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“They Get You Coming And Going”: In America, Being Poor Can Be An Expensive Proposition

Today I came across this very interesting, albeit depressing, bit of data. It’s an analysis by a travel site called Hopper that shows that it costs more to fly in states that have the lowest median incomes.

For example, the study found that in Mississippi, the poorest state, a “good deal” round-trip flight costs about $400, while in Maryland, the state with the highest income, an equivalent ticket costs around $300. The researchers also found that “typical round-trip airfare declines by $2.30 for every additional $1000 in median household income.” The reasons for the increased prices in the poorer states include “average distance traveled, demand density, and airline competition.” Presumably, there’s less demand and less airline competition in poor areas of the country because people there have less money for leisure travel, and also because those locales have less economic development and thus less business travel.

The higher price of air travel for low-income folks is yet another data point that paints a bigger picture: in America, being poor can be an expensive proposition. There are countless, painful examples of this. Food and other basic items tend to cost more in poor neighborhoods. The poor lack access to credit and so are easy prey for payday lenders charging exorbitant interest rates. Poor people are more apt to bounce checks; hello, fees for insufficient funds! There are also late fees for credit card payments — you know, the kind of thing listed in print so fine you need a magnifying glass to be capable of reading about it. But my personal favorites are those extra charges they tack on for restoring utilities they shut off because you couldn’t pay your bill on time in the first place. “They get you coming and going,” as my old man used to say.

In her classic book, Nickel and Dimed, Barbara Ehrenreich described a host of other expensive indignities that plague the working poor. For example, many of her low-wage co-workers were living in hotel rooms, which actually were far costlier, on a monthly basis, than local apartments. But the workers couldn’t move into the apartments because they lacked the month’s rent plus security deposit the landlord required. Many low-wage jobs also require uniforms, the cost of which comes out of the worker’s paycheck, or cars, which the workers are expected to maintain themselves.

There are even darker examples. I wonder how many Americans have put off going to the doctor because they lacked health insurance, sought treatment only when their symptoms were advanced, and ended up being bankrupted by medical bills as a result.

Many of the examples I’ve cited in this post could be greatly improved by some well-targeted regulatory fixes. The rights of workers and consumers against employers, the banks, and the credit card companies need to be vigorously championed, and in some cases, re-invented for our new digital era. There’s no earthly justification other than greed for the $35 bank overdraft ripoff, or the cell phone company gouging you to restore your service because your payment is late. It’s also long past time we bring re-regulation to the airlines. A more regulated airline industry might help bring down fares in certain overpriced markets. Our 30-year old experiment with airline deregulation has hardly been a rousing success — read the excellent 2012 Washington Monthly magazine article by Phillip Longman and Lina Khan for more information on this score.

In addition to more consumer regulation, we also need a much higher minimum wage and a far more generous safety net for poor people in this country. If poor people had more economic resources to begin with — if they simply had enough money to pay their bills on time, and to save a little money for a rainy day — they would never be forced to pay such an outrageously high price for being poor.

 

By: Kathleen Geier, Washington Monthly Political Animal, May 3, 2014

May 4, 2014 Posted by | Economic Inequality, Poor and Low Income, Poverty | , , , , , , , | 1 Comment

“Medicaid On The Ballot”: Unfortunately Mr. Romney, A Lack Of Insurance Does Kill People

There’s a lot we don’t know about what Mitt Romney would do if he won. He refuses to say which tax loopholes he would close to make up for $5 trillion in tax cuts; his economic “plan” is an empty shell.

But one thing is clear: If he wins, Medicaid — which now covers more than 50 million Americans, and which President Obama would expand further as part of his health reform — will face savage cuts. Estimates suggest that a Romney victory would deny health insurance to about 45 million people who would have coverage if he lost, with two-thirds of that difference due to the assault on Medicaid.

So this election is, to an important degree, really about Medicaid. And this, in turn, means that you need to know something more about the program.

For while Medicaid is generally viewed as health care for the nonelderly poor, that’s only part of the story. And focusing solely on who Medicaid covers can obscure an equally important fact: Medicaid has been more successful at controlling costs than any other major part of the nation’s health care system.

So, about coverage: most Medicaid beneficiaries are indeed relatively young (because older people are covered by Medicare) and relatively poor (because eligibility for Medicaid, unlike Medicare, is determined by need). But more than nine million Americans benefit from both Medicare and Medicaid, and elderly or disabled beneficiaries account for the majority of Medicaid’s costs. And contrary to what you may have heard, the great majority of Medicaid beneficiaries are in working families.

For those who get coverage through the program, Medicaid is a much-needed form of financial aid. It is also, quite literally, a lifesaver. Mr. Romney has said that a lack of health insurance doesn’t kill people in America; oh yes, it does, and states that expand Medicaid coverage show striking drops in mortality.

So Medicaid does a vast amount of good. But at what cost? There’s a widespread perception, gleefully fed by right-wing politicians and propagandists, that Medicaid has “runaway” costs. But the truth is just the opposite. While costs grew rapidly in 2009-10, as a depressed economy made more Americans eligible for the program, the longer-term reality is that Medicaid is significantly better at controlling costs than the rest of our health care system.

How much better? According to the best available estimates, the average cost of health care for adult Medicaid recipients is about 20 percent less than it would be if they had private insurance. The gap for children is even larger.

And the gap has been widening over time: Medicaid costs have consistently risen a bit less rapidly than Medicare costs, and much less rapidly than premiums on private insurance.

How does Medicaid achieve these lower costs? Partly by having much lower administrative costs than private insurers. It’s always worth remembering that when it comes to health care, it’s the private sector, not government programs, that suffers from stifling, costly bureaucracy.

Also, Medicaid is much more effective at bargaining with the medical-industrial complex.

Consider, for example, drug prices. Last year a government study compared the prices that Medicaid paid for brand-name drugs with those paid by Medicare Part D — also a government program, but one run through private insurance companies, and explicitly forbidden from using its power in the market to bargain for lower prices. The conclusion: Medicaid pays almost a third less on average. That’s a lot of money.

Is Medicaid perfect? Of course not. Most notably, the hard bargain it drives with health providers means that quite a few doctors are reluctant to see Medicaid patients. Yet given the problems facing American health care — sharply rising costs and declining private-sector coverage — Medicaid has to be regarded as a highly successful program. It provides good if not great coverage to tens of millions of people who would otherwise be left out in the cold, and as I said, it does much right to keep costs down.

By any reasonable standard, this is a program that should be expanded, not slashed — and a major expansion of Medicaid is part of the Affordable Care Act.

Why, then, are Republicans so determined to do the reverse, and kill this success story? You know the answers. Partly it’s their general hostility to anything that helps the 47 percent — those Americans whom they consider moochers who need to be taught self-reliance. Partly it’s the fact that Medicaid’s success is a reproach to their antigovernment ideology.

The question — and it’s a question the American people will answer very soon — is whether they’ll get to indulge these prejudices at the expense of tens of millions of their fellow citizens.

By: Paul Krugman, Op-Ed Columnist, The New York Times, October 28, 2012

October 30, 2012 Posted by | Election 2012 | , , , , , , , , | 3 Comments

“Compassionless Conservatism”: A Gaffe Is When A Republican Tells The Truth

This Sunday, I attended a panel at the Brooklyn Book Festival in which moderator Ta-Nehisi Coates started out with a question for the panelists: Does this campaign season matter? Are we learning anything about the candidates? I was in the audience, but my response would be: Yes, it matters, and we’re learning a great deal. But it’s mostly about what the Republican Party really thinks.

While this election season may appear gaffe-tastic, the most viral moments weren’t misspoken words. Rather, they reveal what’s deep in the conservative heart—opinions that many had warned existed for a long time (and had even appeared in real-life legislation) but have now been put into stark relief for the general public. This election season has been highly instructional about deep-seated beliefs on the right.

The latest and perhaps most viral—nabbing Mother Jones, which broke the story, over 8 million visitors—was Romney’s now-infamous hidden camera 47 percent comment. Here’s what he said:

There are 47 percent of the people…. who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what… These are people who pay no income tax. Forty-seven percent of Americans pay no income tax…. And so my job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

Romney has stood by his comments, with his economic adviser swearing to “triple down” on them. And in fact the ideas he expresses are nothing new to the party. Worse, given the candidness of the moment, Romney expressed what can only be characterized as unabashed disdain for half of the country. It’s not just that he’s worried, as the conservatives who cling to the 47 percent figure explain, that this constituency won’t vote for tax cuts and instead will vote for higher social safety net payouts. He dismisses them entirely because he can “never convince them they should take personal responsibility and care for their lives.”

What that sentiment leaves out, of course, is that while these Americans didn’t pay income taxes (thanks to many policies pushed into law by Republicans themselves), it doesn’t mean they don’t pay any taxes. Over 60 percent of them paid payroll taxes, which means that they also held jobs. Nearly everyone pays sales tax. Another 22 percent of this group was elderly. Add that up, and what he’s mostly talking about are the working poor and low-income older Americans. These are the people that Romney dismisses as taking no responsibility for their lives.

Far from an outlier, Romney’s statement has a long, long history. As my colleague at the Roosevelt Institute Mark Schmitt pointed out last week, this narrative around the 47 percent was hatched in the lab of the American Enterprise Institute. It’s been spouted by the likes of Rick Perry, Michele Bachmann and Republican VP pick Paul Ryan himself. But Romney’s remarks revealed an even more deep-seated disdain for the working poor than is normally expressed. It’s not just about taxes; it’s a belief that those at the bottom are worth less of his attention and care than the rest of the country. So much for compassionate conservatism. Romney’s remarks revealed once and for all that there is a deep disrespect for working-class and low-income people struggling to get by thriving at the heart of the Republican Party.

And it sheds light on another comment of his that blew up not so long ago: “I’m not concerned about the very poor.” At the time, the quote seemed a bit out of context, because Romney continued, “We have a safety net there. If it needs repair, I’ll fix it.” Yet in his hidden-camera moment, he makes it clear just how much he despises the safety net he says should catch the poor. He scoffs at those who require assistance for healthcare, food and housing, some of the most basic provisions that this country is supposed to ensure those who are at the bottom of the income scale. Yet another moment of clarity, made even clearer by his recent comments.

We’ve seen some other very telling moments from the Republican nominee this cycle. There was “Corporations are people, my friend,” an unabashed and straightforward articulation of the conservative ethos that fueled the Citizens United Supreme Court ruling. Then there was the telling, fully five-second silence from Romney aides when asked whether he supports the Lilly Ledbetter Act, exposing discomfort with equal pay legislation.

But it’s not just the presidential candidate who has haphazardly revealed truths. Just last month, before we were talking about the 47 percent, we were talking about “legitimate” rape. Remember Todd Akin? Who could forget? On a random Sunday in the middle of August, Akin told a TV interviewer, “[F]rom what I understand from doctors [pregnancy from rape] is really rare. If it’s a legitimate rape, the female body has ways to try to shut that whole thing down.” Just like Romney, Akin refused to apologize for the meaning behind his words, explaining he merely meant to say “forcible rape,” not “legitimate rape.”

But this wasn’t the first time he—or the Republican Party—used the word “forcible” to categorize rapes that count and those that don’t. Akin co-sponsored the No Taxpayer Funding for Abortion Act in early 2011, which would have tightened the definition of rape for abortions that are covered by the federal exception to only “forcible” ones. While some noticed this at the time, Akin’s remarks made it crystal clear to anyone half tuned in that the Republican Party thinks some rapes count and others don’t. In particular, if you weren’t roughed up when you were raped—if you were drugged, or date raped, or the victim of incest—you weren’t “really” raped.

There are other truths that surfaced about the conservative view of reproductive health. Primaries are often a process of learning, as more marginal candidates push the mainstream ones to address issues they normally wouldn’t. And right on cue, Rick Santorum made birth control, an issue many thought was settled, a debate point. Perhaps his views were made clearest by an interview with the Christian site Caffeinated Thoughts, in which he warned of “the dangers of contraception,” calling it “not okay.”

Shortly after, Irin Carmon summed up his position thus: “Rick Santorum is coming for your birth control.” In fact, conservative opposition to not just abortion, which continues to be a polarizing topic, but birth control, which does not, has been building for quite some time. But many have been in denial—Carmon herself got a wave of pushback for the title of her piece. And yet months later, contraception was once again in the news as the Catholic bishops came out swinging against the Obama administration’s decision to mandate co-pay-free coverage of contraception as part of the ACA. And we all remember what happened next—the fight devolved into Rush Limbaugh calling Sandra Fluke a slut for talking about (her friend’s) contraception needs. The cat is out of the bag: the GOP thinks using contraception, which virtually every woman will do in her lifetime, makes you a dirty whore and doesn’t support increased access.

These awkwardly worded statements and admissions of belief in what candidates assumed were safe spaces are hugely important. It may seem ridiculous that a hidden camera video can fuel three weeks of the news cycle. But what Romney revealed was more than an ability to keep putting his foot in his mouth. Republicans, perhaps more than ever, have exposed long-held beliefs this campaign season. They’re just finally going viral.

 

By: Bryce Covert, The Nation, September 25, 2012

September 27, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Americans Who Do Not Pay Taxes”: Isn’t Mitt Romney A Member Of The 47 Percent?

Mitt Romney, a son of privilege who used family connections and family advantages to accumulate a “vulture capitalist” fortune, and who now collects multimillion-dollar checks for doing absolutely nothing, claims to have identified 47 percent of Americans “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them.”

Most of these people, Romney gripes, “pay no income tax.”

That, Romney suggests, makes them non-entities in his political calculus.

“My job is is not to worry about those people,” says Romney, who predicts all the “dependent” voters will back Barack Obama this year. “I’ll never convince them they should take personal responsibility and care for their lives.

But Romney should not be so dismissive of the tax-avoiding class. After all, he’s one of them.

The nonpartisan Tax Policy Center says roughly 46 percent of Americans paid no income tax for the last year where numbers are available, 2011. Slightly less than half of those who do not pay take advantage of tax breaks designed to ease the burden on elderly Americans who live on fixed incomes. Roughly a third of them do not pay because they are beneficiaries of tax credits designed to help the working poor and children to get by.

In other words, the Americans who do not pay taxes are, for the most part either low-income workers or retired low- or middle-income workers. They are not dodging tax responsibilities. They are filing forms and taking exemptions that were designed to relieve or eliminate tax burdens for those who are least able to pay.

The Tax Policy Center offers the example of a working couple making minimum wages who have two children and earn under $26,400 a year. Using standard deductions and specific exemptions designed for families in their circumstance, they can file a form that has a zero in the amount due column.

Tens of millions of American households—many of them our hardest-working citizens—find themselves in this category. Remember that, according to the Census Bureau, 46.2 million Americans lived in poverty in 2011.

Mitt Romney is not a member of this class of Americans. As a quarter-billionaire, he is part of a multi-generational elite—the most privileged 1 percent of the 1 percent—that has never ever had to worry about making ends meet at the end of the month.

But Mitt Romney has something in common with the working poor.

Like them, he benefits from federal programs that are designed to allow some Americans to avoid paying some or all of the taxes that would otherwise be due from them.

Roughly 13 percent of high-income Americans use itemized deductions—mortgage interest, health payments, or charitable contributions, education tax credits, or tax-exempt interest—to zero out their taxes.

Mitt Romney has not released the tax returns that his dad said a candidate for the presidency owes the American people—forms for the twelve years before their candidacy. So we do not know if he is an actual member of the 47 percent.

By Mitt Romney’s own admission, his accountants make sure that he does not “pay any more (taxes) than are legally due.”

All indications, from Romney and his campaign, are that he has taken full advantage of: tax exemptions, tax credits, tax havens and tax loopholes.

What sort of loopholes? We get an indication from documents filed by the firm that continued to stream money into Romney’s personal accounts long after he quit as a partner.

“The Bain documents posted [in August] show that Bain Capital will go to great lengths to help its partners and its investors avoid tax,” explained Rebecca Wilkins, senior counsel at Citizens for Tax Justice. “Beyond simply putting their funds offshore, the Bain private equity funds are using aggressive tax-planning techniques such as blocker corporations, equity swaps, alternative investment vehicles and management fee conversions.”

That’s how someone who makes tens of millions of dollars says he pays around 13 percent of his annual income into the US Treasury, as opposed to the top marginal tax rate of 35 percent. For 2011, he estimated that he would pay $3.2 million on income of $21 million.

If Mitt Romney had paid at the 35 percent rate that he is supposed to be paying at, the check he wrote would have been for $7.4 million.

So he avoided paying $4.2 million in taxes.

That’s the same as the total amount that—were they paying at the marginal rate that would apply to the working poor if there were no exemptions—would be paid by roughly 1,100 of the low-income families Mitt Romney dismisses as “dependent.”

At the very least, it would seem that Mitt Romney has earned honorary membership in the 47 percent.

 

By: John Nichols, The Nation, September 18, 2012

September 19, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Oh So Good, But Oh So Wrong”: A Well Respected Man For Those Who Are Already Wealthy

Whenever I hear about U.S. Rep. Paul Ryan (R-Wis.), I can’t help thinking of the lyrics from the old Kinks song “A Well Respected Man.” Yes, a number of people seem to think that Ryan is “oh so good, and he’s oh so fine and oh so healthy in his body and his mind.” Indeed, Mitt Romney must have chosen Ryan as his running mate because “he’s a well respected man about town, doing the best things so conservatively.”

Ryan certainly looks the part, doesn’t he? What’s not to love about this kind-looking, young man, with the warm smile, twinkling blue eyes and thick head of hair? His serious demeanor at just the right photo moment shows us how much he cares for all of those struggling middle-class families. He even looks the part of the working-class man when he rolls up his sleeves.

Sadly, this nice-looking and apparently very respectable guy is getting it all wrong when it comes to his vision for the United States. He draws from the same old, worn-out Republican playbook. How many times do we have to hear about reducing taxes on the wealthy so they can be “job creators” before it just becomes a joke? Honestly, we already have lower taxes for the wealthy, so why haven’t the jobs been created?

The only jobs that seem to be created are the ones for the accountants and the attorneys as they broker deals so the wealthy can buy up even more oceanfront property. Seriously, people, how out of control are the tax laws in this country when someone like Romney can pay $12 million in cash for a home, demolish that home, rebuild on the site and then insist on having his property taxes reduced? Is anyone buying this “job creator” lunacy anymore?

Of course, if wouldn’t be the good old Republican Party line if Ryan didn’t redirect the public’s attention away from the wealthy and directly onto some poor, single parent just trying to get by. Oh, no, we can’t have any “entitlements” for the working poor.

I mean, Ryan wants people to pull themselves up by their bootstraps. It doesn’t matter if they don’t have any boots; that’s just too bad for them. I’ve always thought it was odd that even though Republicans are notorious for their suspicions about evolution, they do seem to embrace that whole survival-of-the-fittest thing.

Even if you worked all of your life, paid into Social Security and expect to get on Medicare, you’re just asking too much of America, according to Ryan. Balancing the budget on the backs of working-class men and women is the overriding philosophy behind Ryan’s plan for America.

The bottom line is that Ryan is the choice for those who are already wealthy. I guess he is “A Well Respected Man” for that crowd. For everyone else, he’s oh so wrong.

 

By: Rose Locander, JSOnline, August 13, 2012

August 18, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

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