Mojo - April 2011

Revenge of the Predatory Tax Preparers

| Thu Apr. 14, 2011 11:00 AM EDT

 In "Secrets of the Tax Prep Business," Gary Rivlin investigates one of the tax industry's most exploitative services: the refund anticipation loan. Rivlin explains how RALs—short-term, high-interest loans backed by a customer's pending tax refund—are largely responsible for the rapid proliferation of tax-prep chains throughout working-class America. By disguising the high-priced loans as instant refunds, the tax mills bring in hordes of low-income clients who receive the Earned Income Tax Credit (EITC). Thus the preparers' huge profits come at the expense of what Rivlin calls "arguably the nation's most effective anti-poverty program." IRS data (PDF) reveals that nearly two-thirds of RAL recipients received the EITC in 2009, compared with just 17 percent of taxpayers overall.

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We're Still at War: Photo of the Day for April 14, 2011

Thu Apr. 14, 2011 5:30 AM EDT

A U.S. Army soldier with the 101st Airborne Division returns fire with a M249 light machine gun during combat operations in the valley of Barawala Kalet, Kunar province, Afghanistan, on March 29, 2011. DoD photo by Pfc. Cameron Boyd, U.S. Army.

No Budget Cuts for Federal Prisons

| Wed Apr. 13, 2011 4:53 PM EDT

In the midst of an epic budget battle, the White House and Republicans in Congress appear to agree on one point: Federal prisons need more money.

With more people and a higher percentage of the population locked up than any other country, the United States would seem more than ripe for cuts in both its incarceration rate and its prison spending. A number of states have initiated such measures, and a growing chorus of critics on the right and left are decrying the devastating costs--fiscal and otherwise--of mass incarceration. Yet the Obama Administration’s combined budget requests for FY 2011 and FY 2012 call for a full 10 percent increase over 2010 levels in funding to the federal Bureau of Prisons, to more than $6.8 billion. The increase, says the BOP, is necessary to accommodate a still-growing federal inmate population. And the latest budget deal reached with Republican leadership indicates that this particular category of discretionary spending will emerge from the budget battles comparably unscathed.

There is ample precedent for an expansion of federal prisons under a Democratic administration. According to analyses by the Sentencing Project and the Pew Center on the States, the growth rate in the BOP’s population has far outstripped that of the states (which itself has increased by than 700 percent in the past 40 years). Federal growth was most dramatic during the Clinton years, when a host of new offenses were federalized: Since 1995 alone, the number of federal inmates has more than doubled, to over 211,000. More than half of these prisoners are serving time on drug charges, and another 10 percent are held on immigration violations. In all, more than 72 percent are nonviolent offenders with no history of violence, and 34 percent are first-time nonviolent offenders.

What’s more, the federal government is now bucking a state trend toward decreasing inmate levels and closing prisons. The Pew Center found that in 2009, in the wake of the financial crisis, the overall state prison population fell for the first time in 38 years. States as tough on crime as Texas, Georgia, and Florida are now pushing reforms that range from lighter sentences to early release programs—all under the leadership of Republican governors. In contrast, the BOP population continues to rise, with an increase of 11,000 projected this year, according to Attorney General Eric Holder.

Visualizing Where Your Taxes Go

| Wed Apr. 13, 2011 4:19 PM EDT

With DC embroiled in budget battles and April 18 fast approaching, a lot of Americans are thinking about where their federal tax dollars go. Most of us have no clue, as shown by the recent CNN survey in which respodents guessed that NPR accounts for 5 percent of goverment spending (wrong—it's more like 0.01 percent) and foreign aid gets 10 percent (try 0.6 percent).

Where Did My Tax Dollars Go?Where Did My Tax Dollars Go?For an informative and visually interesting look at how your taxes really break down, check out the six finalists from the recent Data Viz Challenge sponsored by What We Pay For. The most creative is Budget Climb, an interactive game that uses a Microsoft Kinect motion controller so you run around a virtual world made of 26 years of budget data. If you don't want to work up a sweat, a better place to start is Anil Kandangath's Where Did My Tax Dollars Go?, a straightforward site that asks you for your income, estimates your income and payroll taxes, and then shows your personal contribution to the federal budget in an Excelerrific (functional but not pretty) pie chart.

Can I Get a Receipt With That?Can I Get a Receipt With That?There's also some clever stuff in the entries that didn't make the final cut. My favorite may be Can I Get a Receipt With That?, which generates a cash-register receipt for your tax bill—and can convert the bill into alternative currencies such as Big Macs and Starbucks coffees. For example, the 2010 tax bill for a typical American family earning $50,000 comes out to about 1,752 Chipotle burritos. From that, the feds spent about 2,811 bottles of Bud Light on defense, 244 packs of cigarettes on Medicare, and 13 Red Bulls on energy spending. Unfortunately, it does not show how many decaf soy lattes went to NPR.

Pakistan: Fighting Ceasefire with Fire

| Wed Apr. 13, 2011 4:00 PM EDT

Yesterday we told you that Pakistani officials came to Washington to demand that the US put the kibosh on its covert activities in their country, and suspend all drone strikes along its border with Afghanistan.

The US' response: today, drones fired four missiles into Pakistan's South Waziristan tribal region, killing six militants belonging to the pro-Taliban Haqqani group. It was the first strike since an attack on March 17 that killed 38 suspected militants.

How does Pakistan feel about America's latest drone strike? A top Pakistani official said this to CNN: "What is this? A message (from the Americans) that it's business as usual, irrespective of what we ask of you? If it is, it's a crude way of getting your message across," he said.

For the United States, literally firing back at the call for curtailing its operations is an unmistakably aggressive move. And it seems to indicate that it's is tired of playing games with Pakistan.

Which Congressional Staffer's License Plate Is This? (Photos)

| Wed Apr. 13, 2011 1:31 PM EDT

Just received in the office from a congressional staffer we know:

So this Lincoln Navigator belongs to someone who works in the House of Representatives (it's parked in the Longworth Building). Even in a place like Texas with ZERO rules, I figure there have to be some kind of guidelines about what you can get on your license plate. Something tells me you shouldn't be able to get "WHAT THE FUCK, OBAMA?"

Well, we here are big fans of that First Amendment thing, but state motor-vehicle departments do tend to put "decency" limits on how far you can pimp your plate. We'll be askin' the Texas DMV about that very thing momentarily. (We've been through this before...or, actually, an out-and-out case of license-plate racism, with this Virginia state worker's Ford F-150.)

As for the congressional driver's identity, we'll leave that sort of sleuthing up to the cloud for now. Though, judging from the decal under the brake light (see full pic below), they're a Texas Tech alum. Or fan. Or, maybe it's Bobby Knight.

In any case, you'd like to think that a Hill staffer (or member of Congress?) can at least appear politically even-handed in the parking lot. Besides, if you can afford a Lincoln SUV to get you to your government job in the District of Columbia, what exactly are you so pissed at the prez about, anyway?


Photo: Mother Jones

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Next Up: GOPers Dig Into Social Security

| Wed Apr. 13, 2011 12:12 PM EDT

Not content with the GOP plan to upend Medicare and Medicaid, a trio of GOP senators have unveiled a proposal to go after Social Security as well. On Wednesday morning, Senators Lindsey Graham (R-SC.), Rand Paul (R-Ky.), and Mike Lee (R-Utah) presented their plan to slash an eye-popping $6.2 trillion from the debt by reforming Social Security—all without raising taxes. How will they pull this off? By hiking the Social Security retirement age to 70 years by 2032 and reducing benefits for those who earn more than an average of $43,000 over their lifetime. The Republicans' plan also makes sure to exclude anyone bound to retire (and vote) any time soon, by exempting those currently older than 56 years from feeling the pain.

In unveiling the plan, Graham called any kind of tax increase to shore up Social Security a non-starter and economically catastrophic. "Don't raise taxes unless you want to completely destroy America," he said at the Wednesday morning press conference. "It's much better to give up benefits on the end side than pay taxes now." Despite such extreme rhetoric, Graham and his colleagues presented their plan as a reasonably moderate option that didn't go so far as to privatize Social Security, as George W. Bush had proposed years earlier. "You're not going to pass a Social Security plan that increases taxes, you're not having Social Security with personal accounts," Graham explained.

Graham acknowledged that tackling Social Security in any form was politically toxic, noting that the trio couldn't find any other colleagues—Republican or otherwise—to rally behind their proposal on Wednesday. "These are the only two guys we could find," Graham said, referring to Lee and Paul, both freshmen members who rode 2010's tea party wave. Indeed, even GOP Rep. Paul Ryan's drastic 2012 budget proposal avoids drastic changes to Social Security.

It seems like no coincidence that the GOP Senators pushed out their plan just a few hours before Obama was scheduled to deliver a major speech on deficit reduction. Lee claimed that the timing was a mere "coincidence," as the three had been preparing the proposal for weeks. But there's little question that Republicans know their plans will stand in contrast to Obama's remarks today. And it's just the latest sign of how much the GOP has succeeded in moving the goalposts on the deficit and spending in recent weeks: every time the Democrats have accomodated them, the conservative flank of their party has pushed the debate even further to the right.

Mitt Romney Takes on the Birthers

| Wed Apr. 13, 2011 10:46 AM EDT

According to Adam Serwer's Birtherism Lexicon, birthers, like dwarves, come in seven different vintages: birthers, post-birthers, ironic post-birthers, pseudo-birthers, the birther-curious, reform birthers, and orthodox birthers. Newly minted GOP presidential candidate Mitt Romney wants you to know he's in that eighth category: He's not a birther:

Mitt Romney forcefully said Tuesday night that he believes President Barack Obama was born in America and that "the citizenship test has been passed."

"I think the citizenship test has been passed. I believe the president was born in the United States. There are real reasons to get this guy out of office," Romney told CNBC's Larry Kudlow the day after he formally announced that he's exploring a run for the White House. "The man needs to be taken out of office but his citizenship isn't the reason why."

Romney's right—at least about the citizenship bit. But it also goes to show just how low the bar has been set for the Republican field in 2012: A candidate can come off as reasonable and moderate simply by asserting that the President of the United States is, in fact, from the United States, and not part of some sort of vast, international conspiracy to destroy the republic.

We're Still at War: Photo of the Day for April 13, 2011

Wed Apr. 13, 2011 5:30 AM EDT

Soldiers from 34th Infantry Division, Task Force Red Bulls, discuss plans to maneuver into Pacha Khak village, Afghanistan, while conducting a dismounted patrol, April 7. Photo via US Army

Pakistan to CIA: Get the Hell Out, Please

| Tue Apr. 12, 2011 2:05 PM EDT
PESHAWAR, March 19, 2011 Members of Waziristan Students Federation shout slogans during a rally to condemn U. S. drone attacks in Waziristan tribal regions, in northwest Pakistan's Peshawar on March 19, 2011. Pakistan pulled out of talks this month with the United States on the future of Afghanistan in protest of an deadly missile attack, the government said Friday, in a sign of rising tensions between the two uneasy allies.

On Monday, when CIA director Leon Panetta met with Pakistan's spy chief, Lt. Gen. Ahmad Shuja Pasha, everything seemed copasetic. The purpose of the tete-a-tete was to smooth over any lingering tensions over the Raymond Davis episode. In January, Davis, a former Blackwater-employed CIA contractor, killed two Pakistanis and got off scot-free, to the considerable dismay of Pakistanis. After the Panetta-Pasha meeting, CIA spokesman George Little said that their discussions were "productive" and that the relationship between the CIA and Pakistani intelligence "remains on solid footing."

By Tuesday, not so much. A host of news outlets are reporting that Pakistani officials, fed up by the America's cloak and dagger operations in their country, are demanding that the CIA suspend its drone strikes in Pakistan and drastically slash the number of intelligence and special operations personnel operating there. How bad are things? "Some officials in both countries [say] intelligence ties are at their lowest point since the Sept. 11, 2001, attacks spurred the alliance," The Wall Street Journal reports.

General Ashfaq Parvez Kayani, the head of the Pakistani army, is demanding that some 335 American operatives, including special operations forces and CIA contractors like Davis, leave his country. That amounts to a cut of 25 to 40 percent in US Special Operations personnel, officials told the New York Times, including the removal of all American contractors used by the CIA. It's a drastic enough drawdown to hinder drone strikes—central to the US war in the border region—and hamper military training for Pakistani soldiers fighting in the tribal region. The Times also reports that Pasha, in his meeting with Panetta, made no specific requests for reductions of CIA officers, contractors or American military personnel.

Pakistan is also seeking the removal of all CIA operatives who, like Davis, are involved in assignments that its intelligence service knows nothing about. "We need to know who is in Pakistan doing what, and that the CIA won’t go behind our back," a top Pakistani official told The Washington Post. The CIA has "to stop mistrusting the ISI as much as they do...you can't have us as your ally and treat us as your adversary at the same time." But as Andrew Exum of the Center for a New American Security points out, trust-building cuts both ways:

It would be a lot easier to trust the ISI if our own intelligence services were not able to so easily demonstrate that Pakistan's intelligence services have been aiding insurgent groups targeting U.S. and allied troops in Afghanistan while at the same time helping the United States target al-Qaeda and those insurgent groups which threaten Pakistani sovereignty.

This, Exum reminds US officials, gives them considerable leverage over Pakistan. Part of that leverage: the fact that the ongoing, unacknowledged drone strikes are a central plank in Pakistan's effort to clamp down on militant activity in the tribal region. If the Pakistanis kick out the CIA, their fight against the militants becomes an all-but-lost cause. But there's plenty on the line for the US as well. It leans heavily on Pakistani support in the war in Afghanistan, and needs the freedom to conduct drone strikes. In other words, it doesn't seem as if either country can afford to tweak the status quo.

But Pakistani officials have to show their people that they're not willing to be bombed and spied into submission. US officials, meanwhile, have to entertain Pakistani concerns and promise to do better next time. It's a dysfunctional relationship, operating on the premise that nothing ever really changes.