# Herman Cain's Plan to Double Your Taxes

The University of Southern California's Edward Kleinbard performs the thankless task of trying to figure out the actual impact of Herman Cain's 9-9-9 campaign slogan cum tax plan, and he comes up with the following. Warning: It gets a little complicated:

Now let's put the three taxes together. Starting with \$100 of pretax firm-level gross income available to pay salaries, the employee receives \$91 in wages, and the firm pays \$9 in "business flat tax." The employee then pays \$8.19 in "individual flat tax" (9 percent of \$91.00). Finally, the employee incurs a \$7.45 further tax (the sales tax, measured as 9 percent of \$82.81 in post-flat tax cash available for consumption), leaving her with \$75.36 after all federal taxes to invest or spend. That represents a 24.6 percent all-in tax on the firm's gross income attributable to the employee's added value. Converting the \$24.64 in total tax to a payroll tax equivalent, by comparing that tax to the \$91 in salary the employee receives, yields a payroll tax equivalent rate of 27 percent (\$24.64/\$91).

In other words, when you take a look at the actual effect of the three different parts of Cain's plan, they all act similarly to a flat payroll tax. And the three parts add up to 27 percent. This means that if you're an average worker who spends most of your paycheck each month (in other words, virtually all of us), you'll be paying 27 percent of your income in federal taxes under Cain's plan. This compares to a current federal tax burden of about 14 percent for an average family.

Bottom line: If you make, say, \$50,000 a year, your current total federal tax burden is about \$7,000. Under Herman Cain's plan, it would be about \$13,000. Even if you tweak the numbers a bit to make up for different measurement methodologies, that's a big difference.

So here's Herman Cain's new slogan: If you want to double your federal taxes, vote for me! I know I'm not a conservative and can't really pretend to understand what conservatives want, but I'm pretty sure this is not a tea party winner.

Via Ezra Klein, who adds the obvious point that Cain's 9-9-9 plan isn't a real plan anyway; it's just a brief set of bullet points. Which is just another way of saying that it's a joke.

# Mitt Romney's Bum of the Month Club

First we had Romney vs. Trump, then Romney vs. Bachmann, then Romney vs. Perry, and now we have Romney vs. Cain. Remember Joe Louis' Bum of the Month club? That's what the Republican primary campaign looks like this year.

The problem with Herman Cain, of course, is basically the same as the problem with Donald Trump: He knows how to stir the troops, but the whole campaign is basically a joke to him—and even tea partiers aren't going to stick with a guy who treats the presidency like a joke. The zingers are all great, but if you want to be the leader of the free world you can't perform stupid burlesque about not knowing anything about Uzbeki-beki-beki-stan; if you want to run the economy you can't build your whole campaign around a corporate slogan like 9/9/9 that even the marks know is ridiculous; and if you want to be commander-in-chief you can't transparently not care about foreign policy. It's all fun for a while, but it wears thin pretty quickly when it becomes clear you're really campaigning to get a Fox News show, not to sit in the Oval Office.

Anyway, to show this graphically, I've helpfully extended the latest poll of polls from Real Clear Politics. Perry might do a little better than I'm predicting, but not much. As for Cain, he better enjoy his moment as Mitt Romney's latest bum. It won't last much longer.

# The Real Victims of Climate Change

Climate change is the public policy problem from hell. If you were inventing a problem that would be virtually impossible to solve, you'd give it all the characteristics of climate change: it's largely invisibile, it's slow moving, it's expensive to fix, it requires global coordination, and its effects will be disproportionately borne by poor countries that nobody cares about.

That last item might seem like a harsh way of putting things, but it's pretty much the truth. And today, via Brad Plumer, we have a new OECD report that illustrates the problem starkly. It examines which cities will have the most residents vulnerable to coastal flooding due to storm surge and high winds in 2070, and as you can see on the map below, the risk is almost entirely concentrated in developing countries in Asia and Africa. New York and Tokyo have a small bit of exposure, leaving Miami as the sole rich city with a substantial exposure. The total number of vulnerable residents will increase from 40 million today to 150 million in 2070, with the vast bulk of the increase coming in developing countries. The five riskiest cities — by a large margin — are Kolkata, Mumbai, Dhaka, Guangzhou, and Ho Chi Minh City.

Can we just adapt to this? Sure, I suppose we could, if the rich world were willing to donate enormous sums of money to these cities to finance a massive campaign of preparation and amelioration. But what are the odds of that happening? After all, the rich world isn't even doing that in its own cities.

# Matt Taibbi's Advice for #OWS

Matt Taibbi, the man who memorably dubbed Goldman Sachs "a great vampire squid wrapped around the face of humanity," is unsurprisingly sympathetic to the Occupy Wall Street protesters. "But the time is rapidly approaching when the movement is going to have to offer concrete solutions to the problems posed by Wall Street," he says. "To do that, it will need a short but powerful list of demands." Here's an abridged version of his five suggestions:

1. Break up the monopolies....There are about 20 such firms in America, and they need to be dismantled.
2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about.
3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer's own money to lobby against him.
4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break.
5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later.

I think Taibbi is probably right that the OWS protest can't stay chaotic and inchoate forever. The anarchist types in the crowd are apparently opposed to anything that suggests they merely want to reform the existing system instead of tearing it down completely, but let's face it: that's a path to irrelevancy before too much longer.

Taibbi's list is pretty good — and surprisingly measured — and makes a workable starting place. I think #3 probably isn't practical for a variety of reasons, and #5 would be a little tricky, but doable. The others all sound great. If it were up to me I'd slot in some kind of leverage requirement in place of the lobbying item, but I recognize that this wouldn't exactly be a populist crowd pleaser. So if that doesn't work, how about banning credit default swaps? Despite the best efforts of several people to convince me otherwise, I remain skeptical that they're a net positive for the financial system. I don't know how practical an outright ban would be unless we got the rest of the world to go along, but it's probably a little bit better as a rallying cry than "Hey hey, ho ho, risk-based capital has got to go, and it should be replaced by a simple leverage ratio of at least 10%." On the other hand, free silver at 16:1 caught on big a century ago, so who knows?

# Repealing Obamacare is Harder Than Mitt Romney Thinks

Every Republican candidate has sworn that repealing Obamacare will be his or her very first item of business once Obama himself is booted from the Oval Office. Last night, Mitt Romney got a little more specific: On Day 1, he said, he'd issue a waiver from Obamacare for all 50 states, and on Day 2 he'd repeal the whole enchilada via a reconciliation bill, which requires only 51 votes and can't be filibustered.

Sounds great! (Assuming Republicans take control of the Senate, of course.) But would it work? Well, reconciliation can only be used on things that affect the budget, so there's a lot of Obamacare that could indeed be repealed that way. But not quite all. You see, one part of the bill establishes what's called "community rating," which means that health insurers are required to take on all comers and are required to charge them all the same price. This is a godsend for really sick people, who will sign up in droves for health insurance, but not so great for the insurance companies that have to shell out big bucks to keep them healthy.

Crucially, though, this is a regulation that's not budget related. This is why the main healthcare bill was passed via regular order, not reconciliation, and it's why it can't be completely repealed via reconciliation either. And while insurers don't like community rating much, they were willing to accept it as long as everyone, not just the sick, was subsidized by the government and required to get insurance. Jon Chait explains the real-life choices Republicans will have once this becomes clear:

If they eliminate the subsidies but leave the regulations in place, you’ll have insurers required to sell policies to people who are sick, but no way to bring healthy people into the risk pool. A few states tried that. It created a cost spiral that collapsed the whole market. Romney would end up screwing the health insurance industry, which is much harder to do, politically, than screwing the uninsured. The industry has lobbyists.

Those lobbyists were happy to preserve the old system, which screwed all the uninsured and none of the insurance companies. They were fine with the Obama plan that screwed none of the uninsured and none of the insurance firms. They're not going to be happy about creating a system that screws some of the uninsured and all of the insurance companies.

So things aren't so simple. Unless Republicans get rid of the filibuster, they can damage Obamacare but they can't kill it completely. And health insurers, who know perfectly well that repealing the mandate and the subsidies while leaving community rating in place would destroy them, will make their position perfectly clear. For them, repeal is an all or nothing affair.

Obviously, Romney and the other GOP candidates aren't eager to acknowledge this bit of grubby reality. But it's there, and it's going to give fits to any Republican who wins the presidency. To me and my fellow radical socialist America haters, of course, avoiding this whole mess and keeping Obamacare intact is a pretty good reason not to elect a Republican president in the first place — quite possibly the best reason at the moment. But even God's chillun need to acknowledge reality and figure out what their real game plan is going to be if they win next year. Flat out repeal just isn't in the cards.

# Why Are Political Headlines so Limp?

Steve Benen and James Fallows remind me of one of my favorite pet peeves today: the routine use of headlines that blame "the Senate" or "Congress" for blocking a bill. For example: last night every Senate Republican banded together to filibuster a vote on Obama's jobs bill. So how did the New York Times copy desk headline this? Like so: "Obama's Jobs Bill Fails in Senate in First Legislative Test." Nothing about Republicans and nothing about a filibuster. Fallows comments:

The subhead and story make the real situation clear. So how about a headline that says plainly what happened: "Obama's Job Bill Blocked by GOP in Procedural Move" It would fit. And it would help offset the mounting mis-impression that the Constitution dictates a 60-vote margin for getting anything done.

Consider yourselves lucky, guys! My morning copy of the LA Times headlined it just as badly, and unlike the NYT, the subhead doesn't make things any clearer. Needless to say, there was no need for this. The hed could just as well have read "GOP Kills Obama Jobs Plan" if they'd wanted it to.

So why didn't they? This is a genuine question. Why do newspaper editors shy away from making partisan differences clearer in headlines? Is it because two (2) Democrats also voted against the bill, so they think it's unfair to blame it all on Republicans? Is it because they don't want to seem too partisan themselves? Or what? If any friendly copy desk chief has an explanation for this, I'd be happy to pass it along.

# Public Service Announcement

Herman Cain is not going to win the 2012 Republican presidential nomination. That is all.

# Team Perry Goes the Extra Mile for Climate Denial

Kate Sheppard reports today that the sea level in Galveston Bay is rising, but Rick Perry's administration wants to make sure that nobody knows about it:

Top environmental officials under Perry have gutted a recent report on sea level rise in Galveston Bay, removing all mentions of climate change....John Anderson, the oceanographer at Rice University who wrote the chapter, provided Mother Jones with a copy of the edited document, complete with tracked changes from top TCEQ officials. You can see the cuts—which include how much sea level rise has increased over the years, as well as the statement that this rise "is one of the main impacts of global climate change"—here. As the document shows, most of the tracked changes came from Katherine Nelson, the assistant director in the water quality planning division. Her boss, Kelly Holligan, is listed as a reviewer on the document as well.

Click the link for more. They didn't just delete every reference in the report to climate change, they deleted most of the references to the mere fact of sea level rise. I guess they were hoping to spare their boss any more embarrassing debate questions. Click the link for the whole story.

# Suburban Wildlife Update

Our squirrel was back today. I know, I know, it's just a squirrel. Who cares? But there was some doubt about my report of its coloring the last time I mentioned it, and this time I got a picture of our little friend — which is harder than it sounds. They're quick little things. Quicker than the autofocus on my camera, anyway.

So, anyway, here it is, nature red in tooth and claw. Domino was fascinated for a while until the squirrel did something that scared her off. I can't imagine what, since it was hopping from tree to tree the whole time and never got closer to her than ten feet. But something happened, and she made a dash around the side yard. In any case, I assume that our resident squirrel experts can tell me what kind of squirrel this is now that I have a picture? Or maybe embarrass me by telling me that it's actually a chipmunk or something?

This soothing nature break has been brought to you by Emerald Nuts, the favorite of nut-hoarding squirrels everywhere. Frenetic political blogging will resume shortly.

# The GOP's Reality Distortion Field

People used to jokingly refer to Steve Jobs's "reality distortion field," his ability to convince the public that Apple's products existed on a plane of revolutionary awesomeness that no other company in history had ever matched. This is pretty much how I feel when I listen to Republican debates. They seem to take place in some kind of weird extra-dimensional bubble in which mundane laws of evidence and logic are no longer considered necessary. Paul Waldman captures this magical thinking in last night's debate:

1. Health care in general, and Medicare in particular, are bankrupting our country.
2. But government should never try to figure out which treatments are effective.
3. Medicare should pay for any treatment anyone wants, regardless of whether it works or what it costs.
4. If an insurance company refuses to pay for a procedure, that's their right as actors in the free market; if Medicare refuses to pay for a procedure, that's Washington bureaucrats trying to kill you.
5. We need to cut Medicare benefits, because don't forget it's bankrupting our country.

That's about the shape of it: Medicare costs too much, but all proposed cuts to Medicare are a death sentence for seniors. Unless, of course, those cuts are really, really deep and come from Paul Ryan. Don't try to make sense of it. It will just make your head hurt.