites like Jezebel and The Huffington Post —mostly centered around the attention the celebrity couple received...

Lonely at the Top

The debate among the Republican candidates over Mitt Romney’s time at Bain Capital has raised again questions about whether Romney’s tenure in the “1 percent” will damage his campaign. The Obama team certainly welcomes this debate. After all, they have been attacking Romney along precisely these lines: The day after Mr. Romney squeezed out a razor-thin victory in the Iowa caucuses, Mr. Obama’s political brain-trust trained most of its fire on him, painting him as both a Wall Street 1 percent type and an unprincipled flip-flopper. Some new survey data that Lynn Vavreck and I have gathered in collaboration with YouGov suggests that Romney is vulnerable to this line of questioning. In a survey conducted nationwide from January 7-10—right about the time that the Republican attacks on Romney’s “vulture capitalism” were crescendoing as the New Hampshire primary approached—we asked respondents: How well do you think each the following describes Barack Obama/Mitt Romney: very well, somewhat...

Hungary Games

The country is seeking help from the IMF even as its internal policies scare off investors.

Hungarian Prime Minister Viktor Orban. AP Photo/Tamas Kovacs
T amas Fellegi, Hungary’s chief negotiator with the International Monetary Fund, has a tough task this week. Fellegi, a minister without portfolio in Viktor Orban’s right-wing government, is in Washington for preliminary talks with the IMF, in the hopes of setting the foundations for a new package of financial support that will prevent the country’s descent into the Hades of default. This new package, which Orban had previously stated would not be needed, was made necessary in part because of the dramatic deterioration in the economic outlook of the whole of Europe as a result of the eurozone debt crisis and the inept way it has been handled. But the Hungarian government shares responsibility for its predicament: Through its policies in the last year and a half, it has made investors particularly jittery. Critics, whose ranks are rapidly swelling and which include the U.S. administration, argue that the problem is not just one of economic policy. In their view, Orban’s reforms,...

If You Can't Beat 'Em, Join 'Em

In The New York Times this weekend, John Schwartz asked the real question we've all had: If I can't beat 'em, how do I join 'em? We’ve all been hearing about the 1 Percent—you know, the nation’s fat cats. ... Camping out in Zuccotti Park apparently didn’t beat them. They appear to be rather entrenched. ... Now I’m left with just this question: How do I get in on some of that sweet 1 Percent action? He interviews experts for advice and comes to some interesting conclusions, among them: He gamely told me that in order to make it in the world of truly enormous wealth, “money has to be the single most important thing in your life.” The very wealthy, he said, “live in a culture of affluence: your friends, your neighbors, your colleagues, your associates are all vastly rich.” I pondered this for a moment, then wondered aloud: “Does this mean I have to upgrade my friends?” He answered somberly, “I think you have to upgrade your friends.” What about my parents? I asked. “It would be very...

Outsiders Everywhere

"Why do you stay in the U.S., then?" I asked the German-born historian whose last professional job in Germany ended two years ago. Since then, she has been doing piecemeal work and relying on a much thinner social safety net in the U.S. than she would have in her country of origin. There, she'd have her family, health care, lower housing costs, and other social and economic guarantees. She had just told me how much Germany had come to life since her youth: instead of "don't walk on the grass" signs, there's a lively public culture; instead of beige houses, there's an explosion of color; instead of the grim and clenched authoritarian culture for which Germany was once famous, there's playfulness. So why stay in the U.S.? I wasn't challenging her; I was genuinely curious. It takes a certain kind of person to leave your culture behind and be unfamiliar with everything forever after. No matter how long she's been here, she can never be part of certain shared cultural conversations, which...

Mitt the Unassailed

AP Photo/Elise Amendola
Manchester, New Hampshire —Well, that was unremarkable. The last presidential debate until another begins ten hours from now saw none of Mitt Romney’s challengers actually challenge him. His toughest challenge probably came from George Stephanopoulos, who asked him if his assertions on Bain Capital’s job creation were really on the level—neither Newt, Ron, Jon nor the two Ricks, confronted Romney with anything as potentially threatening to his lead. Part of the problem, as my colleague Jamelle Bouie has pointed out, is that a number of these guys don’t really seem to be running for president. Ron Paul, who took off two-and-a-half days between the Iowa caucuses and his arrival in New Hampshire yesterday afternoon, is simply running to spread the libertarian word, and take shots at his inconstantly conservative rivals (focusing tonight on Rick Santorum—not Romney). Paul had a good night pitching to libertarians and anti-warriors. Santorum had a good night, too, but it’s not likely that...

What Can Replace Social Security?

AP Photo/Evan Vucci
Manchester, New Hampshire— Last night, some of Ron Paul’s younger supporters—and Ron Paul supporters are disproportionately young—held a pub crawl through the bars of downtown Manchester. During the first two hours (after which time I crawled away), about 50 largely male Paulists, behaving far too decorously for serious pub crawlers, drank and munched and yacked. Paul himself had arrived in the state just that afternoon—electing, for some mysterious reason, to spend Wednesday, Thursday and Friday morning back in Texas. At a welcome rally at Nashua’s small-plane airport, he spoke in his usual generalities about libertarian values, interspersing occasional anecdotes about unnamed congressional colleagues who had voted to fund one damned project after another. He was hailed, of course, as a conquering hero—Paul’s supporters are the only true zealots among the Republicans this year. One such zealot who turned up at the pub crawl was Nick, who’d driven all the way from Boston. Like many if...

Occupying Grand Central Station

OWS rings in the new year with a fight against NDAA.

Sargeant Shamar Thomas protests against NDAA Tuesday at Grand Central Station.
Five hundred people returned to Zuccotti Park on New Year's Eve, with drums, chants of "Whose Year? Our Year!", and a tent, which they say they gave to police in exchange for entrance to the park. An hour before midnight, police and occupiers attempting to remove metal barricades around Zuccotti had a violent confrontation and, by 1:30 a.m., police had cleared activists from the park. Tuesday, occupiers mobilized against the National Defense Authorization Action signed by President Obama on New Year's Eve. After a lunchtime march to the offices of New York senators, occupiers gathered in the Grand Central train station, where multiple people were arrested while leading "People's Mic" recitations of an anti-NDAA script. The indefinite detention provisions of the NDAA have become a lightning rod for Occupy actions, including Philadelphia—where activists presented "Fascist of the Year" awards to actors portraying their Senators—and Iowa, where they occupied the hotel headquartering the...

Glacial Progress on Jobs

The December jobs numbers are good news—sort of—for the economy and the Obama re-election campaign. The economy added 200,000 new jobs, and the duration of unemployment is down slightly. Wages and hours worked are up, too. We can anticipate continuing progress between now and November. But the bad news is that though the trend is in the right direction, the progress is glacial. As Heidi Sherholz of the Economic Policy Institute (EPI) reports , the deficit of jobs needed to keep up with the normal growth of working age population is still upwards of ten million. Even at December’s modestly improved rate of net job-creation, it will take until 2019 for the US to recover its pre-recession rate of unemployment. Moreover, as EPI points out, if we factor in workers who have dropped out of the labor force by looking at the ratio of employment to population (which is still down almost five percentage points since the beginning of 2007), the adjusted unemployment rate would be 9.5 percent. The...

The Clean-Election State

While officials in other states struggled to balance their budgets in 2011, Governor Dannel Malloy and the Connecticut General Assembly closed a deficit of historic proportions one month early, agreeing on a mix of tax hikes and union concessions. That topped a list of unmatched legislative accomplishments: Connecticut passed in-state tuition for illegal immigrants, a transgender-rights bill, a major genetic research initiative, a bipartisan job-growth package, and the nation’s first paid sick-leave mandate. In a year of reactionary politics and partisan gridlock nationwide, what made Connecticut so different? One-party control over both the governor’s office and the legislature for the first time in 21 years played a role. But the secret behind the Democrats’ success was sweeping campaign-finance reform enacted six years earlier. Reeling from the embarrassment of a corruption scandal that landed a governor in federal prison, Connecticut legislators grabbed the national spotlight in...

Tocqueville for Toffs

O n any given day in Washington, D.C., the city’s hotels teem with civic activity. Trade associations, lobbies, corporations seeking government contracts, lawyers looking to influence agency rules—all form a beehive of action. At last count, there were 12,200 registered lobbyists in Washington, according to opensecrets.org, and that doesn’t include the many thousands of corporate attorneys who are technically not lobbyists. Of the top-spending trade associations or issue organizations, the U.S. Chamber of Commerce leads the list with a budget of more than $46 million. Only one quasi-liberal group, the AARP, is even in the top 20. This is the vision of Alexis de Tocqueville made flesh, with one notable difference: Nearly everyone in this associational paradise speaks for the top 1 percent or 2 percent of the income distribution. Tocqueville, in Democracy in America , famously identified “the art of association” as an essential complement to American constitutional democracy. The...

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