Until or unless Congress actually does something, 2013 will be the year of tax increases. Big tax increases.
The fiscal cliff is a bit of a misnomer, but when it comes to taxes, the metaphor is apt. If all of the tax cuts, credits, and deductions set to expire at year end do in fact expire, incomes will fall off a tax cliff. Median earners will have 4 percent less in take-home pay in 2013 than they otherwise would; households making a million dollars or more would have 11.4 percent less.
You can see what a fully armed and operational tax cliff would mean for different earners in the chart below from the nonpartisan Tax Policy Center.
But not all tax cuts, credits, and deductions are created equal. Some hit much harder than others, and some hit different earners much harder than other earners. The chart below, again from the indispensable Tax Policy Center, breaks down which tax provisions are worth what to different earners. It's pretty crazy that nobody in Washington is fighting to keep the payroll tax cut.
There's a lot going on here, but there are three big takeaways.
1) The middle-class Bush tax cuts, the payroll tax cut, and the stimulus tax credits are the most important tax issues for most households. These three policies are among the two-costliest for everybody making $200,000 or less -- and almost $500,000 or less. The middle-class Bush tax cuts are worth more to the HENRY (high-earner-not-rich-yet) crowd than anything else, since those cuts apply to the bottom $250,000 of income. The Alternative Minimum Tax (AMT) patch is worth a bit more, but not much more, than the payroll tax to those earners.
2) Higher top-end rates, higher capital gains taxes, and limited deductions only hit the rich -- and mostly the very, very rich. Here's a startling fact: The top 0.1 percent of households earn half of all capital gains. That's why higher taxes on savings only make a big difference at the very top of the income ladder, even if the Obamacare surtax on capital gains didn't kick in only for households making $250.000 or more. But it's not just capital gains taxes that mostly matter to the über-wealthy. The same is true of the high-end Bush tax cuts. Remember, these are marginal rates -- they only apply to income above their thresholds. So the more income you have above these thresholds, the more these cuts are worth to you. That's exactly what we see in the chart above, with the high-end Bush tax cuts and uncapped deductions worth twice as much to households making more than a million dollars than to households making between $200,000 and $500,000.
3) The AMT is a big, big deal. The Alternative Minimum Tax is just that -- a minimum tax to prevent rich households from paying little to nothing in taxes. The problem is its threshold wasn't indexed to inflation when it was created back in 1969, so more and more households are subject to it -- unless Congress patches it over. That's become a regular right of passage for Congress, and if it doesn't do so again, then 28 million more households will pay it in 2013, according to Eric Toder of the Tax Policy Center. AMT collection would more than triple from $34 billion this year to $120 billion the next, with those 28 million new AMT payers accounting for $64 billion of the new $86 billion of revenue.
The good news, if there is any, is President Obama and House Republicans agree on extending the middle-class Bush tax cuts, the stimulus tax credits, and patching the AMT. The bad news is neither side wants to extend the payroll tax cut, or replace it with something similar. In other words, even in a best-case scenario, 2013 will be a year of tax increases for all, just not as big as they would otherwise be.
That's probably about the most we can ask for from this Congress.
Most recently, the PBS show Frontline titled an episode “Trump’s Takeover.” In its telling, President Trump wasn’t yet in control of the GOP as recently as his failed effort to get a bill to repeal and replace Obamacare through Congress. Then, he succeeded in signing a tax-reform bill into law. In the celebration that followed, he was praised by Paul Ryan, Mitch McConnell, and Orrin Hatch, even as critics like Senator Jeff Flake were preparing to step away from politics.
A crop of books by disillusioned physicians reveals a corrosive doctor-patient relationship at the heart of our health-care crisis.
For someone in her 30s, I’ve spent a lot of time in doctors’ offices and hospitals, shivering on exam tables in my open-to-the-front gown, recording my medical history on multiple forms, having enough blood drawn in little glass tubes to satisfy a thirsty vampire. In my early 20s, I contracted a disease that doctors were unable to identify for years—in fact, for about a decade they thought nothing was wrong with me—but that nonetheless led to multiple complications, requiring a succession of surgeries, emergency-room visits, and ultimately (when tests finally showed something was wrong) trips to specialists for MRIs and lots more testing. During the time I was ill and undiagnosed, I was also in and out of the hospital with my mother, who was being treated for metastatic cancer and was admitted twice in her final weeks.
To get a job at the Museum of Ice Cream, hopeful future employees show up at the weekly casting call, Tuesdays at noon. They head to the former Savings Union Bank in San Francisco’s financial district, where pink banners announce, in minimalist font, the name of the employer-to-be. Inside, there are giant animal cookies on carousel mounts. Gardens of gummies. A minty scent wafting through a jungle of mint leaves. Each day, roughly 1,700 people pay $38 a ticket to march through the maze of rooms, licking pink vanilla soft-serve cones, following instructions from a cotton candy server to text someone in their life whom they consider the “cherry on top,” and, all the while, angling for photos. It is as if Willy Wonka had redesigned his factory for the selfie age.
Is the social-media gig economy a form of entrepreneurship, fraud—or something else entirely?
“Hi! I noticed you posted about your cold today. It sucks to be sick. I thought maybe you’d like to try some greens! I love them; I swear, you’ll never get sick again!”
I did not want the greens.
This was the third time my friend from college had tried to sell them to me online. She also did things like post statuses about “That Crazy Wrap Thing” that her friends were supposed to pretend were not advertisements. My aunt who homeschools her seven children sells organic cleaning supplies. A poet I know says she sells online for the community it gives her. A young college administrator likes it for the freebies and the friendships. A stay-at-home mom said she was using a lot of makeup anyway, so Younique only made sense.
The intense media focus on President Trump’s personal dramas hurts the party’s ability to sell its message to the voters it needs most.
It was telling that as Tax Day arrived this week, the media’s focus was riveted not on the massive tax overhaul that President Trump recently signed into law, but on James Comey, Stormy Daniels, and Michael Cohen.
In their own ways, these three players in the Trump drama symbolize the ethical storms and moral challenges constantly buffeting the president. Those tempests have imposed an unmistakable political cost on Trump—whose approval rating remains far below what might be expected in an economy this strong—and they represent an inescapable threat to Republicans in the November midterm elections.
What’s ironic is that these storms pose a challenge for Democrats, too: The intense media attention on Trump’s personal deficiencies might not actually move many more voters than they already have, and the economic message pushed by Democrats—one that’s rooted, in part, in the tax bill—is having a hard time breaking through.
The state attorney general asked the legislature to change state law so that the president or his associates could be tried in New York even if pardoned under federal law.
New York state has long functioned as the ace up the sleeve of President Trump’s critics.
The reasoning goes like this: Trump could attempt to pardon people implicated in the Russia probe, whether Michael Cohen, Paul Manafort, or someone else, thus preventing a trial or perhaps insulating himself from legal ramifications. The vast discretion affording the chief executive in the pardon power would allow the president to short-circuit accountability. However, the pardon power only applies to federal laws, so another jurisdiction could haul figures like Cohen and Manafort, or even potentially Trump himself, into state court. Practically speaking, that would probably happen in New York, the president’s home. The state has more robust financial-crime laws than most, because of the presence of the banking industry, and in Attorney General Eric Schneiderman it has a prosecutor who clearly relishes going after Trump.
The root of the problem could be social or linguistic.
The quirks in Ramsey Brewer’s conversation are subtle. The 17-year-old repeats himself from time to time and makes small mistakes in the words he uses. For instance, he says he and his best friend look scaringly, not scarily, similar. He also pauses at odd spots, and for a beat or two longer than most people do. When he’s talking, he makes eye contact briefly but then slides his eyes sideways—or closes them. And his comments swerve in unexpected directions: Asked where he goes to school, he says Boston Latin Academy, but then suddenly adds, “I’m not actually from this state,” even though he and his family have lived in Massachusetts for years.
Ramsey knows he regularly misreads other people, but he leaves it to his mother, Kathryn Brewer, to explain how. Once, she says, when she had just climbed some stairs and was short of breath, he thought she had been about to cry. During a visit to the dentist, when Ramsey put on the safety sunglasses, the dental hygienist joked with him: “Hey, you can really pull those off.” Taking her comment literally, he pulled the glasses off his face.
A new study warns it has become a “highly altered, degraded system.”
Once upon a time, there was a city so dazzling and kaleidoscopic, so braided and water-rimmed, that it was often compared to a single living body. It clustered around a glimmering emerald spine, which astronauts could glimpse from orbit. It hid warm nooks and crannies, each a nursery for new life. It opened into radiant, iris-colored avenues, which tourists crossed oceans to see. The city was, the experts declared, the planet’s largest living structure.
Then, all at once, a kind of invisible wildfire overran the city. It consumed its avenues and neighborhoods, swallowed its canyons and branches. It expelled an uncountable number of dwellers from their homes. It was merciless: Even those who escaped the initial ravishment perished in the famine that followed.
The former first lady was notably eager to learn about people she didn’t understand—and recognize she might have been wrong about them.
Some famous people are much less interesting in person than you would expect. Some are more interesting. And a few—a very few—rock your world. For me, Barbara Bush, who left us on Tuesday, occupies that last category, almost by herself.
Many of the tributes to the former first lady portray her as a throwback to an earlier era of American politics, the silver-haired doyenne of a political dynasty. But I came to value her for an additional reason. Her country changed dramatically during her long, full life. But even as some in her Republican Party recoiled from those shifts, Barbara Bush never ceased questioning, learning, and adapting—changing along with the nation that she and her family served.
Meg Wolitzer’s novel is a timely, dynamic examination of women and power that male readers and gatekeepers should take seriously.
Last November, I went to a swanky party to celebrate the release of advance copies of The Female Persuasion, Meg Wolitzer’s 11th novel. Bartenders created bespoke cocktails named after sections of the book; the evening’s highlight was a public conversation between Wolitzer and New York magazine’s Rebecca Traister. The mood was festive verging on jubilant. The Harvey Weinstein scandal had broken a few weeks earlier, and an anonymously sourced spreadsheet alleging misconduct by various men in media had already resulted in the resignation or firing of a handful of prominent figures. All anyone wanted to talk about was smashing the patriarchy—a conversation that flowed freely, owing to the circumstances, the cocktails, and the fact that nearly all the guests were women. In a room of 100 or so people, I counted only a handful of male faces.