Taxes on millionaires continue to fall

Martin Sullivan of tax.com reports that, based on IRS data, net income tax rates for millionaires in the US have fallen over the last 10 years; in 2007, they were at 22.1%. This data does not include the effect of state and local taxes, although it does include capital gains and dividend taxes (the reduced rates for these probably drove a large proportion of the fall in tax rates).



However, Catherine Rampell indicates on the NYT Economix blog that the very rich actually pay less in taxes than the rich. This is likely due to the low capital gains and dividend taxes and it needs to be rectified.

Social Security actuaries report the effects of several reform options

After the US gets health reform and climate change done, Social Security is likely to be one of the items on the table. Social Security is a big part of the retirement system, and it also provides insurance against disability, death of a spouse and other contingencies. Although notions of an entitlement crisis are overblown, Social Security does have financing challenges.

Actuaries at the U.S. Social Security Administration, led by Stephen Goss, provided an approximate report on several options to reform Social Security given by the National Academy for Social Insurance. When reading the options chart, the actuarial balance of the trust fund is presently -2.00% of taxable payroll; the trust fund needs to be fully funded for 75 years, and that means that it's presently short by 2% of the total taxable amount of pay in the US. The US only levels payroll taxes on salaries up to $106,800 or so.

For example, reducing the cost of living adjustment by 1% (it's presently linked to the CPI) would eliminate about 75% of the current deficit. That option would have a very bad effect on Social Security recipients. Alternatively, raising payroll taxes by 2.2% in 2010 and beyond would eliminate the entire deficit and more. Taxing every cent of earnings and still crediting them for Social Security benefits would eliminate most of the deficit. Taxing 90% of all earnings, which is the historical level, would eliminate about a quarter of the current deficit.

The options are scored as if each one were enacted separately; in real life, several options could interact to produce a different effect.

NY Times: Millions in U.S. Drink Dirty Water, Records Show

A New York Times article by Charles Duhigg documents the gaps in enforcement of the Clean Water Act in the US, and the possible consequences. Some excerpts:

More than 20 percent of the nation’s water treatment systems have violated key provisions of the Safe Drinking Water Act over the last five years, according to a New York Times analysis of federal data.

That law requires communities to deliver safe tap water to local residents. But since 2004, the water provided to more than 49 million people has contained illegal concentrations of chemicals like arsenic or radioactive substances like uranium, as well as dangerous bacteria often found in sewage.

Regulators were informed of each of those violations as they occurred. But regulatory records show that fewer than 6 percent of the water systems that broke the law were ever fined or punished by state or federal officials, including those at the Environmental Protection Agency, which has ultimate responsibility for enforcing standards.

Studies indicate that drinking water contaminants are linked to millions of instances of illness within the United States each year.

In some instances, drinking water violations were one-time events, and probably posed little risk. But for hundreds of other systems, illegal contamination persisted for years, records show.

...

An analysis of E.P.A. data shows that Safe Drinking Water Act violations have occurred in parts of every state. In the prosperous town of Ramsey, N.J., for instance, drinking water tests since 2004 have detected illegal concentrations of arsenic, a carcinogen, and the dry cleaning solvent tetrachloroethylene, which has also been linked to cancer.

In New York state, 205 water systems have broken the law by delivering tap water that contained illegal amounts of bacteria since 2004.

However, almost none of those systems were ever punished. Ramsey was not fined for its water violations, for example, though a Ramsey official said that filtration systems have been installed since then. In New York, only three water systems were penalized for bacteria violations, according to federal data.

The problem, say current and former government officials, is that enforcing the Safe Drinking Water Act has not been a federal priority.

“There is significant reluctance within the E.P.A. and Justice Department to bring actions against municipalities, because there’s a view that they are often cash-strapped, and fines would ultimately be paid by local taxpayers,” said David Uhlmann, who headed the environmental crimes division at the Justice Department until 2007.

“But some systems won’t come into compliance unless they are forced to,” added Mr. Uhlmann, who now teaches at the University of Michigan law school. “And sometimes a court order is the only way to get local governments to spend what is needed.”

A half-dozen current and former E.P.A. officials said in interviews that they tried to prod the agency to enforce the drinking-water law, but found little support.

“I proposed drinking water cases, but they got shut down so fast that I’ve pretty much stopped even looking at the violations,” said one longtime E.P.A. enforcement official who, like others, requested anonymity for fear of reprisals. “The top people want big headlines and million-dollar settlements. That’s not drinking-water cases.”

The majority of drinking water violations since 2004 have occurred at water systems serving fewer than 20,000 residents, where resources and managerial expertise are often in short supply.

It is unclear precisely how many American illnesses are linked to contaminated drinking water. Many of the most dangerous contaminants regulated by the Safe Drinking Water Act have been tied to diseases like cancer that can take years to develop.

But scientific research indicates that as many as 19 million Americans may become ill each year due to just the parasites, viruses and bacteria in drinking water. Certain types of cancer — such as breast and prostate cancer — have risen over the past 30 years, and research indicates they are likely tied to pollutants like those found in drinking water.

The violations counted by the Times analysis include only situations where residents were exposed to dangerous contaminants, and exclude violations that involved paperwork or other minor problems.

...

Those figures [Editor: on low compliance rates] are particularly worrisome, say researchers, because the Safe Drinking Water Act’s limits on arsenic are so weak to begin with. A system could deliver tap water that puts residents at a 1-in-600 risk of developing bladder cancer from arsenic, and still comply with the law.

Times: Archbishop of Canterbury in intensive efforts to combat Ugandan anti-gay death law

Ruth Gledhill, a conservative religion columnist for the Times, reported on December 3 that Abp. Rowan Williams is in intensive efforts to engage the Anglican Church of Uganda against the proposed anti-homosexuality law.

The Archbishop of Canterbury Dr Rowan Williams has been criticised widely for failing to speak out against the new anti-gay law in Uganda that could see some homosexuals being executed. But there is method in his silence. Today, Lambeth Palace told me: 'It has been made clear to us, as indeed to others, that attempts to publicly influence either the local church or political opinion in Uganda would be divisive and counter productive. Our contacts, at both national and diocesan level, with the local church will therefore remain intensive but private.'

In fact, we can take for granted that Dr Williams is against the draconian new law. But speaking out publicly to this effect could indeed, as he says, have the opposite effect to that intended. It would almost certainly be seen as white-led colonialism of the worst possible kind, as a misguided attempt to impose western liberal values upon traditional African culture. It would not help the local Anglican Church, which has yet to come out on either side. But we can assume that the word 'intensive' in his statement today indicates that he is as distressed as the 2,000 who have signed a petition against it.

Foreign Policy Magazine: America's IED Nightmare

Christian Caryl of Foreign Policy Magazine writes about how Improvised Explosive Devices are cause casualties and economic costs far out of proportion to the effort expended to produce them. For me, this serves to emphasize why a military solution cannot possibly be the ultimate solution in Afghanistan - we will simply be unable to pay for the consequences. The author also emphasizes that if anything, US forces will be more vulnerable to IEDs in Afghanistan due to the rougher terrain. An excerpt:

Ex-JIEDDO [Editor: Joint IED Defeat Organization] chief General Montgomery Meigs, now a professor at Georgetown University's Center for Security Studies, boasts that the U.S. military succeeded in reducing the casualty-to-blast ratio of IEDs in Iraq and Afghanistan during his tenure. In 2002, he says, each bomb explosion caused, on average, six casualties (wounded and killed). By the end of 2007, when he left the position, that figure was down to one.

And yet troops continue to die from bomb attacks in Afghanistan at a fearsome rate. Though the Taliban and their allies were comparatively slow to discover the advantages of using IEDs, over the past two years they've turned roadside bombs into their primary weapon. Countering that threat in Afghanistan is proving even more of a challenge than it was in Iraq. Dakota Wood and Andrew Krepinevich of the Center for Strategic and Budgetary Assessments in Washington points out the makeshift bombs being used against U.S. troops in Afghanistan pose a whole new set of challenges. Iraq, they note, is a "relatively modernized 20th-century country" with paved roads, a fact that often makes it easier to figure out where bombs might be planted. Iraqi bomb-makers made ample use of explosives looted from countless Saddam-era munitions dumps scattered around the country -- which tended to translate into myriad but comparatively small-scale attacks. (A Congressional Research Service report on the IED problem a few years ago noted that 40 percent of Saddam-era munitions still weren't being properly guarded a full year after the invasion.) By contrast, Afghanistan has almost no modern infrastructure; the relatively small number of troops there isn't enough to cover its much larger territory. And paved roads are virtually nonexistent, making it easier for Afghan insurgents to hide their explosive packages.

In Iraq, the insurgents proved adept at crafting found munitions -- everything from hand grenades to 155-mm howitzer shells -- into explosive booby traps. In Afghanistan, the preferred IED has been the fertilizer bomb. Even thought the number of "IED incidents" has been lower in Afghanistan, the Taliban have kept casualties high by making their bombs much bigger. The U.S. and NATO forces have responded with everything from high-tech electronic countermeasures (to block command signals) to intense drone surveillance of spots where IED activity tends to be highest. In some parts of the country American troops have even taken to seizing or buying up fertilizer from farmers -- the same farmers who, presumably, have been lectured on the need to replace low-maintenance opium poppies with proper, fertilizer-intensive crops.

The biggest problem for IED-fighters, though, is simply that the target is constantly on the move. The bomb-makers have proven remarkably deft at upping the explosive ante. "There's one thing the more candid generals will tell you," says John Bennett, a reporter with U.S. defense weekly Defense News. "I think they've been caught off guard a bit by how smart the enemy is, how inventive they are."

"The enemy isn't very helpful," admits Meigs. "He keeps adapting every six months." The first Iraqi IEDs were primitive affairs that didn't always explode like they were supposed to. But by October 2003 the insurgents had gained enough know-how to blow up an M1A2 Abrams tank, killing two of its crewmen. U.S. military planners are clearly worried that worse may be in store for their troops in Afghanistan as the Taliban hone their engineering skills.

That speed of adaptation makes it even harder for cumbersome bureaucracies to cope. The GAO report listed a bewildering mélange of competing or overlapping agencies assigned to deal with the IED threat. That proliferation is, in part, the somewhat understandable consequence of the way U.S. military planners reacted to the IED problem. As the casualty figures rose, both defense bureaucrats and congressional policymakers began urging immediate attention to the problem -- and providing corresponding amounts of money to get it fixed.

Abortion restrictions defeated in Senate health bill

For now, the Senate has rejected an abortion amendment similar to the one in the House bill which has passed. However, further challenges could emerge.

The NY Times Economix blog cited several experts who agreed that the Stupak amendment in the House was a significant change from the status quo. Private insurers would be unable to offer abortion services in plans on the insurance exchange - furthermore, the insurance exchange is expected to grow over time, as more small and medium companies opt into the exchange. There is the possibility that insurers might sell separate abortion riders, which would be legal. However, five states presently restrict the availability of abortions in plans regulated by their insurance commissioners and all indications are that markets for riders have not developed.

Experts at George Washington University, led by Professor Sara Rosenbaum, have a detailed analysis.

NY Times: A cloud still hangs over Bhopal

Suketu Mehta has an editorial for the New York Times.

IN the Mumbai kindergarten my son went to, the children never had to clean up after themselves; that was the servants’ job. So I really liked the school my son attended when we moved back to Brooklyn, where the teachers made the children tidy up at the end of the day. “Cleanup time, cleanup time!” my 6-year-old sang, joyfully gathering his scraps. It’s a wonderful American tradition: you always clean up the mess you made.

This is the 25th anniversary of the Bhopal gas disaster, an epic mess that started one night when a pesticide plant owned by the American chemical giant Union Carbide leaked a cloud of poisonous gas. Before the sun rose, almost 4,000 human beings capable of love and anguish sank to their knees and did not get up. Half a million more fell ill, many with severely damaged lungs and eyes.

An additional 15,000 people have since died from the aftereffects, and 10 to 30 people are said to die every month from exposure to the hundreds of tons of toxic waste left over in the former factory. But amazingly, the site still has not been cleaned up, because Dow Chemical, which since acquired Union Carbide, refuses to accept any responsibility. The groundwater is contaminated; children of the survivors suffer from genetic abnormalities; and the victims have long since run out of their measly compensation and are begging on the streets.

I have traveled to Bhopal and seen the post-apocalyptic devastation, seen the sick, seen the factory. Methyl isocyanate is a deadly chemical used to kill insects. The night that 40 tons of it wafted out of the factory is, for the survivors, a fulcrum in time, marking the before and after in their lives. They still talk about “the gas” as if it were an organism they know well — how it killed buffalo and pigs, but spared chickens; how it traveled toward Jahangirabad and Hamidia Road, while ignoring other parts of the city; how it clung to the wet earth in some places but hovered at waist level in others; how it blackened all the leaves of a peepul tree; how they could watch it move down the other side of the road, like a rain cloud seen from a sunny spot.

All over India, when misfortune strikes — when a child is ill, for example — people burn chilies to drive away the evil eye. The gas smelled like chilies burning, and people said to one another, it must be a powerfully evil eye that’s being driven away, the stench is so strong.

Fleeing the gas, the Bhopalis clutched their children. Some babies fell, gasping, and their parents had to choose which ones to carry on their shoulders. One image still comes up over and over in their dreams: in the stampede, a thousand people are stepping on their child’s body.

In 2001, the maker of napalm married the bane of Bhopal: Dow Chemical bought Union Carbide for $11.6 billion and promptly distanced itself from the disaster. If Union Carbide was at fault, that was too bad; it had just ceased to exist. In 2002, Dow set aside $2.2 billion to cover potential liabilities arising from Union Carbide’s American asbestos production. By comparison, the total settlement for Bhopal was $470 million. The families of the dead got an average of $2,200; the wounded got $550; a Dow spokeswoman explained, that amount “is plenty good for an Indian.” As Representative Frank Pallone of New Jersey observed in 2006, “In Bhopal, some of the world’s poorest people are being mistreated by one of the world’s richest corporations.”

Union Carbide and Dow were allowed to get away with it because of the international legal structures that protect multinationals from liability. Union Carbide sold its Indian subsidiary and pulled out of India. Warren Anderson, the Union Carbide chief executive at the time of the gas leak, lives in luxurious exile in the Hamptons, even though there’s an international arrest warrant out for him for culpable homicide. The Indian government has yet to pursue an extradition request. Imagine if an Indian chief executive had jumped bail for causing an industrial disaster that killed tens of thousands of Americans. What are the chances he’d be sunning himself in Goa?

The Indian government, fearful of scaring away foreign investors, has not pushed the issue with American authorities. Dow has used a kind of blackmail with the Indians; a 2006 letter from Andrew Liveris, the chief executive, to India’s ambassador to the United States asked for guarantees that Dow would not be held liable for the cleanup, and thanked him for his “efforts to ensure that we have the appropriate investment climate.”

What’s missing in the whole sad story is any sense of a human connection between the faceless people who run the corporation and the victims. In 1995, a Bhopali woman named Sajida Bano sent a handwritten letter to Union Carbide. The factory had killed her husband in 1981 in an accident, and then, on the night of the disaster, her 4-year-old son. “You put your hand on your heart and think,” she wrote, “if you are a human being: if this happened to you, how would your wife and children feel?” She never received a response.

The survivors of Bhopal want only to be treated as human beings — not victims, not greedy money-grabbers, just human beings who’ve gone through hell and are entitled to a measure of dignity. That includes concrete things like cleaning up the mess and providing health care for the sick, and also something more abstract but equally important — an acknowledgment that a wrong was done to them, and an apology, which Bhopalis have yet to receive.

That was another fine thing my son learned in the Brooklyn school: when you’ve done something bad, you should say you’re sorry. After a quarter of a century, Dow should acknowledge that it is responsible for a very big mess. And now, it’s cleanup time.

Suketu Mehta, a journalism professor at New York University, is the author of “Maximum City: Bombay Lost and Found.”