A few quick articles from the NYTimes....
Nov. 30th, 2012 11:42 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
conulyJapan is expanding its military role, ostensibly in response to China becoming so powerful.
http://www.nytimes.com/2012/11/27/world/asia/japan-expands-its-regional-military-role.html
TOKYO — After years of watching its international influence eroded by a slow-motion economic decline, the pacifist nation of Japan is trying to raise its profile in a new way, offering military aid for the first time in decades and displaying its own armed forces in an effort to build regional alliances and shore up other countries’ defenses to counter a rising China.
Already this year, Japan crossed a little-noted threshold by providing its first military aid abroad since the end of World War II, approving a $2 million package for its military engineers to train troops in Cambodia and East Timor in disaster relief and skills like road building. Japanese warships have not only conducted joint exercises with a growing number of military forces in the Pacific and Asia, but they have also begun making regular port visits to countries long fearful of a resurgence of Japan’s military.
And after stepping up civilian aid programs to train and equip the coast guards of other nations, Japanese defense officials and analysts say, Japan could soon reach another milestone: beginning sales in the region of military hardware like seaplanes, and perhaps eventually the stealthy diesel-powered submarines considered well suited to the shallow waters where China is making increasingly assertive territorial claims.
Taken together those steps, while modest, represent a significant shift for Japan, which had resisted repeated calls from the United States to become a true regional power for fear that doing so would move it too far from its postwar pacifism. The country’s quiet resolve to edge past that reluctance and become more of a player comes as the United States and China are staking their own claims to power in Asia, and as jitters over China’s ambitions appear to be softening bitterness toward Japan among some Southeast Asian countries trampled last century in its quest for colonial domination.
The driver for Japan’s shifting national security strategy is its tense dispute with China over uninhabited islands in the East China Sea that is feeding Japanese anxiety that the country’s relative decline — and the financial struggles of its traditional protector, the United States — are leaving Japan increasingly vulnerable.
“During the cold war, all Japan had to do was follow the U.S.,” said Keiro Kitagami, a special adviser on security issues to Prime Minister Yoshihiko Noda. “With China, it’s different. Japan has to take a stand on its own.”
Japan’s moves do not mean it might transform its military, which serves a purely defensive role, into an offensive force anytime soon. The public has resisted past efforts by some politicians to revamp Japan’s pacifist constitution, and the nation’s vast debt will limit how much military aid it can extend.
But it is also clear that attitudes in Japan are evolving as China continues its double-digit annual growth in military spending and asserts that it should be in charge of the islands that Japan claims, as well as vast swaths of the South China Sea that various Southeast Asian nations say are in their control.
Japanese leaders have met the Chinese challenge over the islands known as the Senkaku in Japan and the Diaoyu in China with an uncharacteristic willingness to push back, and polls show the public increasingly agrees. Both major political parties are also talking openly about instituting a more flexible reading of the constitution that would allow Japan to come to the defense of allies — shooting down any North Korean missile headed for the United States, for instance — blurring the line between an offensive and defensive force.
The country’s self-defense forces had already begun nosing over that line in Iraq and Afghanistan, where Japan backed the United States-led campaigns by deploying naval tankers to refuel warships in the Indian Ocean.
Japanese officials say their strategy is not to begin a race for influence with China, but to build up ties with other nations that share worries about their imposing neighbor. They acknowledge that even building the capacity of other nations’ coast guards is a way of strengthening those countries’ ability to stand up to any Chinese threat.
“We want to build our own coalition of the willing in Asia to prevent China from just running over us,” said Yoshihide Soeya, director of the Institute of East Asian Studies at Keio University in Tokyo.
Or, as the vice minister of defense, Akihisa Nagashima, said in an interview, “We cannot just allow Japan to go into quiet decline.”
The United States has generally welcomed such efforts by Japan, which are in line with its own strategy of building up Asian nations militarily so they can stand their ground against China, as well as expanding an American military presence in the region.
China, which itself suffered mightily in imperial Japan’s 20th-century territorial grabs, has reacted with warnings that Japan is trying to overturn the outcome of World War II by staging a military comeback. At a defense conference in Australia last month, Lt. Gen. Ren Haiquan of China warned his hosts against allying more closely with what he called a fascist nation that once bombed the Australian city of Darwin.
In a measure of the geopolitical changes roiling the region, however, concerns about any resurgent Japanese militarism appear to be fading in some countries embroiled in their own territorial disputes with China, like Vietnam and the Philippines, the scene of fierce fighting during the war.
Analysts there and elsewhere in the region said their countries welcomed, and sometimes invited, Japan’s help.
“We have already put aside our nightmares of World War II because of the threat posed by China,” said Rommel Banlaoi, a security expert at the Philippine Institute for Peace, Violence and Terrorism Research in Manila.
On a recent morning, 22 coast guard officials from a dozen Asian and African nations joined a training cruise around Tokyo Bay aboard a sleek, white Japanese Coast Guard cutter. The visitors snapped photos of the engine room, the electronics-studded bridge and the 20-millimeter cannon. Before the cutter left port, the foreign contingent and the Japanese crew stood at attention on deck facing each other, then bowed deeply.
“Japan is joining the United States and Australia in helping us face China,” said Mark Lim, an administrative officer from the Philippine Coast Guard who joined the cruise.
Japan is widely viewed as being the only nation in the region with a navy powerful enough to check China.
Although Japan’s military spending has been shrinking, the military budget is, by many measures, the sixth largest in the world. In keeping with its pacifist stance, Japan has none of the long-range missiles, nuclear submarines or large aircraft carriers necessary for projecting real power. But its diesel-powered subs are considered the best of their type in the world. The Japanese Navy also has sophisticated Aegis-equipped cruisers capable of shooting down ballistic missiles, and two large helicopter-carrying destroyers that could be retrofitted to carry fighter jets that can take off vertically.
The Japanese Navy took a big step toward opening up in 2009 by holding a joint military drill with Australia — its first such exercise with a nation besides the United States. It has since joined a number of multinational naval drills in Southeast Asia, and in June held its first joint maneuver with India.
Analysts and former officials say Japan’s military has so far been careful to offer assistance in noncombat-related areas like disaster relief, antipiracy and health care. But even these limited steps build ties between military forces. One plan now under negotiation is to train medical personnel from Vietnam’s navy next year to care for the crews on that nation’s newly purchased Russian-built submarines.
“Our strategy is to offer hardware and training to create mini-Japanese coast guards and mini-Japanese Self-Defense Forces around the South China Sea,” said Tetsuo Kotani, a researcher at the Japan Institute of International Affairs in Tokyo.
Under the decade-old civilian aid program to build up regional coast guards, Japanese officials say they are in the final stages of what would be their biggest security-related aid package yet — to provide the Philippine Coast Guard with 10 cutters worth about $12 million each. Ministry officials say they may offer similar ships to Vietnam.
Japan’s Ministry of Defense said it planned to double its military aid program next year to help Indonesia and Vietnam. Vietnam could also be among the countries that Japan would allow to buy its submarines, according to a former defense minister, Toshimi Kitazawa, who named Australia and Malaysia as other possible buyers.
“Japan has been insensitive to the security needs of its regional neighbors,” Mr. Kitazawa said in a recent interview. “We can offer much to increase their peace of mind.”
Closing doors is the smartest thing you can do in a fire.
http://www.nytimes.com/2012/11/28/nyregion/a-closed-door-the-best-ally-in-a-home-fire.html
Early Thanksgiving morning, a neighbor in my building died when her bed caught fire. The woman, who was 87, usually took a sputtering old radio to bed at night, and fire marshals believe some fault in its wiring started the fire. She lived and died alone. No one else was hurt.
Beginning at 3:27 a.m., 60 firefighters from 12 units were sent to the building, in Upper Manhattan, and the fire never spread beyond the woman’s apartment, which was on the second floor. It was under control by 4 a.m.
Many floors away, I slept through it all.
Death by fire was once a scourge in the city, killing someone, on average, nearly every day through the 1960s and 1970s. So far this year, 47 people have died in residential fires, a pace that would mean the fewest number of such deaths since New York City began keeping reliable counts early in the 20th century.
Today, smoke kills most people who die at fires because modern building materials and design can often contain the flames to a single room — if the door is closed.
That leaves smoke as the most elusive danger. In December 1998, a fire that killed four people started in a West Side apartment where the family of the actor Macaulay Culkin lived. Fire officials said it began in a heater, spread to a sofa, then ignited a Christmas tree.
The Culkins escaped the apartment. So did the smoke. Someone had used a mat to prop open the apartment door. Someone had also left open the hallway door to the stairs. The Culkin fire was on the 19th floor. The four people who died were nowhere near that apartment or the fire: they all suffocated between the 27th and 29th floors in the stairwell, which had become a chimney filled with hot gases because of the open doors.
How to survive a fire in your home? The Fire Department provides educational material on its Web site at www.nyc.gov/html/fdny/html/safety/fire_safety_downloads.shtml.
The department’s advice is tailored to the kind of building, but one common theme is that a closed door is a powerful ally. A door will slow the spread of the fire, and a wet towel or cloth at its bottom can block the smoke.
Here are some other critical points from fire-safety experts.
In nonfireproof buildings, like virtually all private homes, brownstones and low-rise older apartment buildings that have external fire escapes, the department says the safest approach is to get out right away. “That’s why you need a working smoke alarm, so you know at the first moment to leave,” said Lt. Anthony Mancuso, the Fire Department’s director of fire-safety education. If the door or exit route is too hot, he said, “close the door.” Only after the door is closed, he said, should people open an external window — and not one in a bathroom — if fresh air is needed.
The thrust of the advice is different for modern buildings, which are fire resistant. That would include apartment houses that are 10 stories or higher, with two enclosed stairwells. People in a burning apartment should alert anyone else there, leave right away and then call 911. But the safest place for a vast majority of people in those buildings is in their apartments, said Francis X. Gribbon, a deputy commissioner in the Fire Department.
“We call it shelter in place,” Mr. Gribbon said. Residents can place wet towels under the door, and can call 911. The dispatchers will get word to the chiefs about their location.
Why is it better to stay in an apartment when the fire is elsewhere? The Culkin fire is one example of how dangerous a stairway can be.
I learned about how risky hallways can be after noticing that firefighters had pried open two apartment doors on the same floor as the fire. The purpose was to create a refuge for the firefighters in the event that a ball of fire or hot gases blew out of the burning apartment when its door was opened. “You don’t want to be in a hallway or stairway with nowhere to go when that happens,” Mr. Gribbon said.
At this time of year, the Fire Department is especially concerned about holiday lights and extension cords, he said. The department will send fire-safety education officers to a building without charge to give seminars. My building had one a few years ago. We will be setting up a refresher soon.
Most Americans are paying less in taxes than they were or would have been a few decades ago.
http://www.nytimes.com/2012/11/30/us/most-americans-face-lower-tax-burden-than-in-the-80s.html
BELLEVILLE, Ill. — Alan Hicks divides long days between the insurance business he started in the late 1970s and the barbecue restaurant he opened with his sons three years ago. He earned more than $250,000 last year and said taxes took more than 40 percent. What’s worse, in his view, is that others — the wealthy, hiding in loopholes; the poor, living on government benefits — are not paying their fair share.
“It feels like the harder we work, the more they take from us,” said Mr. Hicks, 55, as he waited for a meat truck one recent afternoon. “And it seems like there’s an awful lot of people in the United States who don’t pay any taxes.”
These are common sentiments in the eastern suburbs of St. Louis, a region of fading factory towns fringed by new subdivisions. Here, as across the country, people like Mr. Hicks are pained by the conviction that they are paying ever more to finance the expansion of government.
But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.
Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.
Lower-income households, however, saved little or nothing. Many pay no federal income taxes, but they do pay a range of other levies, like federal payroll taxes, state sales taxes and local property taxes. Only about half of taxpaying households with incomes below $25,000 paid less in 2010.
The uneven decline is a result of two trends. Congress cut federal taxation at every income level over the last 30 years. State and local taxes, meanwhile, increased for most Americans. Those taxes generally take a larger share of income from those who make less, so the increases offset more and more of the federal savings at lower levels of income.
In a half-dozen states, including Connecticut, Florida and New Jersey, the increases were large enough to offset the federal savings for most households, not just the poorer ones.
Now an era of tax cuts may be reaching its end. The federal government depends increasingly on borrowed money to pay its bills, and many state and local governments are similarly confronting the reality that they are spending more money than they collect. In Washington, debates about tax cuts have yielded to debates about who should pay more.
President Obama campaigned for re-election on a promise to take a larger share of taxable income above roughly $250,000 a year. The White House is now negotiating with Congressional Republicans, who instead want to raise some money by reducing tax deductions. Federal spending cuts also are at issue.
If a deal is not struck by year’s end, a wide range of federal tax cuts passed since 2000 will expire and taxes will rise for roughly 90 percent of Americans, according to the independent Tax Policy Center. For lower-income households, taxation would spike well above 1980 levels. Upper-income households would lose some but not all of the benefits of tax cuts over the last three decades.
Public debate over taxes has typically focused on the federal income tax, but that now accounts for less than a third of the total tax revenues collected by federal, state and local governments. To analyze the total burden, The Times created a model, in consultation with experts, which estimated total tax bills for each taxpayer in each year from 1980, when the election of President Ronald Reagan opened an era of tax cutting, up to 2010, the most recent year for which relevant data is available.
The analysis shows that the overall burden of taxation declined as a share of income in the 1980s, rose to a new peak in the 1990s and fell again in the 2000s. Tax rates at most income levels were lower in 2010 than at any point during the 1980s.
Governments still collected the same share of total income in 2010 as in 1980 — 31 cents from every dollar — because people with higher incomes pay taxes at higher rates, and household incomes rose over the last three decades, particularly at the top.
There are now many more millionaires, in other words, paying more than they did in 1980, but they are paying less than they would have if tax laws had remained unchanged. And while they still pay a larger share of income in taxes than the rest of the population, the difference has narrowed significantly.
The trend can be seen by comparing three examples:
¶A household making $350,000 in 2010, roughly the cutoff for the top 1 percent, on average paid 42.1 percent of its income in taxes, compared with 49 percent for a household with the same inflation-adjusted income in 1980 — a savings of about $24,100.
¶A household making $52,000 in 2010, roughly the median income, on average paid 27.7 percent of its income in taxes, compared with 30.5 percent in 1980, saving $1,500.
¶A household making $22,000 in 2010 — roughly the federal poverty line for a family of four — on average paid 19.4 percent in taxes, compared with 20.2 percent, saving $200.
Jared Bernstein, who served as chief economist to Vice President Joseph R. Biden Jr., said the Times analysis highlighted the need to raise taxes on the affluent and cut taxes for the poor. He cautioned that the middle class most likely would need to pay more, too.
“When you look at these numbers, you understand why we’re not collecting the revenue we need to support the spending we want,” said Mr. Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a liberal research group. “We’ve really gutted the system.”
But Douglas Holtz-Eakin, a prominent conservative economist, said the changes in taxation over the last three decades reflected a conscious and successful strategy to encourage economic growth that should be reinforced, not reversed.
Mr. Holtz-Eakin, a former director of the Congressional Budget Office who is the president of the American Action Forum, said government should reduce deficits primarily through spending cuts, particularly to Medicare and Medicaid, the health programs that are the largest source of projected increases in the federal debt.
“We can’t grow our way out of it, and we can’t tax our way out of it,” he said of the government’s fiscal predicament. “We have a spending problem, period.”
Mr. Hicks, like many residents of Belleville, views this debate with unhappiness. He would like the government to cut spending but not reduce services. He is certain that the government should not raise taxes on the middle class, a group in which he includes himself, but he is ambivalent about asking anyone to pay more. Higher taxes would hurt his businesses, he said, so raising taxes on those who make more money seems likely to hurt their businesses, too.
“At this point, I guess it’s inevitable in order to get us out of this hole,” Mr. Hicks said of higher taxes. “Illinois is in bad shape, along with a lot of the nation. But I don’t feel like we should tax the middle class any more than we are right now. There’s going to come a point where they take the incentive out of working hard.”
If the government cut his taxes, Mr. Hicks said, he would use the money to put a roof over the picnic tables outside the restaurant, expanding the year-round seating area. He already employs 14 people; then he could hire more.
And if taxes rose? Would Mr. Hicks, who started working when tax rates were higher, really choose to slow down?
He smiled. “No,” he said. “I like it. What else would I do with my time?”
Cutting From Both Ends
The federal income tax, which will turn 100 next year, is in decline.
Congressional Republicans and Democrats have repeatedly voted to reduce the share of income that people must pay. Over the last decade, annual revenues from federal taxation of individual and corporate income averaged just 9.2 percent of the nation’s gross domestic product, the lowest level for any 10-year period since World War II.
The recession and new rounds of tax cuts further reduced revenues, to 7.6 percent of economic output in the 2009 and 2010 fiscal years. Stronger economic growth has produced a modest increase in tax collections, but the White House budget office estimates that collections for the fiscal year that ended in September will total 9 percent of economic output, still less than before the financial crisis.
Federal spending, meanwhile, grew faster than the economy over the last decade — particularly during the recession. To pay those bills, the government borrowed more money than it collected in income taxes in each of the last three fiscal years, something it had not done in even a single year since World War II, federal data show.
Congress could have eliminated those deficits by cutting spending. It might also have averted those deficits by leaving the tax code unchanged. The government on average would have collected an additional $800 billion in each year from 2006 to 2010 if the 1980 code had remained in effect and economic activity had continued at the same pace, the Times analysis found. The annual federal deficits during those years averaged $714 billion.
Leaving the tax code as it was in 1980, however, would not have solved the nation’s long-term fiscal problems. Increases in federal spending, driven primarily by the rising cost of health care, are projected to outstrip even the revenue-raising capacity of the 1980 tax code in the coming decades, necessitating some combination of spending cuts and tax increases.
The income tax stands apart from other forms of taxation. It is the reason that upper-income households pay a larger share of their income in taxes than the rest of the population. The combined burden of all other federal, state and local taxes takes roughly the same share from all taxpayers. And many Americans — even in a middle-class, Democratic stronghold like Belleville — have misgivings about imposing higher tax rates on the affluent, an important reason that income taxation has declined.
The share of Americans who said high-income households paid too little in taxes fell from 77 percent in 1992 to 62 percent in 2012, according to Gallup, even as income inequality rose to the highest levels since the Great Depression.
Some people in Belleville subscribe to the argument that higher tax rates impede economic growth by discouraging investment. For others, it is a matter of fairness.
Anita Thole, a middle-income safety supervisor for a utility contractor, is not wealthy. She does not expect that she ever will be. She is a single mother with a daughter in college, and she said she regarded the wealthy with a mixture of envy and admiration. But she does not want them to pay higher taxes.
“They work their butt off to get what they got,” she said. “I wouldn’t want them to pay more so that I can pay less.”
Do they work harder than you?
“What? No. I work my butt off,” Ms. Thole, 46, said. “But you got to believe in the American dream. You got to love them for what they did, for what they made of themselves and for being more aggressive than me.”
Ms. Thole, like many in Belleville, is also convinced that governments could avoid raising taxes by adopting more frugal habits.
“There’s some days we stay home and we eat peanut butter,” she said.
What would she like governments to cut?
“I really like it when they cut the weeds along the highway,” she said. “I like it when there’s good roads to drive on. The schools, I don’t know, I don’t want to pull back from the schools. I don’t have the answer of where to pull back.
“I want the state parks to stay open. I want, I want, I want. I want Big Bird. I think it’s beautiful. What don’t I want? I don’t know.”
To Tax or Not to Tax?
William L. Enyart is a rarity in Belleville: he wants to raise his own taxes.
Mr. Enyart and his wife are lawyers, although for the last five years he led the Illinois National Guard. The couple made $380,587 in 2011 and paid $104,864 in federal taxes. His conviction that they should have paid more may not be shared by many of the area’s higher-income residents. But as the newly elected Democratic congressman for southwestern Illinois, Mr. Enyart, 63, is also the only man in town with a direct vote on federal tax policy.
Mr. Enyart, who won the seat of a retiring Democratic congressman, campaigned in part on his support for Mr. Obama’s tax plan. He defeated a Republican candidate who opposed it, 52 percent to 43 percent. But Mr. Enyart said he heard little enthusiasm for tax increases in his district. What has changed, he said, is that people are increasingly concerned about cuts to government benefits and services.
“Nobody likes to pay taxes. Nobody wants to raise taxes on anybody,” Mr. Enyart said. “But nobody wants to cut veterans services, nobody wants to give up that Interstate highway, nobody wants — pick the service that you like. These are necessary services, and they need to be paid for.”
The tax increase proposed by Mr. Obama, on taxable income — income after deductions and other adjustments — above $250,000 a year, would pay for only a small part of those services. It would reduce the projected deficit over the next decade by a little less than 10 percent, according to the Congressional Budget Office.
Nonetheless, Mr. Enyart said that he did not support broader tax increases. The focus, he said, should be on requiring the rich to pay more.
“We have the greatest disproportion of wealth since 1928, and I don’t think that’s a healthy thing,” he said. “How much money is enough? Do hedge fund traders really need to make a billion dollars a year and pay only 15 percent in taxes when we have teachers making $50,000 and paying 20 percent?”
John Siemens, who did not vote for Mr. Enyart, said that kind of “raise taxes” talk was a crowd-pleasing distraction from the need for painful spending cuts.
Mr. Siemens and his wife, Jan, both 59, own a company with a pair of factories in southwestern Illinois where workers assemble dollar-bill scanners for vending machines, dashboard lights for automobiles, magnetic probes for hospitals and other electronic equipment. They earned about $250,000 last year, so Mr. Obama’s plan would not have increased their income taxes. But it would raise the estate taxes they would have to pay to pass the company to their children someday.
Like many opponents of the president’s plan, Mr. Siemens thinks higher taxes will discourage investment and slow economic growth.
“There’s some tax rates that probably do need to be raised,” he said. “There are some that need to be lowered. But the politicians are not having an honest discussion. Is it fair or not fair is not the question. The question is, If you want to raise revenues, does that make sense or not?”
He noted as an example that interest on municipal bonds is tax-exempt, which encourages the wealthy to lend to local governments.
“Those lower tax rates were put into place for a reason,” he said. “It’s not just, let’s give the wealthy a break.”
Mr. Siemens does have a concern about fairness. He believes that lower-income households are not paying enough in taxes.
“By any measure, the wealthy are still paying a disproportionate amount of their income in taxes,” he said. “Is that fair or not fair? I don’t know, but I have an issue with the dramatic reduction of taxes at the low end because I think everybody needs some skin in the game.”
The debate is no longer theoretical here in Illinois. Facing perhaps the deepest budget crisis of any state, the Illinois legislature last year raised the state income tax rate to 5 percent from 3 percent. Unlike the federal income tax, Illinois taxes all income at the same rate.
Mr. Enyart said that the state needed more revenue, but that it should move to a tax system that imposed a heavier burden on high-income households. Mr. Siemens said the state should have cut spending.
The higher taxes have increased his costs and given an advantage to competitors in other states. And there are broader ripples, too: he said he was planning to buy some used machines, rather than new ones, to save money.
“We feel the burden of that, but it hasn’t gotten to the threshold of pain yet where we would move,” Mr. Siemens said. “There’s a lot of expense that would be incurred in moving, including a disruption of the work force, which you are always loath to do.”
View From the Lower End
Taylor McCallister, 20, works the front window at Mr. Hicks’s barbecue restaurant, taking orders from customers. She also works a second job and attends Southwestern Illinois College. She earned about $30,000 last year and, like her boss, she wishes the government would take less of that money.
“When I see my check it’s like, damn, that’s a huge chunk that was taken out,” she said. “I could have been making $450 instead of $378.”
Mitt Romney’s remarks about the “47 percent” focused public attention on the rising share of Americans who do not pay federal income taxes, a trend that has encouraged the public perception that lower-income households are getting a sweetheart deal. The share of Americans who think lower-income households pay too little in taxes increased to 24 percent in 2012 from 8 percent in 1992, according to Gallup.
But low-wage workers like Ms. McCallister still pay federal payroll taxes, which provide financing for Social Security and Medicare. They still pay sales taxes. Even if they are renters, they still bear the cost of property taxes in the form of higher rents.
And those taxes have climbed most quickly in recent decades.
The average American in 2010 paid 30 percent more of income in payroll taxes than in 1980, even while paying 27 percent less in federal income taxes. As a result, revenue from the payroll tax almost equaled income tax revenue before a temporary payroll tax cut took effect in 2011. The cut is scheduled to expire at the end of this year.
The rise of the payroll tax reflects the general movement away from requiring upper-income households to pay a larger share of income in taxes. All workers pay the same Social Security tax on wages below a threshold, which stood at $106,800 in 2010. The Medicare tax imposes a single rate on all wages, without a threshold.
Some experts argue, however, that payroll taxes are a special case because workers are entitled to Social Security benefits based in part on the amounts that they pay in taxes — a system more akin to a pension plan than an income tax.
In Illinois, the average burden of state and local taxes rose to 10.2 percent of income in 2010 from 8.8 percent in 1980, even before the latest round of tax increases last year.
And Illinois, like most states, takes a larger share of income from those who make less. Illinois households earning less than $25,000 a year on average paid 14.3 percent of income in state and local taxes in 2010, while those earning more than $200,000 paid 9.4 percent, according to the Times analysis.
Ms. McCallister said she and her friends worry about the nation’s financial problems. Their answer is simple: Someone has to pay more, and the affluent can best afford to do so. She said it was time to reverse a trend that had been going on so long it predated her birth by a decade.
“I want to know honestly how the more wealthy feel,” she said between tending to customers. “You’d think that they would want to help. We’re working these kinds of jobs and that’s what we have to do to make it through, and there’s other people making all this money. I don’t get it, honestly.
“I feel that maybe people who don’t make as much shouldn’t have to pay as much in. But who makes the rules?
“Not me.”
http://www.nytimes.com/2012/11/27/world/asia/japan-expands-its-regional-military-role.html
TOKYO — After years of watching its international influence eroded by a slow-motion economic decline, the pacifist nation of Japan is trying to raise its profile in a new way, offering military aid for the first time in decades and displaying its own armed forces in an effort to build regional alliances and shore up other countries’ defenses to counter a rising China.
Already this year, Japan crossed a little-noted threshold by providing its first military aid abroad since the end of World War II, approving a $2 million package for its military engineers to train troops in Cambodia and East Timor in disaster relief and skills like road building. Japanese warships have not only conducted joint exercises with a growing number of military forces in the Pacific and Asia, but they have also begun making regular port visits to countries long fearful of a resurgence of Japan’s military.
And after stepping up civilian aid programs to train and equip the coast guards of other nations, Japanese defense officials and analysts say, Japan could soon reach another milestone: beginning sales in the region of military hardware like seaplanes, and perhaps eventually the stealthy diesel-powered submarines considered well suited to the shallow waters where China is making increasingly assertive territorial claims.
Taken together those steps, while modest, represent a significant shift for Japan, which had resisted repeated calls from the United States to become a true regional power for fear that doing so would move it too far from its postwar pacifism. The country’s quiet resolve to edge past that reluctance and become more of a player comes as the United States and China are staking their own claims to power in Asia, and as jitters over China’s ambitions appear to be softening bitterness toward Japan among some Southeast Asian countries trampled last century in its quest for colonial domination.
The driver for Japan’s shifting national security strategy is its tense dispute with China over uninhabited islands in the East China Sea that is feeding Japanese anxiety that the country’s relative decline — and the financial struggles of its traditional protector, the United States — are leaving Japan increasingly vulnerable.
“During the cold war, all Japan had to do was follow the U.S.,” said Keiro Kitagami, a special adviser on security issues to Prime Minister Yoshihiko Noda. “With China, it’s different. Japan has to take a stand on its own.”
Japan’s moves do not mean it might transform its military, which serves a purely defensive role, into an offensive force anytime soon. The public has resisted past efforts by some politicians to revamp Japan’s pacifist constitution, and the nation’s vast debt will limit how much military aid it can extend.
But it is also clear that attitudes in Japan are evolving as China continues its double-digit annual growth in military spending and asserts that it should be in charge of the islands that Japan claims, as well as vast swaths of the South China Sea that various Southeast Asian nations say are in their control.
Japanese leaders have met the Chinese challenge over the islands known as the Senkaku in Japan and the Diaoyu in China with an uncharacteristic willingness to push back, and polls show the public increasingly agrees. Both major political parties are also talking openly about instituting a more flexible reading of the constitution that would allow Japan to come to the defense of allies — shooting down any North Korean missile headed for the United States, for instance — blurring the line between an offensive and defensive force.
The country’s self-defense forces had already begun nosing over that line in Iraq and Afghanistan, where Japan backed the United States-led campaigns by deploying naval tankers to refuel warships in the Indian Ocean.
Japanese officials say their strategy is not to begin a race for influence with China, but to build up ties with other nations that share worries about their imposing neighbor. They acknowledge that even building the capacity of other nations’ coast guards is a way of strengthening those countries’ ability to stand up to any Chinese threat.
“We want to build our own coalition of the willing in Asia to prevent China from just running over us,” said Yoshihide Soeya, director of the Institute of East Asian Studies at Keio University in Tokyo.
Or, as the vice minister of defense, Akihisa Nagashima, said in an interview, “We cannot just allow Japan to go into quiet decline.”
The United States has generally welcomed such efforts by Japan, which are in line with its own strategy of building up Asian nations militarily so they can stand their ground against China, as well as expanding an American military presence in the region.
China, which itself suffered mightily in imperial Japan’s 20th-century territorial grabs, has reacted with warnings that Japan is trying to overturn the outcome of World War II by staging a military comeback. At a defense conference in Australia last month, Lt. Gen. Ren Haiquan of China warned his hosts against allying more closely with what he called a fascist nation that once bombed the Australian city of Darwin.
In a measure of the geopolitical changes roiling the region, however, concerns about any resurgent Japanese militarism appear to be fading in some countries embroiled in their own territorial disputes with China, like Vietnam and the Philippines, the scene of fierce fighting during the war.
Analysts there and elsewhere in the region said their countries welcomed, and sometimes invited, Japan’s help.
“We have already put aside our nightmares of World War II because of the threat posed by China,” said Rommel Banlaoi, a security expert at the Philippine Institute for Peace, Violence and Terrorism Research in Manila.
On a recent morning, 22 coast guard officials from a dozen Asian and African nations joined a training cruise around Tokyo Bay aboard a sleek, white Japanese Coast Guard cutter. The visitors snapped photos of the engine room, the electronics-studded bridge and the 20-millimeter cannon. Before the cutter left port, the foreign contingent and the Japanese crew stood at attention on deck facing each other, then bowed deeply.
“Japan is joining the United States and Australia in helping us face China,” said Mark Lim, an administrative officer from the Philippine Coast Guard who joined the cruise.
Japan is widely viewed as being the only nation in the region with a navy powerful enough to check China.
Although Japan’s military spending has been shrinking, the military budget is, by many measures, the sixth largest in the world. In keeping with its pacifist stance, Japan has none of the long-range missiles, nuclear submarines or large aircraft carriers necessary for projecting real power. But its diesel-powered subs are considered the best of their type in the world. The Japanese Navy also has sophisticated Aegis-equipped cruisers capable of shooting down ballistic missiles, and two large helicopter-carrying destroyers that could be retrofitted to carry fighter jets that can take off vertically.
The Japanese Navy took a big step toward opening up in 2009 by holding a joint military drill with Australia — its first such exercise with a nation besides the United States. It has since joined a number of multinational naval drills in Southeast Asia, and in June held its first joint maneuver with India.
Analysts and former officials say Japan’s military has so far been careful to offer assistance in noncombat-related areas like disaster relief, antipiracy and health care. But even these limited steps build ties between military forces. One plan now under negotiation is to train medical personnel from Vietnam’s navy next year to care for the crews on that nation’s newly purchased Russian-built submarines.
“Our strategy is to offer hardware and training to create mini-Japanese coast guards and mini-Japanese Self-Defense Forces around the South China Sea,” said Tetsuo Kotani, a researcher at the Japan Institute of International Affairs in Tokyo.
Under the decade-old civilian aid program to build up regional coast guards, Japanese officials say they are in the final stages of what would be their biggest security-related aid package yet — to provide the Philippine Coast Guard with 10 cutters worth about $12 million each. Ministry officials say they may offer similar ships to Vietnam.
Japan’s Ministry of Defense said it planned to double its military aid program next year to help Indonesia and Vietnam. Vietnam could also be among the countries that Japan would allow to buy its submarines, according to a former defense minister, Toshimi Kitazawa, who named Australia and Malaysia as other possible buyers.
“Japan has been insensitive to the security needs of its regional neighbors,” Mr. Kitazawa said in a recent interview. “We can offer much to increase their peace of mind.”
Closing doors is the smartest thing you can do in a fire.
http://www.nytimes.com/2012/11/28/nyregion/a-closed-door-the-best-ally-in-a-home-fire.html
Early Thanksgiving morning, a neighbor in my building died when her bed caught fire. The woman, who was 87, usually took a sputtering old radio to bed at night, and fire marshals believe some fault in its wiring started the fire. She lived and died alone. No one else was hurt.
Beginning at 3:27 a.m., 60 firefighters from 12 units were sent to the building, in Upper Manhattan, and the fire never spread beyond the woman’s apartment, which was on the second floor. It was under control by 4 a.m.
Many floors away, I slept through it all.
Death by fire was once a scourge in the city, killing someone, on average, nearly every day through the 1960s and 1970s. So far this year, 47 people have died in residential fires, a pace that would mean the fewest number of such deaths since New York City began keeping reliable counts early in the 20th century.
Today, smoke kills most people who die at fires because modern building materials and design can often contain the flames to a single room — if the door is closed.
That leaves smoke as the most elusive danger. In December 1998, a fire that killed four people started in a West Side apartment where the family of the actor Macaulay Culkin lived. Fire officials said it began in a heater, spread to a sofa, then ignited a Christmas tree.
The Culkins escaped the apartment. So did the smoke. Someone had used a mat to prop open the apartment door. Someone had also left open the hallway door to the stairs. The Culkin fire was on the 19th floor. The four people who died were nowhere near that apartment or the fire: they all suffocated between the 27th and 29th floors in the stairwell, which had become a chimney filled with hot gases because of the open doors.
How to survive a fire in your home? The Fire Department provides educational material on its Web site at www.nyc.gov/html/fdny/html/safety/fire_safety_downloads.shtml.
The department’s advice is tailored to the kind of building, but one common theme is that a closed door is a powerful ally. A door will slow the spread of the fire, and a wet towel or cloth at its bottom can block the smoke.
Here are some other critical points from fire-safety experts.
In nonfireproof buildings, like virtually all private homes, brownstones and low-rise older apartment buildings that have external fire escapes, the department says the safest approach is to get out right away. “That’s why you need a working smoke alarm, so you know at the first moment to leave,” said Lt. Anthony Mancuso, the Fire Department’s director of fire-safety education. If the door or exit route is too hot, he said, “close the door.” Only after the door is closed, he said, should people open an external window — and not one in a bathroom — if fresh air is needed.
The thrust of the advice is different for modern buildings, which are fire resistant. That would include apartment houses that are 10 stories or higher, with two enclosed stairwells. People in a burning apartment should alert anyone else there, leave right away and then call 911. But the safest place for a vast majority of people in those buildings is in their apartments, said Francis X. Gribbon, a deputy commissioner in the Fire Department.
“We call it shelter in place,” Mr. Gribbon said. Residents can place wet towels under the door, and can call 911. The dispatchers will get word to the chiefs about their location.
Why is it better to stay in an apartment when the fire is elsewhere? The Culkin fire is one example of how dangerous a stairway can be.
I learned about how risky hallways can be after noticing that firefighters had pried open two apartment doors on the same floor as the fire. The purpose was to create a refuge for the firefighters in the event that a ball of fire or hot gases blew out of the burning apartment when its door was opened. “You don’t want to be in a hallway or stairway with nowhere to go when that happens,” Mr. Gribbon said.
At this time of year, the Fire Department is especially concerned about holiday lights and extension cords, he said. The department will send fire-safety education officers to a building without charge to give seminars. My building had one a few years ago. We will be setting up a refresher soon.
Most Americans are paying less in taxes than they were or would have been a few decades ago.
http://www.nytimes.com/2012/11/30/us/most-americans-face-lower-tax-burden-than-in-the-80s.html
BELLEVILLE, Ill. — Alan Hicks divides long days between the insurance business he started in the late 1970s and the barbecue restaurant he opened with his sons three years ago. He earned more than $250,000 last year and said taxes took more than 40 percent. What’s worse, in his view, is that others — the wealthy, hiding in loopholes; the poor, living on government benefits — are not paying their fair share.
“It feels like the harder we work, the more they take from us,” said Mr. Hicks, 55, as he waited for a meat truck one recent afternoon. “And it seems like there’s an awful lot of people in the United States who don’t pay any taxes.”
These are common sentiments in the eastern suburbs of St. Louis, a region of fading factory towns fringed by new subdivisions. Here, as across the country, people like Mr. Hicks are pained by the conviction that they are paying ever more to finance the expansion of government.
But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.
Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.
Lower-income households, however, saved little or nothing. Many pay no federal income taxes, but they do pay a range of other levies, like federal payroll taxes, state sales taxes and local property taxes. Only about half of taxpaying households with incomes below $25,000 paid less in 2010.
The uneven decline is a result of two trends. Congress cut federal taxation at every income level over the last 30 years. State and local taxes, meanwhile, increased for most Americans. Those taxes generally take a larger share of income from those who make less, so the increases offset more and more of the federal savings at lower levels of income.
In a half-dozen states, including Connecticut, Florida and New Jersey, the increases were large enough to offset the federal savings for most households, not just the poorer ones.
Now an era of tax cuts may be reaching its end. The federal government depends increasingly on borrowed money to pay its bills, and many state and local governments are similarly confronting the reality that they are spending more money than they collect. In Washington, debates about tax cuts have yielded to debates about who should pay more.
President Obama campaigned for re-election on a promise to take a larger share of taxable income above roughly $250,000 a year. The White House is now negotiating with Congressional Republicans, who instead want to raise some money by reducing tax deductions. Federal spending cuts also are at issue.
If a deal is not struck by year’s end, a wide range of federal tax cuts passed since 2000 will expire and taxes will rise for roughly 90 percent of Americans, according to the independent Tax Policy Center. For lower-income households, taxation would spike well above 1980 levels. Upper-income households would lose some but not all of the benefits of tax cuts over the last three decades.
Public debate over taxes has typically focused on the federal income tax, but that now accounts for less than a third of the total tax revenues collected by federal, state and local governments. To analyze the total burden, The Times created a model, in consultation with experts, which estimated total tax bills for each taxpayer in each year from 1980, when the election of President Ronald Reagan opened an era of tax cutting, up to 2010, the most recent year for which relevant data is available.
The analysis shows that the overall burden of taxation declined as a share of income in the 1980s, rose to a new peak in the 1990s and fell again in the 2000s. Tax rates at most income levels were lower in 2010 than at any point during the 1980s.
Governments still collected the same share of total income in 2010 as in 1980 — 31 cents from every dollar — because people with higher incomes pay taxes at higher rates, and household incomes rose over the last three decades, particularly at the top.
There are now many more millionaires, in other words, paying more than they did in 1980, but they are paying less than they would have if tax laws had remained unchanged. And while they still pay a larger share of income in taxes than the rest of the population, the difference has narrowed significantly.
The trend can be seen by comparing three examples:
¶A household making $350,000 in 2010, roughly the cutoff for the top 1 percent, on average paid 42.1 percent of its income in taxes, compared with 49 percent for a household with the same inflation-adjusted income in 1980 — a savings of about $24,100.
¶A household making $52,000 in 2010, roughly the median income, on average paid 27.7 percent of its income in taxes, compared with 30.5 percent in 1980, saving $1,500.
¶A household making $22,000 in 2010 — roughly the federal poverty line for a family of four — on average paid 19.4 percent in taxes, compared with 20.2 percent, saving $200.
Jared Bernstein, who served as chief economist to Vice President Joseph R. Biden Jr., said the Times analysis highlighted the need to raise taxes on the affluent and cut taxes for the poor. He cautioned that the middle class most likely would need to pay more, too.
“When you look at these numbers, you understand why we’re not collecting the revenue we need to support the spending we want,” said Mr. Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a liberal research group. “We’ve really gutted the system.”
But Douglas Holtz-Eakin, a prominent conservative economist, said the changes in taxation over the last three decades reflected a conscious and successful strategy to encourage economic growth that should be reinforced, not reversed.
Mr. Holtz-Eakin, a former director of the Congressional Budget Office who is the president of the American Action Forum, said government should reduce deficits primarily through spending cuts, particularly to Medicare and Medicaid, the health programs that are the largest source of projected increases in the federal debt.
“We can’t grow our way out of it, and we can’t tax our way out of it,” he said of the government’s fiscal predicament. “We have a spending problem, period.”
Mr. Hicks, like many residents of Belleville, views this debate with unhappiness. He would like the government to cut spending but not reduce services. He is certain that the government should not raise taxes on the middle class, a group in which he includes himself, but he is ambivalent about asking anyone to pay more. Higher taxes would hurt his businesses, he said, so raising taxes on those who make more money seems likely to hurt their businesses, too.
“At this point, I guess it’s inevitable in order to get us out of this hole,” Mr. Hicks said of higher taxes. “Illinois is in bad shape, along with a lot of the nation. But I don’t feel like we should tax the middle class any more than we are right now. There’s going to come a point where they take the incentive out of working hard.”
If the government cut his taxes, Mr. Hicks said, he would use the money to put a roof over the picnic tables outside the restaurant, expanding the year-round seating area. He already employs 14 people; then he could hire more.
And if taxes rose? Would Mr. Hicks, who started working when tax rates were higher, really choose to slow down?
He smiled. “No,” he said. “I like it. What else would I do with my time?”
Cutting From Both Ends
The federal income tax, which will turn 100 next year, is in decline.
Congressional Republicans and Democrats have repeatedly voted to reduce the share of income that people must pay. Over the last decade, annual revenues from federal taxation of individual and corporate income averaged just 9.2 percent of the nation’s gross domestic product, the lowest level for any 10-year period since World War II.
The recession and new rounds of tax cuts further reduced revenues, to 7.6 percent of economic output in the 2009 and 2010 fiscal years. Stronger economic growth has produced a modest increase in tax collections, but the White House budget office estimates that collections for the fiscal year that ended in September will total 9 percent of economic output, still less than before the financial crisis.
Federal spending, meanwhile, grew faster than the economy over the last decade — particularly during the recession. To pay those bills, the government borrowed more money than it collected in income taxes in each of the last three fiscal years, something it had not done in even a single year since World War II, federal data show.
Congress could have eliminated those deficits by cutting spending. It might also have averted those deficits by leaving the tax code unchanged. The government on average would have collected an additional $800 billion in each year from 2006 to 2010 if the 1980 code had remained in effect and economic activity had continued at the same pace, the Times analysis found. The annual federal deficits during those years averaged $714 billion.
Leaving the tax code as it was in 1980, however, would not have solved the nation’s long-term fiscal problems. Increases in federal spending, driven primarily by the rising cost of health care, are projected to outstrip even the revenue-raising capacity of the 1980 tax code in the coming decades, necessitating some combination of spending cuts and tax increases.
The income tax stands apart from other forms of taxation. It is the reason that upper-income households pay a larger share of their income in taxes than the rest of the population. The combined burden of all other federal, state and local taxes takes roughly the same share from all taxpayers. And many Americans — even in a middle-class, Democratic stronghold like Belleville — have misgivings about imposing higher tax rates on the affluent, an important reason that income taxation has declined.
The share of Americans who said high-income households paid too little in taxes fell from 77 percent in 1992 to 62 percent in 2012, according to Gallup, even as income inequality rose to the highest levels since the Great Depression.
Some people in Belleville subscribe to the argument that higher tax rates impede economic growth by discouraging investment. For others, it is a matter of fairness.
Anita Thole, a middle-income safety supervisor for a utility contractor, is not wealthy. She does not expect that she ever will be. She is a single mother with a daughter in college, and she said she regarded the wealthy with a mixture of envy and admiration. But she does not want them to pay higher taxes.
“They work their butt off to get what they got,” she said. “I wouldn’t want them to pay more so that I can pay less.”
Do they work harder than you?
“What? No. I work my butt off,” Ms. Thole, 46, said. “But you got to believe in the American dream. You got to love them for what they did, for what they made of themselves and for being more aggressive than me.”
Ms. Thole, like many in Belleville, is also convinced that governments could avoid raising taxes by adopting more frugal habits.
“There’s some days we stay home and we eat peanut butter,” she said.
What would she like governments to cut?
“I really like it when they cut the weeds along the highway,” she said. “I like it when there’s good roads to drive on. The schools, I don’t know, I don’t want to pull back from the schools. I don’t have the answer of where to pull back.
“I want the state parks to stay open. I want, I want, I want. I want Big Bird. I think it’s beautiful. What don’t I want? I don’t know.”
To Tax or Not to Tax?
William L. Enyart is a rarity in Belleville: he wants to raise his own taxes.
Mr. Enyart and his wife are lawyers, although for the last five years he led the Illinois National Guard. The couple made $380,587 in 2011 and paid $104,864 in federal taxes. His conviction that they should have paid more may not be shared by many of the area’s higher-income residents. But as the newly elected Democratic congressman for southwestern Illinois, Mr. Enyart, 63, is also the only man in town with a direct vote on federal tax policy.
Mr. Enyart, who won the seat of a retiring Democratic congressman, campaigned in part on his support for Mr. Obama’s tax plan. He defeated a Republican candidate who opposed it, 52 percent to 43 percent. But Mr. Enyart said he heard little enthusiasm for tax increases in his district. What has changed, he said, is that people are increasingly concerned about cuts to government benefits and services.
“Nobody likes to pay taxes. Nobody wants to raise taxes on anybody,” Mr. Enyart said. “But nobody wants to cut veterans services, nobody wants to give up that Interstate highway, nobody wants — pick the service that you like. These are necessary services, and they need to be paid for.”
The tax increase proposed by Mr. Obama, on taxable income — income after deductions and other adjustments — above $250,000 a year, would pay for only a small part of those services. It would reduce the projected deficit over the next decade by a little less than 10 percent, according to the Congressional Budget Office.
Nonetheless, Mr. Enyart said that he did not support broader tax increases. The focus, he said, should be on requiring the rich to pay more.
“We have the greatest disproportion of wealth since 1928, and I don’t think that’s a healthy thing,” he said. “How much money is enough? Do hedge fund traders really need to make a billion dollars a year and pay only 15 percent in taxes when we have teachers making $50,000 and paying 20 percent?”
John Siemens, who did not vote for Mr. Enyart, said that kind of “raise taxes” talk was a crowd-pleasing distraction from the need for painful spending cuts.
Mr. Siemens and his wife, Jan, both 59, own a company with a pair of factories in southwestern Illinois where workers assemble dollar-bill scanners for vending machines, dashboard lights for automobiles, magnetic probes for hospitals and other electronic equipment. They earned about $250,000 last year, so Mr. Obama’s plan would not have increased their income taxes. But it would raise the estate taxes they would have to pay to pass the company to their children someday.
Like many opponents of the president’s plan, Mr. Siemens thinks higher taxes will discourage investment and slow economic growth.
“There’s some tax rates that probably do need to be raised,” he said. “There are some that need to be lowered. But the politicians are not having an honest discussion. Is it fair or not fair is not the question. The question is, If you want to raise revenues, does that make sense or not?”
He noted as an example that interest on municipal bonds is tax-exempt, which encourages the wealthy to lend to local governments.
“Those lower tax rates were put into place for a reason,” he said. “It’s not just, let’s give the wealthy a break.”
Mr. Siemens does have a concern about fairness. He believes that lower-income households are not paying enough in taxes.
“By any measure, the wealthy are still paying a disproportionate amount of their income in taxes,” he said. “Is that fair or not fair? I don’t know, but I have an issue with the dramatic reduction of taxes at the low end because I think everybody needs some skin in the game.”
The debate is no longer theoretical here in Illinois. Facing perhaps the deepest budget crisis of any state, the Illinois legislature last year raised the state income tax rate to 5 percent from 3 percent. Unlike the federal income tax, Illinois taxes all income at the same rate.
Mr. Enyart said that the state needed more revenue, but that it should move to a tax system that imposed a heavier burden on high-income households. Mr. Siemens said the state should have cut spending.
The higher taxes have increased his costs and given an advantage to competitors in other states. And there are broader ripples, too: he said he was planning to buy some used machines, rather than new ones, to save money.
“We feel the burden of that, but it hasn’t gotten to the threshold of pain yet where we would move,” Mr. Siemens said. “There’s a lot of expense that would be incurred in moving, including a disruption of the work force, which you are always loath to do.”
View From the Lower End
Taylor McCallister, 20, works the front window at Mr. Hicks’s barbecue restaurant, taking orders from customers. She also works a second job and attends Southwestern Illinois College. She earned about $30,000 last year and, like her boss, she wishes the government would take less of that money.
“When I see my check it’s like, damn, that’s a huge chunk that was taken out,” she said. “I could have been making $450 instead of $378.”
Mitt Romney’s remarks about the “47 percent” focused public attention on the rising share of Americans who do not pay federal income taxes, a trend that has encouraged the public perception that lower-income households are getting a sweetheart deal. The share of Americans who think lower-income households pay too little in taxes increased to 24 percent in 2012 from 8 percent in 1992, according to Gallup.
But low-wage workers like Ms. McCallister still pay federal payroll taxes, which provide financing for Social Security and Medicare. They still pay sales taxes. Even if they are renters, they still bear the cost of property taxes in the form of higher rents.
And those taxes have climbed most quickly in recent decades.
The average American in 2010 paid 30 percent more of income in payroll taxes than in 1980, even while paying 27 percent less in federal income taxes. As a result, revenue from the payroll tax almost equaled income tax revenue before a temporary payroll tax cut took effect in 2011. The cut is scheduled to expire at the end of this year.
The rise of the payroll tax reflects the general movement away from requiring upper-income households to pay a larger share of income in taxes. All workers pay the same Social Security tax on wages below a threshold, which stood at $106,800 in 2010. The Medicare tax imposes a single rate on all wages, without a threshold.
Some experts argue, however, that payroll taxes are a special case because workers are entitled to Social Security benefits based in part on the amounts that they pay in taxes — a system more akin to a pension plan than an income tax.
In Illinois, the average burden of state and local taxes rose to 10.2 percent of income in 2010 from 8.8 percent in 1980, even before the latest round of tax increases last year.
And Illinois, like most states, takes a larger share of income from those who make less. Illinois households earning less than $25,000 a year on average paid 14.3 percent of income in state and local taxes in 2010, while those earning more than $200,000 paid 9.4 percent, according to the Times analysis.
Ms. McCallister said she and her friends worry about the nation’s financial problems. Their answer is simple: Someone has to pay more, and the affluent can best afford to do so. She said it was time to reverse a trend that had been going on so long it predated her birth by a decade.
“I want to know honestly how the more wealthy feel,” she said between tending to customers. “You’d think that they would want to help. We’re working these kinds of jobs and that’s what we have to do to make it through, and there’s other people making all this money. I don’t get it, honestly.
“I feel that maybe people who don’t make as much shouldn’t have to pay as much in. But who makes the rules?
“Not me.”
no subject
Date: 2012-12-02 06:40 pm (UTC)no subject
Date: 2012-12-02 06:50 pm (UTC)