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Hillary Clinton Takes Aim at Capital Gains Taxes for the Rich

| Fri Jul. 24, 2015 11:43 AM EDT

The Wall Street Journal reports that Hillary Clinton's tax plan is starting to take shape:

Hillary Clinton will propose a sharp increase in the capital-gains tax rate for the highest earners for investments held only a few years, a campaign official said Friday. Under the Clinton plan, investments held between one and two years would be taxed at the normal income-tax rate of 39.6%, nearly double the existing 20% capital gains rate.

....The rate for top-bracket taxpayers would be set on a sliding scale, with the lowest rate applied to investments held the longest. To qualify for the existing 20% rate, one would have to hold an investment for at least six years.

This change would apply only to high-income taxpayers and only to short-term investments. Lower-income workers would continue to get a break on capital gains taxes compared to the rate they pay on ordinary income. This is mostly for show, however: low-income workers barely have any capital gains income in the first place. The chart on the right from the Tax Policy Center shows the breakdown. Anyone making less than a six-figure income pays virtually no capital gains taxes, so changing their rates serves no purpose. It's only at the high end of the income spectrum that the preferential capital gains rate matters.

Hillary's proposal will enrage conservatives, who are convinced that capital gains rates are the magic key to prosperity. Since there's virtually no evidence linking capital gains rates to economic growth, the cynical among you might think that what really motivates their tireless advocacy of low rates is that it benefits the rich enormously. But that's only for the cynical among you.

In any case, folks who make more than a million dollars a year are going to be pretty exercised about this, even though Hillary's proposal allows them to keep a modestly preferential rate for investments held longer than two years and the current super-preferential rate for investments held for six years or more. Still, details aside, the rich account for virtually all the capital gains taxes paid, and raising that rate in any way would hurt them considerably. These are also the folks who are donating vast sums to the Republican candidates, so you can be sure they'll be insisting that their favored candidate goes after this proposal hammer and tongs. But Hillary is right. There's little evidence that higher capital gains rates do much harm, and a fair number of reasons to actively prefer a higher rate. Jared Bernstein has more here.

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Here's How to Stop Covering Donald Trump: Stop Covering Donald Trump

| Fri Jul. 24, 2015 11:00 AM EDT

Message to everyone: You don't have to cover Donald Trump's every move. Honest. If you're going to whine and complain about how he's sucking all the oxygen out of the race, then stop covering him unless he does something genuinely newsworthy. Which actually isn't all that often.

For God's sake, how hard can this be? If clickbait is all that matters to you, fine. But don't pretend you're being journalists if that's all that's driving you.

Hillary vs. the Press, Round One Million: The Times Screws Up a Scoop

| Fri Jul. 24, 2015 10:25 AM EDT

Hillary Clinton's email travails are a genuine problem for her. At best, relying solely on her own server to handle email while she was Secretary of State shows bad judgment, and at worst it might have violated government rules. There's not much question this is going to dog her going into next year's election.

That said, Jonathan Allen points out that the press is back to its old bad habits as well:

The Clinton rules are in full effect again. This case would fall under the umbrella of No. 3: The media assumes that Clinton is acting in bad faith until there's hard evidence otherwise. The New York Times, which got the scoop, rewrote its original story and is taking a beating from political observers and other media outlets for it. The first version said the inspectors general want a criminal investigation into Clinton's actions specifically, while the revised copy says they want the Justice Department to open a probe, more broadly, into whether the email was mishandled. It may turn out that Clinton is responsible for mishandling sensitive material, but the inspectors general didn't ask for an investigation into her, as the first version of the Times story said.

Here are the two versions of the Times lede:

Two inspectors general have asked the Justice Department to open a criminal investigation into whether Hillary Rodham Clinton mishandled sensitive government information....

 Two inspectors general have asked the Justice Department to open a criminal investigation into whether sensitive government information was mishandled....

The second one is correct. [See update below.] The request is a very generic one, asking whether the State Department misclassified some documents, and criticizing it for "its reliance on retired senior Foreign Service officers to decide if information should be classified, and for not consulting with the intelligence agencies about its determinations." Aside from the fact that the buck stops at the top, there's nothing here that's specifically about Clinton. And yet, the Times writers originally made their lede all about Hillary, almost as if on autopilot.

The feud between Hillary and the press is sort of like the Hatfields and McCoys: it's now so old, and so deeply ingrained, that it's almost impossible to tell who's more at fault. The press learned to deeply mistrust the Clintons during the 90s, sometimes with cause, and the Clintons learned to deeply mistrust the press at the same time, also sometimes with cause. The result is that Hillary does everything she can to shield herself from the press, and the press assumes that everything she does has some kind of sinister motive. Meanwhile, Republicans sit back and fan the flames, just as you'd expect them to.

It's gonna be a grim 2016 campaign if this keeps up.

UPDATE: Actually, even the second one is wrong. It's not a criminal investigation. From Politico: "In an attempt to clarify reports, a Justice Department official said on Friday, 'The Department has received a referral related to the potential compromise of classified information. It is not a criminal referral.' "

Uber vs. Taxis: Round 2 in the Big Apple

| Fri Jul. 24, 2015 9:15 AM EDT

On Monday I passed along some news about a study of cost and wait times for Uber vs. taxis in low-income neighborhoods in Los Angeles. In a nutshell, Uber was both cheaper and faster. Now, the same folks who did the LA study have done a quickie follow-up in the New York City boroughs of Brooklyn and Queens. It's based on a very small sample—so treat it with caution—but it found that although Uber was no cheaper than New York cabs, the wait time for a car was significantly less. Plus this:

Observations in which the taxi company refused to send a driver speak to the unreliability of dispatch taxi service in lower-income and geographically dispersed community districts of New York City. Of the total number of attempted dispatch taxi rides, the company was unable to send a driver within 30 minutes 38% of the time. Although it is possible these specific taxi companies did not serve the boroughs of Brooklyn or Queens except when dropping off or picking up a rider from the airport, this lack of clear information contributes to the difficulty riders new to the city generally or merely a particular part of the city face when attempting to travel around the city via car service.

The full report is here. As with the LA report, it was funded by Uber.

It's worth noting—though it should be obvious—that nothing in this report addresses various other concerns about Uber: pay and working conditions for drivers, regulatory compliance, privacy issues, etc. It's just data about one specific thing: how Uber compares to cabs on the metrics of price and convenience.

Surprise! EPA's New Power Plant Rules Aren't Going to Destroy America After All.

| Fri Jul. 24, 2015 12:13 AM EDT

Whenever a new environmental regulation gets proposed, there's one thing you can count on: the affected industry will start cranking out research showing that the cost of compliance is so astronomical that it will put them out of business. It happens every time. Then, when the new regs take effect anyway, guess what? It turns out they aren't really all that expensive after all. The country gets cleaner and the economy keeps humming along normally. Hard to believe, no?

Apologies for the spoiler, but can you guess what's happening now that President Obama's new carbon rules for power plants are about to take effect? Mitch "War on Coal" McConnell has been issuing hysterical warnings about these regulations for years, but the Washington Post reports that—sorry, did you say something? You've already guessed, have you?

More striking is what has happened since: Kentucky’s government and electric utilities have quietly positioned themselves to comply with the rule — something state officials expect to do with relatively little effort....“We can meet it,” Kentucky Energy and Environment Secretary Leonard Peters, speaking at a climate conference, said of the EPA’s mandate.

The story is the same across much of the country as the EPA prepares to roll out what is arguably the biggest and most controversial environmental regulation of the Obama presidency....Despite dire warnings and harsh political rhetoric, many states are already on track to meet their targets, even before the EPA formally announces them, interviews and independent studies show.

Iowa is expected to meet half of its carbon-reduction goal by next year, just with the wind-power projects already planned or in construction. Nevada is on track to meet 100 percent of its goal without additional effort, thanks to several huge ­solar-energy farms the state’s electricity utilities were already planning to build. From the Great Lakes to the Southwest, electric utilities were projecting huge drops in greenhouse-gas emissions as they switch from burning coal to natural gas — not because of politics or climate change, but because gas is now cheaper.

“It’s frankly the norm,” said Malcolm Woolf, a former Maryland state energy official and now senior vice president for Advanced Energy Economy....“We’ve yet to find a state that is going to have a real technical challenge meeting this.”

Try to contain your surprise.

I Can’t Stop Laughing At This Video Of Donald Trump Trying To Sell Steaks At Sharper Image

| Thu Jul. 23, 2015 6:38 PM EDT

Who buys steaks at Sharper Image?

Also, this quote makes no sense.

 

It's good to laugh.

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Silicon Valley Made a Bunch of Dudes Billionaires, But It’s Making You Poorer

| Thu Jul. 23, 2015 5:25 PM EDT

First the tech industry made your life easier with iPhones, tablets, and smart-everything. But is it also making it harder for you to get ahead?

A recent study on global income inequality by the International Monetary Fund identifies technological change as a top factor driving the split between rich and poor worldwide. Specifically, the study's authors found that the growth of technology accounts for nearly one-third of the widening gap between the top 10 percent and bottom 90 percent over the past quarter century. Other factors include the globalization of trade and finance.

Here's how tech has contributed to widening the gap: It's eliminated jobs by automating tasks, and it's driven up the "skill premium," meaning jobs that require skills like coding pay more lucratively than traditional blue-collar jobs. But even tech workers aren't safe, because their industry's needs evolve so quickly that they may be made obsolete by the very advancements they're working toward. In the end, the jobs that pay the most are only for those who can keep up with the changing times, and those who can afford the required education to get a position in the first place.   

The study notes that technological change has contributed most to rising income inequality in the 39 OECD countries that make up 80 percent of global trade and investment. It finds that inequality has grown the most in the United States and the United Kingdom, even as poverty in emerging economies has decreased.

Education hasn't alleviated income inequality as much as it could, according to the study. Despite a notable rise in highly-educated workers, the wage gap between high- and low-skilled workers remains. The researchers suggest that education is a viable solution only if governments invest it and make it affordable. "What we find really is that raising income shares of the rich doesn't trickle down," says Era Dabla-Norris, the study's lead author and a researcher at the International Monetary Fund. "And raising the income shares of the poor and middle class is actually good for growth."

And while other studies have found links between housing costs and venture capital investment, high levels of innovation, high concentrations of high-tech industry and venture capital startups (looking at you, San Francisco), the issue of inequality is a complex one. "There are some common drivers across the world, but the drivers vary," Dabla-Norris says. "Policies to alleviate inequality have to be country-specific; there is no one-size-fits-all."

It's Not Just Social Security Anymore. Jeb Bush Wants to Destroy Medicare Too.

| Thu Jul. 23, 2015 5:12 PM EDT

Republicans have been talking for years about "reforming" Social Security. Usually this involves privatizing it in some way, which they insist that people will love. In fact, they'll love it so much that, um, Republicans don't dare suggest that their reforms should apply to current recipients. Or to people who are within even a decade of retiring. Why exempt these folks? There's a lot of blah blah blah when you ask, but the real reason is that these people vote, and they actually pay attention to Social Security. They know perfectly well that the current system is a better deal for them. It's only younger workers, who don't pay as much attention and have been brainwashed—by conservatives—into believing that Social Security will never pay them a dime anyway, who give this nonsense the time of day. Even if the GOP's reformed version of Social Security is a lousy deal, anything is better than nothing. Right?

But I've never really heard this argument about Medicare. Until now. Here's Jeb Bush:

A lot of people recognize that we need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits. But that we need to figure out a way to phase out this program for others and move to a new system that allows them to have something—because they’re not going to have anything.

Boom! If we don't gut Medicare, they'll have nothing. When they turn 65 they'll be out on the street dying, with no one to help them. Why? Because Democrats let the system go bankrupt. Wouldn't it be much better to offer them some crappy, rationed system instead? At least it's something, after all.

Jesus. You'd think we were Greece. Oh wait—these guys do think that Democrats are turning us into Greece. So I guess it makes a kind of sense.

In any case, Jeb sure picked the wrong time to make this pitch. Just yesterday we got the latest projections for Social Security and Medicare. If they're correct, the cost of both programs will top out at a combined 12 percent of GDP by the middle of the century and then flatten out. That's about 3 percent of GDP more than we're spending now.

So this is what Jeb is saying: Right now the federal government spends about 20 percent of GDP. We can't afford to increase that to 23 percent of GDP over the next 30 years. That would—what? I don't even know what the story is here. Turn us into Greece? Require us to tax millionaires so highly they all give up and go Galt? Deprive Wall Street of lots of pension income they can use to blow up the world again?

Beats me. This whole thing is ridiculous. Over the next 30 years, we need to increase spending by 1 percent of GDP per decade. That's it. That will keep Social Security and Medicare in good shape. Why is it so hard for people to get that?

Jeb Bush Wants America to "Phase Out" Medicare

| Thu Jul. 23, 2015 4:40 PM EDT

On Wednesday, Republican presidential candidate Jeb Bush told a crowd in New Hampshire that Americans need to consider ways to "phase out" Medicare.

The former Florida governor, who was speaking at an event hosted by the Koch-brothers supported group Americans for Prosperity, also suggested "people understand" and agree with him on the issue.

"They know, and I think a lot of people recognize that we need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits," Bush said. "But that we need to figure out a way to phase out this program for others and move to a new system that allows them to have something—because they're not going to have anything."

Bush's comments echo the views of former president and brother George W. Bush, who pushed to severely slash Social Security with a controversial reform plan back in 2005. That effort proved overwhelmingly unpopular and failed.

A day before Bush's Medicare comments, a new report showing the program's costs to be significantly under what had been previously projected nearly ten years ago, as our own Kevin Drum noted:

Beyond that, it's always foolish to assume that costs will rise forever just because they have in the past. Medicare is a political program, and at some point the public will decide that it's not willing to fund it at higher levels. It's not as if it's on autopilot, after all. We live in a democracy, and after lots of yelling and fighting, we'll eventually do something about rising medical costs if we simply don't think the additional spending is worth it.

Despite the resulting failure of his brother's plan to do away with Social Security, Bush said he believes that his plan to gradually eliminate Medicare will prove to be a "winning argument if we take it directly to people."

Waller County Officials: Sandra Bland Autopsy Consistent With Suicide

| Thu Jul. 23, 2015 4:04 PM EDT

In a press conference on Thursday afternoon, the Waller County District Attorney revealed preliminary autopsy results in the death of Sandra Bland, the 28-year-old black woman who was found dead in her jail cell days after being arrested for a traffic stop, saying that examiners discovered no apparent injuries consistent with a violent homicide or struggle.

Assistant District Attorney Warren Diepraam told reporters that he was presenting physical rather than criminal findings, but said there was no evidence found in the autopsy of injuries to Bland's hands or internal organs to suggest a violent struggle had taken place in the jail. Previously, a medical examiner called her death a suicide by hanging. Bland's family disputes the finding.

There was no evidence the first autopsy performed on Bland was defective as was previously alleged by an attorney representing Bland's family, Diepraam added.

According to the new autopsy findings, Bland's injuries were consistent with having "a force against her back."

A portion of the press conference focused on the presence of marijuana found in Bland's system—confirmed by preliminary autopsy results. Many took to social media to question the relevance of the finding.