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NEWS FLASH

One In Four Millionaires Pays Lower Taxes Than The Median Middle-Class Household [UPDATED] | Republicans, aided by a misleading Associated Press “fact-check,” have been casting aspersions on President Obama for claiming that many millionaires pay lower taxes than middle-class households. But as the Tax Policy Center noted, one in four millionaires has a lower tax rate (accounting for federal income and payroll taxes) than the median middle-class households. Center for American Progress Director of Tax and Budget Policy Michael Linden added that 10 percent of people making between $10,000 and $20,000 annually actually pay higher tax rates than 25 percent of millionaires. More than 40,000 millionaires pay 4.2 percent or less of their income in taxes.

Update

The Tax Policy Center has retracted the tables upon which it based its number.

Sarah Palin Praises Lamestream AP’s Misleading ‘Fact Check’ For Exposing Obama’s ‘Lies’

Former Alaska Gov. Sarah Palin (R) has built her public image on attacking the “lamestream media” for supposedly getting everything wrong. But she praised the lamest-stream media outlet of them all — the Associated Press — last night on Fox News host Sean Hannity’s show for agreeing with her about President Obama’s tax proposal:

PALIN: The president is way off on his math for one. And I hope that you will get into what the AP did in terms of fact checking. I so appreciate that they just wanted to get to their readers, some information that helps us make better decisions. And I appreciate that they called the president on some of these — you know, I call them lies. Because I think surely, the president is too smart to not have people around him with a calculator and can tell us truly what people’s tax rates are and what his proposals will result in new tax rates been.

Watch it:

As ThinkProgress noted yesterday, the AP’s “fact-check” completely missed the point of Obama’s tax plan, which would make sure that wealthy Americans don’t pay less in taxes than middle-class Americans. The provision is dubbed the “Buffett Rule,” in honor of Warren Buffett, who has been advocating for higher taxes on the wealthy, like him.

The AP “fact check” claims that Obama is wrong because the average tax rate on the wealthy is already higher than that on the middle-class. But no one is disputing this. What the AP and Palin ignore is that there are many wealthy people who do not pay anywhere close to that higher rate.

In 2009, 1,470 households reported income of more than $1 million, but paid zero federal income tax. For the richest 400 people in the country, the average effective federal income tax rate in 2008 was just 18.11 percent. The Buffett rule is meant to ensure that this group of people can no longer slip through the tax code’s cracks.

Moreover, Palin’s invocation of the word “lie” — a word, while often hinted at, that is almost never used in politics — is notable, especially considering the AP never alleged anything of the sort.

NEWS FLASH

U.S. Lost 2.8 Million Jobs To China Since 2001 | In a new report the Economic Policy Institute estimates that in the last decade, the United States has lost some 2.8 million jobs to China. All 50 states, the District of Columbia, and Puerto Rico have been affected by job loss and labor displacement from trade with China, with Texas and California suffering the greatest losses. Those two states lost 232,000 and 451,000 jobs, respectively, mostly in manufacturing. Other areas that have been hard hit include technology products, apparel and accessories, and textile fabrics and products.

New York City Police Use 150-Year-Old Law Against Wearing Masks To Arrest Wall Street Demonstrators

Is walking around with this mask in New York illegal?

As ThinkProgress previously reported, hundreds of demonstrators have encamped themselves in the financial district in New York City, hoping to call attention to Wall Street’s misdeeds.

Yesterday, seven protesters were arrested by the New York Police Department, despite being peaceful and not noticeably disrupting the normal activities of the city. The Wall Street Journal notes that the charges being brought against these demonstrators include “loitering and wearing [a] mask.” The Village Voice points out that the anti-mask law being used against demonstrators dates back to 1845, when farmers wore masks to conduct attacks against the police. The law was updated in 1965 to “prevent masked gathering of two or more people,” unless they are throwing masquerade parties:

The anti-mask law goes back to 1845, when tenant farmers used disguises (dressing up like Indians) to attack law enforcement officials, apparently. In 1965 the law was updated to prevent masked gatherings of two or more people, except in the case of masquerade parties. Whew.

Demonstrators took video of the arrests of some of the protesters. One of the protesters is simply wearing a plastic mask on the back of her head:

The occupation and protests on Wall Street are now entering their fifth day. Protesters are requesting on their website that people donate money for food for the demonstrators, and note that more than $9,000 has been donated so far.

After Calling Obama’s Taxes On The Rich ‘Class Warfare,’ Romney Calls For Raising Taxes On The Poor

Many Republicans have played the “class warfare” card when reacting to President Obama’s plan to reduce the deficit, in part, by returning the top two income tax brackets to where they were under the Clinton administration and instituting the “Buffett rule,” which calls for an end to millionaires dodging taxes. GOP presidential hopeful Mitt Romney was no exception, telling Fox News’ Neil Cavuto that “attacking business like the Democrats want to do, and class warfare like some members of the administration want to do, is simply the wrong way to go.”

Romney may feel that hiking taxes on the rich is class warfare, but he evidently doesn’t feel the same way about increasing taxes on the poor. During a campaign stop in Florida (ahead of tomorrow night’s GOP primary debate), Mitt Romney told a town hall audience that low-income Americans having no income tax liability is “a problem” that will ultimately “kill the country”:

This is a challenge. This is a problem. Ronald Reagan used to say, he was quoting a philosopher but I think it was really his own view as well, he used to say, look, if you get to a point where people recognize that they can vote themselves money from the Treasury, they will do so and ultimately kill the country. And I think it’s a real problem when you have half of Americans, almost half of Americans, that are not paying income tax.

Watch it:

Romney was trying to reference a quote that Reagan employed (which is unverified but often attributed to the Scottish professor Alexander Fraser Tytler) that said “a democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.” Reagan used to quote to warn against the rise of a dictatorship following poor people voting themselves benefits.

Regardless of the sentiment, the practical upshot of Romney’s pronouncement is that he believes people who earn too little to have any federal income tax liability should have their taxes raised. But leaving aside that these people likely pay a hefty amount in sales and excise taxes, payroll taxes, and state and local taxes, there’s a simple reason that they have no federal income tax bill: they don’t make enough money!

Overall, less than a quarter of the nation’s households don’t contribute to federal tax receipts in some way or another — and the majority of the non-contributors are students, the elderly, or the unemployed. 60 percent of those with no income tax bill make less than $20,000 annually.

Romney, of course, did not express any dismay that there are 1,470 households in the U.S. that reported income of more than $1 million in 2009 but paid zero federal income tax on it.

Contrary To GOP Claims, Research Shows Environmental Regulation Actually Spurs Economic Growth

Besides President Obama, Republicans vying for the presidential nomination have made government regulations their favorite punching bag on the campaign trail. Without exception, the candidates have scapegoated “burdensome regulation” for stifling job creation and economic growth — ignoring that a lack of regulation enabled the financial crisis that led to the Great Recession.

Environmental regulations and the agency that enforces them, the EPA, have been singled out for particularly rough treatment. Republicans have scheduled a series of votes starting this week aimed at repealing or halting them. But two reports highlighted today by Politico — one by the Economic Policy Institute, the other by Public Citizen — are a useful reminder that in addition to saving lives and protecting public health, regulation actually spurs economic growth and competition:

A new report by Public Citizen documents five major instances in which the introduction of government regulations led to breakthrough innovations.

“In some ways, what happens is regulation sort of rallies business’ motivation,” said Taylor Lincoln, a research director for the consumer advocate group. “Industry has an incentive to come up with a better mousetrap.”

For example, increased energy efficiency for refrigerators, washing machines, air conditioners and other appliances will save consumers more than $13 billion a year through 2030.

The EPI report concludes that far from deterring economic progress, “the dollar value of the benefits of the major rules finalized or proposed by the EPA…exceeds the rules’ costs by an exceptionally wide margin.” Additionally, their June 2011 report titled “A lifesaver, not a job killer” found that the EPA’s proposed “air toxics rule” would actually lead to modest job creation.

Laurie Johnson, chief economist at the Natural Resources Defense Council, points out that if better ozone pollution standards were in place, businesses sitting on $2 trillion in cash reserves would have bought and installed new equipment, possibly generating tens of thousands of jobs.

When Republicans talk about the costs of complying with regulations, they always neglect to mention the accompanying economic benefits, which are usually far greater. For instance, a 2010 EPA analysis found that tighter standards should cost $19 billion to $25 billion, while generating economic benefits of up to $37 billion.

Equally important, Republicans’ relentless focus on deregulation actually hurts the economy. EPI writes that “an emphasis on deregulation can contribute to dramatic economic dislocation.”

Michele Bachmann’s Latest Job Creation Idea: Less Food Safety Regulation, More E. Coli

GOP 2012 presidential hopeful Michele Bachmann yesterday brought her anti-government message to a meatpacking plant in Des Moines, Iowa, one day after she delivered the same rhetoric at a traffic light factory in Waterloo, Iowa (that depends on government contracts). At the meatpacking plant, Bachmann railed against regulations that protect the nation’s food supply, saying that they are “overkill” that is preventing job creation:

Bachmann says, as do most of those in the GOP field, that a lightened regulatory load would allow employers to spend money on expansion rather than federal compliance. But the Minnesota congresswoman is the first to focus the argument on the food-processing industry.

That’s part of the problem, the overkill,” Bachmann told reporters during an appearance in which she posed with huge slabs of beef. “And when they make it complicated, they make it expensive and so then you can no longer stay in business.”

As the Associated Press noted, Bachmann’s call to do away with food safety regulations “follows high-profile recalls of peanuts, eggs and other tainted food products.” Just last month, in the third-largest recall on record, food giant Cargill had to pull 36 million pounds of ground turkey out of stores after a salmonella outbreak linked to one of the company’s plants sickened nearly 80 people, killing one.

At the moment, one out of six Americans suffers from a foodborne illness every year, with 128,000 of those resulting in hospitalization. Ultimately, 3,000 people die from foodborne illness annually, according to the Department of Health and Human Services. Georgetown University’s Produce Safety Project has found that foodborne illness costs the U.S. $152 billion each year. This month, the Agriculture Department announced that it “will ban the sale of ground beef tainted with six toxic strains of E. coli bacteria that are increasingly showing up as the cause of severe illness from food.”

Early this year, President Obama signed a landmark food safety law, which was the first upgrade of the nation’s food safety system since 1938 (and which Bachmann voted against). However, House Republicans have refused to approve the necessary funds to implement the law, because they believe the private sector always “self-polices.” And it seems that if Bachmann had her way, the government would begin rolling back these regulatory advances.

Yglesias

GOP Leaders Write Unprecedented Letter Urging The Federal Reserve To Keep Unemployment High

In a move without precedent in the modern era, Republican congressional leaders including House Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Minority Whip Jon Kyl (R-Ariz) have penned a letter to Federal Reserve Chairman Ben Bernanke urging him not to take any steps to help the economy.

The context for the letter is a special two-day meeting of the Federal Reserve’s Open Market Committee being held precisely in order that FOMC members can inform themselves about the options available. For those of us who are frustrated with the prospect of endless mass unemployment, it was an exciting sign that the federal agency with primary responsibility for managing the short-term fluctuations in the economy is prepared to stop debating whether to end the recession and start debating how. Conservatives, meanwhile, have been increasingly outspoken about their desire to continue or even intensify the hard-money policies that are strangling the economy. When Rick Perry suggested he would treat Bernanke “pretty ugly” if he dared take steps to boost economic growth, his language and tone met with considerable criticism from other conservatives but at a subsequent debate GOP Presidential contenders uniformly agreed agreed that Bernanke should be fired for pursuing unduly stimulative policies.

The truth is the reverse. The Federal Reserve has a dual mandate to focus on employment and price stability. On prices, the Bernanke Fed has presided over unusually low inflation while unemployment is unusually high. The question facing FOMC members today is whether they’ll face up to that reality and take the additional steps they need to fulfill their mandate, or will they back down in the face of extraordinary efforts to politicize their work.

Amazon Forced Employees To Work Brutal Hours In 100 Degree Warehouse Or Face Termination

For the past several months, online retail giant Amazon.com has been fighting tooth and nail to preserve its massive tax loophole in the state of California. The loophole allows the company to forego collecting $200 million a year in sales taxes, which helps it undercut more traditional retail outlets.

But that’s not the only way in which Amazon seeks to drive its prices ever lower: it has reportedly been pushing its employees to the breaking point in order to gain an edge. A new report by the Morning Call reveals that workers at an Amazon warehouse in Pennsylvania were forced to work brutal hours in 100 degree temperatures and were constantly threatened with termination if their productivity waned:

Workers said they were forced to endure brutal heat inside the sprawling warehouse and were pushed to work at a pace many could not sustain. Employees were frequently reprimanded regarding their productivity and threatened with termination, workers said.

The consequences of not meeting work expectations were regularly on display, as employees lost their jobs and got escorted out of the warehouse. Such sights encouraged some workers to conceal pain and push through injury lest they get fired as well, workers said. [...]

An emergency room doctor in June called federal regulators to report an “unsafe environment” after he treated several Amazon warehouse workers for heat-related problems. The doctor’s report was echoed by warehouse workers who also complained to regulators, including a security guard who reported seeing pregnant employees suffering in the heat.

Interviews with more than 20 former workers paint the picture of a company with little regard for the welfare of its employees and that preyed on people’s desperation to keep their jobs during tough economic times. One former employee who worked in warehouses for 10 years commented that he had never experienced conditions so bad. “They can do that because there aren’t any jobs in the area,” he said.

Mandatory overtime is a common practice. Lax laws regulating workplace temperatures allow the company to get away with making workers keep up a grueling pace in 100 degree heat. Conditions are so bad at warehouses in the summer that Amazon has to have paramedics in ambulances standing by to treat workers who faint. Those who can’t recover quickly enough are taken out in stretchers and wheelchairs, and new applicants quickly take their place.

Instead of hiring a permanent workforce that expects raises and benefits, Amazon keeps a revolving door of temporary workers that it treats as dispensable cogs. Turnover is high and many workers don’t last more than a few months. Few temporary workers are ever hired full time — they’re just pushed harder to work faster until they are terminated or quit. Amazon has been plagued by lawsuits and allegations of employee abuse for years now.

Econ 101: September 21, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • The Federal Reserve today “looks set to launch a fresh effort to invigorate the faltering U.S. recovery, embarking on what could be the first in a series of incremental steps to foster stronger growth.” [Reuters]
  • A dispute over how much money to provide the Federal Emergency Management Agency for disaster relief is renewing threats of a government shutdown. [The Hill]
  • A report from the inspector general of the Securities and Exchange Commission shows that the SEC’s general counsel worked on the Bernie Madoff case “despite his family’s $2 million inheritance from a Madoff account.” [New York Times]

  • The internet companies Nextag, Yelp, and Expedia “are gearing up to attack Google Inc. on Capitol Hill, claiming the company is taking new profits for itself by unfairly punishing them on its search engine.” [Wall Street Journal]
  • Federal prosecutors and regulators “are moving closer toward bringing criminal charges against Rajat Gupta, a former Goldman Sachs Group Inc. director who allegedly leaked inside information about the Wall Street giant at the height of the financial crisis.” [Wall Street Journal]
  • “President Barack Obama’s high-speed passenger rail initiative may be unfunded next year” after a Senate appropriations subcommittee passed a Transportation Department budget with no money for the program. [Bloomberg]
  • 100 House Republicans sent a letter to President Obama yesterday “asking his administration to settle its lawsuit blocking the merger of AT&T and T-Mobile.” [The Hill]
  • “Less than a week after Democrat Elizabeth Warren launched her campaign for the U.S. Senate in Massachusetts,” a poll shows her leading incumbent Sen. Scott Brown (R) by two points. [Huffington Post]

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