ThinkProgress Logo

Economy

Tax Rates For America’s Wealthiest Fell In 2010

With debate in Washington focused on the taxes paid by the wealthiest Americans, new data from the Internal Revenue Service shows that the effective tax rates for America’s top earners fell even lower in 2010.

The average effective tax rate fell for all income groups above $500,000, continuing a drop that has occurred for years. For incomes above $10 million, the average rate fell from 22.4 percent in 2009 to 20.7 percent in 2010. The reason for the continual drop is clear: the 2003 high-income Bush tax cuts lowered the rate on investment income, and wealthy Americans are deriving more income from investments than they ever have, the Wall Street Journal reports:

The reason for the drop in average tax rates is no secret: It’s the special 15% top rates for capital gains and dividends that President George W. Bush pushed through. In 2009, taxpayers with incomes exceeding $10 million reported 35.8% of their income as capital gains and dividends. That rose to 48.5% for 2010.

Low capital gains rates have helped the wealthy pay lower and lower tax rates even as their incomes have skyrocketed. And while capital gains income makes up almost half of the incomes of the wealthiest Americans, it accounts for 2.2 percent or less for earners under $200,000. Half of all capital gains income goes to just to the richest 0.1 percent of Americans.

The capital gains rate has been steadily eroded since President Ronald Reagan taxed such income equal to wages in the 1980s, and the result has been rising income inequality. A January 2012 study found that low capital gains rates were the biggest driver of American income inequality, which now rivals the levels seen in countries like Ivory Coast and Pakistan. In 2010, the capital gains preference helped the richest 1 percent capture 93 percent of all income gains.

Climate Progress

NY Times Warns On Climate Change: ‘Fear Death By Water’, Rising Seas Likely To Swallow Up City If We Don’t Act Soon

The NY Times (finally) goes apocalyptic on climate change. Here’s the cover image of their big Sunday Review piece, “Is This The End?

The sub-hed of the print story is “Whether in 50 or 100 or 200 years, there is a good chance New York City will sink beneath the sea.” The story begins:

WE’D seen it before: the Piazza San Marco in Venice submerged by the acqua alta; New Orleans underwater in the aftermath of Katrina; the wreckage-strewn beaches of Indonesia left behind by the tsunami of 2004. We just hadn’t seen it here. (Last summer’s Hurricane Irene did a lot of damage on the East Coast, but New York City was spared the worst.) “Fear death by water,” T. S. Eliot intoned in “The Waste Land.” We do now.

There had been warnings. In 2009, the New York City Panel on Climate Change issued a prophetic report. “In the coming decades, our coastal city will most likely face more rapidly rising sea levels and warmer temperatures, as well as potentially more droughts and floods, which will all have impacts on New York City’s critical infrastructure,” said William Solecki, a geographer at Hunter College and a member of the panel. But what good are warnings? Intelligence agents received advance word that terrorists were hoping to hijack commercial jets. Who listened? (Not George W. Bush.) If we can’t imagine our own deaths, as Freud insisted, how can we be expected to imagine the death of a city?

Yes, there is a strain of fatalism in this piece. The media often treat global warming like a progressive illness whose ever-worsening symptoms have been ignored too long — which, of course, they share culpability for (see “Silence of the Lambs 2: Media Herd’s Coverage of Climate Change Drops Sharply — Again“).

A companion piece, “Rising Seas, Vanishing Coastlines,” does a better job of spelling out the choices:

There are two basic ways to protect ourselves from sea level rise: reduce it by cutting pollution, or prepare for it by defense and retreat. To do the job, we must do both. We have lost our chance for complete prevention; and preparation alone, without slowing emissions, would — sooner or later — turn our coastal cities into so many Atlantises.

Precisely. And the Times includes an excellent interactive graphic of the nation’s major cities with 5 feet, 12 feet and 25 feet of warming, “What Could Disappear.”

Still, the fatalism in the main piece is over the top:

Read more

Climate Progress

Ground Source Heat Pumps: Good Enough For Queen Elizabeth So Why Not For The Northeast?

Home Heating Oilby Ryan Matley, via Rocky Mountain Institute

George W. Bush, the Queen of England, Sir Elton John, and Sir Richard Branson probably don’t have much in common, but they all have installed ground source heat pumps. And it’s not just a technology for the rich and famous. Habitat for Humanity installed heat pumps in its Oklahoma City development, Hope Crossing, because the low operating costs would help future residents save on their utility bills.

Sixteen percent of America’s 18.8 million barrel per day oil consumption is burned to heat our homes and businesses, and two-thirds of that demand is in the Northeast (New England, New York, New Jersey, and Pennsylvania). Swapping out oil consumption for electric ground source heat pumps offers a low cost, low pollution heating source that can generate $20 billion in savings and is a crucial step to achieving RMI’s Reinventing Fire vision in the Northeast.

The region spends over $14 billion every year on fuel oil—consisting of both distillate fuel oil, which is nearly identical to diesel fuel, and residual fuel oil, which is a heavy, viscous fuel also called “bunker fuel.” That means the six million residential and 450,000 commercial customers who use oil spend an annual average of $1,700 and $8,900, respectively, to heat their homes and businesses.

Along with the economic drag from using this high-priced fuel, 43,000 tons of nitrogen oxides, 69,000 tons of sulfur oxides, and 57 million tons of CO2 are added to our atmosphere every year, negatively impacting our health, air, water, and climate.

If residents and business owners in the Northeast switch entirely from oil to heat pumps they could save a total of $5.5 billion per year in heating costs, which is more than the healthcare expenditures of the entire state of Vermont. Over the lifetime of a heat pump system, each resident in the state could save $3,000 (present value), and each business could save $50,000 (present value). Emissions of NOx, SOx and CO2 would be reduced by 81 percent, 66 percent, and 81 percent, respectively. Those CO2 emissions reductions alone are equivalent to taking 8.2 million cars off the road.

How Does it Work?

Read more

Health

McCain: Republicans Should Stop Talking About Abortion

Former GOP presidential candidate Sen. John McCain (R-AZ) admitted that “the demographics are not on our side” in the aftermath of President Obama’s re-election and implored the GOP to pursue a “positive agenda” that includes “immigration reform.” He added, during an appearance on Fox News Sunday, that Republicans should stop pursuing the issue of abortion and restricting women’s health:

McCAIN: I think we have to have a bigger tent. No doubt about it, and, obviously we have to do immigration reform. There is no doubt whatsoever that the demographics are not on our side and we are going to have to give a much more positive agenda. [...] And as far as young women are concerned, absolutely. I don’t think anybody like me, I can state my position on abortion, but, to — other than that, leave the issue alone. When we are in the kind of economic situation and, frankly, national security situation we’re in.

CHRIS WALLACE (HOST): When you say leave the issue alone, you would allow, you say, freedom of choice?

McCAIN: I would allow people to have those opinions and respect those opinions and I’m proud of my pro-life position and record, but if someone disagrees with me, I respect your views.

Watch it:

Last week, former Mitt Romney adviser Dan Senor conceded that the GOP’s focus on women’s health hurt them in the election and criticized Republicans who pulled the party into “a really idiotic debate” about contraception.

Economy

Another GOP Senator Shows Willingness To Abandon Norquist Tax Pledge

Sen. Lindsey Graham (R-SC)

Less than a week after Georgia Sen. Saxby Chambliss (R) signaled a willingness to abandon the radical anti-tax pledge authored by Grover Norquist that has brought previous debt negotiations to a standstill, another prominent Republican has joined him.

Asked last week if Norquist would hold his support for new revenues against him, Chambliss said, “I don’t worry about that because I care too much about my country. I care a lot more about it than I do Grover Norquist.” South Carolina Sen. Lindsay Graham (R) seemed to echo that sentiment today, saying on ABC’s This Week that he could conceivably abandon the pledge as part of a deal to avoid going over the so-called “fiscal cliff,” the package of spending cuts and tax increases set to take effect at the end of the year:

GEORGE STEPHONOPOLOUS (HOST): In the end, Norquist said that you’re not going to go through with this promise to raise revenues, because, quote, you like being a senator, your response?

GRAHAM: I love being a senator and i want to be a senator that matters for the state of South Carolina and the country. When you’re $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece, and Republicans should put revenue on the table. We’re this far in debt. We don’t generate enough revenue. Capping deductions will help generate revenues. Raising tax rates will hurt job creation. I agree with Grover that we shouldn’t raise rates, but I think Grover is wrong when it comes to we can’t cap deductions. [...] I will violate the pledge, long story short for the good of the country, only if Democrats will do entitlement reforms.

Norquist is clinging to the support he does have, even as the pledge wreaked havoc on the GOP’s candidates in the November elections. Sixteen Republican incumbent Republicans and one incumbent senator who signed the pledge lost re-election, and a total of 56 House members or candidates and 24 senators or candidates lost. As a result, a growing number are abandoning the pledge.

Still, Graham’s insistence on entitlement reforms ignores that Democrats have already made significant changes to Medicare (as part of the Affordable Care Act) and have proposed reforms to Social Security, even though the program is not in need of an immediate fix. And his claims that raising tax rates will kill jobs is tenuous, if oft-used. Reports from the Congressional Research Service and the Congressional Budget Office, both non-partisan agencies, have shown that allowing the expiration of the high-income Bush tax cuts would have little impact on economic growth.

Security

McCain Backs Off Susan Rice Smear Campaign

Shortly after news broke about a fatal attack on the American consulate in Benghazi, Libya, GOP presidential candidate Mitt Romney accused President Obama of “sympathiz[ing] with those who waged the attacks.” And Romney continued to make Benghazi-related attacks a centerpiece of his campaign even after his efforts were debunked and widely condemned.

Mitt Romney lost. But that has not prevented Sen. John McCain (R-AZ) from picking up this torch. Shortly after Romney conceded his loss earlier this month, McCain set his sites on UN Ambassador Susan Rice, a likely nominee to succeed Secretary of State Hilary Clinton. Pointing to several television appearances where Rice communicated the intelligence community’s as-yet imperfect understanding of what happened during the Benghazi attacks, McCain promised that “I will do everything in my power to block her from becoming Secretary of State.”

On Fox News Sunday this morning, however, McCain sang a much more conciliatory tune, backing off his hardline opposition to Rice:

HOST: You say that you will do everything in your power to block Susan Rice’s nomination if the President decides to name her to be secretary of state . . . . Is there anything that Ambassador Rice can do to change your mind?

MCCAIN: Sure, she can give everyone the benefit of explaining their position and the actions that they took. And I’ll be glad to have the opportunity to discuss these issues with her. Why did she say that al Qaeda has been decimated in her statement here on this program? Al Qaeda hasn’t been decimated. They’re on the rise. They’re all over Iraq.

Watch it:

If McCain isn’t sure why Rice said that al Qaeda has been decimated, he may want to ask Osama bin Laden. When he fails at that, he can then ask the National Counterterrorism Center, which found that “a 16 percent drop in successful attacks by the al Qaeda network; a 65 percent drop in successful attacks by the al Qaeda network outside Africa; and a 35 percent drop in casualties caused by al Qaeda” in just the period from May 2011 until May 2012. Twenty-two senior-level al Qaeda operatives and leaders were captured or killed in the same one year window.

Regardless, hopefully today’s more conciliatory statement is a sign that McCain will back off his efforts to inject partisan politics into our nation’s security.

Climate Progress

Ohio’s Next Big Decision: A Clean Or Dirty Energy Future?

FirstEnergy Billboardby Mary Anne Hitt, via the Sierra Club

Now that the presidential election is over, the people of Ohio are facing another important choice — whether their state will embrace clean energy measures that will save money and lives, or continue wasting energy from polluting coal plants. To help get the message out far and wide, the Ohio Sierra Club is launching new billboards that are taking energy efficiency to the street. There’s a big question mark hanging over the state’s energy direction. Will the Public Utilities Commission of Ohio choose a future of unnecessary and expensive coal and gas generating plants that make people sick or, instead, a twenty-first century path that reduces energy waste and creates jobs?

To help steer Ohio toward clean energy, the billboards call out one particular utility that keeps trying to take the dirtiest path possible: FirstEnergy, which serves more than 2 million Ohioans.

We’ve placed three billboards in Akron and two in Columbus, with one near the offices of the Public Utilities Commission of Ohio. The Commission will decide next month whether FirstEnergy’s plan to meet the state’s energy efficiency goals is sufficient. The Sierra Club and our allies have shown them that it is nowhere near that.

FirstEnergy’s plan is just like its track record on renewable energy. Unlike Ohio’s other energy companies, FirstEnergy discourages its customers to save energy and lower their electric bills. For example, earlier this year, an audit of FirstEnergy found that they had paid nearly 15 times a reasonable price for renewable energy to its subsidiary company, FirstEnergy Solutions. The confidential audit report is being released for further review to get to the bottom of this. In the meantime, when FirstEnergy retired coal plants earlier this year and had the opportunity to support its workforce by transitioning to clean-energy projects, it did nothing. FirstEnergy’s record with efficiency programs is no different.Efficiency Graph 

And right now, FirstEnergy is trying to eliminate energy savings from efficiency programs by lobbying for a removal of the state’s energy efficiency savings targets. But this is not the first attempt by FirstEnergy:

Read more

Security

Barney Frank Calls Out Republican Senator: Stop Using ‘Weasel Words’

Rep. Barney Frank (D-MA) challenged the GOP’s implications that the Obama administration or the FBI sat on the Gen. David Petraeus sex scandal until after the election, describing such claims underhanded and unsubstantiated.

During an appearance on CNN’s State of the Union on Sunday with retiring lawmakers Sens. Jon Kyl (R-AZ), Kay Bailey Hutchison (R-TX) and Joe Lieberman (I-CT), Frank pushed back against Hutchison’s claims that “top level officials,” including the President, may have known about the scandal before Election Day. He pressed her to define her accusations and identify whose integrity she was impugning:

HUTCHISON: I’m very worried about this. I’m very worried. I want to know a whole lot more about what these first emails really were and did it really trigger an FBI investigation of the CIA director and a low level and it wasn’t raised to a higher level? I mean, if anybody is investigating the director of the CIA, the President of the United States should know immediately, and I feel like a, we don’t know enough, and, b, I have great concerns about a lot of this. [...]

FRANK: Are you suggesting there was some coverup, that the FBI are playing games? I think we ought to be explicit about this. I’m troubled by the implication of your statement and are you suggesting that something wasn’t legitimate here? Because that would trouble me.

HUTCHISON: I’m suggesting that I have great concerns about the legitimacy of…

FRANK: Excuse me, “great concerns” is kind of a weasel word….

HUTCHISON: …It appears the President didn’t know until two months later? ….

FRANK: It seems to me frankly you’re kind of hinting at something bad, and I don’t see what that could be.

HUTCHISON: I’m hinting at something out of control and not with the proper authority.

FRANK: Do you distrust the FBI? Is [FBI Director Robert] Mueller lying? Who are you accusing of not having done the right thing?

HUTCHISON: I’ve always had great respect for him and great respect for General Petraeus.

Watch it:

There is no evidence to suggest that the public timeline of the Petraeus scandal is improper. Attorney General Eric Holder defended his department’s handling of the investigation last week, noting that standard protocol prohibits DOJ from sharing information about pending investigations with members of Congress or the president, so long as they do not undermine national security. The rule, which has been in place since 1993, is designed to prevent politics from contaminating the process.

Justice Department officials had known about the investigation since the summer, but were told that the matter did not affect national security. Petraeus’s boss, Director of National Intelligence James R. Clapper Jr, was notified about the affair on Election Day, after the FBI concluded its review. That night, Clapper advised Petraeus to resign.

Climate Progress

Oceans ’13: The Post-Election Future Of Ocean Policy

by Michael Conathan

On November 7 the American people woke up to a post-election Washington, D.C., that looks an awful lot like pre-election Washington, D.C. President Barack Obama earned a four-year extension on his lease at 1600 Pennsylvania Avenue. Sen. Harry Reid (D-NV) and his Democratic colleagues retained their hold on the Senate, and Speaker of the House John Boehner (R-OH) and his Republican colleagues still control the agenda in the House of Representatives.

Despite historically bad approval ratings for Congress, which actually dipped down into the single digits as recently as last month, 21 of the 22 senators seeking re-election held onto their offices in general elections—10 others retired, and one incumbent lost in a primary election. And with four House seats still awaiting decisions as of this writing, only 25 of the 382 incumbent representatives in general elections lost their races—40 others retired, and 13 were beaten in primary elections—and five of them were running against other incumbents as a result of redistricting changes.

Yet even with the outward appearance of status quo, a deeper look inside the results of last week’s elections shows that when a few key seats change hands, the effects on our oceans and coasts may be striking. There are some new obstacles to overcome, as well as some great opportunities to cultivate new leaders who will prioritize these issues in the 113th Congress.

The president of the United States

On November 6 all eyes gravitated to the Obama/Romney ticket-topping tilt-a-whirl. Coming as a surprise to no one, oceans—besides former Massachusetts Gov. Mitt Romney’s mockery of their rise at the Republican national convention in Tampa and a brief rebuttal from President Obama in Charlotte—were absent from the campaign trail. Aside from this one brief thrust-and-parry neither candidate bothered to talk much about climate change at all.

Now, however, following President Obama’s surge to victory in the aftermath of Hurricane Sandy, climate change is gaining prominence in the national political dialogue. A new Rasmussen poll released the week of the election showed that 68 percent of Americans now view climate change as a “very serious” or “somewhat serious” problem, up from just 46 percent in 2009, continuing a trend that has been emerging in other recent polling showing greater awareness and belief that climate change is a contributing factor to the recent uptick in extreme weather events.

While the two presidential candidates spoke little about climate change during the race, their positions differed greatly. The White House website’s climate change page touts the president’s efforts to combat the problem through efforts including international negotiations, reduction of emissions through a commitment to clean energy, and Environmental Protection Agency regulatory overhauls. By contrast, Gov. Romney’s efforts to downplay the seriousness of the problem came back to bite him in the closing days of the campaign as voters watched dire predictions about the vulnerability of infrastructure in New York City and New Jersey come true with tragic results.

In addition to climate change, President Obama’s re-election means that there is life for his National Ocean Policy—an effort launched by executive order and designed to bring a semblance of cohesiveness to the multitude of federal agencies that have a role in the management of issues that affect our oceans, coasts, and Great Lakes. Despite the policy’s intention to streamline and reduce redundancy in government activity and enhance states’ rights by providing support for individual states and regions that opt to manage their coasts according to the policy’s core set of principles, many Republicans, particularly on the House Natural Resources Committee, lambast the policy as another example of “job killing regulations” handed down by the White House. Nothing could be further from the truth.

It was widely anticipated that under a Romney administration, the policy and the National Ocean Council established to support it would have been shelved. With President Obama still in the White House, the policy’s supporters have at least another four years to prove the value of its underlying principles, primarily comprehensive ocean planning.

The Senate

Read more

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up