Should the Upper Middle Class Take the Biggest Tax Hit?

Humans learn the concept of fairness at a very young age. After all, it doesn’t take long for a child to start whining about a sibling who gets an extra serving of ice cream. As the Republican-controlled Congress tries to push through tax reform this year, one group of Americans may similarly question why it’s coming up a scoop short.

The upper middle class gets relatively few benefits and a disproportionate number of tax hikes under the $1.4-trillion Tax Cuts and Jobs Act approved by the U.S. House of Representatives last week. Families earning between $150,000 and $308,000—the 80th to 95th percentile—would still get a tax cut on average. But by 2027, more than a third of those affluent Americans can expect a tax increase, according to the Tax Policy Center.

If the House bill becomes law, overall benefits for the upper middle class will start out small, and later vanish almost entirely.

Is this fair? Some argue it’s only right for the upper middle class to carry a heavier burden. This is because the top fifth of the U.S. by income has done pretty well over the past three decades while the wages and wealth of typical workers have stagnated. People in the 81st to 99th percentiles by income have boosted their inflation-adjusted pre-tax cash flow by 65 percent between 1979 and 2013, according to the Congressional Budget Office. That’s more than twice as much as the income rise seen by the middle 60 percent. (The top 1 percent, meanwhile, saw their income rise by 186 percent over the same period, but that’s another story.)

“Many upper-middle-class families will tell you they do not feel wealthy,” said Brian Riedl, a senior fellow at the Manhattan Institute, a right-leaning think tank. “Their standard of living [is] closer to the middle class than to the top 1 percent.” The income numbers don’t tell the whole story, he explained. The upper middle class is weighed down by high costs: Affluent workers live in expensive areas, pay a lot for real estate and daycare, and are taxed far more than Americans further down the ladder.

Richard Reeves, a senior fellow at the left-leaning Brookings Institution, isn’t buying that argument. He’s the author of “Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It.”

“There’s a culture of entitlement at the top of U.S. society,” Reeves said. While others focus on rising wealth of the top 1 percent, Reeves argues that the gap is widening between the top 20 percent and everyone else. The upper middle class is guilty of “hoarding” its privileges, using its power to skew the job market, educational institutions, real estate markets, and tax policy for its own benefit, he contends.

“The American upper middle class know how to take care of themselves,” Reeves said during a presentation at the City University of New York last week. “They know how to organize. They’re numerous enough to be a serious voting bloc, and they run everything.”

So by his measure, the tax legislation’s disproportionate hit to the upper middle class is indeed fair.

A family earning $240,000 a year is bringing in four times the U.S. median household income of $59,000, according to the U.S. Census Bureau. All that money, along with the upper middle class’s political power, buys some huge advantages, Reeves said. For example, affluent parents compete for access to the best schools, bidding up home values in the best school districts. Then, they use zoning rules to prevent new construction, keep property values high, and prevent lower-income Americans from moving in. In the process, children of this demographic end up at the most prestigious universities, nab the best internships and jobs, and ultimately join their parents at the top of U.S. society. 

The very existence of the House tax bill rebuts Reeves’s argument that the upper middle class is in a position to manipulate Washington. (The Senate is considering its own tax legislation, which differs from the House bill in several ways.) Compared with middle class Americans, the upper middle class is less likely to see marginal tax rates fall under the House legislation. The bill also limits or scraps entirely some of the group’s favorite tax breaks, especially deductions for state-and-local taxes, and medical expenses, and tax breaks for education.

If you’re part of the upper middle class and concede you should be paying more, don’t count on wealthier groups making the same sacrifice—at least under the House bill. 

While a repeal of the alternative-minimum tax helps some people with incomes below $300,000, it’s more likely to benefit those on the higher wealth rungs. The very rich, including President Donald Trump, who has been pressing for a legislative victory before the end of his first year in office, would benefit from a repeal of the estate tax, lower corporate tax rates and a lower “pass-through” rate on business income. The House bill explicitly tries to limit the pass-through benefit for doctors, lawyers, accountants, and other high-earning professionals—traditional denizens of the upper middle class. 

This all may seem terribly unfair to members of the upper middle class, but there are some provisions they can take solace in. The bill leaves untouched some sweet tax breaks that predominately benefit people with lower six-figure salaries, such as 529 college savings plans and 401(k)s and other retirement perks. The CBO calculates that two-thirds of the government’s costs for retirement tax breaks go to the top 20 percent.

But beyond these few exceptions, much of the upper middle class will still take it on the chin.

And maybe they should. Higher taxes on the upper middle class make sense to some liberal tax experts—but only if the proceeds are used the right way, they said, for things like better health care, more affordable college, and rebuilding infrastructure. Under the House bill, though, any new tax revenue is used to offset tax cuts—much of which will benefit the super wealthy and corporations, especially over time.

“There would be a lot of people in the country who would be willing to chip in for those goals,” said Carl Davis, research director of the left-leaning Institute on Taxation and Economic Policy. In the House plan, however, the upper middle class is “going to pay more for a bill that’s going to grow the national debt, and provide the lion’s share of the benefits to corporations and their shareholders.”

Riedl, who has advised Republican candidates, argues the upper middle class should get a more generous tax cut under GOP tax reform. “It’s hard to argue the upper middle class is not currently paying its fair share,” he said. Reeves said the U.S. should ultimately tax the upper middle class more—but “the top 5 percent more still.”

Looking at Republican tax plans, Reeves said, “it’s like they only read half my book.”

    Read more: http://www.bloomberg.com/news/articles/2017-11-20/should-the-upper-middle-class-take-the-biggest-tax-hit

    Trump Officials Dispute the Benefits of Birth Control to Justify Rules

    When the Trump administration elected to stop requiring many employers to offer birth-control coverage in their health plans, it devoted nine of its new rule’s 163 pages to questioning the links between contraception and preventing unplanned pregnancies.

    In the rule released Friday, officials attacked a 2011 report that recommended mandatory birth-control coverage to help women avoid unintended pregnancies. That report, requested by the Department of Health and Human Services, was done by the National Academies of Sciences, Engineering and Medicine — then the Institute of Medicine — an expert group that serves as the nation’s scientific adviser.

    “The rates of, and reasons for, unintended pregnancy are notoriously difficult to measure,” according to the Trump administration’s interim final rule. “In particular, association and causality can be hard to disentangle.”

    Multiple studies have found that access or use of contraception reduced unintended pregnancies. 

    Claims in the report that link increased contraceptive use by unmarried women and teens to decreases in unintended pregnancies “rely on association rather than causation,” according to the rule. The rule references another study that found increased access to contraception decreased teen pregnancies short-term but led to an increase in the long run.

    “We know that safe contraception — and contraception is incredibly safe — leads to a reduction in pregnancies,” said Michele Bratcher Goodwin, director of the Center for Biotechnology and Global Health Policy at the University of California, Irvine, School of Law. “This has been data that we’ve had for decades.”

    Riskier Behavior

    The rules were released as part of a broader package of protections for religious freedom that the administration announced Friday.

    The government also said imposing a coverage mandate could “affect risky sexual behavior in a negative way” though it didn’t point to any particular studies to support its point. A 2014 study by the Washington University School of Medicine in St. Louis found providing no-cost contraception did not lead to riskier sexual behavior.

    The rule asserts that positive health effects associated with birth control “might also be partially offset by an association with negative health effects.” The rule connects the claim of negative health effects to a call by the National Institutes of Health in 2013 for the development of new contraceptives that stated current options can have “many undesirable side effects.” 

    The rule also describes an Agency for Healthcare Research and Quality review that found oral contraceptives increased users’ risk of breast cancer and vascular events, making the drugs’ use in preventing ovarian cancer uncertain.

    Federal officials used all of these assertions to determine the government “need not take a position on these empirical questions.”

    “Our review is sufficient to lead us to conclude that significantly more uncertainty and ambiguity exists in the record than the Departments previously acknowledged.”

      Read more: http://www.bloomberg.com/news/articles/2017-10-06/trump-officials-dispute-birth-control-benefits-to-justify-rules

      Exclusive: footage shows young elephants being captured in Zimbabwe for Chinese zoos

      Rare footage of the capture of wild young elephants in Zimbabwe shows rough treatment of the calves as they are sedated and taken away

      The Guardian has been given exclusive footage which shows the capture of young, wild elephants in Zimbabwe in preparation, it is believed, for their legal sale to Chinese zoos.

      In the early morning of 8 August, five elephants were caught in Hwange national park by officials at Zimbabwe Parks and Wildlife Management Authority (Zimparks).

      These captures are usually kept as secret as possible. The Guardian understands that in this case the usual procedure was followed. First, a viable herd is identified. Then operatives in a helicopter pick off the younger elephants with a sedative fired from a rifle. As the elephant collapses, the pilot dive-bombs the immediate vicinity so the rest of the herd, attempting to come to the aid of the fallen animal, are kept at bay. When things quieten down, a ground-team approaches the sedated elephants on foot, bundles them up, and drags them on to trailers.

      The footage, a series of isolated clips and photographs provided to the Guardian by an anonymous source associated with the operation, documents the moment that operatives are running into the bush, then shows them tying up one young elephant. The elephants are then seen herded together in a holding pen near the main tourist camp in Hwange.

      Elephant
      In this part of the footage, a young female elephant is seen being kicked in the head repeatedly by one of the captors. Photograph: The Guardian

      Finally, in the most disturbing part of the footage, a small female elephant, likely around five years old, is seen standing in the trailer. Her body is tightly tied to the vehicle by two ropes. Only minutes after being taken from the wild, the animal, still groggy from the sedative, is unable to understand that the officials want her to back into the truck, so they smack her on her body, twist her trunk, pull her by her tail and repeatedly kick her in the head with their boots.

      Altogether, 14 elephants were captured during this time period, according to the source, who asked to remain to anonymous for fear of reprisal. The intention was to take more elephants, but the helicopter crashed during one of the operations. It is estimated that 30-40 elephants were to be captured in total.

      The elephants that were taken are now in holding pens at an off-limits facility within Hwange called Umtshibi, according to the source. One expert who reviewed the photographs, Joyce Poole, an expert on elephant behaviour and co-director of the Kenya-based organisation ElephantVoices, said the elephants were bunching huddling together because they are frightened.

      The
      The young elephants in their enclosure. According to experts, they are bunching, huddling together because they are frightened. Photograph: The Guardian

      Audrey Delsink, an elephant behavioural ecologist and executive director for Executive Director for Humane Society International Africa, also reviewed the photos and footage. She believed that most of the elephants were aged between two and four. Basically, these calves have just been weaned or are a year or two into the weaning process. In the wild, elephants are completely dependent on their mothers milk until they are two, and are not fully weaned until the age of five.

      A number of the calves, she said, were displaying temporal streaming a stress-induced activity. Many of the gestures indicate apprehensive and displacement behaviour trunk twisting, trunk curled under, face touching, foot swinging, head-shaking, ear-cocking, displacement feeding, amongst others. Zimparks were approached but did not make a comment.

      The buyer for the young elephants is a Chinese national, according to inside sources who asked not to be named. Last year he was associated with a case involving 11 wild hyenas, who were discovered in a truck at Harare international airport that had been on the road for 24 hours without food or water and were reportedly in an extremely stressed condition, dehydrated and emaciated and, in some cases, badly injured.

      One
      One of the hyenas found in a consignment at Harare airport in Zimbabwe. Photograph: The Guardian

      The legal live trade in wild animals

      The capture of the baby elephants is just one of a number of operations that have taken place in Zimbabwe and across the continent over several decades. Nine elephants were reportedly exported from Namibia to Mexico in 2012, six from Namibia to Cuba in 2013, and more than 25 from Zimbabwe to China in 2015. In 2016, the US imported 17 elephants from Swaziland despite objections from the public and conservationists. From 1995-2015, more than 600 wild African elephants and 400 wild Asian elephants are reported to have been traded globally, according to a database kept by the Convention on International Trade in Endangered Species (Cites).

      Under Cites, trading live elephants is legal, with a few stipulations. The destination must be appropriate and acceptable, and the sale must benefit conservation in the home country. But elephant conservationists and animal welfare advocates point out a number of flaws in the system. There are no criteria setting out what appropriate and acceptable means and what is really contributing to conservation, explained Daniela Freyer of Pro-Wildlife, a German-based organisation that seeks to improve international legislation protecting wildlife. Currently, it is entirely up to authorities in the importing countries to define and decide. There are no common rules and no monitoring of the conditions of the capture, the number of animals being traded, where they will end up or the conditions in which they will be kept at their destination. There is also no monitoring of the requirement that a sale benefit conservation.

      For example, Zimbabwe and China are the biggest players in the live elephant trade, but Iris Ho, wildlife programme manager at Humane Society International (HSI), says they have found little information from the importing countries on the animals arrival. We dont know how many facilities in China have received the elephants imported from Zimbabwe during the last few years. We dont know the status of these animals.

      Attempts to comply with the few Cites stipulations such as appropriate and acceptable destinations are sometimes dismissed. In 2016, a Zimbabwe delegation of Zimparks and ZNSPCA inspectors travelled to China to access the facilities, where they found that most of the zoos showed signs of poor treatment of the animals. But their recommendation that a shipment of 36 elephants remain in Zimbabwe until the holding facilities in China were completed and assessed for compliance by Zimbabwe, was ignored.

      On September 16 Chinese papers announced in cheery headlines that three elephants two females and a male, aged approximately four years old had arrived at the Lehe Ledu wildlife zoo. Photographs of the elephants from Chinese media were analysed by Poole, who noted that the face one of the females looked pinched and stressed. The elephant appears to have begun to wear her tusks down on the bars, rubbing back and forth in frustration. Poole added that the sunken look, dark eyes and mottled skin are common for young, captured elephants. In the wild, you only see the pinched, sunken look in sick or orphaned elephants.

      The zoo has said that it is providing more than 1,000 square metres of indoor space and 3,000 sq metres outdoors. The animals have six full-time babysitters and every meal is prepared carefully, based on scientific recommendation.

      A video posted on YouTube celebrating the arrival of the elephants at Lehe Ledu zoo.

      Finally, questions have been asked about whether Zimbabwe is complying with the Cites stipulation that the sale of the elephants must benefit their conservation in the wild. The environment minister, Oppah Muchinguri-Kashiri, was reported in the Guardian last year as saying the sale of the elephants was necessary to raise funds to take care of national parks in Zimbabwe, which have been ravaged by drought and poaching. But in the past, there have been unconfirmed reports of Grace Mugabe, the presidents wife, using funds from the sales of elephants to pay off a military debt to the Democratic Republic of the Congo.

      The international body governing the trade, Cites, is increasingly coming under fire for its role. The scientific literature states that captive facilities continue to fall far short of meeting elephants natural needs for movement, space and extended social networks, with negative effects on health, behavior and reproduction, said Anna Mul, a legal adviser on animal law at Fondation Franz Weber, an organisation that is lobbying Cites to end the trade of live elephants.

      A spokesman for CITES said: The triennial CITES conference held last year (CoP17) agreed that appropriate and acceptable destinations was defined as destinations where the importing State is satisfied that the recipient of the live animals is suitably equipped to house and care for them. CoP17 also agreed on a process to assess if additional guidance on this matter is required. Further, both the importing and exporting countries are now required to be satisfied that any trade in live elephants should promote the conservation of elephants in the wild. In addition, the exporting Party must also be satisfied that animals are prepared and shipped so as to minimize the risk of injury, damage to health or cruel treatment of live elephants in trade… CITES does not address the way in which the animals are captured or stored prior to export.

      But for now, China continues to import the vulnerable elephants at almost conveyor-belt speed. According to Ho, some pressure to stop the practice is beginning to be felt, but the country is influenced by the view that breeding is conservation. And then, of course, there is a willing partner in Zimbabwe and the thrill of seeing African elephants by the visitors.

      Its a win-win, she said, for those who are financially profiting from the legal trade in the calves. But its a lose-lose for the animals, both imported and left behind.

      Read more: https://www.theguardian.com/environment/2017/oct/03/exclusive-footage-shows-young-elephants-being-captured-in-zimbabwe-for-chinese-zoos

      ‘No doesn’t really mean no’: North Carolina law means women can’t revoke consent for sex

      Recent rape cases highlight legal loophole resulting from 1979 state supreme court ruling, prompting a renewed campaign for change

      One Monday in January, Aaliyah Palmer, 19, spent several hours telling law enforcement in Fayetteville, North Carolina, that she had been raped.

      Things started out OK, she said, in a consensual encounter in a bathroom. But when the man having sex with her began tearing out her hair, she demanded he stop; he didnt.

      It was here a detective interrupted Palmers account with a question. At any time after she said no, did her attacker stop having sex with her, then penetrate her once again?

      Yes, Palmer said.

      OK, the detective replied, according to Palmer. Thats important.

      It was important because in North Carolina, a person cannot withdraw consent for sex once intercourse is taking place. Because of a 1979 state supreme court ruling that has never been overturned, continuing to have sex with someone who consented then backed out isnt considered to be rape.

      The whole thing is ridiculous, Palmer told the Guardian. Its crazy.

      The North Carolina law is an example of how the US legal system has not always kept pace with evolving ideas about rape, sex and consent. Just last year, an Oklahoma court ruled that the states forcible sodomy statute did not criminalize oral sex with a victim who is completely unconscious. The toughest charge available to prosecutors was unwanted touching.

      But the North Carolina law appears to be unique. And it has shocked even those who are used to dealing with such legalistic vagaries.

      Its absurd, said John Wilkinson, a former prosecutor and an adviser to AEquitas, a group which helps law enforcement pursue cases of sexual violence. I dont think you could find anyone today to agree with this notion that you cannot withdraw consent. People have the right to control their own bodies. If sex is painful, or for whatever reason, they have the right to change their mind.

      The ruling has devastated victims and frustrated prosecutors in North Carolina for years. State senator Jeff Jackson, who has introduced legislation to amend the law, encountered a similar case when he was a criminal prosecutor. His office was ultimately forced to dismiss the rape charge.

      North Carolina is the only state in the country where no doesnt really mean no, he said in a statement. We have a clear ethical obligation to fix this obvious defect in our rape law.

      This May, another North Carolina woman, Amy Guy, revealed that the law had prevented prosecutors from charging her husband with rape, after a violent attack in which she repeatedly resisted.

      Guy was estranged from her husband when he showed up unannounced at her new home and demanded she sleep with him. Her husband had been violent in the past, Guy said, so she consented. When he began to hurt her, she told him to stop. He did not.

      A rape conviction could have carried a prison sentence of five and a half to nearly seven years, according to Guys attorney. But once somebody in the prosecutors office recalled the 1979 ruling, law enforcement allowed Guys husband to plead guilty to a lesser charge, of misdemeanor assault, for being violent during their encounter.

      I was devastated, Guy said in an interview. That did not make any sense. I was taught that no means no and its not really true.

      He was given a sentence of 10 months and is due to be released in November.

      No one can seriously defend this loophole

      The 1979 ruling, State v Way, arose after a man named Donnie Leon Way appealed his recent conviction for second-degree rape. Way was convicted of using extreme violence to force an acquaintance to submit to rape and oral sex. Wilkinson, the AEquitas adviser, said he was confounded as to why the state supreme court even introduced the idea of withdrawing consent.

      No one can seriously defend this loophole, Jackson said in his statement. His bill would amend state law to read, in part: A person may withdraw consent to engage in vaginal intercourse in the middle of the intercourse, even if the actual penetration is accomplished with consent and even if there is only one act of vaginal intercourse

      A defendant who continues the act of vaginal intercourse after consent is withdrawn is deemed to have committed the act of vaginal intercourse by force and against the will of the other person.

      The proposal is stuck in committee with no sign that lawmakers will try to pass it before the current legislative session ends.

      Palmers case, however, has put the decades-old ruling back in the spotlight.

      The person she says attacked her has not been arrested or charged. Palmer wonders if that is because it would be difficult to prove he penetrated her multiple times, after she told him to stop. In his defense, she reasons, he could say she consented at the beginning of intercourse and they only had sex once.

      A Fayetteville police spokesperson did not respond to a message asking if the 1979 ruling had any influence on law enforcements decision not to bring rape charges. Police have told Palmer and the Fayetteville Observer, which first publicized her case, that the evidence they collected wasnt enough to substantiate a rape.

      Palmer agreed to be identified by name to create awareness of her case.

      On a Saturday in January, according to Palmer and court documents, she and a friend went to Fort Bragg to connect with men they met on Tinder Social. After Palmer and her friend split up, Palmer went to a party in an apartment complex where she met the man she identifies as her assailant.

      In an emptier apartment, she recalled, he pulled her into a bathroom to have sex. But when he began to grab her hair so hard that she could feel it ripping out, she told him he was hurting her and he had to stop. He told her to be quiet and relax, Palmer said. He didnt stop.

      Palmer said she repeated her demand several more times, but he never relented. Fighting back seemed dangerous: Army guys are trained in physical combat, she said.

      During the ordeal, she said, she saw at least one camera phone that had been slipped under the bathroom door, apparently to make a recording. Four soldiers stationed at Fort Bragg were later charged with creating or possessing video recordings of the incident.

      The following Monday, Palmer submitted to a rape kit and gave police the clothes she had worn that night.

      But Fayetteville police did not charge the man Palmer says raped her. Palmer believes they waited too long to collect vital evidence. Between the time she reported a crime and the time investigators entered the apartment where she says the attack took place, she said, a week elapsed.

      Since then, Palmer has become too depressed and anxious to go to class. Videos of her encounter circulated on Snapchat, and she is tortured by the thought that classmates might have seen them.

      This spring, she withdrew from North Carolina State University, and she has lost at least one of her two scholarships because she is no longer a full-time student. She has also lost friendships.

      It was really heartbreaking for me, she said. Everyone just believes that women are lying about rape Im going public about this to say, my word should be enough to be believed.

      Read more: https://www.theguardian.com/us-news/2017/jun/24/north-carolina-rape-legal-loophole-consent-state-v-way