Poverty & Wealth

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,...

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...

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