Some rich people accuse Obama of class warfare while they praise the bipartisan deficit commission. Do they realize that the latter raises taxes more on the top 0.1%?
Pop quiz, hotshot. Which fiscal cliff plan raises taxes on the rich more, President Obama's or Bowles-Simpson?
The answer is ... both. Obama's plan increases taxes more on the top 1 percent, but Bowles-Simpson increases taxes more on the top 0.1 percent. The chart below breaks down the top-end tax increases in the Obama
and Bowles-Simpson plans over the next ten years. There's $1.36 trillion
in new revenue for Obama and $1.253 trillion for Bowles-Simpson from
the top 1 percent, versus $753.6 billion in new revenue for Obama and
$834.6 billion for Bowles-Simpson from the top 0.1 percent. That's the
difference between class warfare and super-class warfare.*
Here's a quick refresher on what the Obama and Bowles-Simpson plans would do for high earners. The president's plan would bring back the Clinton-era level rates of 36 and 39.6 percent for the top two brackets -- kicking in at incomes of $250,000 and $398,350, respectively -- and limit the value of their tax deductions to 28 percent. (Remember, deductions are currently worth more to higher earners because of their higher tax brackets). Then it would raise the capital gains tax from 15 to 20 percent -- which is really a 23.8 percent rate when you include the Obamacare surtax -- and tax dividends as ordinary income. Add it all up, and it's roughly $1.6 trillion in new revenue over the next decade, all from the top 2 percent of households.
Bowles-Simpson raises far more in overall taxes, but it raises about as much from the wealthy. Nearly half of the $2.6 trillion it would bring in over a decade would come from the top 1 percent, and it does that while cutting the top marginal rate to 28 percent. It's not magic. It's fundamental tax reform. (This is the part where you mutter something about lowering rates and broadening the base). Bowles-Simpson would pare or eliminate nearly every tax expenditure. They would turn the mortgage interest and charitable deductions into 12 percent credits so they wouldn't be worth more to richer households, phase out the employer healthcare exemption entirely by 2038, end the tax-free status of municipal bonds, limit tax-preferred retirement contributions and, oh, get rid of everything else. That's a lot of base-broadening, but the big change, at least when it comes to progressivity, is their plan to tax capital gains and dividends as ordinary income -- in other words, at 28 percent. That's quite a tax hike for the top 0.1 percent, who earned half of all capital gains in 2011. But there's a caveat. This assumes that Bowles-Simpson actually could end the exclusion of capital gains at death, which would do a lot for progressivity and revenues, but is towards the "not" end of the politically possible spectrum. This is how you get a plan that's more HENRY (high-earner-not-rich-yet) friendly, and less plutocrat friendly.
Now, there are plenty of reasons for CEOs to like Bowles-Simpson despite its higher taxes. It cuts entitlements how they like to cut entitlements. In other words, it raises the retirement age and uses less generous measures of inflation when it calculates benefits -- never mind that Social Security isn't a driver of long-term deficits. It also raises taxes significantly on the middle class, which the rich might like because it doesn't make them feel like they're being singled out.
But it shows how little anybody knows what's actually in Bowles-Simpson that Obama's plan to tax the rich is seen as soaking them and Bowles-Simpson is not, despite raising almost as much money from the top 1 percent -- and doing it more progressively! What's the matter with the Upper East Side? Maybe Fix the Debt needs to fix its false consciousness? Or at least realize that Obama doesn't want to punish success any more than a pair of swashbuckling centrists do.
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.
I spent a year in Tromsø, Norway, where the “Polar Night” lasts all winter—and where rates of seasonal depression are remarkably low. Here’s what I learned about happiness and the wintertime blues.
Located over 200 miles north of the Arctic Circle, Tromsø, Norway, is home to extreme light variation between seasons. During the Polar Night, which lasts from November to January, the sun doesn’t rise at all. Then the days get progressively longer until the Midnight Sun period, from May to July, when it never sets. After the midnight sun, the days get shorter and shorter again until the Polar Night, and the yearly cycle repeats.
So, perhaps understandably, many people had a hard time relating when I told them I was moving there.
“I could never live there,” was the most common response I heard. “That winter would make me so depressed,” many added, or “I just get so tired when it’s dark out.”
But the Polar Night was what drew me to Tromsø in the first place.
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.
The social network learns more about its users than they might realize.
Facebook, you may have noticed, turned into a rainbow-drenched spectacle following the Supreme Court’s decision Friday that same-sex marriage is a Constitutional right.
By overlaying their profile photos with a rainbow filter, Facebook users began celebrating in a way we haven't seen since March 2013, when 3 million peoplechanged their profile images to a red equals sign—the logo of the Human Rights Campaign—as a way to support marriage equality. This time, Facebook provided a simple way to turn profile photos rainbow-colored. More than 1 million people changed their profile in the first few hours, according to the Facebook spokesperson William Nevius, and the number continues to grow.
“This is probably a Facebook experiment!” joked the MIT network scientist Cesar Hidalgo on Facebook yesterday. “This is one Facebook study I want to be included in!” wrote Stacy Blasiola, a communications Ph.D. candidate at the University of Illinois, when she changed her profile.
A day after default, there's no deal in sight—and Greece’s defiant prime minister says Sunday's referendum will still happen.
July 1, 2015 11:01 a.m.
The referendum will go on, says Greece’s Prime Minister Alexis Tsipras. Yesterday, there was doubt about whether Sunday’s referendum—where Greeks would decide whether to accept its creditors conditions—would still happen. If Greece had managed to secure a third bailout, or an extension from the IMF, there would theoretically be no need for the referendum.
Neither of those two things happened, and Tsipras addressed the nation on Greek television an hour ago to confirm that the referendum will take place. He’s also not backing down from his original position, strongly urging Greeks to vote “no.” Tsipras has since tweeted 18 updates on his position, including this: “You're being blackmailed & urged to vote Yes to all of institutions' measures without any solution to exiting the crisis.”
People labeled “smart” at a young age don’t deal well with being wrong. Life grows stagnant.
At whatever agesmart people develop the idea that they are smart, they also tend to develop vulnerability around relinquishing that label. So the difference between telling a kid “You did a great job” and “You are smart” isn’t subtle. That is, at least, according to one growing movement in education and parenting that advocates for retirement of “the S word.”
The idea is that when we praise kids for being smart, those kids think: Oh good, I'm smart. And then later, when those kids mess up, which they will, they think: Oh no, I'm not smart after all. People will think I’m not smart after all. And that’s the worst. That’s a risk to avoid, they learn.“Smart” kids stand to become especially averse to making mistakes, which are critical to learning and succeeding.
In 1908, photographer Lewis Hine traveled across the U.S. to document child laborers and their workplaces. His portraits were used by reformers to drive legislation that would protect young workers or prohibit their employment.
At the start of the 20th century, labor in America was in short supply, and laws concerning the employment of children were rarely enforced or nonexistent. While Americans at the time supported the role of children working on family farms, there was little awareness of the other forms of labor being undertaken by young hands. In 1908, photographer Lewis Hine was employed by the newly-founded National Child Labor Committee (NCLC) to document child laborers and their workplaces nationwide. His well-made portraits of young miners, mill workers, cotton pickers, cigar rollers, newsboys, pin boys, oyster shuckers, and factory workers put faces on the issue, and were used by reformers to raise awareness and drive legislation that would protect young workers or prohibit their employment. After several stalled attempts in congress, the NCLC-backed Fair Labor Standards Act passed in 1938 with child labor provisions that remain the law of the land today, barring the employment of anyone under the age of 16.
The untold story of the improbable campaign that finally tipped the U.S. Supreme Court.
On May 18, 1970, Jack Baker and Michael McConnell walked into a courthouse in Minneapolis, paid $10, and applied for a marriage license. The county clerk, Gerald Nelson, refused to give it to them. Obviously, he told them, marriage was for people of the opposite sex; it was silly to think otherwise.
Baker, a law student, didn’t agree. He and McConnell, a librarian, had met at a Halloween party in Oklahoma in 1966, shortly after Baker was pushed out of the Air Force for his sexuality. From the beginning, the men were committed to one another. In 1967, Baker proposed that they move in together. McConnell replied that he wanted to get married—really, legally married. The idea struck even Baker as odd at first, but he promised to find a way and decided to go to law school to figure it out.
The question is at the center of the Greek crisis.
In 1961, the economist Robert Mundell published a paper laying out, per the title, “A Theory of Optimum Currency Areas.” In it, he inquired about the appropriate geographic extent of a shared unit of money. Was it the world? A country? Part of a country? A border-spanning region of, say, the western parts of the United States and Canada, with a separate currency circulating in the eastern parts of the two countries?
“It might seem at first that the question is purely academic,” he wrote, “since it hardly seems within the realm of political feasibility that national currencies would ever be abandoned in favor of any other arrangement.” But it was worth considering anyway, in part because “certain parts of the world are undergoing processes of economic integration and disintegration,” and an idea of what an “optimum currency area” would look like could help “clarify the meaning of these experiments.”
Mike Huckabee and Ted Cruz are suggesting there might be ways for states and cities to nullify the justices’ ruling. They’re wrong.
The Supreme Court’s decision last week did make gay marriage legal around the nation. Unfortunately for social conservatives, it did not, however, make nullification legal around the nation.
Nullification is the historical idea that states can ignore federal laws, or pass laws that supersede them. This concept has a long but not especially honorable pedigree in U.S. history. Its origins date back to antebellum America, where Southern states tried to nullify tariffs and Northern states tried to nullify fugitive-slave laws. In the 1950s, after Brown v. Board of Education, some Southern states tried to pass laws to avoid integrating schools. It didn’t work, because nullification is not constitutional.