Tag Archives: taxes

The Minimum Wage Took a Beating Last Night

by DanelleTier Posted on November 11, 2015

Mother Jones

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Nobody was in favor of raising the minimum wage last night:

Trump: Taxes too high, wages too high, we’re not going to be able to compete against the world….People have to go out, they have to work really hard and have to get into that upper stratum.

Carson: My first job working in a laboratory as a lab assistant, and multiple other jobs. But I would not have gotten those jobs if someone had to pay me a large amount of money….I would not raise it. I would not raise it, specifically because I’m interested in making sure that people are able to enter the job market and take advantage of opportunities.

Rubio: If I thought that raising the minimum wage was the best way to help people increase their pay, I would be all for it, but it isn’t. In the 20th century, it’s a disaster. If you raise the minimum wage, you’re going to make people more expensive than a machine.

So we have a billionaire who says people just have to suck it up and work harder; a neurosurgeon who doesn’t realize he got paid minimum wage for his jobs as a kid; and a senator who thinks it’s still the 20th century. But one thing is for sure: they’re in favor of cutting taxes on the rich and keeping wages low for the poor. Sweet.

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The Minimum Wage Took a Beating Last Night

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Paying extra to get that new iPhone faster? It’s a bad deal

by mkrgmyrao Posted on October 22, 2015

Paying extra to get that new iPhone faster? It’s a bad deal

By on 22 Oct 2015commentsShare

The problem with tech companies — you know, besides all of these ones — is that when it comes to fighting climate change, they’re about as committed to the cause as your friend was that one time she went vegetarian for a guy.

Sure, the big tech giants like Google, Microsoft, and Apple can throw money at the problem. Or they can build little eco-utopias for themselves, where their workers can forget about all the poverty, pollution, and tragic dearth of free snacks that plague the real world. But considering that these companies have tremendous power over society through the devices and services that they sell us, none of that really matters. Until they make sustainability as important to their core operations as sleek aesthetics and performance, they’ll continue to be part of the problem.

Exhibit A: The smartphone industry’s new “equipment installment plans.” These plans allow consumers to lease smartphones with monthly payments, rather than buy them outright. They also allow consumers to upgrade to a new phone every year, rather than suffer through the two whole years that it usually takes to get an upgrade through standard plans.

The New York Times did a price comparison on the two options for various phone companies and found that it’s actually cheaper to just buy the phones outright. For a 64GB iPhone 6S you might pay Apple, AT&T, or Verizon a total of $438.96, $450, and $425.07 a year, respectively. By contrast, if you just buy a $750 iPhone and use it for two years, that’s $375 per year. Plus, the Times points out, you could then just sell that old phone for around $175.

Basically, the main incentive to lease a smartphone is to get an early upgrade, which, the Times concludes, might be a good enough reason for someone who can afford it.

But woefully absent from this discussion over whether or not it’s better to buy or lease a phone is any mention of sustainability — save for one lone voice of reason at the end of the article:

“Why do we constantly need new things?” said Kyle Wiens, the chief executive of iFixit, a company that sells parts for people to repair products. “Why can’t we be happy with what we have?”

In an ideal world, where we all live in eco-utopias, I understand how to do my taxes, and sustainability is an integral part of tech culture, these companies — and the media outlets that cover them — would have to answer questions like: How many new phones would factories have to churn out every year if everyone opts for these frequent upgrades? How much would that increase resource extraction? What eventually happens to all of these leased phones? Is e-waste going to be a problem? Because if we’ve learned anything in recent decades, it’s that we’re in for a rough ride, unless we fundamentally change how we think and live on this planet — and that means throwing away our throwaway culture.

But alas, sustainability isn’t an integral part of tech culture at the moment, just like your friend’s foray into the veg life wasn’t part of some new moral code. In the end, they’re all just in it to impress someone.

Source:

Lease a Smartphone or Buy It? The Pros and Cons

, The New York Times.

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Paying extra to get that new iPhone faster? It’s a bad deal

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The GOP Is the Party of No Escape

by RozellaMccune Posted on October 19, 2015

Mother Jones

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In the print magazine this month (yes! print!) I have a piece arguing that this year’s odd lack of enthusiasm among Republicans for repealing Obamacare—something that many folks have noted—is just a bellwether for wider GOP problems:

Obamacare’s foes running out of steam is just the most obvious sign of a larger trend: A lot of traditional conservative issues are losing their momentum. Gay marriage lost its fear factor years ago….The economy is probably in good enough shape to not be a big campaign issue. Taxes have already been lowered so much that the average family pays only about 5 percent of its earnings to the IRS.

….True, Republicans still have a short list of hot-button topics that inflame their base, but increasingly these are wedge issues that promise nearly as much downside as upside. Immigration is the most visible example….Republican voters aren’t sold on the idea of Iraq War 2.0….Even abortion runs the risk of becoming a wedge issue for the party as activists demand that candidates take extreme positions such as opposing exceptions for rape, incest, or the life and health of the mother—even though these are popular among most Republican voters.

The big Republican problem right now is not that they’re out of ideas. The problem is that just as Democrats were torn apart by their ideas 30 years ago, Republicans are being torn apart by theirs today. All the once-reliable Republican applause lines are fast becoming wedge issues that divide the party regulars from the tea party base. And this is all coming at the same time that Republicans are fighting the headwind of a long-term demographic shift that weakens them further with every election cycle. “In an era when the inmates are running the asylum, it’s not just Obamacare bashing that’s become a double-edged sword for Republicans. It’s nearly everything they’ve relied on for the past three decades.”

Read the whole thing! I’m excited about it. Not because it’s the most astute piece of political analysis ever, but because it’s my first print piece in over a year. That’s right: As of a couple of months ago, I had recovered enough from chemotherapy that I once again had the energy to start writing longer print pieces in addition to blogging. And I just finished another, better one for the next issue. Read it too! (When it comes out.)

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The GOP Is the Party of No Escape

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Jeb Bush’s Tax Plan Is Written in Pixels, Not Stone Tablets

by LuellaHayman Posted on September 28, 2015

Mother Jones

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There’s nothing Republicans like more than talking about taxes. So Chris Wallace asked Jeb Bush about his tax plan this weekend. In particular, he wanted to know why the rich were getting such a big break under Bush’s plan. Jeb replied that this was simply a law of nature:

The simple fact is 1 percent of people pay 40 percent of all the taxes. And so, of course, tax cuts for everybody is going to generate more for people that are paying a lot more. I mean that’s just the way it is.

You will be unsurprised to learn that this isn’t true. Bush’s plan includes new tax brackets for everyone, and the rich pay a lot less under his plan because he chose to cut taxes in their bracket a lot. He didn’t have to do that. He could have left their tax rates where they are or lowered them only a little. Instead he chose to lower them a lot. However, as my comprehensive graphic below shows, this was handed down in pixels, not stone tablets. So Bush can change this anytime he wants.

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Jeb Bush’s Tax Plan Is Written in Pixels, Not Stone Tablets

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How Californians Screwed Drought-Plagued California

by OliverSheets Posted on April 22, 2015

Mother Jones

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Solving California’s water crisis got a lot harder on Monday when a state appeals court struck down steeply tiered water rates in the city of San Juan Capistrano. Like many other California cities, this affluent Orange County town encourages conservation by charging customers who use small amounts of water a lower rate per gallon than customers who use larger amounts. The court ruled that the practice conflicts with Proposition 218, a ballot measure that, among other things, bars governments from charging more for a service than it costs to provide it.

The drought isn’t the only way Prop. 218 is hamstringing California cities. Early last year, San Francisco’s Municipal Transportation Agency announced a controversial pilot program that would allow Google buses and other tech shuttles to use public bus stops for $1 a stop. Activists, who saw the shuttles as symbols of inequality and out-of-control gentrification, wanted the agency to charge Google much more than that and use the profits to subsidize the city’s chronically underfunded public transit system. But MTA officials argued that their hands were tied: Prop. 218 prevented them from charging more than the estimated $1.5 million cost of administering the program.

Prop. 218, the “Right to Vote on Taxes Act,” was a constitutional amendment drafted in 1996 by the Howard Jarvis Taxpayers Association, the group that led the tax revolt that swept California in the 1970s and eventually helped elect President Ronald Reagan. After 1978, when the group’s signature initiative, Prop. 13, began severely limiting property tax increases, cities and counties moved to plug their budgetary holes with other types of taxes and fees. Prop 218 was designed to constrain those workarounds by requiring that any new tax be approved by voters or affected property owners. For the purposes of the act, taxes included any fees from which a government derived a profit.

Prop. 218 has been widely criticized for making it harder for cities to raise revenues, but the recent cases with water rates and tech shuttles point to another issue: the way the initiative prevents state and local governments from addressing urgent social and environmental problems. It’s worth remembering that withdrawing water from California’s dwindling reservoirs to feed verdant lawns is in itself a tax of sorts, and Mother Nature may not wait until the next election to revoke our ability to levy it.

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How Californians Screwed Drought-Plagued California

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Why Do Progressive States Have Regressive Tax Codes?

by LettiePulido Posted on April 13, 2015

Mother Jones

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A lot of people think the federal tax code should be more progressive, but it looks downright socialist compared to the typical state tax code. A chart released last week by Citizens for Tax Justice puts it in context, showing how the wealthy typically pay lower state tax rates:

Citizens for Tax Justice

This problem isn’t limited to conservative states: According to a recent report by the Institute on Taxation and Economic Policy (ITEP), every state places a higher effective tax rate on the poor than it does on the rich. In fact, several of the nation’s most politically progressive states count among the worst when it comes to shoveling the tax burden onto low-income people and the middle class.

The nation’s most regressive tax code belongs to Washington, a state that was ranked by The Hill last year as the bluest in the country based on its voting patterns and Democratic dominance. The poorest 20 percent of Washingtonians pay an effective state tax rate of 16.8 percent, while the wealthiest 1 percent effectively pay just 2.4 percent of their income in taxes.

There’s a clear explanation for that: Washington has no income tax and thus heavily relies on a sales tax that disproportionately affects the poor. What’s harder to grasp is why Washington’s liberals put up with it.

Structural conditions help explain why regressive taxes endure in Washington and many other states. Some states require supermajorities to raise taxes or have constitutions that mandate a flat tax. In Washington’s case, voters approved a personal income tax in 1932 by a two to one margin but were overruled the following year by the state Supreme Court, which decided that a constitutionally mandated 1 percent cap on property taxes also applied to income. An income tax bill passed by the state legislature a few years later was likewise struck down.

But the courts, weirdly, are no longer the biggest obstacle to a fairer tax code in Washington; over the years, they’ve gradually overturned most of the legal precedents that had been used to invalidate an income tax, and most experts believe such a tax would become law today if passed. The bigger problem is voters. In 2010, Washingtonians rejected by a whopping 30-point margin a proposal to establish an income tax that would only have applied to people earning more than $200,000 a year.

How do you square this with California, where, just two years later, a similar tax hike on the wealthy easily sailed through? Or with Oregon, Washington’s political cousin, which has long had a progressive income tax?

I asked John Burbank, the executive director of the Seattle-based Economic Opportunity Institute and an architect of Washington’s failed 2010 income tax measure, why he thought the measure had failed to pass. At first, he cited the off-year election and opposition scare tactics. But when pressed, he offered a third explanation that I think makes more sense: “There is almost like a cultural prohibition that exists.”

In other words people, liberal or conservative, who live in states with low or no income taxes get used to paying little. They may differ on protecting the environment, legalizing weed, or raising the minimum wage, but when you start to mess with the system on which they’ve built their personal finances, they get scared and balk. This is why changing the tax code is so hard, even in states where people may in their hearts believe it’s the right thing to do.

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Why Do Progressive States Have Regressive Tax Codes?

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Republicans Are Cutting Taxes on the Rich and Raising Them on the Poor

by ArethaWortman Posted on February 13, 2015

Mother Jones

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Shaila Dewan surveys the tax policies of actual Republicans who are governing actual states:

A number of Republican-led states are considering tax changes that, in many cases, would have the effect of cutting taxes on the rich and raising them on the poor.

Conservatives are known for hating taxes but particularly hate income taxes, which they say have a greater dampening effect on growth. Of the 10 or so Republican governors who have proposed tax increases, virtually all have called for increases in consumption taxes, which hit the poor and middle class harder than the rich.

Favorite targets for the new taxes include gasoline, e-cigarettes, and goods and services in general (Governor Paul LePage of Maine would like to start taxing movie tickets and haircuts). At the same time, some of those governors — most notably Mr. LePage, Nikki Haley of South Carolina and John Kasich of Ohio — have proposed significant cuts to their state income tax. In an effort to relieve some of the added pressure, Mr. LePage’s plan includes a tax break for the lowest-income families.

This gets back to what I was talking about a couple of days ago. Contrary to what Republican reformicons are proposing, Republicans on the ground continue to focus most of their attention on cutting taxes on the rich. Or, in a pinch, if they have to raise revenue, they’re raising it from the poor and middle class. This is despite the well-known fact that virtually all of the income gains in recent years have gone to the well-off.

There are ways to make consumption taxes progressive. It’s not impossible. The problem is that Republicans simply don’t want to. Their goal is, and always has been, to reduce taxes on the wealthy. Any other tax agenda just isn’t on the table.

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Republicans Are Cutting Taxes on the Rich and Raising Them on the Poor

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House Republicans Pass Bill to Lower Taxes on the Rich and Raise Taxes on the Poor

by Adam Stossel Posted on July 28, 2014

Mother Jones

So what are Republicans in the House of Representatives up to these days? According to Danny Vinik, they just passed a bill that would reduce taxes on the rich and raise them on the poor.

I know, I know: you’re shocked. But in a way, I think this whole episode is even worse than Vinik makes it sound.

Here’s the background: The child tax credit reduces your income tax by $1,000 for each child you have. It phases out for upper middle-income folks, but—and this is the key point—it phases out differently for singles and couples. The way the numbers sort out, it treats singles better than couples. This is the dreaded “marriage penalty,” which is bad because we want to encourage people to get married, not discourage them.

So what did House Republicans do? Naturally, they raised the phase-out threshold for married couples so that well-off couples would get a higher benefit. They didn’t have to do this, of course. They could have lowered the benefit for singles instead. Or they could have jiggled the numbers so that everyone got equal benefits but the overall result was revenue neutral.

But they didn’t. They chose the path that would increase the benefit—and thus lower taxes—for married couples making high incomes. The bill also indexes the credit to inflation, which helps only those with incomes high enough to claim the full credit. And it does nothing to make permanent a reduction in the earnings threshold that benefits poor working families. Here’s the net result:

If the House legislation became law, the Center for Budget and Policy Priorities estimated that a couple making $160,000 a year would receive a new tax cut of $2,200. On the other hand, the expiring provisions of the CTC would cause a single mother with two kids making $14,500 to lose her full CTC, worth $1,725.

So inflation indexing, which is verboten when the subject is the minimum wage, is A-OK when it comes to high-income taxpayers. And eliminating the marriage penalty is also a good idea—but again, only for high-income couples. Which is crazy. I don’t really have a firm opinion on whether the government should be in the business of encouraging marriage, but if it is, surely it should focus its attention on the people who need encouragement in the first place. And that is very decidedly not the upper middle class, which continues to get married at the same rate as ever.

So we have a deficit-busting tax cut. It’s a cut only for the upper middle class. It’s indexed for inflation, even though we’re not allowed to index things like the minimum wage. And the poor are still scheduled for a tax increase in 2017 because this bill does nothing to stop it. It’s a real quad-fecta. I wonder what Paul Ryan thinks of all this?

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House Republicans Pass Bill to Lower Taxes on the Rich and Raise Taxes on the Poor

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Who Deserves Credit for Reducing the Federal Deficit?

by FinlayBales Posted on May 12, 2014

Mother Jones

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Hey, looky here! Steve Benen highlights the chart on the right, which shows that President Obama is making steady progress reducing the massive federal deficit that was rung up in FY2009 by George Bush and the Republican Party. Nice work, Obama!

But wait. Does this seem a wee bit unfair? Fine. You’re right. Bush wasn’t responsible for the deficit. The Great Recession was responsible for the deficit. Nor is Obama (or Boehner or McConnell or anyone else) responsible for the reduction in the deficit. That happened because the economy started to recover. That’s it. That’s the whole story. Deficits always go up during recessions and they always go down after recessions end. Tax and spending policy makes a difference, but not much of one. Taxes and spending almost always go down during recessions, and they almost always go back up during recoveries.

However, with the deficit now around 3 percent of GDP, we’re back in fairly normal territory, which means that tax and spending policy does make a difference. (Until the next recession, anyway.) However, there’s an iron law that everyone should remember but nobody ever does. Here it is:

If we drive the deficit down to zero, then private savings have to equal our trade balance.

In other words, if we run a trade deficit, then we’ll have negative private savings. If we want positive private savings (and we do), then we either have to run a trade surplus or else we have to offset private savings with a big budget deficit. There is no way around this. It’s an accounting identity. So whenever you hear someone yakking away about the horrors of the federal deficit, ask them what they want in its place. There’s no hedging on this. You either want a trade surplus (no more living beyond our means!) or negative private savings (bad for growth). It’s one or the other, whether you like it or not.

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Who Deserves Credit for Reducing the Federal Deficit?

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Wage Subsidies Might Be a Good Idea, But Republicans Will Never Support It

by Kornelajjb Posted on December 3, 2013

Mother Jones

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James Pethokoukis, after citing some research suggesting that a higher minimum wage reduces employment among low-skill workers, wonders why progressives seem so obsessed with the idea:

These studies aren’t some secret. So why do so many smart people keep advocating for a higher minimum wage? The best answer I can come up with is that they think it is more politically likely than the better economic answer: wage subsidies

….Noah Smith explains: When a company offers you a wage, the government matching would have already done behind the scenes. Someone comes and offers to pay me $20 an hour, the government is paying $12 of that. I would be making $8 an hour, but I would feel like a person who making $20 an hour. Unlike the Earned Income Tax Credit where you get a check from the government based on how much income you earned, I think people would feel a lot better in term of the framing of it if the government matched their wages instead.

I’d make several points about this. First, as Pethokoukis says, no one thinks wage subsidies are politically feasible. If there’s even a single Republican politician who favors them, I’d like to hear about it. Conversely, even if the minimum wage is a second-best alternative, it’s well-known, popular, widely understood, doesn’t require higher taxes, and is part of the political status quo. It wouldn’t be easy to raise the minimum wage, but it’s not impossible either.

Second, Pethokoukis is cherry picking the minimum wage research. It’s true that some studies show a small disemployment effect from a higher minimum wage, but there are others that show no effect at all. A fair reading of all the research suggests that the employment impact of a modestly higher minimum wage would be either very small or zero.

Third, wage subsidies can be tricky to implement. Are they temporary or permanent? Targeted or universal? Are they in addition to the EITC or a replacement? How do you prevent employers from gaming the system and reducing wages because they know the wage subsidy will make up the difference? There may be answers to these questions, but they aren’t trivial.

Finally, wage subsidies haven’t been widely adopted elsewhere, which means there isn’t a lot of compelling research to show how well they’d work. There are good reasons to be optimistic about wage subsidies, but as far as I know, they’re still fairly untested.

In any case, I really think the first point is the critical one. Wage subsidies would supposedly distort the labor market less than a higher minimum wage, but that’s because it would remove the onus of higher wages from employers and place it on the federal government. That means higher taxes to pay for the subsidy, and that’s just flatly a no-go for the modern Republican Party. This in turn means it could be implemented only as a tax credit, and that inherently places some restrictions on its reach and effectiveness. So Democrats would be in the position of backing either a good policy that will never get Republican support because it requires a tax increase, or else a mediocre policy that would still probably be a very heavy lift.

Incentives matter in politics as much as they do in the market economy, and there’s no incentive for Democrats to expend political capital on a policy change that’s highly unlikely to ever get any Republican backing. If and when that changes, perhaps wage subsidies will become a live option. Until then, a higher minimum wage is the only game in town.

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Wage Subsidies Might Be a Good Idea, But Republicans Will Never Support It

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