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.
“Here is what I would like for you to know: In America, it is traditional to destroy the black body—it is heritage.”
Last Sunday the host of a popular news show asked me what it meant to lose my body. The host was broadcasting from Washington, D.C., and I was seated in a remote studio on the Far West Side of Manhattan. A satellite closed the miles between us, but no machinery could close the gap between her world and the world for which I had been summoned to speak. When the host asked me about my body, her face faded from the screen, and was replaced by a scroll of words, written by me earlier that week.
The host read these words for the audience, and when she finished she turned to the subject of my body, although she did not mention it specifically. But by now I am accustomed to intelligent people asking about the condition of my body without realizing the nature of their request. Specifically, the host wished to know why I felt that white America’s progress, or rather the progress of those Americans who believe that they are white, was built on looting and violence. Hearing this, I felt an old and indistinct sadness well up in me. The answer to this question is the record of the believers themselves. The answer is American history.
In 1992, the neuroscientist Richard Davidson got a challenge from the Dalai Lama. By that point, he’d spent his career asking why people respond to, in his words, “life’s slings and arrows” in different ways. Why are some people more resilient than others in the face of tragedy? And is resilience something you can gain through practice?
The Dalai Lama had a different question for Davidson when he visited the Tibetan Buddhist spiritual leader at his residence in Dharamsala, India. “He said: ‘You’ve been using the tools of modern neuroscience to study depression, and anxiety, and fear. Why can’t you use those same tools to study kindness and compassion?’ … I did not have a very good answer. I said it was hard.”
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
New data shows that students whose parents make less money pursue more “useful” subjects, such as math or physics.
In 1780, John Adams wrote a letter to his wife, Abigail, in which he laid out his plans for what his children and grandchildren would devote their lives to. Having himself taken the time to master “Politicks and War,” two revolutionary necessities, Adams hoped his children would go into disciplines that promoted nation-building, such as “mathematicks,” “navigation,” and “commerce.” His plan was that in turn, those practical subjects would give his children’s children room “to study painting, poetry, musick, architecture, statuary, tapestry, and porcelaine.”
Two-hundred and thirty-five years later, this progression—“from warriors to dilettantes,” in the words of the literary scholar Geoffrey Galt Harpham—plays out much as Adams hoped it would: Once financial concerns have been covered by their parents, children have more latitude to study less pragmatic things in school. Kim Weeden, a sociologist at Cornell, looked at National Center for Education Statistics data for me after I asked her about this phenomenon, and her analysis revealed that, yes, the amount of money a college student’s parents make does correlate with what that person studies. Kids from lower-income families tend toward “useful” majors, such as computer science, math, and physics. Those whose parents make more money flock to history, English, and performing arts.
Most adults can’t remember much of what happened to them before age 3 or so. What happens to the memories formed in those earliest years?
My first memory is of the day my brother was born: November 14, 1991. I can remember my father driving my grandparents and me over to the hospital in Highland Park, Illinois, that night to see my newborn brother. I can remember being taken to my mother’s hospital room, and going to gaze upon my only sibling in his bedside cot. But mostly, I remember what was on the television. It was the final two minutes of a Thomas the Tank Engine episode. I can even remember the precise story: “Percy Takes the Plunge,” which feels appropriate, given that I too was about to recklessly throw myself into the adventure of being a big brother.
In sentimental moments, I’m tempted to say my brother’s birth is my first memory because it was the first thing in my life worth remembering. There could be a sliver of truth to that: Research into the formation and retention of our earliest memories suggests that people’s memories often begin with significant personal events, and the birth of a sibling is a textbook example. But it was also good timing. Most people’s first memories date to when they were about 3.5 years old, and that was my age, almost to the day, when my brother was born.
The singer’s violent revenge fantasy was intended to provoke outrage, and to get people to talk about her. It succeeds on both counts.
Of all the scandalized reactions to Rihanna’s music video for “Bitch Better Have My Money,” my favorite comes, as is not surprising for this sort of thing, from the Daily Mail. Labelling herself in the headline as a “concerned parent” (a term to transport one to the days of Tipper Gore’s crusade against lyrics if there ever was one), Sarah Vine opens her column by talking at length about how so very, very reluctant she was to watch Rihanna’s new clip. Then she basically goes frame-by-frame through the video, recounting her horror at what unfolds. “By the time it had finished, I wondered whether I ought not to report [Rihanna] to the police,” Vine writes. “Charges: pornography, incitement to violence, racial hatred.”
For centuries, experts have predicted that machines would make workers obsolete. That moment may finally be arriving. Could that be a good thing?
1. Youngstown, U.S.A.
The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.
For much of the 20th century, Youngstown’s steel mills delivered such great prosperity that the city was a model of the American dream, boasting a median income and a homeownership rate that were among the nation’s highest. But as manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.
Gentrification is pushing long-term residents out of urban neighborhoods. Can collective land ownership keep prices down permanently?
AUSTIN, Tex.—Not long ago, inner cities were riddled with crime and blight and affluent white residents high-tailed it to the suburbs, seeking better schools, safer streets, and, in some cases, fewer minority neighbors.
But today, as affluent white residents return to center cities, people who have lived there for years are finding they can’t afford to stay.
Take the case of the capital city of Texas, where parts of East Austin, right next to downtown, are in the process of becoming whiter, and hip restaurants, coffee shops, and even a barcatering to bicyclists are opening. Much of Austin’s minority population, meanwhile, is priced out, and so they’re moving to far-out suburbs such as Pflugerville and Round Rock, where rents are affordable and commutes are long.
The show reveals what happened to Ray, while Bezzerides and Woodrugh investigate the mayor, and Frank indulges in some amateur dentistry.
Orr: More than a third of the way into this season of True Detective, I’d say that the two best scenes so far were adjacent ones, albeit ones in consecutive episodes: the last scene of episode two—the man in the bird mask appearing out of nowhere, the stunning (apparent) death of a principal character as the radio plays “I Pity the Fool”—and the first scene of tonight’s episode: Ray and his father in the bar, and yet clearly someplace else altogether, someplace otherworldly. “Where is this?” Ray asks. His dad replies, “I don’t know. You were here first.” Is this Ray’s dying vision? Is he a ghost who will watch the season unfold from beyond the grave?