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Record Debt and Inequality Gap? It's Almost Like 40 Years of Republican Tax Cuts Failed. Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=51761"><span class="small">Steven Strauss, USA TODAY</span></a>   
Friday, 04 October 2019 13:18

Strauss writes: "Since the Reagan administration, Republicans have fervently claimed lower taxes will unleash the 'makers' - incentivizing them to work harder and invest more, thereby trickling down to benefit ordinary Americans."

A man puts on a jacket at a homeless encampment in St. Louis. (photo: Jeff Roberson/AP)
A man puts on a jacket at a homeless encampment in St. Louis. (photo: Jeff Roberson/AP)


Record Debt and Inequality Gap? It's Almost Like 40 Years of Republican Tax Cuts Failed.

By Steven Strauss, USA TODAY

04 October 19


Trickle-down failure: The cult-like Republican belief in tax cuts isn’t supported by results. It's leading to an apocalypse of debt and inequality.

ince the Reagan administration, Republicans have fervently claimed lower taxes will unleash the "makers" — incentivizing them to work harder and invest more, thereby trickling down to benefit ordinary Americans. Moreover, they have consistently claimed that their tax cuts would create such dramatic economic growth that they’d literally pay for themselves. A rising tide lifts all boats! No hard choices to make — just cut taxes!

Instead, the national debt is at a record high, and the gap between the richest and the poorest U.S. households is now the largest it has been in the 52 years the Census Bureau has been tracking it. And that inequality gap started to expand dramatically about the same time the Republican Party started cutting taxes

More growth during higher-tax eras 

The American economy since 1950 offers a chance to consider the impact of these tax cuts. From 1950 to 1980, the top federal marginal tax rates (the rates on income above certain levels) were as high as 92% and never below 70%. Republicans have been slashing the top tax bracket for annual earned income since the early 1980s, and it is now 37% on income above $612,350. 

Further, in 2003 the GOP shrank the tax rate on unearned income (such as dividends) to 15%, resulting (for example) in the billionaire Warren Buffett having a lower tax rate than his secretary. With such dramatic tax cuts, GOP dogma predicted a booming U.S. economy.

But it turns out U.S. economic growth was substantially higher during the period of high taxes. From 1950 to 1980, average annual growth in real (inflation-adjusted gross domestic product) was 3.9%, while from 1981 to 2018 the comparable number was 2.7%. 

Similarly, during the high tax period, median household incomes increased on average (in real terms) by a bit over 2.5% per year. During the low income tax period, average real growth in household income declined to 0.7% per year.

Since the Reagan administration, Republicans have fervently claimed lower taxes will unleash the "makers" — incentivizing them to work harder and invest more, thereby trickling down to benefit ordinary Americans. Moreover, they have consistently claimed that their tax cuts would create such dramatic economic growth that they’d literally pay for themselves. A rising tide lifts all boats! No hard choices to make — just cut taxes!

Instead, the national debt is at a record high, and the gap between the richest and the poorest U.S. households is now the largest it has been in the 52 years the Census Bureau has been tracking it. And that inequality gap started to expand dramatically about the same time the Republican Party started cutting taxes

More growth during higher-tax eras 

The American economy since 1950 offers a chance to consider the impact of these tax cuts. From 1950 to 1980, the top federal marginal tax rates (the rates on income above certain levels) were as high as 92% and never below 70%. Republicans have been slashing the top tax bracket for annual earned income since the early 1980s, and it is now 37% on income above $612,350. 

Further, in 2003 the GOP shrank the tax rate on unearned income (such as dividends) to 15%, resulting (for example) in the billionaire Warren Buffett having a lower tax rate than his secretary. With such dramatic tax cuts, GOP dogma predicted a booming U.S. economy.

But it turns out U.S. economic growth was substantially higher during the period of high taxes. From 1950 to 1980, average annual growth in real (inflation-adjusted gross domestic product) was 3.9%, while from 1981 to 2018 the comparable number was 2.7%. 

Similarly, during the high tax period, median household incomes increased on average (in real terms) by a bit over 2.5% per year. During the low income tax period, average real growth in household income declined to 0.7% per year.

Disciples of the Cult of the Magic Tax Cuts will generally respond to these facts by noting that economic growth stems from a number of factors besides tax policy (such as external markets, investment in education and government funding of basic research).  These cultists claim that America’s results from 1980 to the present would have been much worse without the GOP’s obsessive reliance on tax cuts. 

But roughly 40 years of GOP tax cuts have provided opportunities for controlled studies of the American economy, and they don't show that. 

No impact on paychecks or investment

For example, Republican President George W. Bush’s 2003 tax act reduced the top tax rate on dividend income from 38.6% to 15% — a massive reduction that was supposed to trigger an investment boom and a trickle-down of benefits, such as higher compensation, to ordinary Americans. However, in a 2015 study of IRS data from 1996 to 2008, published in the American Economic Review, Berkeley economist Danny Yagan found that "the tax cut had no detectable impact on investment or employee compensation."

Another study, “Do Tax Cuts Produce More Einsteins?”, looked at how government tax incentives influenced individuals’ decisions to pursue careers in innovation (using a dataset of 1.2 million inventors, including their tax information). The study found that “financial incentives, such as top income tax reductions, have limited potential to increase aggregate innovation because they … have no impact on the decisions of star inventors, who matter most for aggregate innovation.”

Tax cuts cost money we don't have

More intuitively, the idea that Mark Zuckerberg was thinking about his tax rate while working in his college dorm room on what became Facebook is ridiculous.

Another (though related) argument the GOP keeps making is that its tax cuts will pay for themselves. The available data, however, show that the 2003 tax cut and an earlier cut in 2001 benefited the richest Americans, and did not pay for themselves (indeed, by some calculations the two tax cuts added $5.6 trillion to the national debt). 

More recently, Republican Treasury Secretary Steven Mnuchin claimed that the GOP’s 2017 tax cut would not only pay for itself, but would actually reduce the federal deficit by $1 trillion. So far (according to the nonpartisan Congressional Budget Office), the 2017 tax cut isn’t paying for itself with higher tax revenue, and it’s projected to add $1.5 trillion to our national debt over the next 10 years.

GOP must stop believing in magic 

I’m not making a plea for larger government — just a plea for economic sanity. If Congress in its all-seeing wisdom wants to spend $700 billion on the military, billions of dollars on farm subsidies and so on, it must either raise enough money in taxes to pay for the programs it authorizes or reduce the size of government. 

Instead, although Republicans controlled the White House, the Senate and the House from 2017 to 2019, they chose not to make (or even seriously debate) any substantial cuts to government programs that would balance the revenue lost by their series of massive unfunded tax cuts.

Unquestioning and unsubstantiated belief in the magical power of tax cuts isn’t a viable economic policy. The GOP is putting America on an unsustainable path that is disastrous both for its fiscal future and for the hopes of people trying to get ahead. 

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FOCUS: Trump's Wrecking-Ball Impeachment Defense Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=6853"><span class="small">Frank Rich, New York Magazine</span></a>   
Friday, 04 October 2019 10:54

Rich writes: "We can safely assume that even Trump's most ardent fans would not put him and 'focused plan' or 'strategy' in the same sentence. His brand is chaos, and his default position is human (or more often inhuman) wrecking ball."

Protesters call for Trump to be impeached. (photo: AP)
Protesters call for Trump to be impeached. (photo: AP)


Trump's Wrecking-Ball Impeachment Defense

By Frank Rich, New York Magazine

04 October 19


Most weeks, New York Magazine writer-at-large Frank Rich speaks with contributor Alex Carp about the biggest stories in politics and culture. Today, Donald Trump’s frantic attempts at an impeachment defense, efforts by Bill Barr and Mike Pompeo to protect themselves from Ukraine fallout, and Bernie Sanders’s health issues.

week in, Trump’s defense to the growing impeachment proceedings seems to be tantrums and denial. Is there a cost to failing to develop a more focused plan, or will this strategy help him slip out of trouble, as it has in the past?

We can safely assume that even Trump’s most ardent fans would not put him and “focused plan” or “strategy” in the same sentence. His brand is chaos, and his default position is human (or more often inhuman) wrecking ball. That will never change, nor does he want it to change. The question is less whether Trump’s malevolence will allow him to escape impeachment than whether American governance, already on the ropes, will tumble into a coma before he leaves office and allow opportunistic American enemies like Vladimir Putin and Kim Jong-un to pounce. An ancillary question is whether Trump will in fact leave the Oval Office voluntarily if he is convicted in an impeachment trial or defeated in the election that’s now 13 months away. A president who finds new constitutional norms to violate daily can hardly be counted upon to respect the verdicts of either Congress or the voters.

A third question is his sanity. Even by his standards, yesterday’s #TrumpMeltdown was wild. The nation saw him tossing around a jockstrap insult (aimed at Adam Schiff) in an ornate White House setting as the Finnish president trapped beside him tried, with mixed results, to maintain a poker-faced dignity. We watched Trump in desperation cite abject GOP lapdogs like Lindsey Graham, Rick Scott, and Rob Portman as character witnesses. We watched him lie with his usual heedlessness and velocity, but as often as not his fictions undermined his own craven self-interest: By referring to the White House’s readout of his fateful July 25 call with the Ukrainian president as a “word-for-word, comma-for-comma” transcript, he was attempting to further the cover-up in plain sight. All you need is eyes to see that this document is not labeled a “transcript” and is too brief to be the entirety of what was officially listed as a 30-minute presidential conversation. (Interns in the office of one senator, Angus King of Maine, read the released version aloud and clocked it at roughly ten minutes.) Not to mention that the “comma-for-comma” White House readout contains ellipses — which may yet prove to be tantamount to the notorious 18-and-a-half-minute gap on an incriminating Nixon White House tape.

Trump retains enough animal cunning to know he’s in jeopardy. New Deep Throats are surfacing in the press (especially at the Washington Post) daily. The polls are starting to shift. Members of Congress are home talking to their constituents over recess. Even Mitch McConnell budged a tiny bit, letting the release of the whistle-blower complaint proceed without senatorial interference and going on record that he cannot prevent impeachment from being taken up by his chamber. At the height of yesterday’s #TrumpMeltdown, the Dow was plummeting 500 points on trade-war fears. And Trump is running low on rhetorical ammunition to fight back. His repeated characterization of the July 25 phone conversation as “perfect” and “beautiful” is not just false but adjectivally weird. Writing “BULLSHIT” in a tweet attacking his opponents is an indicator of desperation as well as his usual vulgarity. Running out of words, he is more dependent than ever on the feedback loop of Fox News for fresh gambits: His new claim to be the victim of a “coup” originated there, as did his threat that his impeachment would lead to “civil war.”

Could he and his country sink even lower while impeachment is adjudicated? Quite possibly; there seems to be no bottom. If this historical moment echoes Watergate in some regards, it also echoes the rise of toxic anti-government rhetoric and right-wing American terrorist militias and cults in the period leading up to the bombing of the Alfred P. Murrah Federal building in Oklahoma City in 1995. Back then it was the likes of NRA chief Wayne LaPierre who were railing against “jack-booted government thugs.” Now it’s the president of the United States who is doing so, relentlessly suggesting that Schiff, the whistle-blower, and members of the press (among others) be punished for committing treason. And he is doing so in a society that is, if anything, even more gun-crazy and gun-saturated now than it was in the 1990s.

Let’s be clear here: As he retreats more and more into his bunker, Trump is not being careful about what he wishes for, and what he is wishing for is violence. Yet the Vichy Republicans — even those senators up for reelection like Susan Collins and Cory Gardner — remain silent. Be assured that they’ll be among the first to offer their thoughts and prayers on camera if this dam breaks.

Ukraine-related questions have continued to grow around Attorney General Bill Barr and Secretary of State Mike Pompeo, both of whom seem to be doing everything they can to sidestep direct questioning. Will their stonewalling protect them? 

No. Nor will stonewalling protect the increasingly implicated Mike Pence. Pompeo, the cagiest of the three, has started to figure this out — probably because he realized he would fail in his attempt to stop former State Department officials like the special Ukraine envoy Karl Volker and the summarily fired U.S. ambassador to the Ukraine, Marie Yovanovitch, from talking to investigators. That’s why it took only days for Pompeo to go from lying and dissembling about what he knew about the Ukraine call and when he knew it to conceding he was present. This is surely a smarter legal strategy than Pence’s; as Jonathan Chait has pointed out, the vice-president is claiming essentially that he was too stupid to understand what was going on all around him, even when he was participating in the White House’s Ukrainian plot. As for Barr, he continues hobnobbing all over the world to do both Trump and Putin’s bidding in pursuing a crackpot conspiracy theory that would clear Russia of 2016 election interference and implicate Ukraine instead. One could argue that even Rudy Giuliani has more sense than Barr does: This week he recruited a former Watergate prosecutor to represent him in impeachment proceedings.

Bernie Sanders announced that he has been hospitalized with a heart issue, and had two stents inserted.  Do health concerns change his standing in the Democratic primary?

Assuming that the public diagnoses by cardiologists hold up, the answer is no. Sanders will return to the stump after a fairly brief break, and only if he stops shouting upon return should he or his supporters start to worry.

What’s more interesting is that there are few signs that Trump’s anti-Biden jihad is shaking up the Democratic primary either, despite the president referring to him and his son as “stone-cold crooked” and such antics as today’s, in which he publicly urged China to investigate them. Both Sanders and Biden have been slipping in polls while Elizabeth Warren is gaining, but neither is tanking, and both are very much in what’s still a fluid race. Biden’s decision to employ some rare reticence in handling Trump’s baseless charges against his son may be his shrewdest move so far in the campaign.

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The Party of Collusion Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=24111"><span class="small">William Saletan, Slate</span></a>   
Friday, 04 October 2019 08:38

Saletan writes: "Trump asked a foreign government for help in an election. Republicans say that's fine."

Sen. Lindsey Graham speaks during a Senate Foreign Relations Committee meeting in June in Washington. (photo: Stefani Reynolds/Getty)
Sen. Lindsey Graham speaks during a Senate Foreign Relations Committee meeting in June in Washington. (photo: Stefani Reynolds/Getty)


The Party of Collusion

By William Saletan, Slate

04 October 19


Trump asked a foreign government for help in an election. Republicans say that’s fine.

wo years ago, in the early days of the Russia investigation, many Republican senators said collusion with a foreign government to influence an American election would be a betrayal of the United States. They didn’t believe Donald Trump had solicited campaign help from Russia. But they agreed that if he had, it was illegal and perhaps impeachable. 

Today, some of those senators—notably, the committee chairmen responsible for protecting national security and the rule of law—have renounced that principle. They now assert, in the case of Ukraine, that collusion is OK. 

Sen. James Risch of Idaho is the chairman of the Senate Committee on Foreign Relations. In June 2017, he interrogated then–Attorney General Jeff Sessions at a hearing of the Senate Select Committee on Intelligence. “Collusion with the Russians—or any other government, for that matter, when it comes to our elections—certainly would be improper and illegal,” Risch stipulated. He asked Sessions, “Would that be a fair statement?” Sessions replied, “Absolutely.” 

Sen. Lindsey Graham of South Carolina expressed a similar view. At a press conference earlier this year, Graham, who is now the chairman of the Judiciary Committee, explained, “The big thing for me, guys, has always been: Did Trump work with the Russians? And I told him to his face, almost two years ago: ‘If you did, that’s it between me and you. And anything that follows, you deserve.’ I will say that about any politician of any party.” 

Sen. Ron Johnson, the chairman of the Committee on Homeland Security and Governmental Affairs, espoused the same rule. The pivotal question, the Wisconsin senator insisted, was whether “members of the Trump Campaign conspired or coordinated with the Russian government.” The United States “should be investigating, ‘Was there collusion?’ ” said Johnson. In April, NBC’s Andrea Mitchell asked the senator whether he agreed with Trump’s lawyer, Rudy Giuliani, that “it’s OK for Republican campaign members, for Republican candidates, to welcome support from a foreign adversary, from Russia. Do you feel the same way? Would you welcome support from Russia in your campaign?” Johnson replied decisively, “No.” 

Then, on July 25, Trump flagrantly crossed that line. In a phone call, Trump reminded Ukrainian President Volodymyr Zelensky that his country, besieged and partially occupied by Russia, depended on U.S. military aid. “We do a lot for Ukraine,” said Trump. He complained that Ukraine wasn’t providing “reciprocal” help, and he asked Zelensky for “a favor”: to work with Giuliani and U.S. Attorney General William Barr on two investigations that could help Trump in 2020. Trump explicitly named former U.S. Vice President Joe Biden, who was, at that point, the Democrat most likely to face Trump in the general election. “There’s a lot of talk about Biden’s son, that Biden stopped the prosecution” of him, said Trump. “A lot of people want to find out about that. So whatever you can do with the attorney general would be great. Biden went around bragging that he stopped the prosecution. So if you can look into it … ” 

The phone call was open-and-shut collusion. Trump had asked a foreign government to investigate his opponent, and the request was recorded in a White House transcript. When the transcript was released on Sept. 25, it put Republican senators in a bind. They had to choose between country and party, between abandoning Trump and defending collusion. 

They chose to embrace collusion. 

“I looked at the transcript,” Risch told an Idaho TV station. “This conversation that the president had with the head of Ukraine is a typical conversation.” The senator argued that Trump’s statements in the call “were absolutely normal, ordinary, regular things.” When a reporter asked Risch to address the incriminating parts of the transcript, the senator talked over him and shut the conversation down, insisting, “I saw nothing in the conversation that was inappropriate. We’re done here.” 

Johnson, too, fell in line. After a meeting at the White House, at which he and other Republican lawmakers received the transcript and Trump’s talking points, the senator told reporters that the transcript showed nothing wrong with the call. “We all kind of looked at it and said, ‘There’s nothing here,’ ” said Johnson. The next day, he elaborated: “I never got any sense at all there was any kind of pressure [on Zelensky]. I just put the best construction on the call.” When a reporter for the Milwaukee Journal Sentinel asked Johnson whether he was “troubled that—even absent a quid pro quo—the president would ask a foreign leader to investigate a political opponent of his,” Johnson dismissed the question. “Almost everybody who is saying that is just troubled that Donald Trump is president,” the senator scoffed. 

Graham, like his colleagues, says the call is fine. On Sunday, in an interview with Margaret Brennan of CBS News, he defended it line by line. Graham described Trump’s pitch to Zelensky this way: “We are very generous to the Ukraine. Other countries, like Germany, should do more. And, oh, by the way, I have heard that this prosecutor that got fired, maybe he was a good guy, and they fired him because he was looking at Joe Biden’s son. Could you look into that?” 

Graham’s paraphrase of the call was, by his own previous standard, collusion. But he defended Trump’s message to Zelensky, even when Brennan cited other incriminating parts of the call. She noted that Trump, in the transcript, “brings up the Biden family and the need for an investigation. He repeatedly lays that out. And also the aid package is mentioned.” She asked Graham, “You have no problem with any of this?” Graham replied, “I have zero problems with this phone call.” Brennan persisted: “Do you think it was ethical for the president to bring up Joe Biden?” Graham replied, “Yes, absolutely.” 

The president thinks these declarations of innocence exonerate him. At the White House on Wednesday, he claimed that Graham privately told him the call was unimpeachable. “Lindsey Graham said, ‘I never knew you were that nice a person,’ ” Trump told reporters. “He said, ‘You never asked [Zelensky] for anything. You were really, really nice. … That was a perfect conversation.’ ” 

It’s true that the chairman of the Judiciary Committee sees nothing wrong with the conversation. Nor do the chairmen of the committees on Homeland Security and Foreign Relations. But that doesn’t mean the conversation was perfect. It means that the Republican Party no longer believes it’s wrong to enlist the help of foreign governments to win an election. It has become the party of collusion. 

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Why the 'Joker' Gun Violence Protests Miss the Mark Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=38164"><span class="small">Kareem Abdul-Jabbar, The Hollywood Reporter</span></a>   
Thursday, 03 October 2019 12:39

Abdul-Jabbar writes: "To him, we are all amoral sleeper agents awaiting the secret code word to awaken us to selfish violence. Yet, even if the universe is indifferent, most people are not."

A still from the film 'Joker.' (photo: Warner Bros. Pictures)
A still from the film 'Joker.' (photo: Warner Bros. Pictures)


Why the 'Joker' Gun Violence Protests Miss the Mark

By Kareem Abdul-Jabbar, The Hollywood Reporter

03 October 19


Though supportive of their goals, the Hollywood Reporter columnist (and gun owner) argues that survivors of shootings are targeting the wrong film with the wrong strategy, "setting a bad precedent for all activist groups."

n Alan Moore’s brilliant graphic novel, Batman: The Killing Joke, the Joker justifies his psychopathic behavior by philosophizing that every human being is just "one bad day away" from rejecting the polite veneer of civilization’s morality in the face of an indifferent universe. To him, we are all amoral sleeper agents awaiting the secret code word to awaken us to selfish violence.

Yet, even if the universe is indifferent, most people are not.

We share each other’s grief and try to lighten each other’s burdens caused by that "one bad day." And so we continue to grieve with and support the survivors and victims’ families like those of the 2012 Aurora, Colorado, shooting during a screening of The Dark Knight Rises that killed 12 and wounded 70 others. But, while their campaign against Joker and Warner Bros. may evoke our sympathies, it is counterproductive to their goal as it sets a bad precedent for activist groups trying to define the boundaries between free speech, hate speech and violence-promoting speech.

The Aurora group, Survivors Empowered, have made it clear that they aren’t asking the studio not to release the film, nor are they promoting a boycott. Instead, they asked Warner Bros. to donate to groups that help victims of gun violence, to “end political contributions to candidates who take money from the NRA and vote against gun reform,” and to “use your political clout and leverage in Congress to actively lobby for gun reform.” Despite being a gun owner myself, I fully support the Aurora group’s goals of promoting aggressive gun reform by pressuring the members of Congress who are generous with “thoughts and prayers” but miserly with actions that might actually curtail the epidemic of mass shootings — especially when they’re getting millions of dollars in political contributions from the NRA and gun manufacturers.

One can only imagine the intensity of the anger and frustration of the Aurora people to see seven years pass with very little change except the body count. So far in 2019 alone, as of Sept. 24, there have been 334 mass shootings (1.24 per day) with 377 dead and 1,347 injured. In just nine months.

However, though I am supportive of their goal, this is the wrong movie and the wrong strategy to promote the fight for gun control because it creates a diversion. First, the strategy is wrong because it feels uncomfortably close to passive extortion. Even though there is no call to boycott, they have cast a pall over the film that is meant to be damaging. No matter how Warners reacts, the damage has already been done. Even if Warners complied with their demands, the movie has been tainted in the eyes of the average moviegoer. A photo of a Warner Bros. executive handing them a large check wouldn’t change that. There’s therefore no incentive for the studio to comply. In fact, according to a Warner Bros. statement in response: “Our company has a long history of donating to victims of violence, including Aurora, and in recent weeks, our parent company joined other business leaders to call on policymakers to enact bipartisan legislation to address this epidemic.”

Second, Warner Bros. and Joker are the wrong focus of attention, which further compromises the group’s goal. Despite their claim that “we support your right to free speech and free expression,” launching this campaign around a movie — especially one like this that strives to be more artistic than exploitative — can have a chilling effect on free expression. Especially when one of the writers of the letter described the film as a "slap in the face”: "My worry is that one person who may be out there — and who knows if it is just one — who is on the edge, who is wanting to be a mass shooter, may be encouraged by this movie. And that terrifies me.” Her emotion is understandable, but her reasoning is not. And since she is using her reasoning to persuade the rest of us, it needs to be examined.

Though movies (Taxi Driver for John Hinckley Jr., would-be assassin of Ronald Reagan), books (The Catcher in the Rye for Mark David Chapman, John Lennon’s murderer) and songs (“Helter Skelter” for Tate-LaBianca murders mastermind Charles Manson) may articulate specific criminals acts, they don’t inspire the person’s desire for violence. Science has proven that in numerous studies. It’s tempting to blame movies, video games and rap music because they often express humanity’s worst impulses, but impulses are not actions for most of us. And for the mentally ill seeking violence, anything can set them off. Alek Minassian, the self-described incel (involuntary celibate) who deliberately drove his van into a crowd in Toronto in 2018, killing 10 people, said he was motivated by his resentment toward women for having sexually rejected him in favor of giving “their love and affection to obnoxious brutes.” Should we then demand that studios producing romantic comedies and publishers of romance novels be shamed into contributing to anti-incel causes? The 2017 Las Vegas shooter killed 59 and injured 851 during a country music festival. Should country music bear some responsibility?

I stand with Survivors Empowered and other organizations fighting for gun reform. And I’ve been a strong supporter of controversial activist strategies over the past 50 years. But we need to be effective so that we change the country for the better without curtailing the legitimate rights of others. As I have learned the hard way, social change is exceedingly slow and cautious, and moves at all only because we continually prod it to do so. We all seek peace, but as W.B. Yeats wrote, "Peace comes dropping slow."

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IRS: Sorry, but It's Just Easier and Cheaper to Audit the Poor Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=6729"><span class="small">Paul Kiel, ProPublica</span></a>   
Thursday, 03 October 2019 12:39

Kiel writes: "The IRS audits the working poor at about the same rate as the wealthiest 1%. Now, in response to questions from a U.S. senator, the IRS has acknowledged that's true but professes it can't change anything unless it is given more money."

IRS Commissioner Charles Rettig. (photo: Anna Moneymaker/Getty)
IRS Commissioner Charles Rettig. (photo: Anna Moneymaker/Getty)


IRS: Sorry, but It's Just Easier and Cheaper to Audit the Poor

By Paul Kiel, ProPublica

03 October 19


Congress asked the IRS to report on why it audits the poor more than the affluent. Its response is that it doesn’t have enough money and people to audit the wealthy properly. So it’s not going to.

he IRS audits the working poor at about the same rate as the wealthiest 1%. Now, in response to questions from a U.S. senator, the IRS has acknowledged that’s true but professes it can’t change anything unless it is given more money.

ProPublica reported the disproportionate audit focus on lower-income families in April. Lawmakers confronted IRS Commissioner Charles Rettig about the emphasis, citing our stories, and Sen. Ron Wyden, D-Ore., asked Rettig for a plan to fix the imbalance. Rettig readily agreed.

Last month, Rettig replied with a report, but it said the IRS has no plan and won’t have one until Congress agrees to restore the funding it slashed from the agency over the past nine years — something lawmakers have shown little inclination to do.

On the one hand, the IRS said, auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. They are “the most efficient use of available IRS examination resources,” Rettig’s report says.

On the other hand, auditing the rich is hard. It takes senior auditors hours upon hours to complete an exam. What’s more, the letter says, “the rate of attrition is significantly higher among these more experienced examiners.” As a result, the budget cuts have hit this part of the IRS particularly hard.

For now, the IRS says, while it agrees auditing more wealthy taxpayers would be a good idea, without adequate funding there’s nothing it can do. “Congress must fund and the IRS must hire and train appropriate numbers of [auditors] to have appropriately balanced coverage across all income levels,” the report said.

Since 2011, Republicans in Congress have driven cuts to the IRS enforcement budget; it’s more than a quarter lower than its 2010 level, adjusting for inflation.

Recently, bipartisan support has emerged in both the House and Senate for increasing enforcement spending, but the proposals on the table are relatively modest and would not restore the budget to pre-cut levels. However, even a proposed small increase might not come to pass, because it’s unclear whether Congress will actually pass any appropriations bills this year.

In response to Rettig’s letter, Wyden agreed in a statement that the IRS needs more money, “but that does not eliminate the need for the agency to begin reversing the alarming trend of plummeting audit rates of the wealthy within its current budget.”

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