Fox Nation Hypocrisy Over IRS Tax Code

This last summer, when Fox Nation pitched a bitch about Media Matters supposedly violating IRS tax law, I wondered if they had expressed similar outrage when churches (who are also 501(c)(3) Tax Exempt) had explicitly endorsed political candidates, in clear violation of IRS tax law. Turns out, when "Project Fair Play" 2010 came around, Fox Nation showed support:

Nearly 100 pastors across the country took part in Pulpit Freedom Sunday today, an in-your-face challenge to what the government says can and cannot be said in church. The pastors, along with the Scottsdale, Ariz.-based nonprofit Alliance Defense Fund, planned today's event as a reaction to a law stating that churches are not allowed to support politicians from the pulpit, according to the ADF. The growing trend is a challenge to the IRS from the churches, and may jeopardize their all-important tax-exempt status. But some pastors and church leaders said they are willing to defy the law to defend their right to freedom of speech. Pastor Dan Fisher from Trinity Baptist Church in Yukon, Okla., who took part in today's challenge, said should be allowed to discuss politics with their congregation. Separation of church and state is not in the Constitution, but the government uses tax exemption as a means to enforce that notion, he added. "The crowd applauded, and said it was wonderful," Fisher said of his sermon this morning. "I can't say that everyone was happy, but no one came up to me to complain." Federal tax law, established in 1954, prohibits churches and tax exempt entities from endorsing or opposing political candidates. (emphasis mine)

Never mind the misleading rhetoric about "Separation of church and state" not being in the Constitution (a fallacy). Given how much rage was seen from Fox Nation over Media Matters (despite the incredible shakiness of their claim), one would expect similar outrage to what amounts to a clear violation of tax law. But this is Fox News we are talking about. So why would anyone be surprised at the hypocrisy. Let's see what happens this year...

Update 9-29-11: The details of what a church could actually lose are detailed in the "IRS tax Guide for Churches and Religious Organizations:"

"When it participates in political campaign activity, a church or religious organization jeopardizes both its tax-exempt status under IRC section 501(c)(3) and its eligibility to receive tax-deductible contributions. In addition, it may become subject to an excise tax on its political expenditures."

Nobel Laureate Economist Peter Diamond On The Need For Both Fiscal AND Monetary Stimulus

Peter Diamond discusses a few things :

• Economic projections deal with significant uncertainty. The job of policy makers is to compare projections over a wide variety of possibilities and design policy on best projections of the time.
• Monetary Policy doesn't work instantly ("the long invariable lag").
• The labor market has to be factored into BOTH of the Fed's mandates.
• The fed cannot control the labor market. It can only influence into the direction that seems best at a given time
• There is no broader crisis, or long term trend, for why the employment population is so low today. It is the result of the economic crisis.
• This recent economic crisis cannot be represented by just one individual model.
• This recent economic crisis combined both a banking and housing market failure to create something significantly different from a standard cyclical recession. The Economy will not bounce back quickly.
• We need to focus on projects such as infrastructure spending because we have an abundance of capital, interest rates are low, and we do get a Keynesian multiplier out of it.
• The government needs to find out what it needs to be spending more on and figure out to what extent that will help us out of this economic crisis.
• The slow level at which infrastructure spending will be implemented is not a problem since all forecasts say it will take a long time to get out of this economic crises anyway.
• Obama's first priority should be fiscal stimulus for jobs
• There should be less focus on stimulus size (relative to time frame) and more focus on what Washington does with the stimulus
• We need better education, worker training, and Research & Defense Spending. The government has been cutting back on R&D spending. Yet technology drives increased wealth in the country.
• Most, but not all, of our low employment is attributable to low aggregate demand, resulting in the need for both fiscal and monetary stimulus.
• Our goal right now should be to make the economy less vulnerable to a double dip recession
• Austerity is a long run problem, not a short term one. The level of public debt is comfortably below the level it has been historically for the bond market to push up interest rates
• Policies need to have a long run effect of reducing debt growth
• Austerity TODAY will make the economy MORE vulnerable to a double dip recession, which would significantly reduce tax revenue, thereby exacerbating the problem of austerity anyway
• Cutting back the number of teachers in public schools at a time when we need to improve education is not going in the right direction

He Also discusses his nomination to the Federal Reserve's board of governors, as well as his Nobel Prize in Economics.
Video from Greg Mankiw's Blog.

Income Inequality Shows Up In Taxes (that fun 70% figure)

Ive been meaning to post on this for quite some time, but never got around to it. However, it looks like Chris Hayes seems to have already done essentially what I was going to do:



As Chris Hays points out, the fact that the richest 10% pay over 70% of income taxes doesn't necessarily suggest the rich are over-taxed. He mentions other taxes that are not factored into the analysis (but misses the Corporate Tax). However, he mentions that another cause of this income tax phenomenon could also be income inequality. His simple model makes this point rather well. I will use another more dramatic model later in this post. However, it seems that Chris also had another argument to make: The US is "Inequalistan."

Now for my model. Let's take a fictitious 2 person country where one poor person makes $10 a day while the other rich person makes $950 a day. Let us also say there is a regressive-style tax rate where the rich person pays only 10% of their income in taxes while the poor person pays 50%.

The poor person would contribute $5 to daily income tax revenue.

The rich person would contribute $95 to daily income tax revenue.

Since total daily income taxes would equal $100, that means the rich person would contribute 95% of income tax revenue, despite the fact that they are taxed at a much lower rate than the poor person! Do you think the rich person could make the case he is over-taxed by saying he is responsible for 95% of the tax revenue?

Unlike Hayes, I was not trying to make the last point that my fictitious country is actually any real country. My point was to show that the rich paying the lion's share of income taxes does not necessarily mean the rich are over-taxed. I did this with a simple counter example, extreme enough to make the point painfully obvious. Now we may never see any example this extreme in real life. However, this example does point out that one should not come to abrupt conclusions about statistics where the outcome is affected by more than one variable.

Is the left really as anti-science as the right?

It is no secret that conservative mainstream political discourse includes quite a bit of anti-science rhetoric. However, is that also true on the left? Although there are plenty of liberal cases of anti-science, I have a few questions about any one of them:

1. Do a significant number of liberals support it?
2. Is it endorsed by liberal politicians?
3. Is it even part of popular political discourse on the left?

As Chris Mooney points out, the answer to all three of these questions seems to be no. A few things to note about this article. Chris Mooney points out a few examples of anti-science on the left that could potentially be candidates for "Yes" answers to these questions:

2) Nuclear power–this is a pretty good one, because for a long time the left really was anti-nuclear. However, I don’t think that is the case today, and in fact, President Obama’s administration is pretty much pro-nuclear. And again, the author makes no case that nuke opponents are factually wrong about, say, the risk of low-dose radiation. (Although some of them are.)

Conservatives are no strangers to anti-science about nuclear power. However their false statements generally come from the other extreme.

3) Vaccines–polling data suggests that distrust of vaccines is rather bipartisan, but I actually agree with the author in suspecting those data aren’t that good and that this is more of a left wing thing. But of course, liberal journalists like myself, and liberal commentators, have pretty much chased vaccine denial out of the realm of polite discourse. We’ve held our own accountable and really, you cannot defend this view any more without being pilloried.

I'm surprised Chris Mooney didn't point to his recent work on Bachmann's false allegations against the Gardasil vaccine. Make no mistake. Anti-vaxers are alive and well in the mainstream right.

GOP Sacrificing Economy To Oust Obama

David Frum recently took note of a recent letter from the GOP to the Fed:

"We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers."

As Frum points out:

"We are living through the most rapid deleveraging of the American consumer since the 1930s... The markets see deflation and depression, not inflation. Yet ironically this non-existent and much dreaded inflation is exactly the remedy we need to lighten the load of consumer debt."

He later asks:

"As is, we’re looking at a continued economic slump, more unemployment, and more deleveraging via continuing catastrophic consumer default on mortgages, car loans, credit cards, and student aid. And now the GOP leadership is urging that the Federal Reserve make the catastrophe worse? To what end?"

Could it be that Republicans are against such measures? In another article, Frum points out Republicans had exactly the opposite conclusion during early 90s:

"if conservative journalists could write so feelingly about the need to inject credit during the downturn of 1990-1991, how is that they have arrived at exactly the opposite policy conclusions during the much more severe downturn and deleveraging of 2009-2011? The need for monetary ease seems even greater this time than last – and yet the policy recommendation has been utterly reversed. What’s changed?"

As Joe Nocera of the New York Times explains:

"if the great conservative economist [Milton Friedman] were alive today, he would be leading the charge for quantitative easing."(emphasis mine)

There a a few possibilities for the answer to this question. One of the the most probable seems to be that Republicans have undergone a massive chance in ideology. However, when one of the most prominent leaders in the GOP say their number one priority is to make Obama a one-term president, it is hard to conclude this is not a major factor behind any otherwise crazy-sounding position. Nothing can sink an incumbent worse than a recession.

On Ending/Lowering Corporate Taxes

Lately there has been a bit of a stir over Rep. Louie Gohmert's proposal to eliminate corporate taxes as a single solution to fixing the economy:

Republican Congressman Louie Gohmert of Texas introduced legislation to the House of Representatives on Wednesday that would drop the corporate tax rate to all the way down to zero.

It should be noted that lowering or removing the corporate tax is actually a bi-partisan idea. Moreover, as Harvard Economist Robert Barro pointed out:

"the inefficiency is magnified here because of double taxation: the income is taxed when corporations make profits and again when owners receive dividends or capital gains"

However, unlike Barro, I do not think Austerity will save the economy:

"Although advanced economies need medium-run fiscal consolidation, slamming on the brakes too quickly will hurt incomes and job prospects"

And unlike Gohmert, I do not think lowering the corporate tax rate is sufficient to get us out of the recession

"Corporations are already sitting on trillions in cash, so cutting their taxes would likely do very little to help the economy,"

Nonetheless, it is definitely something that should be included in any serious jobs bill as it is sure to help increase business investments once demand has increased to the point where businesses actually want to invest again:

According to a 2008 study by the Organization for Economic Cooperation and Development, “Corporate taxes are found to be most harmful for growth.” Tax reform that reduced the burden on capital income and shifted it toward consumption would improve prospects for long-run growth and, in so doing, encourage greater investment today.

Tea Party Debate Fact Fail

Politifact has rated a few of the comments on the CNN / Tea Party Express GOP debate from 9-12-11:

Mitt Romney led the attacks on the Republican frontrunner, Texas Gov. Rick Perry, by saying that Perry didn't support the retirement program. "In writing his book, Gov. Perry pointed out that … by any measure Social Security has been a failure," Romney said. We checked Perry's book and found Romney was right. We rated the claim True.

Romney found much of his ammunition from Fed Up!, the book Perry published last year. Romney said that Perry said in the book that Social Security "is unconstitutional." We found that while Perry never exactly used those words, he came pretty close. We rated Romney's claim Mostly True.

Perry, asked about his comment likening Social Security to a Ponzi scheme, replied, "It has been called a Ponzi scheme by many people before me."

But when we asked experts about the structure of a Ponzi scheme and the funding of Social Security, the analogy does not hold up. So we rated Perry's claim False.

... 

When the conversation turned to jobs, Perry repeated a claim of many critics that the economic stimulus has created "zero jobs." We rated that Pants on Fire. The stimulus may not have created enough jobs to offset other losses, but most economists say it did add some jobs. (We even interviewed a man who attributed his new job to the stimulus.)
...

Romney and Rep. Michele Bachmann took aim at the health care law passed last year, claiming it took $500 billion out of Medicare. Bachmann said that President Barack Obama "stole over $500 billion out of Medicare to switch it to Obamacare." She has a point that cost-savings from Medicare were used to offset the cost of the rest of the law, but she misleads when she says the money was stolen. We rated her statement Mostly False.

Notice the return of a few doozies from their success in 2010:
They are still trying to pin Obama as a man who wants to rob Medicare of its funding. Of course nobody doubts this is a winning strategy. No truth needed.
Update 9-14-11: The Washington Post Fact Cheker pointed out something else about this claim:

In fact, in the House Republican budget this year, lawmakers repealed the Obama health-care law but retained all but $10 billion of the nearly $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers. (emphasis mine)

Republicans have decided to skip any conversation about the details of the stimulus and its effects on the economy. Instead they just repeat the demonstrably false claim that it didn't create a single job. Republicans have gone beyond the point of just calling it a failure. Now they feel they must continue to lie. Only problem, these lies are gunna take the market down with them.
Update 9-14-11: In the Fact Checker article mentioned above, Glen Kessler noted "A recent review of nine different studies on the stimulus bill found that six studies concluded the stimulus had “a significant, positive effect on employment and growth,” and three said the effect was “either quite small or impossible to detect.” "(emphasis mine)

One great point of the night was that Mitt Romney seemed to be constructing Obama's campaign for him. When you attack a program loved by 75% of the population, you may just as well plan on keeping your job in Texas.


Update 9-14-11: Fackcheck also checked the debate:

• "Bachmann said an executive order signed by Perry would have "forced" young girls to take a "potentially dangerous drug." But federal government regulators declared the drug a "safe and effective vaccine" to prevent a sexually transmitted disease that could lead to cervical cancer. Also, the order allowed parents to opt-out.
• Romney falsely accused Perry of misquoting him on Social Security. Perry correctly characterized a section of Romney's book in which Romney compared the federal government's management of Social Security to a banker who steals from his client's trust fund.
• Huntsman falsely claimed that Romney's book labeled Social Security "a fraud." Romney wrote that Americans have been "defrauded" because of the way the program has been managed, but he did not call it a "fraud."
• Santorum claimed Pennsylvania voters in 1994 rewarded his "courage to tell them the truth" about Social Security. But, as Santorum himself acknowledged at the time, he nearly lost that election after his opponent unearthed a video tape of the Republican discussing the need to raise the eligibility age for Social Security.
• Cain claimed county government retirees in Galveston, Texas, make "at least 50 percent more than they would ever get out of Social Security" because the county opted out of Social Security. But that's only for initial benefits, and those retirees do not get annual cost-of-living adjustments. Also, not all retirees get such a high initial benefit. 
• Perry cherry-picked job creation numbers when he boasted of creating 1 million jobs as governor "while the current resident of the White House is overseeing the loss of 2.5 million jobs." Texas has increased jobs by 1 million during Perry's tenure, but only 95,600 have come since Obama has been president."

Update 9-14-11: The GOP is becoming the party of the anti-corporate anti-vaxers.