Mitt Romney says his new tax plan adds up. It doesn't. It means higher taxes for the poor, huge tax cuts for the rich, and huge deficits. Call him George W. Romney.
Well, of course Romney's new tax numbers don't add up.
Romney's plan has gone through several iterations, but through it all the the basic contours and basic impracticality have stayed the same. As I have described it before, Romney's plan is a three-legged stool that doesn't stand. He wants to 1) cut tax rates by 20 percent across the board; 2) fully pay for these tax rate cuts by cutting tax expenditures; and 3) cut taxes for the middle class without reducing the tax burden of the rich.
This is all kinds of impossible. For one, the nonpartisan Tax Policy Center pointed out there aren't enough tax expenditures for the rich to pay for Romney's tax rate cuts for the rich -- in other words, his plan couldn't help but reduce high-end taxes. Romney would have to either abandon his tax cuts for the rich, raise taxes on the middle class, or explode the deficit. The latter seemed most likely given Romney's refusal to name a single expenditure he would eliminate -- although he had previously hinted at a few -- before he switched tacks. Romney's new plan is to cap household expenditures rather than cut specific expenditures. He's floated several versions of this plan, but at the second debate he said he would limit households to $25,000 of deductions and credits. It's a very clever idea. It would spare Romney from the, ahem, taxing battle with special-interest groups over which expenditures get the ax and which don't. But it's not so clever that it makes Romney's tax plan work. Nothing short of suspending the rules of arithmetic can do that.
Meet the new Romney tax plan, same as the old Romney tax plan. It's a massive tax cut for the rich, a small tax cut for the middle class, and a tax hike for the poor. That adds up to mega-deficits. How mega? Well, the Tax Policy Center calculates Romney's $25,000 cap would raise about $1.3 trillion over a decade -- against almost $5 trillion in tax cuts over that period. And remember, that's a $3.7 trillion hole relative to a world with the Bush tax cuts. It's an almost $8 trillion dollar hole compared to a world with Bill Clinton-level taxes.
Here's what this means for households. Combining this table showing the revenue gains with this table gives us, my apologies, what might be the world's least helpful graph that shows the average tax cut each income group would receive under the Romney plan. If you're far-sighted, it's a $150 hike for the bottom quintile, a $722 cut for the middle quintile, and a $496,115 cut for the top 0.1 percent.
Here's a slightly more useful version of the same chart that excludes the top 10 percent of households.
There are three big stories here. First, Romney's plan actually hurts low-income households, because it lets the tax credits from the stimulus, which were renewed in 2010, expire. These credits, all of which are at least partially refundable, include expansions of the American Opportunity Tax Credit, the Earned Income Tax Credit and the Child Tax Credit. Second, Romney's across the board 20 percent rate cuts help higher earners more, because their rates are higher to begin with -- in other words, 20 percent of 35 percent is more than 20 percent of 25 percent. And third, capping deductions hits higher earners hardest, but it doesn't hurt them nearly as much as the rate cuts help them. Still, it's worth emphasizing just how progressive capping itemized deductions would be by itself. The chart below looks at what percent of the overall revenue gained from a $25,000 cap would come from each income group. Over half of the $1.3 trillion the cap would raise would come from the top 1 percent, and 81.7 percent of it from the top 10 percent.
This gets at the fundamental contradiction of Romney's tax plan. He can't raise enough revenue without raising taxes on the middle class, which he has promised not to do. Now, his deduction cap should be a shrewd way to make it all work. The cap raises money mostly from higher income households, because those households take more itemized deductions and those deductions are worth more to them due to their higher tax brackets. Romney's problem is his tax cuts are far too deep to make this math -- or any math! -- work. Even if he set the cap at zero -- that is, eliminated itemized deductions altogether -- the numbers would not come close to adding up. The Tax Policy Center calculates zeroing out all deductions would only generate around $2 trillion over a decade under Romney's plan. That would leave Romney with a big, fat $3 trillion hole -- which, remember, is actually a $3.7 trillion hole when we use his actual plan.
And that leaves us with one caveat and one question. The caveat is the Tax Policy Center only looked at deductions, and not credits, for the $25,000 cap. As Bob Williams of the Tax Policy Center explained to me, deductions and credits are apples and oranges -- deductions reduce taxable income according to tax rates and credits reduce taxable income directly. They can't be combined. The question is what Romney would do about his $3.7 trillion revenue gap. Kevin Hassett, one of his economic advisers, suggested Romney might back off his high-end tax rate cuts, but the campaign quickly dismissed this, as did Romney himself when he was asked about it point-blank during the second debate. Now we're down to doors two and three -- either Romney expands his cap to include tax exclusions or he expands the deficit by a cool $3.7 trillion. I'll give you one guess which looks more likely. Romney has already ruled out including the biggest exclusion, employer healthcare, under his cap -- which means forfeiting the $2 trillion in revenue doing so would raise over the next decade. Romney could include the exclusion for pension contributions -- think IRAs and 401(k)s -- or the exclusion of capital gains on death, but doing so would violate his promise to preserve the preferences for savings and investment. We're running out of big exclusions. In other words, Romney's plan to pay for his tax cuts is not to pay for his tax cuts.
In the final analysis, Romney's tax plan means higher taxes for the poor, huge tax cuts for the rich, and huge deficits. Who does that remind you of? It sounds like George W. Bush, only if George W. Bush thought the 47 percent were a bunch of lucky duckies.
Compassionate conservatism is out. Severe conservatism is in.
When new countries rise to power, the transition can end badly, often in war. Harvard’s Graham Allison has argued in The Atlantic that “judging by the historical record, war is more likely than not” between the United States, the world’s current reigning superpower, and China, a rising military and economic force. There is considerable debate on this point, but American pundits and presidential candidates often talk as if China were already an American adversary; Donald Trump has warned, for example, that China will “take us down.” Yet few in the United States seem worried about Asia’s other rising giant, India.
To the contrary, there’s a temptation to support India, a like-minded democracy, as a counterweight against the growing power of authoritarian China. But if American leaders feel confident India can accumulate power without becoming an antagonist, can they find a way to make the same true for China?
For centuries, philosophers and theologians have almost unanimously held that civilization as we know it depends on a widespread belief in free will—and that losing this belief could be calamitous. Our codes of ethics, for example, assume that we can freely choose between right and wrong. In the Christian tradition, this is known as “moral liberty”—the capacity to discern and pursue the good, instead of merely being compelled by appetites and desires. The great Enlightenment philosopher Immanuel Kant reaffirmed this link between freedom and goodness. If we are not free to choose, he argued, then it would make no sense to say we ought to choose the path of righteousness.
Today, the assumption of free will runs through every aspect of American politics, from welfare provision to criminal law. It permeates the popular culture and underpins the American dream—the belief that anyone can make something of themselves no matter what their start in life. As Barack Obama wrote in The Audacity of Hope, American “values are rooted in a basic optimism about life and a faith in free will.”
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
The deadline to enter the National Geographic Travel Photographer of the Year Contest is fast approaching—entries will be accepted until May 27, 2016.
The deadline to enter the National Geographic Travel Photographer of the Year Contest is fast approaching—entries will be accepted until May 27, 2016. The grand prize winner will receive a seven-day Polar Bear Safari for two in Churchill, Canada. National Geographic was once more kind enough to allow me to share some of this year’s entries with you here, gathered from three categories: Nature, Cities, and People. The photos and captions were written by the photographers.
The author Moira Weigel argues that the various courtship rituals of the past hundred-odd years have reflected the labor-market conditions of their day.
Love, it turns out, has always been a lot of work.
While every generation will lament anew the fact that finding love is hard, history seems to indicate that this particular social ritual never gets any easier or less exciting. In Labor of Love, a new book documenting the history of dating in America, Moira Weigel, a Ph.D. candidate in comparative literature at Yale University, confirms this lament: Since dating was “invented,” it has always been an activity that required a lot of effort.
As part of her research, Weigel read dating-advice books from the 1800s and hundreds of articles on dating from teen and women’s magazines over the years, and she found two common themes: First, there is usually an older part of the population that perceives dating to be “dying,” or, at least, as not being done “appropriately.” Second, Weigel found that the way people date has almost always been tied to the market forces of their era.
How a strange face in a random 19th-century newspaper ad became a portal to a forgotten moment in ASCII art history
One of the joys of modern technology is how easy it is to immerse yourself in the past. Every day, more libraries and archives are pushing pieces of their collections online in easily browsable interfaces.
Recent polls shown increasing support for the former governor, who’s hoping to win the Libertarian Party’s nomination this weekend.
If Gary Johnson wants to make it onto a primetime presidential-debate stage as the Libertarian Party’s nominee, he needs to qualify by polling above 15 percent. If he wants to be the nominee, he needs a strong showing at the party’s convention this weekend. And if he wants a strong showing at the convention, he needs to demonstrate to delegates that he’s their party’s ideal standard-bearer—a candidate who can be even a little competitive in a three-way matchup with Donald Trump and Hillary Clinton. Johnson just got good news: A poll released Tuesday morning shows the candidate with 10 percent of the national vote.
The Morning Consult survey puts Clinton at 38 percent, Trump at 35 percent, and Johnson, the two-term former New Mexico governor who also ran for president in 2012, trailing with 10 percent. For any other candidate, that low number would be a sign that the end is near. But not for Johnson, or other third-party candidates hoping to make it big in an election year when many voters will likely hold their noses as they cast their ballots. The 10-percent figure is close to a personal best for Johnson as a presidential candidate; poll analysts note that it is roughly twice as high as Johnson’s figures from the last cycle.
It’s not easy fitting 1.2 million annual visitors onto an island of 330,000 residents.
Iceland may be beautiful, but it’s dangerously close to full. This is the message currently filtering out from the North Atlantic island as it struggles to absorb unprecedented numbers of visitors. Last year, the nation hosted 1.26 million tourists, a staggering number for a chilly island whose population barely scrapes past 330,000 citizens.
Those numbers are powered partly by a “Game of Thrones Effect” that has seen fans of the TV series flock to its shooting locations. The 2010 eruption of the Eyjafjallajökull volcano, which has since become a tourist attraction, also helped to push up its profile as a vacation spot—perversely so, given that the eruption initially led to 107,000 flights across Europe being canceled. Given the rocky waters the country has been sailing through since the 2008 financial crisis, the revenue brought in by this spike in tourism is no doubt welcome. But the sheer volume of visitors to what was until recent decades a remote part of the world is still causing major stress. So how can Iceland keep welcoming people while making sure it isn’t trampled underfoot?
The U.S. president talks through his hardest decisions about America’s role in the world.
Friday, August 30, 2013, the day the feckless Barack Obama brought to a premature end America’s reign as the world’s sole indispensable superpower—or, alternatively, the day the sagacious Barack Obama peered into the Middle Eastern abyss and stepped back from the consuming void—began with a thundering speech given on Obama’s behalf by his secretary of state, John Kerry, in Washington, D.C. The subject of Kerry’s uncharacteristically Churchillian remarks, delivered in the Treaty Room at the State Department, was the gassing of civilians by the president of Syria, Bashar al-Assad.
It’s a paradox: Shouldn’t the most accomplished be well equipped to make choices that maximize life satisfaction?
There are three things, once one’s basic needs are satisfied, that academic literature points to as the ingredients for happiness: having meaningful social relationships, being good at whatever it is one spends one’s days doing, and having the freedom to make life decisions independently.
But research into happiness has also yielded something a little less obvious: Being better educated, richer, or more accomplished doesn’t do much to predict whether someone will be happy. In fact, it might mean someone is less likely to be satisfied with life.
That second finding is the puzzle that Raj Raghunathan, a professor of marketing at The University of Texas at Austin’s McCombs School of Business, tries to make sense of in his recent book, If You’re So Smart, Why Aren’t You Happy?Raghunathan’s writing does fall under the category of self-help (with all of the pep talks and progress worksheets that that entails), but his commitment to scientific research serves as ballast for the genre’s more glib tendencies.