Tuesday, January 8, 2013

Syria crisis: Food aid 'cannot reach a million people'

A man sells vegetables on the streets of Aleppo, file pic from 25 December 2012The UN estimates that around 
One million Syrians are going hungry and helpless due to the 22-month civil conflict in the country, the UN says.
The World Food Program (WFP) says it is helping 1.5 million Syrians, but continued fighting and an inability to use the port of Tartus to deliver food mean many people are not receiving aid.
The UN estimates that more than 60,000 people have been killed in the uprising, which began in March 2011.
Rebels have gained control of swathes of northern Syria in recent months.
The increasingly dangerous situation meant the WFP had pulled its staff out of its offices in Homs, Aleppo, Tartus and Qamisly, said agency spokeswoman Elisabeth Byrs.
Late 2012 saw a sharp rise in the number of attacks on WFP aid trucks, said the agency, which has also been hit by fuel shortages.
Meanwhile, the UN refugee agency said the number of refugees fleeing the violence in Syria had leapt by nearly 100,000 in the past month.
It said there were 597,240 registered refugees and individuals awaiting registration as of 6 January - up from 509,559 the month before.
The UN estimates that around four million Syrians are in need of humanitarian aid.
Opposition forces have been making considerable gains in recent weeks, but their efforts to take control of areas around major cities including Damascus have met with stiff resistance and increasingly destructive air strikes.
On Monday, the New York Times reported that Israeli intelligence indicated Syrian troops were mixing chemicals - suspected to be the deadly nerve gas sarin - at two storage sites, and filling dozens of 500-pound (225kg) bombs that could be loaded on airplanes.
The reports in late November prompted a flurry of international statements warning the regime of President Bashar al-Assad against using chemical weapons on his own people.

Eurozone unemployment reaches new high

The unemployment rate across the eurozone hit a new all-time high of 11.8% in November, official figures have shown.
image of Andrew WalkerThis is a slight rise on 11.7% for the 17-nation region in October. The rate for the European Union as a whole in November was unchanged at 10.7%.
Spain, which is mired in deep recession, again recorded the highest unemployment rate, coming in at 26.6%.
More than 26 million people are now unemployed across the EU.
For the eurozone, the number of people without work reached 18.8 million said Eurostat, the official European statistics agency said.
'Continuing saga'
Greece had the second-highest unemployment rate in November, at 20%.
The youth unemployment rate was 24.4% in the eurozone, and 23.7% in the wider European Union. Youth unemployment - among people under 25 - was highest in Greece (57.6%), followed by Spain (56.5%).


Overall unemployment was lowest in Austria (4.5%), Luxembourg
(5.1%) and Germany (5.4%).
The eurozone and wider European Union economies are struggling with recession as government measures to reduce sovereign debt levels have impacted on economic growth.
However, European Commission President Jose Manuel Barroso said on Monday that he believed the worst was over.
Mr Barroso said the turning point was last September's promise from the European Central Bank to buy unlimited amounts of eurozone states' debts, which has helped crisis hit countries borrow more cheaply.
But in the view of the UK's Institute of Directors, whose members rely on demand from trading partners in the eurozone, this "has bought time, but that is all it has done".
"It is clear that the economic implosion of several member states continues at a troubling pace," said the business group's chief economist Graeme Leach.
"The headline figures spell bad news, but that is compounded by the political and human impact of terrifying levels of youth unemployment in Spain, Greece and Italy.
"This saga is far from over, whatever President Barroso may believe, and it seems it is set to get worse in 2013."
'Very shocking'
BBC Economics Correspondent Andrew Walker said: "The biggest rises, in percentage terms, were in countries at the centre of the eurozone financial crisis - Greece, Spain, Cyprus and Portugal. One striking exception to that pattern was the Republic of Ireland where unemployment fell.
"The general trend however remains upwards and it makes it even harder for the governments concerned to collect the taxes they need to stabilise their debts."
Rabobank economist Jan Foley said the rise in unemployment was "the other side of austerity or structural reform."
"There is a very worrying picture painted by these numbers, and governments do need to wonder if they need more pro-growth strategies in the next few years," she told the BBC's News Channel.
The record low for the eurozone unemployment rate was 7.2%, which was recorded in February 2008, before the financial crisis that first gripped the banking sector spread to the real economy.
The historic low for the eurozone youth unemployment rate was 15% in 

Three Delhi gang rape suspects to plead not guilty

People shout slogans against guru Asharam in Delhi protest - 8 JanuaryThree of the five men accused of the abduction, gang rape and murder of a 23-year-old woman in Delhi will plead not guilty to all charges against them, their lawyer has said.
Manohar Lal Sharma told the BBC the three - Mukesh Singh, Akshay Thakur and Ram Singh - should get a fair trial.
The five accused were charged on Monday. The next hearing in the case will be held on Thursday.
The case has shocked India and prompted a debate about the treatment of women.
A sixth suspect, who is thought to be 17, will be tried separately in a youth court if it is confirmed he is a minor.
On Thursday, a magistrate is expected to transfer the case for trial to a special fast-track court.
If convicted, the suspects could face the death penalty. Prosecutors have said they have extensive forensic evidence.
Public outcry
Mr Sharma said he would file a representation letter on behalf of his clients on Thursday.
"I believe the accused should get a fair trial and I have come forward to represent them," he said, adding that he plans to challenge the police over their handling of the evidence linking the accused to the case.
It is not clear how the other two suspects - Pawan Gupta and Vinay Sharma - will plead or who will represent them.
Earlier reports said they had offered to give evidence, possibly in return for a lighter sentence.
The lawyers' association in the district of Saket, where hearings in the case are being held, has refused to defend the accused because of the outcry the crime has provoked.
The case has triggered numerous protests, as have suggestions by various public figures that women themselves can be partly to blame for being raped.
Most recently the popular guru Asharam, known to his followers as "Bapu" or father, told followers that the tragedy would not have happened if the victim had chanted God's name and fallen at the feet of the attackers.
Ravi Shankar Prasad, spokesman for the main opposition Bharatiya Janata Party, condemned the remarks.
"For him to make the statement in relation to a crime which has shocked the conscience of the country is not only unfortunate, but deeply regrettable," he said.
The victim and a male friend were attacked on a bus in south Delhi on 16 December. She died two weeks later in a hospital in Singapore.
Campaigners are calling for tougher rape laws and reforms to the police, who - critics say - often fail to file charges against accused attackers.

Saturday, January 5, 2013

Nato deploying Patriot missiles to Turkey-Syria border

Nato has begun to deploy Patriot missiles to Turkey to help Turkish troops repel attacks by missiles or aircraft from neighbouring Syria.
The US European Command said its troops and equipment had started arriving in southern Turkey, and more would arrive in the coming days.
Germany and the Netherlands are preparing to ship their Patriot batteries early next week.
The six battery units are scheduled to be operational by the end of January.
Nato approved the deployment of the surface-to-air missiles early last month, after a request from Turkey, amid "grave concerns" that Syria could use chemical weapons.
Syria has said it would never use such weapons against its own people.
But new launches of "Scud-type missiles" against rebel fighters were being detected in Syria, Nato said in mid-December.
Nato Secretary General Anders Fogh Rasmussen described it as "an act of a desperate regime approaching collapse" and said it emphasised "the need for effective defence and protection of our ally Turkey".
The US, Germany and the Netherlands have agreed to deploy two batteries of Patriot missiles each to be placed under the command of Nato along the Turkish-Syria border.
US personnel and equipment had begun arriving at Turkey's southern Incirlik Air Base and a further 400 personnel and equipment would be airlifted there in the coming days, the US command in Europe, Eucom, said. More equipment would reach Turkey by sea later in January, Eucom was quoted by the Associated Press as saying.
The Dutch Patriot batteries will depart for Turkey on Monday and are expected to arrive by 22 January along with nearly 300 troops, the country's daily De Telegraaf newspaper reports. Germany is expected to follow a similar schedule.
"The forces will augment Turkey's air defence capabilities and contribute to the de-escalation of the crisis along the Alliance's border," Eucom said in a statement.
"The deployment will be defensive only and will not support a no-fly zone or any offensive operation," it added.
The Syrian Observatory for Human Rights says more than 44,000 people have been killed since the uprising began nearly two years ago, including nearly 31,000 civilians
The UN believes up to four million people inside Syria are soon going to need humanitarian aid, up from 2.5 million. Another 500,000 Syrians have also fled to neighbouring countries.

India rape: Delhi court hears of forensic evidence

Indian protesters in Delhi, 5 JanuaryThe case has caused outrage in India, with demands for greater protection

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DNA tests have linked five men with a gang rape and murder last month that has caused outrage in India, a court in Delhi has heard.
The pre-trial hearing was held at the District Court in the Saket area of the Indian capital.
The judge ordered the five to appear before her on Monday. A sixth suspect is expected to be tried as a juvenile.
The woman, 23, died last weekend. Her friend has been recalling the harrowing details of the attack on a bus.
The man, who has not been named, told Zee News how he and the victim had boarded the bus and paid a fare, before he was beaten unconscious by men on board, who then attacked her.
'Robbed items'
Prosecutor Rajiv Mohan told Magistrate Namrita Aggarwal that DNA tests confirmed by the Central Forensic Science Laboratory had shown that blood stains found on the clothing of all of the accused had matched the blood of the victim.
Mr Mohan also cited records from the Mount Elizabeth Hospital in Singapore, where the woman died, which said death was caused by septicaemia and multiple-organ failure.

The victim's friend, who witnessed the attack, speaks to Zee News
The five accused, aged between 19 and 35, are charged with rape, abduction and murder, and could face the death penalty if convicted. They include the driver of the bus.
The prosecutor also said items robbed from the victim had been recovered from the accused.
The magistrate said: "[The suspects] will be produced in court on Monday."
A following hearing was set for 10 January.
Protesters gathered outside the court in Saket, carrying a banner demanding justice for the victim.
Police 'argued'
The friend of the woman who died has given his first interview since the incident.
The man, who has not been named, told Zee News he and the rape victim had boarded the bus after a trip to the cinema and after failing to flag down an auto-rickshaw.
He said the bus had tinted windows, and that he believed the group of men had laid a trap for them.
"She tried to dial the police control room number 100, but the accused snatched her mobile away.
"I tried to fight against the men but later I begged them again and again to leave her."
He confirmed earlier reports that the assailants had thrown them off the bus and tried to run them over.
The friend said he had tried to get help from passers-by and motorists.
"They slowed down, looked at our naked bodies and left," he said.
And he also criticised the authorities, accusing them of being slow to arrive, then arguing over jurisdiction, and eventually taking them to the wrong hospital.
"My friend was bleeding profusely. But instead of taking us to a nearby hospital, they [police] took us to a hospital that was far away," he said.
Delhi Police on Saturday denied its officers were late in arriving. A statement said the first vehicle had arrived within four minutes of the distress call, left the scene with the victims within another three minutes and reached Safdarjung Hospital within another 24.
The BBC's Andrew North, in Delhi, says the case continues to put Indian life under a sharp magnifying glass, and for many people it is uncomfortable viewing.
Meanwhile, police have opened an investigation into whether Zee News broke broadcasting laws relating to disclosure of the victim's identity.
The victim's friend was not named but his face was shown.
Police spokesman Rajan Bhagat told AFP news agency that a case had been filed against the broadcaster.
The case has caused a national outcry, and there have been frequent protests calling for greater protection for women.

Gun Ownership Is a Hobby, Not a Right

Sure, some people can use guns safely. Some people can also smoke crack safely, drink and drive safely and handle explosives safely. We don't let them because too many other people can't.

In the wake of every horrific school shooting comes the predictable call for gun control. Just as predictably comes the crazy counter-argument: If only the teachers had been armed, the shooting could have been prevented. 
Welcome to gun-crazy America. Illustration by DonkeyHotey / Flickr.
Welcome to gun-crazy America. Illustration by DonkeyHotey / Flickr.

The simple fact is that guns are not compatible with 21st century civilized life. We should get rid of them. If we can't get rid of them today, we should at least start the process of getting rid of them for the future. The world needs a future without guns.
No one should have guns. Not criminals, not responsible citizens, not the police. Guns should be safely locked away for use in a serious emergency and issued to police officers on a limited basis only when necessary. Even most police don't need guns.
What about criminals? They have guns. Don't we need guns to fight them with? Sure, maybe for a while. But after a hundred years with no guns, the supply will dry up even for criminals. We should be planning for the future, not arming for the present.
What about the Constitution? Gun rights are enshrined in the Second Amendment to the US Constitution. Well, I have news for Constitutional fundamentalists: The US Constitution has been changed 27 times. It can be changed again.

Latest "Fiscal Cliff" Proposals Would Deepen Inequality

The latest proposals by both President Barack Obama and House Speaker John Boehner would widen economic inequality in the United States. Here’s a quick rundown of some of the major offers on the table.
Obama Boehner
Top personal income tax rates
Rather than allowing Bush tax cuts on personal income over $250,000 to expire as scheduled at the end of the year, President Obama is now proposing to continue tax breaks for all income up to $400,000. This means just a fraction of the nation’s top 1 percent would be asked to pay more (the 1 percent threshold is $343,927). Shifting the goal posts would place more than $200 billion more into the pockets of those in the top 2 percent than would be the case if the $250,000 threshold were kept in place. This doesn’t just give a tax break to families with between $250,000 and $400,000 in income. Since we’re just talking about lifting the top marginal tax rate, those who earn more than $400,000 would also get a tax break of about $6,900 per year by not having to pay higher rates on their income in the $250,000-$400,000 range.
Neither the President nor Speaker Boehner has sought to end the carried interest exclusion which allows hedge fund managers to continue to pay taxes at the capital gains rate, not the higher wage income rate. The top hedge fund manager made $3.9 billion in 2011, meaning that the carried interest exclusion saved him $780 million last year alone.
Estate Tax
President Obama is proposing returning the U.S. estate tax to its tepid 2009 level: a 35 percent tax on couple’s estates over $7 million. At that level, only people in the top 0.25 percent would be affected. A more equitable approach would be a proposal by Senator Bernie Sanders (I-VT) that would establish the same $7 million per couple exemption, but impose a graduated tax, starting at 45 percent for amounts between $7 million and $10 million; 50 percent between $10 million and $50 million; and 55 percent on amounts above $50 million. A ten percent “billionaire’s surtax” would be imposed on estates worth more than $1 billion for couples or $500 million for individuals.
Earned Benefit Programs
Even though Social Security, by law, is not funded out of the general fund, both President Obama and Speaker Boehner continue to act as if Social Security is somehow a part of the federal deficit. The President’s latest proposal, one supported by many House Democrats, would result in immediate and on-going reductions in Social Security benefits, through use of a new formula to calculate annual cost-of-living benefits. The so-called “chained CPI,” allegedly a more accurate measure of inflation for the society at large, would reduce Social Security cost of living allowance (COLA) by 0.3 percent per year.
This doesn’t sound like much, but over 20 years, that’s a cut of 6 percent (or about $1,000 a year) over what benefits would have otherwise been. Moreover, economist Dean Baker points out that the new measure poorly reflects the actual consumption patterns of elderly Americans. Since health care inflation has historically risen much more rapidly than other consumer items, retirees face costs that are already 0.2 to 0.3 percent higher than the current COLA formula reflects. Given that the median income of Americans over 65 is less than $20,000, and that 45 percent of senior citizens rely on Social Security for more than 90 percent of their income, the proposed change represents increased hardship for those who can least afford it.
Capital Gains and Dividends
President Obama has abandoned his proposal to tax dividends as ordinary income and instead would allow all income from wealth – capital gains and dividends – to be permanently taxed at 20 percent. That’s only about half the top marginal tax rate for income from work and reflects an additional $100 billion in tax savings that would go disproportionately to upper-income Americans. This would assure that America’s wealthiest citizens, including folks like Warren Buffett, will continue to pay lower tax rates than many middle class families.
Corporate Taxes
President Obama is proposing a “fast track” process for achieving both corporate and individual tax reform. This suggests that members of Congress will have only limited time to debate and no chance to amend the tax legislation. Pushing corporate tax reform through as part of a “fast track” package is particularly problematic, given the high-profile role of corporate CEOs in backing tax hikes for wealthy taxpayers in exchange for sharp cuts in corporate tax rates and a permanent offshore tax holiday on foreign profits.
Neither side is taking up the issue of the $100 billion lost each year as the result of tax haven abuse. This $1 trillion over the 10-year budget window nearly is equal to the total proposed cuts to health, social security, and military spending under the draft proposals.
Not only are both sides silent on offshore tax abuse, they stand ready to make permanent two pernicious loopholes in the corporate tax extenders bill. One, called the active financing exception is the principal reason General Electric pays little to no taxes each year. The other, called the “Controlled Foreign Corporation Look-Through” is the reason why companies like Apple, Microsoft and Google can shift their U.S. profits to a foreign tax haven with a simple computer keystroke. Both of these egregious abuses have been targeted by progressive fair tax advocates.
While corporate profits are at a 50-year high, corporate tax collections as a share of the economy are at 50-year lows. If corporate lobbyists get their way, corporate taxes will be going lower still.
Giving rich individuals and prosperous corporations more tax cuts, while asking seniors to give up Social Security benefits is a bad deal. The early reaction by many progressive organizations is that it would be better to go over the cliff than accept the emerging bargain the President has offered.

Fix the Debt Empties Its Trojan Horse

Fix the Debt Empties Its Trojan Horse

January 2, 2013 · 

The corporate-driven campaign didn't get everything it wanted with the fiscal deal, but it's likely to continue to be a major force as budget talks continue.

Fix the Debt trojan horseOver the last three months, the Fix the Debt campaign, led by more than 100 big company CEOs, has unleashed a firestorm of ads, blanketing political news web sites and entirely plastering the Capitol South Metro station used by most Congressional staffers.
In late October, the Institute for Policy Studies began exposing the Fix the Debt campaign's Trojan Horse. While they presented themselves as a patriotic bipartisan group, merely seeking a “balanced” deal, their own lobby materials revealed they were out to use the fiscal cliff as an opportunity to win massive new corporate tax breaks paid for with cuts to earned benefit programs like Social Security and Medicare.
The hypocrisy was stunning. We documented, for example, how many of the campaign’s leaders had contributed massively to the national debt through tax-dodging tricks. Twenty-four of them had even paid their CEOs more in 2011 than their firms paid in corporate income taxes. We also calculated that the average Fix the Debt CEO calling for cuts to Social Security themselves had pension assets of $12 million, enough to garner a $65,000 monthly retirement check starting at age 65.
Did all their high-priced subterfuge pay off? The New Year’s deal was a huge disappointment for those of us hoping that President Barack Obama would use his bargaining position to strike a strong blow against the extreme inequality that is undermining our economy and democracy. But the Fix the Debt campaign also suffered a loss. After one of the most ambitious corporate lobby campaigns in history, they failed to win any of their three major objectives:
In a press release, Fix the Debt leaders lamented that “Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs.”
As in the tale of the Trojan Horse, however, we cannot assume that the Fix the Debt army is going to just sail away. Corporate tax reform is expected to be a major focus of Congress in 2013, starting as early as the debt ceiling fight, which is likely to come to a head in March. (By then, we expect to be able to report on how many profitable U.S. corporations avoided paying taxes in 2012.)
Congress’s New Year’s Eve capitulation to its wealthiest benefactors heightens the stakes for the corporate tax fight. Because Congress and the White House lavished so much on high-income individual taxpayers, they may well find themselves with fewer goodies to pass out to corporations. These will have to be paid for with either higher deficits or even more draconian cuts to Social Security, Medicare, and other programs ordinary Americans depend upon.
As Iowa Senator Tom Harkin stated in opposition to the fiscal cliff deal: “Every dollar that wealthy taxpayers do not pay under this deal, we will eventually ask Americans of modest means to forgo in Social Security, Medicare and Medicaid benefits.”
The Fix the Debt gang is likely to be a major force for the duration. Last fall they boasted of having$60 million for the “initial phase” of their campaign. Even if they’ve completely blown through that pile of dough, they will likely have no trouble securing additional mega-millions for the battles to come.

Crony Capitalist Blowout

In praising Congress's huge new tax increase, President Obama said Tuesday that "millionaires and billionaires" will finally "pay their fair share." That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress's New Year celebration.
There's plenty to lament about the capital and income tax hikes, but the bill's seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.
Getty Images
U.S. Sen. Max Baucus
Senate Finance Chairman Max Baucus got the party started this summer when he said he would subject 75 special-interest tax breaks to a "tax reform" review. That was pretty funny. Nearly every attempt by Tom Coburn (R., Okla.) and others to pare back the list was defeated in a bipartisan rout.
The Senators even voted down, 14-10, an amendment to list the corporate interests that receive tax perks on a government website. This "tax extenders" bill passed Mr. Baucus's committee, 19-5 (see the table nearby), and then sat waiting until Harry Reid and the White House stuffed it wholesale into the "fiscal cliff" bill.
Thus Michigan Democrat Debbie Stabenow was able to retain an accelerated tax write-off for owners of Nascar tracks (cost: $78 million) to benefit the paupers who control the Michigan International Speedway. New Mexico's Jeff Bingaman saved a tax credit for companies operating in American Samoa ($62 million), including a StarKist factory.
Distillers are able to drink to a $222 million rum tax rebate. Perhaps this will help to finance more of those fabulous Bacardi TV ads with all those beautiful rich people. Businesses located on Indian reservations will receive $222 million in accelerated depreciation. And there are breaks for railroads, "New York Liberty Zone" bonds and so much more.
But a special award goes to Chris Dodd, the former Senator who now roams Gucci Gulch lobbying for Hollywood's movie studios. The Senate summary of his tax victory is worth quoting in full: "The bill extends for two years, through 2013, the provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States ($20 million if the costs are incurred in economically depressed areas in the United States)."
You gotta love that "depressed areas" bit. The impoverished impresarios of Brentwood get an extra writeoff if they take their film crews into, say, deepest Flatbush. Is that because they have to pay extra to the caterers from Dean & DeLuca to make the trip? It sure can't be because they hire the jobless locals for the production crew. Those are union jobs, mate, and don't you forget it.
The Joint Tax Committee says this Hollywood special will cost the Treasury a mere $248 million over 10 years, but over fiscal years 2013 and 2014 the cost is really $430 million because it is supposed to expire at the end of this year. In reality Mr. Dodd will wrangle another extension next year, and the year after that, and . . . . Investing a couple million in Mr. Dodd in return for $430 million in tax breaks sure beats trying to make better movies.
Then there are the green-energy giveaways that are also quickly becoming entitlements. The wind production tax credit got another one-year reprieve, thanks to Mr. Obama and GOP Senators John Thune (South Dakota) and Chuck Grassley (Iowa). This freebie for the likes of the neediest at General Electric GE +0.47% andSiemens SIE.XE +0.08% —which benefit indirectly by making wind turbine gear—is now 20 years old. Cost to taxpayers: $12 billion.
Cellulosic biofuels—the great white whale of renewable energy—also had their tax credit continued, and the definition of what qualifies was expanded to include producers of "algae-based fuel" ($59 million.) Speaking of sludge, biodiesel and "renewable diesel" will continue receiving their $1 per gallon tax credit ($2.2 billion). The U.S. is experiencing a natural gas and oil drilling boom, but Congress still thinks algae and wind will power the future.
Meanwhile, consumers will get tax credits for buying plug-in motorcycles ($7 million), while the manufacturers of energy-efficient appliances ($650 million) and builders of energy-efficient homes ($154 million) also retain tax credits. Manufacturers like Whirlpool love these subsidies, and they are one reason that company paid no net taxes in recent years.
The great joke here is that Washington pretends to want to pass "comprehensive tax reform," even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be. Even as he praised the bill full of this stuff, Mr. Obama called Tuesday night for "further reforms to our tax code so that the wealthiest corporations and individuals can't take advantage of loopholes and deductions that aren't available to most Americans."
One of Mr. Obama's political gifts is that he can sound so plausible describing the opposite of his real intentions.
The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.
Republicans who are looking for a new populist message have one waiting here, and they could start by repudiating the corporate welfare in this New Year disgrace.

Fiscal cliff deal gets to heart of Obama’s tax promises

Fiscal cliff deal gets to heart of Obama’s tax promises

Published on Wednesday, January 2nd, 2013 at 4:42 p.m.
Barack Obama, when he ran for president in 2008, promised to raise taxes on the wealthy. He campaigned for higher income taxes, higher capital gains taxes and fewer loopholes benefiting the rich. Republicans in Congress fought him on tax increases every day of the last four years, but then the fiscal cliff crept in like a storm cloud threatening to deluge the country’s economic recovery.

Twenty-three hours past their deadline, Obama and congressional Republicans finally forged a deal to avert the cliff. That got the needle moving on the Obameter, where PolitiFact tracks hundreds of promises Obama made during the 2008 campaign. In the legislation, formally known as H.R. 8, Obama did get a tax hike on high incomes. But he didn’t get everything he wanted.

The centerpiece of the deal is a change to income tax rates. The law will raise rates permanently for families with annual income above $450,000 and individuals above $400,000. Incomes below those amounts will remain at the current rates, which were set during President George W. Bush’s term. Obama promised to keep those rates in placefor families making less than $250,000 and individuals making less than $200,000 a year. On the flip side, he promised to raise taxes for individuals and families above those thresholds.

So Obama kept his pledge to extend the lower rates for lower incomes, which merits a Promise Kept on the Obameter. But he had to give a little on the dollar figures in repealing the low rates on higher incomes. That rating: Compromise.

Obama also vowed to increase capital gains and dividends taxes from 15 percent to 20 percent for those making more than $250,000 (for couples) or $200,000 (for individuals). The fiscal cliff bill raised those taxes to 20 percent, but only for taxpayers earning $400,000 (for individuals) or $450,000 (for couples) and up. So the deal executed most of what Obama promised on capital gains and dividends, but it did so only above a higher income threshold. We rate this a Compromise.
In 2008, Obama promised to limit personal exemptions and itemized deductions for high-income tax filers. These provisions were in force in the 1990s, but were minimized under Bush and eliminated by 2010. The fiscal cliff bill did something very close to what Obama pledged in 2008, bringing back the Personal Exemption Phaseout, commonly known as PEP, as well as the "Pease limitation." We rate this a Promise Kept.
After years of incremental fixes, lawmakers made a permanent amendment to the Alternative Minimum Tax within the fiscal cliff deal. The AMT, as it is commonly known, it is a separate income tax calculation that was intended to ensure that wealthy people did not use loopholes to avoid paying taxes. Once taxpayers reached a certain income level, they needed to pay the amount calculated under the AMT even if the deductions and exemptions available under the regular tax code would otherwise allow them to pay less in tax.

But the AMT, unlike the standard tax code, was not indexed for inflation. So, every year, more and more Americans hit the threshold and found themselves owing higher taxes. As a result, the AMT was increasingly becoming a burden on the middle class, or at least the upper-middle class, rather than the rich.

In recent years, lawmakers have "patched" the AMT in a way that kept it from hitting many non-wealthy taxpayers. But this produced regular headaches for lawmakers. The fiscal cliff bill ends the need to regularly patch the AMT by permanently indexing it for inflation. We rate this a Promise Kept.

In revising the estate tax law -- another long-running battle -- Obama and congressional Republicans met in the middle.
Obama wanted to exempt the first $3.5 million in value of estates and impose a top rate of 45 percent. When the fiscal cliff deal was negotiated, Obama had to yield on those numbers. The fiscal cliff bill set the top tax rate at 40 percent -- halfway between Obama’s pledge and the reported 35-percent rate favored by some Republicans -- and estates smaller than $5 million will be exempted. Going forward, that $5 million limit will be indexed for inflation.
Given that both sides had to give ground here, we classify this as a Compromise.