2012 - %3, September

Romney: Taxes on the Wealthy Are So High I Paid Extra

| Fri Sep. 21, 2012 11:50 AM PDT

Mitt Romney says that tax rates are too high—so high that he wants to cut them. So why did he deliberately avoid deducting charitable contributions in his 2011 tax return in order to pay a higher effective tax rate?

The Romney campaign released a letter about the Romneys' 2011 return on Friday, and says it plans to release the full return and a summary of previous years' returns late Friday. The Romneys, who are most likely worth more than $200 million, paid a 14.1 percent effective tax rate in 2011, less than many Americans who aren't nearly that wealthy. But they did so deliberately: The Romneys gave $4.1 million to charity, but only took a deduction of 2.5 million of that in order to make sure their tax rate stayed above 14 percent.

Forget for a second that Romney once said that paying more in taxes than owed would disqualify someone from running for president. The cynical answer here is that Romney deliberately paid more in taxes because he's "running for office for pete's sake." But his doing so undercuts one of his core policy arguments: That tax rates on the wealthy are too high. Not only that, but as revealed in the recording of a private fundraiser published by Mother Jones, Romney believes that those who pay income taxes are financing the laziness of those who don't, even though that's not a realistic description of Americans don't pay income taxes. 

Yet Romney just opted to shovel more cash to those he sees as irresponsible moochers, because paying an even lower tax rate might harm his chances of getting elected. The best part? If he loses, he might be able to file an amended return and claim those deductions anyway.

 

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State Department Officially Removing MEK From US Terror List

| Fri Sep. 21, 2012 11:31 AM PDT
MEK supporters in front of the US State Department on August 26, 2011.

After a few months of will-they-won't-they tension, the US State Department decided on Friday to officially remove the Mujahideen-e-Khalq (MEK) from the Foreign Terrorist Organizations list, which the Iranian exile group has been on for the past 15 years.

CNN broke the story:

Secretary of State Hillary Clinton is expected to notify Congress as early as Friday that she intends to take the [MEK]...off a State Department terror list, three senor administration officials told CNN...MEK was placed on the US terrorism list in 1997 because of the killing of six Americans in Iran in the 1970s and an attempted attack against the Iranian mission to the United Nations in 1992. However, since 2004, the United States has considered the residents of Camp Ashraf [in Iraq] "noncombatants" and "protected persons" under the Geneva Conventions. The group is in the final stages of moving from a refugee camp in Iraq where they've lived for more than 25 years is nearing completion under the auspices of the United Nations Assistance Mission for Iraq.

The Paris-based MEK—which enjoys a solidly low level of popular support among Iranians—is also called the The People's Mujahideen of Iran, and was founded in Tehran in the mid-1960s as a synthesis of Islamic principle, left-wing populism, and violent resistance to the Shah. It has since been blasted by critics as a totalitarian, hero-worshipping cult with a history of engaging in indiscriminate mass murder (a particular sore spot is the allegation that MEK fighters acted as a death squad for Saddam Hussein during the 1991 Shiite and Kurdish uprisings in Iraq). Today, the group is reportedly on the frontlines of assassinating Iranian nuclear scientists, and has a long, bipartisan list of powerful friends in the US who pitch the group as the Western-friendly and pluralistic antidote to the Islamic republic.

The bizarro patchwork of high-profile advocates includes John Bolton, Gen. Wesley Clark (Ret.), at least two Romney campaign advisor, Rudy Giuliani, Howard Dean, Ed Rendell, Nobel Peace Prize laureate Elie Wiesel, and ex-FBI director Louis Freeh. Some of these top supporters received subpoenas from the Treasury department last March during an investigation of speaking fees for pro-MEK events—something that could potentially amount to providing material support to a designated terror organization.

As I reported last year, well-funded MEK backers also received a lobbying assist from high-powered international PR firm Brown Lloyd James—a company that has something of a reputation for sanitizing the records of dictators with names like Qaddafi and Assad. (Other clients have included AARP, the state of Qatar, the Washington embassy of Ecuador, Al Jazeera English, Russia Today, Forbes, and the famous composer Andrew Lloyd Webber.)

VIDEO: "Farm It Maybe"

| Fri Sep. 21, 2012 11:02 AM PDT

Just when I was about to give Cookie Monster the award for best parody of "Call Me Maybe," this kid comes along:

"Hey, I just milked you. This cow is crazy! But here's her udder. So milk her maybe."

 

House Passes Extra-Terrible Pro-Coal Bill Before Heading Home

| Fri Sep. 21, 2012 10:59 AM PDT

One of the difficult things about being a policy-minded environmental blogger these days is deciding what merits weighing in on. The House passes crazy measures rolling back environmental and health protections, and then the Senate…just does nothing with those bills. But on Friday, the House passed a monumentally terrible bill that is worth pointing out, as it would undo many laws—old and new—dealing with coal.

The "Stop the War on Coal Act" (H.R. 3409) would take away the power to regulate a lot of things—mountaintop-removal coal mining, greenhouse gas emissions, coal ash disposal, mercury and air toxins. Democrats on the Energy and Commerce Committee calls the the legislation the "single worst anti-environment bill to be considered in the House this Congress."

It's just all kinds of bad—throwing out many rules dealing with coal and preventing the EPA and the Department of Interior from regulating in the future. That includes both coal mining and coal burning in power plants. The House passed the bill by a vote of 233 to 175, which included 19 Democrats who voted for it as well. This is the last vote the House will take before the election, which is no coincidence. The bill isn't going pass; it's only meant to be an instrument to bludgeon Obama and other Democrats, which has been very clear from Republicans' remarks.

Chart of the Day: Turning the Entire Planet Into a Tropical Zone Might Be Bad for Economic Output

| Fri Sep. 21, 2012 9:37 AM PDT

People in hot climates don't work as hard as people in more temperate climates. It's hot! You get tired more quickly. You need to take more breaks. You don't get as much done.

This is hardly a new insight. But it turns out you can measure how much less people work when the temperature goes up. And the answer is: about 2% less for every extra degree Celsius (see chart below). A recent natural experiment confirmed this, when the Japanese government asked businesses to use less air conditioning after the Fukushima earthquake and tsunami. Productivity decreased at just about the predicted rate.

But earthquakes and equatorial latitudes aren't the only things that raise temperatures. Global warming does it too. So what does that mean for worker productivity in the future? Solomon Hsiang, a sustainable development post-doc at Princeton, explains:

In my 2010 PNAS paper, I found that labor-intensive sectors of national economies decreased output by roughly 2.4% per degree C and argued that this looked suspiously like it came from reductions in worker output.

[From a later post] Reductions in worker output have never been included in economic models of future warming [] despite the fact that experiments fifty years ago showed that temperature has a strong impact on worker output []. In my dissertation I did some back-of-the-envelope estimates using the above numbers and found that productivity impacts alone might reduce per capita output by ~9% in 2080-2099 (in the absence of strong adaptation). This cost exceeds the combined cost of all other projected economic losses combined.

Of course, maybe robots will be doing all our work for us by then. But maybe not. It's yet another reason — in addition to famines, drought, drowned cities, and the death of millions — to think that turning the entire world into a tropical zone might not be such a great idea.

Via Andrew Gelman at The Monkey Cage.

Fossil Fuel Group Whines About Tax Credits for Wind

| Fri Sep. 21, 2012 9:35 AM PDT

The production tax credit (PTC) for wind energy is set to expire at the end of the year, and Congress doesn't look likely to extend it anytime soon. This precarious situation is already causing some layoffs in the industry, as the New York Times reports today. A study cited by the American Wind Energy Association predicts that as many as 37,000 jobs in the industry could be lost in the first quarter of 2013 alone if the PTC is not extended.

Of course, there's a healthy debate about how much and for how long we should subsidize any energy source. But wind power is still a relative newcomer to the energy scene, and subsidies that expand its use also help meet other national goals like reducing emissions and reliance on fossil fuels. Moreover, the US has provided billions of dollars in subsidies to the coal, oil, and gas industries for decades. Wind power has barely had a chance to catch up since the PTC was first enacted in 1992. Which is what makes this quote, from the spokesman for a fossil-fuel-funded interest group, really hilarious:

"Big Wind has had extension after extension after extension," said Benjamin Cole, a spokesman for the American Energy Alliance, a group partly financed by oil interests that has been lobbying against the credit in Washington. "The government shouldn't be continuing to prop up industries that never seem to be able to get off their training wheels."

Shame on the Times for not pointing out how pitiful this claim is. Fossil fuels haven't just had training wheels; these industries have been sitting in one of those little child seats on the back of the bike while the rest of us peddle. Via the Environmental Law Institute, this is what the breakdown has looked like in recent years:

Environmental Law InstituteEnvironmental Law Institute

Oil Change International has more. It's also worth noting that the tax credits for wind and other renewables have been short-term since 1999, granted in one- or two-year increments. That makes it really hard for companies to make long-term plans. Oil, gas, and coal have never really had to worry about whether they'll get their government dole.

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Judge on Drone Secrecy: "Emperor Has No Clothes"

| Fri Sep. 21, 2012 9:30 AM PDT

The Obama administration has argued that the CIA technically has not acknowledged the existence of its targeted killing program—despite the administration having bragged about it publicly on many occasions. The federal judges hearing oral arguments in an ACLU lawsuit seeking information on the program didn't seem to buy that explanation, according to the Washington Post:

But Judge Merrick Garland cited a speech this year by President Barack Obama’s counterterrorism chief, John Brennan, in which Brennan said the government targets terrorists with drones, and uses the "full range" of the government's intelligence capabilities.

"Isn't that an official acknowledgment that the CIA is involved with the drone program?" asked Garland, an appointee of Democratic President Bill Clinton.

Stuart F. Delery, acting assistant attorney general, said Brennan's statement wasn't sufficient to tie the drone program to the CIA because the intelligence community has 17 agencies.

Garland said that the government was asking the court to say "the emperor has clothes, even when the emperor’s boss" says the emperor doesn’t have clothes.

As we learned with the Affordable Care Act, however, oral arguments aren't always indicative of how judges will rule. But the ACLU, which is seeking information on who can be targeted and when, does have logic on their side: It makes no sense for the administration to seek political credit for the targeted killing program while officially not acknowledging its existence.

We're Still at War: Photo of the Day for September 21, 2012

Fri Sep. 21, 2012 9:08 AM PDT

U.S. Army Soldiers from 1st Battalion, 21st Infantry Regiment, 2nd Stryker Brigade Combat Team, 25 Infantry Division return from the firing range Sept. 19, 2012, at Pohakuloa Training Area, on Hawaii. Department of Defense photo by U.S. Air Force Tech. Sgt. Michael R. Holzworth.

Why Congress Won't Pass Popular, Bipartisan Bills

| Fri Sep. 21, 2012 8:16 AM PDT

Matt Yglesias remarks today that increasing the number of visas for high-skill workers is a popular, bipartisan idea. And yet, it hasn't happened. Matt says this is because legislators don't really want to pass a bill, they simply want to score partisan points:

So Texas Republican Lamar Smith's challenge was to write a bill that did what the tech companies wanted (more visas for skilled foreigners) but that wouldn't actually pass the House of Representatives. He took a two-step approach to this. One was to ensure that each new visa for a skilled foreigner would be offset by one fewer visa allocated under the current system. That helped gin up Democratic opposition. Then the House leadership ensured the bill would be introduced under rules that required a two-thirds vote for passage. The combination of the ruleset and the poison pill was sufficient to achieve Rep Smith's objective—overwhelming GOP support for a bill tech companies love and that failed in the House.

Conversely, the way Democrats like to play this issue when they have the majority is by linking increased immigration of high-skill foreigners to a broader comprehensive immigration reform package that creates a path to citizenship for current undocumented residents. That way it's Republicans who block what the tech companies want.

It's true that in-caucus scheming plays a role here, but overall I have a more transactional take on this. Whenever there's a contentious bill on the table, at least a few pundits will start to suggest that instead of something big, Congress should "go small." Why not just pass the two or three things that everyone agrees on and leave the hard stuff for later?

But the reason is obvious, and it's not wholly down to partisan cynicism: it's those easy parts that help grease the skids for the bigger, harder-to-pass bill. If you pass all the popular stuff on its own, you're left solely with a bunch of controversial and/or unpopular bits, and what chance does that have to pass? About zero. Passing the small, popular bits on their own basically dooms your chances of ever sweetening up a comprehensive bill enough to get a majority of Congress to swallow it in the face of all the sour bits they're going to have to swallow alongside it. So you save those bits for later. That's politics.

At First Debate, Scott Brown Gets Nasty

| Fri Sep. 21, 2012 7:52 AM PDT

If you hadn't been following the Massachusetts Senate race closely, the attack seemed to come out of nowhere: At Thursday night's Massachusetts Senate debate, Sen. Scott Brown (R) charged that Democratic challenger Elizabeth Warren had represented the insurance giant Travelers in a case against asbestos victims. Far from being an advocate for the little guy, Brown argued, Warren was nothing more than a money-hungry corporate lawyer. If Brown's criticism of Warren's Native American ancestry was a not-so-subtle challenge appeal to identity politics, this attack went straight to Warren's political core.

Except Brown is not telling the whole story about Warren and Travelers insurance. The Boston Globe explored the case—one of Warren's only forays into corporate law—in detail in May and found a much more complicated picture. Warren had signed on with Travelers because she feared that a bad outcome could overturn an important part of federal bankruptcy law she'd long advocated for. One group of asbestos victims did oppose Warren and Travelers. But another, much larger group of asbestos victims were on the side of Warren and the insurance company. That's because Warren believed she was securing a $500 million settlement from the insurance company on behalf of the asbestos victims.

That's not how it turned out. After Warren, Travelers, and the largest group of asbestos victims won their Supreme Court case, Travelers reneged on its end of the deal and never paid out the $500 million settlement. Here's how the Globe's Noah Bierman explained it:

Though some asbestos victims still objected to the Travelers settlement, another larger group of victims was on the same side as the insurer - at least during this portion of the case - in seeking to have the settlement upheld.

The Supreme Court decision gave Travelers a victory, validating the legality of the 1986 agreement and the immunity it provided. But it left to the lower courts to decide whether Chubb [another insurance company] had a right to challenge the 2004 settlement.

That triggered another series of legal arguments that ultimately unraveled the $500 million settlement, leaving Travelers with permanent immunity from most asbestos lawsuits without having to pay the victims.

It turned out pretty badly! But it's not clear why that would make Warren a sell-out, as Brown suggests.

The beauty of this charge for Brown, though, is it's an incredibly easy charge to level and a complicated one to explain—which is why you should expect to hear a lot more of it. And true to form, on Friday, in his first remarks following the debate, Brown held a press conference to hammer home the Travelers narrative.