The Missouri Budget Crisis And The Year 1985

Yesterday’s editorial in the Joplin Globe included this bad news for Missourians:

The state faces a $500 million to $700 million budget deficit for fiscal year 2012 that must be resolved by the Legislature and Gov. Jay Nixon. There is little hope for substantial federal funding to offset that shortfall.

The only news worse than that is what the Globe editorial said in response to that bad news:

We urge our governor and legislators in the upcoming legislative session to continue to make the painful choices necessary to keep Missouri state government living well within its means.

Let’s keep it that way with responsible state and local government and the acknowledgment from our residents that government is not a cure for all that ails society today.

Where does one start with such, well, with such reactionary Republican ridiculousness?

Okay, I’ll start with being the first resident to acknowledge that government is not a cure for all that ails society today.  There.  That’s done.

Now, to the “painful choices necessary to keep Missouri state government living well within its means” nonsense. 

It has become obvious that conservative governance in this state, as well as in the country at large, has undertaken a “starve the beast”—the government is always the beast—strategy.   Nationally, we are paying less in federal taxes as a percentage of GDP than at any time since 1950, which is illustrated nicely by this graph:  

Notice the increase in revenues resulting from the famous 1993 tax increase (which created budget surpluses) and the decline in revenues resulting from the Bush tax cuts (which created massive deficits).  And notice that the conservative strategy of starving the beast is working to the extent that nearly everyone is now talking about entitlement cuts and other government-reducing exercises.

As for the states, according to the conservative Tax Foundation, there are only 15 states with a lower combined tax burden than Missouri.  But more disturbing is, in the words of  The Missouri Budget Project, “the erosion of Missouri’s revenue base since 1985”:

Missouri General Revenue spending as a portion of the economy is below the 1985 level.  The Hancock Amendment to Missouri’s Constitution restricts state general revenue growth to the ratio of general revenue to personal income that existed in the 1980s. The ratio of the two measures provides a picture of how far Missouri state general revenue has declined when compared to the state’s economy. State general revenue in FY 2010 was just 3.124 percent of state personal income, well below what it was in 1985 and nearly $2 billion below the Hancock “lid.” 

Here’s the chart:

Let this sink in:

State general revenue in FY 2010 was just 3.124 percent of state personal income, well below what it was in 1985 and nearly $2 billion below the Hancock “lid.”

Was Missouri an unfit place to live in 1985?  Were businesses and people fleeing the state? Were things so bad that we can’t see our way to go back to the revenue percentages of that time? 

Of course not.

That $2 billion would solve the “crisis” we face now, without the Joplin Globe fretting over “painful choices,” which really means painful budget cuts that naturally hurt the most vulnerable among us.

How about an editorial on that?

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The Climate Has Changed And So Has The Politics

“He had discovered that the earth itself was breathing.”

Justin Gillis, referring to scientist Charles David Keeling’s finding that the levels of atmospheric CO2 oscillated according to the seasons

In an informative article published last week in the New York Times, Justin Gillis points out that now that climate change deniers—through the Republican takeover of the House—have some political clout, they intend on using it to “subject climate researchers to a season of new scrutiny”:

One of them is Representative Dana Rohrabacher, Republican of California. In a recent Congressional hearing on global warming, he said, “The CO2 levels in the atmosphere are rather undramatic.”

But most scientists trained in the physics of the atmosphere have a different reaction to the increase.

“I find it shocking,” said Pieter P. Tans, who runs the government monitoring program of which the Mauna Loa Observatory is a part. “We really are in a predicament here, and it’s getting worse every year.”

It was from data collected—beginning in the 1950s—on Hawaii’s Mauna Loa that Dr. Charles David Keeling discovered “the increasing level of carbon dioxide in the atmosphere,” which Gillis claims “transformed the scientific understanding of humanity’s relationship with the earth.”

When Keeling made his first super-accurate measurements, he discovered that the amount of carbon dioxide in the atmosphere was 310 parts per million.  By the time he died in 2005, it was 380 parts per million and rising.  Gillis writes that predictions are that without efforts to control carbon emissions, “the number could pass 560 before the end of the century, double what it was before the Industrial Revolution.”  Here is the way Gillis explains what may result from such an increase:

The risks include melting ice sheets, rising seas, more droughts and heat waves, more flash floods, worse storms, extinction of many plants and animals, depletion of sea life and — perhaps most important — difficulty in producing an adequate supply of food. Many of these changes are taking place at a modest level already, the scientists say, but are expected to intensify.

None of that worries right-wing radio and television talk show-climatologists, their climate change credentials being that they have microphones and big mouths.  It is these chattering consensus-doubters who are responsible for much of the shift in public attitudes toward climate change. Polls show an increase in skepticism, which emboldens public officials like Dana Rohrabacher and Republican Senator Jim Inhofe to pursue their crusades against the science of global warming.

According to Wikipedia, Senator Inhofe has compared the environmentalist movement to the Third Reich; he has compared the Environmental Protection Agency to the Gestapo; he has said that global warming is “the second-largest hoax ever played on the American people, after the separation of church and state.” 

Needless to say, Inhofe is one of the right’s heroes, when it comes to this issue. 

As for the politics of Dr. Keeling, whose research first alerted us to the possible dangers of global warming, here is Gillis again:

In an interview in La Jolla, Dr. Keeling’s widow, Louise, said that if her husband had lived to see the hardening of the political battle lines over climate change, he would have been dismayed.

“He was a registered Republican,” she said. “He just didn’t think of it as a political issue at all.”

You can bet we will be in for a real treat when newly empowered Republicans in the House execute their assault on the lifetime work of Dr. Keeling and his fellow scientists.

Hillbilly Tolerance And The Founders

For those of you out there who don’t live in these parts and wonder just what it is like, here is a sample of opinion submitted to the Joplin Globe from someone from Lamar, Missouri, birthplace of Harry Truman.  This opinion, unfortunately, represents the thinking of a lot of folks here in the Ozark foothills.  For lack of a better word, let’s just call it hillbilly tolerance:

Like so many others, I too long for the days of old when politicians behaved more like statesmen. But in those days, most of them were at least nominally Christian, not like today when so many in both parties are, at best, Christian in name only.

The last time I checked, “nominally” meant something like “in name only,” so essentially what the writer, Dave Spiering, is saying is this:

In the good old days, most politicians at least called themselves Christians, not like today when so many in both parties, at best, call themselves Christians.

Get it?  Neither do I.

In any case, I suppose the worst of what Mr. Spiering had to say was the following:

So who’s to blame? John Adams, our second president said: “Our system of government is designed for a Christian people, and is wholly inadequate to govern any other.” If we as Americans refuse to humble ourselves and return to our creator, how can we expect any better than gridlock and demagoguery?

Forget for a moment the breathtaking audacity of claiming that any gridlock or demagoguery in our political system can be attributed to a refusal—especially on the part of our politicians—to prostrate themselves before “our”—meaning, of course, the author’s—creator. 

Often, it is precisely an unwarranted reliance on the dubious dictates of divinity that leads to gridlock and demagoguery, since politicians often stake out uncompromising positions that conform to their religious convictions, real or imagined.

But let’s look at that John Adams quote again:

Our system of government is designed for a Christian people, and is wholly inadequate to govern any other.

Now, as an online commenter pointed out, that isn’t exactly what Adams said.  Here is the quote in some additional context:

Avarice, ambition, revenge, or gallantry, would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.

A moral and religious people,” and not “a Christian people.”  That’s quite a difference, don’t you think?  Especially if you were “a moral and Islamic American,” or “moral and Jewish American.”

I don’t know if Mr. Spiering ever bothered to check the Adams quote out himself or whether he just copied the erroneous version from some right-wing Christian publication or website, but it is an example of the narrow-mindedness and intolerance of conservative Christianity. 

Here is another example from a less-Ozarkian, but still intolerant, source, Coral Ridge Ministries, founded by Dr. D. James Kennedy.  On its website, under “Truth #4,” we find the above quote plus two additional quotes:

We have no government armed with power capable of contending with human passions unbridled by morality and religion.  — John Adams

Religion and morality are necessary to good government, good order, and good laws, for when the righteous are in authority, the people rejoice.        — William Paterson, a signer of the Constitution from New Jersey

So far, we have three quotes from allegedly infallible “founders,” and so far we have exactly zero evidence that by “religion” or “morality” these men referred exclusively to the Christian faith.  Yet, like the claim by Mr. Spiering from Lamar, we find this erroneous conclusion advanced by Coral Ridge Ministries:

The Founders understood that Christian morality was essential for both the preservation of liberty and the stability of law. They knew that if Americans ever abandoned the biblical standards of morality, there could be no fixed boundaries to maintain either liberty or law. Consequently, there would be no end to the possibilities of national evil. They saw that the future of the nation was dependent upon the vitality of religion and the exercise of biblical morality.

All of that nonsense* was extracted from a few quotes about morality and religion, which contained no references to Jesus or the Bible.  As you can see, these religious zealots take this stuff seriously.  It’s either their way or doom.

But I like what the anonymous commenter on Mr. Spiering’s letter pointed out:

Our country will be better when politicians don’t even have to be a ‘Christian in name only.’ Why should someone have to put on a religious facade to be viewed as a person with morality.

The entitlement to deceit that Mr Spiering has shown with his misquotation, is just a small example of how religiosity doesn’t imply righteousness.

Amen.

____________________________

*Nonsense?  Yes. For anyone who has ever read the Old Testament accounts of Yahweh-sanctioned murder and mayhem, this quote is ridiculous:

They knew that if Americans ever abandoned the biblical standards of morality, there could be no fixed boundaries to maintain either liberty or law.

Which “biblical standards of morality” would we be talking about?  Those that allow for the killing of innocents in the name of the religion of Yahweh?

Nonsense, indeed.

Local Yahoos And The Race Card

The Joplin Globe published an editorial today on the “controversy building around the travel expenses of Joplin Councilwoman Melodee Colbert-Kean.”

It seems Colbert-Kean accepted a position on the board of the National League of Cities without obtaining input from the city council, from which she has sought and still seeks reimbursement for some NLC-related expenses.

My interest is not in whether the city should or shouldn’t reimburse her, or whether she should or shouldn’t have sought the opinion of the Joplin city council before accepting the NLC offer. 

Here’s what I’m interested in, which was found in the “Discussion” section of a news story about the issue on the Globe website:

Please, please Melodee make that call to good ol’ buddy Al and claim something, let’s get it all out in the open for review like it should be.

Forget for a moment the reference to her as “Melodee,” and focus on the reference to her as a “good ol’ buddy” of “Al” Sharpton, noted African-American civil rights activist and attorney.  Where did he come from and how does the commenter know whether Colbert-Kean knows Al Sharpton at all, let alone well enough to be a “good ol’ buddy”?

That reference to Sharpton was written by “Geoff”—presumably Obama-hating Globe blogger Geoff Caldwell, who also wrote this:

Sadly Colbert-Kean is behaving in the same way as thousands of other elected officials, they just feel because of their position they are somehow special or entitled to behave outside the rules.

The only ‘honor’ you have Ms. Melodee is that you were elected to the city council to represent the citizens of Joplin, not to travel to Denver and D.C. to inflate an already bursting ego, especially if said inflation is paid for by us.

Remember, it is you, not them who has spent over a third of all the money spent on travel in the past three years. Play the card if you want but better make darn sure you know what’s in the deck before you do.

Now, obviously I don’t have a problem with anyone criticizing any politician, whether it be a city council member or the President of the United States.  But why would “Geoff” raise the issue of Al Sharpton and the race card or whether Ms. Colbert-Kean feels “entitled“? 

And why would that same blogger, who refers to President Obama as “boy,” refer to Ms. Colbert-Kean as having an “already bursting ego”?  How does he know that? 

Oh, yeah. Ms. Colbert-Kean is (whisper) black.   You see, here’s a picture of her:

Yep!  You can tell just by looking at her that Ms. Colbert-Kean will go running to her good buddy Al Sharpton seeking representation, if she doesn’t get her way.  Isn’t it as plain as day?  And it’s obvious she feels “entitled.”  It’s written all over her face!

Except that the Globe reported this exchange between Ms. Colbert-Kean and another council member, Morris Glaze:

Glaze asked: “Before you were elected to the board, shouldn’t you have come back and asked the council?”

“No, it’s pretty much an honor to serve,” Colbert-Kean replied. “It’s fine either way you vote. I will still go either way you vote.”

That doesn’t exactly sound like she’s headed for Al Sharpton’s law office, does it?  Or that she is even demanding reimbursment.

Yet, another brilliant commenter on the Globe story wrote this:

‘Pretty much an honor’ sounds like another council member with entitlement issues. It’s funny how this ‘honor’ comes at the expense of the people and taxpayers of Joplin…

Entitlement” issues?  Hmmm. There’s that word again. You get it, don’t you? 

Another commenter even posed as Al Sharpton himself:

sharpton wrote:

im ready for your call, melodee

To be fair, many of the online comments actually addressed the issues without the allusions to Ms. Colbert-Kean’s complexion.  But we still have a long way to go before we can get to the point where African-Americans are judged according to their deeds or misdeeds, without some yahoos—whether bloggers for the local newspaper or anonymous commenters—playing their own race card.

Democratic Accomplishments: No Brag, Just Fact

“This is a very good day.”

—Barack Obama

Having been fairly critical of the President in recent weeks, it’s time for a little praise.  Finally convincing Congress to end the military’s “Lie and Die” policy, also known as “Don’t Ask, Don’t Tell,” President Obama has the right to be proud.

And so does the Democratic Congress.

Sometimes, as we liberals get passionate about what we didn’t achieve and why we didn’t achieve it, we forget the number of victories and their importance.  In fact, this is the most productive Congress since the early Johnson administration.

Now that New START and the 9/11 first-responders bill look like they will get through the Senate, it’s time to look back at all the accomplishments of the first two years of the Obama administration and the Democrat-controlled legislature.

As usual, Saint Rachel has provided the perfect segment, which includes a warning that some of the Democratic accomplishments will be under assault come January 5, when Republicans take over the House.  

There’s barely enough time to savor the wins:

Vodpod videos no longer available.

Adam And Eve And The GOP

A dispatch from the intersection of reason and superstition:

The good news is that fewer people now believe that God personally constructed Adam and Eve—the first Republicans—less than a mere 10,000 years ago.  

The bad news is that the number of folks who still so believe is a disturbingly high 40%.  That means four in every ten of your fellow Americans—likely more in southwest Missouri—have either no understanding of or appreciation for modern science. 

However, there is more good news: The number of people who believe in evolution-without-divine-strings-attached has almost doubled over the last thirty years.  But there is also more bad news: That number is only 16%. 

One of the more disturbing results of Gallup’s poll is that 37% of college graduates and 22% of post-grads believe in creationism, which just goes to show that in America you can get a college degree without getting an education.  What a country!

In any case, here is how it breaks down by political affiliation: 

As you can see, more than half of the Republicans you meet believe that the Earth is still wet behind the ears and that a few thousand years ago there were two human prototypes parading around naked and ignorant in a lush but, it turns out, dangerous garden.

The Corporate Internet?

“Allowing corporations to control the Internet is simply unacceptable. ”     

—Senator Al Franken 

Tomorrow, according to Senator Al Franken, is a big day, if you care anything at all about whether corporations will ultimately control the Internet.  The Federal Communications Commission will meet on Tuesday to discuss new regulations related to the issue of “net neutrality.”   Here’s Franken:

As a source of innovation, an engine of our economy, and a forum for our political discourse, the Internet can only work if it’s a truly level playing field. Small businesses should have the same ability to reach customers as powerful corporations. A blogger should have the same ability to find an audience as a media conglomerate.

This principle is called “net neutrality” — and it’s under attack. Internet service giants like Comcast and Verizon want to offer premium and privileged access to the Internet for corporations who can afford to pay for it. 

Franken complains that FCC Chairman Julius Genachowski, an Obama appointee, has been courting the very corporations he is supposed to be regulating in order to get them to endorse the FCC’s newly proposed regulations, which Franken says are “worse than nothing.”  He says, 

grassroots supporters of net neutrality are beginning to wonder if we’ve been had. Instead of proposing regulations that would truly protect net neutrality, reports indicate that Chairman Genachowski has been calling the CEOs of major Internet corporations seeking their public endorsement of this draft proposal, which would destroy it.

No chairman should be soliciting sign-off from the corporations that his agency is supposed to regulate — and no true advocate of a free and open Internet should be seeking the permission of large media conglomerates before issuing new rules.

Although I don’t want to press this point beyond the appropriate boundaries, in too many ways, the Obama administration—vilified on the right for being a socialist “regime”—resembles the prior administration, in terms of its deference to corporate and business interests. 

That’s not to say that the administration should be the enemy of those interests, it’s just to say that the administration should be the friend of the consumer, of the public, of we the people. 

Many of us believed that when we sent Barack Obama to the White House, he would act as a check against moneyed interests, protecting the public—via the regulatory arm of the government—from corporate domination.  But in the case of the FCC and net neutrality, what is happening seems like a familiar Bush-era scenario: make regulations so innocuous as to get corporate support for them. 

After discussing the various ways that large media giants could manipulate the Internet to make profits for themselves, Franken ends with this:

Imagine if a cable news network could get its website to load faster on your computer than your favorite local political blog. Imagine if big corporations with their own agenda could decide who wins or loses online. The Internet as we know it would cease to exist.

That’s why net neutrality is the most important free speech issue of our time. And that’s why, this Tuesday, when the FCC meets to discuss this badly flawed proposal, I’ll be watching. If they approve it as is, I’ll be outraged. And you should be, too.

What’s The Matter With Mexico?

More than 3,000 people have been murdered this year in Juarez, Mexico, which has six border crossings into the United States and is just an hour south of Las Cruces, New Mexico.  According to some estimates, 1.3 million folks live in Juarez.  That’s about the same number who live in Dallas.  There have been 93 murders in Dallas so far this year.

Last year, more than 2,600 were killed in Juarez. Relying on AP records, Olivia Torres writes that despite the fact that so many were murdered in 2009, Mexican prosecutors filed a mere 93 homicide cases and got 19 convictions.

Needless to say, Juarez, Mexico is a mess.  Perhaps most of Mexico is a mess. Since 2006, there have been more than 30,000 drug-war deaths there.

Torres opens her story with this:

CIUDAD JUAREZ, Mexico — Gunmen killed a mother who had been protesting for three days in front of a governor’s office in northern Mexico to demand justice for her slain daughter, authorities said Friday…

The vicious nature of the killing – which was caught on a security camera and broadcast repeatedly on national television – added to the anger. The video shows masked men pull up in a car Thursday night in front of the governor’s office in Chihuahua city, the capital of Chihuahua state, where Ciudad Juarez is located.

One man appeared to exchange words with Escobedo Ortiz, who tried to flee by running across the street. The gunman chased her down and shot her in the head, said Jorge Gonzalez, special state prosecutor for crime prevention.

You have to read the entire sad story to get just how strange is the system of justice—if you call it that—in this part of Mexico. 

I read the stories about the violence and the murders and the drugs and the dysfunction and I wonder:  Is our War on Drugs at least partly responsible for what’s happening to our southern neighbors?  Is our demand for drugs responsible? Is it our exporting guns to the drug dealers that is the problem? Or is that country just hopelessly corrupt?

I don’t know.  I have heard those who love Mexico say that we are getting the wrong picture of that wonderful country on our nightly news.  Again, I don’t know.

I only know that if I were a Mexican living anywhere near the border of the United States, I would be sitting up day and night trying to figure out how to get my family the hell out of Mexico.

Even if it pisses off the Tea Party.

Remarks And Asides

Here’s what wrong with Washington:  Harry Reid was told by nine Republicans that they would support his efforts to get the omnibus budget bill—which would have funded the government through next September—to the floor for debate, which meant it would have eventually passed the Senate. 

But because of a fear of the Tea Party—in the person of Jim DeMint, who demanded the 1900-page bill be read by the Senate clerk, a 50-hour endeavor—Republicans who gave their word to Harry Reid stabbed him squarely in the back at the last minute Thursday night, while he was on the floor.  He was forced to pull the bill and make yet another deal with Mitch McConnell over a continuing resolution.

Now, backstabbing Republicans are a problem, no doubt.  But why can’t the guys on our side at least name names when deceit like this happens?  Reid said on the floor that he would not call out the names of those senators—liars, all—who pulled back their support.  He said they knew who they were.  Yes, they do.  But the rest of us don’t. 

UPDATE: At noon today, I heard Andrea Mitchell, on her show on the “liberal” network MSNBC, say that Reid was “outfoxed.”  Outfoxed? The definition of that word is, “to surpass in guile or cunning.”  In other words, both sides were using guile and Reid simply got out-guiled by a better guiler.  That’s what happens when Democrats refuse to name names and put a face on the deception of the other side. 

At least Missouri’s own Claire McCaskill, who was going to vote against the omnibus bill anyway, did call them out. She specifically mentioned that the Republican Minority Leader had his own earmarks in the bill and fiercely criticized Republicans for their hypocrisy. 

_____________________________ 

Last night, the headline on CNN was: House passes Obama tax plan.  Get that?  It’s Obama‘s tax plan.

On CNN’s Anderson Cooper last night, I watched the first ten-minute segment, which was about all the “game playing” in the Congress.  Except, that if one were just a casual observer of American politics and didn’t know the truth, the impression left by Cooper and cast was that “both sides” were engaging in the game playing. 

This is Anderson Cooper and CNN at their split-the-difference best.  In order to solidify their self-described standing as the anti-Fox and anti-MSNBC network, they distort the truth to make it appear they are being neutral.  That’s not journalism, people.  Both sides are not equally guilty as regards the mess that is Washington, D.C.

______________________________

A new poll found what we all know:  Republicans believe certain facts about the world that are not in fact facts.  But so do Democrats.  The study also found that “those who had greater levels of exposure to news sources had lower levels of misinformation.”  Of course, that makes sense. 

But then there’s this:

There were, however, a number of cases where greater exposure to a particular news source increased misinformation on some issues.

Those who watched Fox News almost daily were significantly more likely than those who never watched it to believe that most economists estimate the stimulus caused job losses (12 points more likely), most economists have estimated the health care law will worsen the deficit (31 points), the economy is getting worse (26 points), most scientists do not agree that climate change is occurring (30 points), the stimulus legislation did not include any tax cuts (14 points), their own income taxes have gone up (14 points), the auto bailout only occurred under Obama (13 points), when TARP came up for a vote most Republicans opposed it (12 points) and that it is not clear that Obama was born in the United States (31 points). The effect was also not simply a function of partisan bias, as people who voted Democratic and watched Fox News were also more likely to have such misinformation than those who did not watch it–though by a lesser margin than those who voted Republican.

Surprise!

To be fair, there was one case in which MSNBC and NPR were allegedly the guilty party:

Daily consumers of MSNBC and public broadcasting (NPR and PBS) were higher (34 points and 25 points respectively) in believing that it was proven that the US Chamber of Commerce was spending money raised from foreign sources to support Republican candidates.

Given the fact that the Chamber of Commerce won’t—and doesn’t legally have to—release donor lists or reveal just how it keeps foreign money separate in its accounting, it’s understandable how folks could jump to that conclusion.  But, again, to be fair, it is conclusion jumping, since apparently there isn’t a way to prove it.

So, in the Misinformation Olympics, Fox “News” has nine gold medals, and MSNBC and NPR have one bronze.  In other words, Fox is the East German swim team of propaganda.  Congratulations!

Obama Tax Deal Makes It Even Better To Be Rich

I was all set to just get over it.  To bite my tongue and quit ragging on Obama and the Democrats for paying ransom to the Republicans over the tax issue.

Then, I came across a depressing article at Bloomberg Businessweek, written by Ben Steverman.  If you’re still trying to recover from the madness, I advise you not to read on.

It’s not that there was anything new in the article, in terms of what we already knew about the general ramifications of the Obama-McConnell tax deal (doesn’t that just roll off the tongue?).  It’s just that the article lays it out in all its ingloriousness.

Titled, “It’s a Great Time to Be Rich“—by the way, when isn’t it a great time to be rich?—the article begins:

Under legislation approved by the U.S. Senate on Wednesday, Dec. 15, and now moving on to the House, savvy wealthy Americans would be able to capitalize on an environment in which their tax rates on income and investments remain at historic lows. Also, new rules would make it possible to pass on fortunes to heirs with less fuss and lower taxes than all but a brief period of the past 80 years. It’s a far cry from the 70 percent bite the federal government took out of the largest incomes and estates as recently as 1980.

Here are some facts from the article (all the highlights, italics, and teardrops in the following are mine):

Except for a period from 1988 to 1992, the top [income] tax rate has never been this low since 1931.

Says Indiana University law professor Ajay Mehrotra:

The most surprising thing is that rates have remained at this level even as the U.S. has been fighting two wars, in Afghanistan and Iraq. Historically, income taxes on the wealthy have spiked during wartime: The first income tax was initiated during the Civil War and then later repealed. The top rate on income hit 77 percent in 1918, during World War I, and 94 percent from 1944 to 1945, during World War II.

Starting in 2010, all taxpayers, including those in high income brackets, could convert traditional, tax-deferred individual retirement accounts, or IRAs, to tax-free Roth IRAs. Importantly, in 2010 only, the law allows taxpayers to spread the tax payments required by such conversions over 2011 and 2012. When it looked like tax rates would rise in 2011 and 2012, this looked like a bad deal, Baxley says. Now, with rates remaining the same over the next two years, a Roth conversion can be a lucrative move.

As for sources of income, this shocked me:

For the country’s wealthiest families, income from wages can be far less important than income from investments…18.1 percent of all Americans’ cash income comes from business ownership or capital investments, compared with 64.5 percent from labor. For those in the top 1 percent of earners, however, business and capital income make up 53.6 percent of income and labor accounts for 35.3 percent.  Thus… taxes on capital gains and dividends can be far more important to the rich than income tax rates. The tax compromise extends a 15 percent top tax rate on long-term capital gains and dividends enacted in 2003, which is the lowest rate since 1933. The top capital-gains rate was 77 percent in 1918 and, since 1921, its highest point was 39.9 percent in 1976 and 1977—though certain gains could be excluded from taxation.

Let’s be clear:  For the top 1% of earners, their top tax rate on more than half of their income is 15%!  That’s why billionaire Warren Buffet can lament that he is taxed at a much lower rate than the folks who work for him.

As for estates, excluding the 2010 anomaly, the Obama-McConnell estate tax will be the lowest since 1931, and that’s only on individual estates over $5 million. And,

The number of people who must worry about estate taxes, already tiny, would shrink to less than 0.2 percent of the population… In 2009, when the exemption was $3.5 million, 14,713 people had fortunes large enough to file taxable estate returns, according to the IRS. Just 4,296 of those people had estates of $5 million or larger… From 1942 to 1976, the estate tax rate was 77 percent for estates over $10 million, and only estates under $60,000 were exempt from the tax entirely.

Finally, for those unfortunate folks who have to fret over the fact that their estates are over the $5 million exemption (or $10 million for husband and wife), we find that,

the new tax legislation is written to make it much easier to manage their fortunes. For example, individuals can easily pass their remaining tax exemptions on to their spouses after death, without creating complex trusts. Also, new rules treat gifts to children during a donor’s lifetime the same as those made after death, making it easier to pass on estates before assets appreciate and incur extra taxes.

And,

Low interest rates make this the perfect time for many clients to set up trusts like Grantor Retained Annuity Trusts, known as GRATs. In a GRAT, parents loan assets like stocks or even an interest in a private business to the trust at the lowest interest rate possible under the law, which is set each month by the IRS. If the value of those assets increases over time, the GRATs’ beneficiaries reap any benefit above that interest rate. Luckily for those who set up GRATs now, interest rates are at record lows—the IRS set the December rate at 1.8 percent.

Obama and other Democrats had sought to limit the use of GRATs, but failed. “That’s a wonderful technique for parents looking to pass assets on to children at nearly zero [tax rates],” says Jennifer Immel, senior wealth planner at PNC Wealth Management.”

I think I’m gonna be sick again.

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