Archive | Politics

Washington Post’s maps paint a fascinating – and unexpected – picture of the USA

The Washington Post’s “GovBeat” feature is doing some great work, including this story and link to 25 maps and charts of the United States (your first 10 stories a month at Washingtonpost.com are free; then the paywall rises up.)

One, “Finding America’s Uninsured,” (#23) shows that the national problem of people not having health insurance may be strangely localized, with 116 counties (out of more than 3,000 total) accounting for more than half of all the uninsured in the U.S. Another, “Cartogram of Total Disenfranchisement rates by State,” (#16) features a stunningly distended Florida, where more than one out of every five black adults are not allowed to vote because they were at some point convicted of a felony.

On the other hand, it’s worth giving your brain a bit of a break and focusing on the maps of “Where The Breweries Are,”(#5) and “Where the Closest Pizza Joints Are” (#25).

For privileged corporations, paying state taxes is increasingly becoming a thing of the past

States regularly offer tax incentives (or, depending on your point of view, corporate welfare) to major corporations in exchange for promises of expansion, corporate relocation, retention of old jobs, creation of new jobs, and anything else with the word ‘jobs’ in the sentence. If you think about it, it’s an almost mindless rush to the bottom: the more tax incentives that get offered, the lower overall corporate taxes paid to all states and the more states will have to look to other sources (that’s you, Mr. & Ms. Non-Corporation) to make up the difference.

Now at least one state politician is trying to reverse this trend, or at least slow it down. The New York Times reports that Missouri governor Jay Nixon has called for a halt to the tax incentive border war between that state and Kansas.

“That is bad for taxpayers,” Mr. Nixon said of the moving of jobs. “It’s bad for our state budget, and it’s not good for our economy.”

Meanwhile, the Washington State legislature has just passed what Seattle Times columnist Danny Westneat reports is the largest state tax subsidy in history—more than $8 billion-with-a-B in corporate tax breaks — almost entirely for Boeing-with-a-B — over 15 years.

Super-rich have super-low tax rates, in super times or bad ones

Let’s stop a moment to reflect on the tax lives of the 400 highest-earning Americans, and how they suffered in the Great Recession of 2008-2009.

Oh, wait a minute—they didn’t suffer. As James B. Stewart points out in The New York Times, the fortunate 400 still averaged $202 million apiece in adjusted gross income in 2009. Perhaps even more extraordinary, they paid an average federal income tax rate of less than 20%–less than people in the top 1% (adjusted gross income of at least $344,000) and quite possibly less than you.

How did they do it? Well, more than half of their income came from capital gains and qualifying dividends, which were taxed at the preferential rate of 15%, compared to wages and other income that could be taxed as high as 35%.

Is there any sound reason for taxing earnings from capital at half the rate or less than earnings from one’s labor? Not really. No less a financial heavyweight than Pimco mutual fund co-founder Bill Gross wrote in his November investment outlook that, “The era of taxing “capital” at lower rates than “labor” should now end.”

If that ever happens, we’ll be back to one of the features of The Tax Reform Act of 1986, under which capital gains and wages were taxed equally. That bill was promoted and signed by that well-known enemy of the wealthy . . . Ronald Reagan.

Food stamp cut passes House; why should “the takers” eat?

The House of Representatives in September passed, on an almost party-line vote, a bill slashing $40 billion from the Supplemental Nutritional Assistance Program, more commonly known as food stamps, Read about it in the New York Times. The vote may have marked a new high, or low, in mean-spirited political gamesmanship.

If this bill survives the Senate, it would eliminate between 4 million and 6 million people from the food stamp program. As Paul Krugman points out in his blog, the SNAP program has gotten bigger in recent years , and that is exactly what you would expect when the economy is weak and unemployment and underemployment are at high levels.

But would cutting the program have much of a budget impact or reduce American’s taxes taxes? Not likely. The program historically amounts to about one-quarter of one percent of our gross domestic product. Slashing benefits won’t have much effect at all on the overall federal budget.

But the reductions would surely directly affect real people, including millions of the working poor, confirms the New York Times. Former Republican Presidential nominee Bob Dole and former senator Tom Daschle summarized their view of prospects going forward, writing in The Los Angeles Times, “The latest proposal from the House is an about-face on our progress fighting hunger. If Congress lets this bill fall victim to the misguided and detrimental partisan politics we face today, the results for families and children challenged with hunger will be severe.”

And it’s not as if the money spent on food just vaporizes into the atmosphere. Payments go to farmers, grocery stores, cashiers, truck drivers and other workers who produce food and bring it to market.

About 48 million Americans rely on food stamps, and almost three-quarters of the participants are families with children. The idea that it makes sense to try and balance the federal budget on their backs is nothing short of appalling.

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The real IRS tax-exempt scandal is who they DIDN’T go after

The rolling sideshow of hearings and revelations about the IRS department responsible for reviewing organizations applying for 501(c)(4) tax-exempt status might not ever get around to dealing with a larger question: Why were some little organizations steamrolled with questions and scrutiny, while major national operations apparently got a pass?

As ProPublica pointed out in a long piece examining what it characterized as dysfunction at the IRS, a review by the Inspector General said that there was insufficient oversight of 200 lower-level employees responsible for examining more than 60,000 nonprofit applications annually.

“The main question raised…is how the Cincinnati office and superiors in Washington could have gotten it so wrong,” the story notes. “The audit shows no evidence that these workers even looked at records from the Federal Election Commission to vet much larger groups that spent hundreds of thousands and even millions in anonymous money to run election ads.”

The tax-exempts that didn’t come under scrutiny, as The New York Times points out, included mega-fundraisers from both sides of the political spectrum, such as Crossroads Grassroots Policy Strategy, Karl Rove’s organization, and the Democratic-oriented Priorities USA.

Organizations are supposed to operate “exclusively” for the promotion of social welfare in order to qualify as a 501(c)(4) tax-exempt group. At least, that’s what the tax code says. But the IRS has given a pass to groups that can show they are not “primarily engaged” in election-related activities.

Admit it: Regardless of where you stand politically, isn’t this one area where you’d like to see the IRS enforce the very letter of the tax code?