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.
As the world frets over Greece, a separate crisis looms in China.
This summer has not been calm for the global economy. In Europe, a Greek referendum this Sunday may determine whether the country will remain in the eurozone. In North America, meanwhile, the governor of Puerto Rico claimed last week that the island would be unable to pay off its debts, raising unsettling questions about the health of American municipal bonds.
But the season’s biggest economic crisis may be occurring in Asia, where shares in China’s two major stock exchanges have nosedived in the past three weeks. Since June 12, the Shanghai stock exchange has lost 24 percent of its value, while the damage in the southern city of Shenzhen has been even greater at 30 percent. The tumble has already wiped out more than $2.4 trillion in wealth—a figure roughly 10 times the size of Greece’s economy.
A new book by the evolutionary biologist Jerry Coyne tackles arguments that the two institutions are compatible.
In May 1988, a 13-year-old girl named Ashley King was admitted to Phoenix Children’s Hospital by court order. She had a tumor on her leg—an osteogenic sarcoma—that, writes Jerry Coyne in his book Faith Versus Fact, was “larger than a basketball,” and was causing her leg to decay while her body started to shut down. Ashley’s Christian Scientist parents, however, refused to allow doctors permission to amputate, and instead moved their daughter to a Christian Science sanatorium, where, in accordance with the tenets of their faith, “there was no medical care, not even pain medication.” Ashley’s mother and father arranged a collective pray-in to help her recover—to no avail. Three weeks later, she died.
Defining common cultural literacy for an increasingly diverse nation.
Is the culture war over?
That seems an absurd question. This is an age when Confederate monuments still stand; when white-privilege denialism is surging on social media; when legislators and educators in Arizona and Texas propose banning ethnic studies in public schools and assign textbooks euphemizing the slave trade; when fear of Hispanic and Asian immigrants remains strong enough to prevent immigration reform in Congress; when the simple assertion that #BlackLivesMatter cannot be accepted by all but is instead contested petulantly by many non-blacks as divisive, even discriminatory.
And that’s looking only at race. Add gender, guns, gays, and God to the mix and the culture war seems to be raging along quite nicely.
Former Senator Jim Webb is the fifth Democrat to enter the race—and by far the most conservative one.
In a different era’s Democratic Party, Jim Webb might be a serious contender for the presidential nomination. He’s a war hero and former Navy secretary, but he has been an outspoken opponent of recent military interventions. He’s a former senator from Virginia, a purple state. He has a strong populist streak, could appeal to working-class white voters, and might even have crossover appeal from his days as a member of the Reagan administration.
In today’s leftward drifting Democratic Party, however, it’s hard to see Webb—who declared his candidacy Thursday—getting very far. As surprising as Bernie Sanders’s rise in the polls has been, he looks more like the Democratic base than Webb does. The Virginian is progressive on a few major issues, including the military and campaign spending, but he’s far to the center or even right on others: He's against affirmative action, supports gun rights, and is a defender of coal. During the George W. Bush administration, Democrats loved to have him as a foil to the White House. It’s hard to imagine the national electorate will cotton to him in the same way. Webb’s statement essentially saying he had no problem with the Confederate battle flag flying in places like the grounds of the South Carolina capitol may have been the final straw. (At 69, he’s also older than Hillary Clinton, whose age has been a topic of debate, though still younger than Bernie Sanders or Joe Biden.)
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.
On Sunday, citizens will vote on how to move forward in the country's financial crisis.
On Sunday, the people of Greece will help decide the financial future of their country. With the nation already in default and capital controls in place to prevent a run on the banks, it’s up to Greece’s citizens to decide what road the country will take from here.
The referendum—which asks Greeks to either vote yes or no to a current proposal from Eurogroup leaders to extend financing to the deeply indebted country— was called for by Greek Prime Minister Alexis Tsipras amid meetings of Eurozone leaders as they tried to come up with a deal that would allow the country to avoid default. The call for a vote effectively ended discussions.
Opponents of thecurrent proposal from the Eurogroup feel that the austerity measures put forth by the Eurogroup’s leaders—which would includes things like tax hikes, pension cuts, and reductions in government jobs—are overly harsh and punitive, and could hurt Greeks more than help them.
An attorney who helped players file a gender-discrimination lawsuit over artificial turf in the World Cup proposes a way forward for the sport.
On Sunday, players from the U.S. and Japan’s women’s soccer teams will step onto the field in Vancouver to compete for the sport’s greatest achievement: the World Cup. But perhaps the bigger battle—one that started well before the final match and will continue well after—isn’t about a trophy or national glory. Women’s soccer teams have long fought for recognition and respect not just from the public, but also from the male organizers of the sport, and it’s a struggle symbolized by the very fields they’ve been playing on.
The co-hosts of the World Cup—FIFA and the Canadian Soccer Association—failed to stage this year’s tournament to be played on real grass like every other World Cup previously, mandating that it be played on artificial turf instead. This is despite the dangers and inconveniences plastic turf poses. The synthetic pitches bake in the sun, with surface temperatures sometimes reaching 120 degrees. Clouds of rubber pebbles fly into players’ eyes, and the turf makes it difficult for the women to gauge the way the ball will bounce.