NY Times Editoral on Keystone XL & Tax the Rich

NUMBER ONE
EDITORIAL “The Right Call on the Pipeline” by NY Times, Large Print Edition, Jan. 29, 2012

President Obama has properly rejected, at least for now, the Keystone XL pipeline that would run from Canada to the Gulf Coast. He rebuffed the demand of House Republicans that the controversial project be decided in haste under an election year deadline.

That foolish requirement that Mr. Obama issue a decision on the pipeline by February 21, 2012, cynically inserted into the payroll tax bill passed in December - could never be met given the need for a through environmental study before any judgment is made.

The president made the right call in accepting the recommendation of the State Department which has primary jurisdiction over the proposed 1,700 mile pipeline that would cross through ecologically sensitive areas in the Midwest.

The pipeline sponsor, TransCanada, could submit a proposal to build along another route, but that too, would require time for a comprehensive environmental review.

Republicans intent on scoring campaign points immediately repeated their fallacious cries that “tens of thousands” of jobs would be lost by not instantly approving the project. They made no mention of the risks inherent in the project: harm to the Canadian boreal forests and threats to water supplies in the Midwest. Bipartisan opposition to the project has notably been led by Gov. Dave Heineman of Nebraska, a Republican.

The extraction and production of tar sands oil in the fields of northern Alberta would also cause far more greenhouse gas emissions than drilling for conventional crude. Lobbyist and the House Republicans have tried to sell the project as a redaction in America’s dependence on Middle Eastern oil. But much of the pipeline oil that would be refined on the Gulf Coast would be destined for foreign export.

Far more important to the nation’s energy and environmental future is the development of renewable and alternative energy sources. This is the winning case that Mr. Obama should make to voters in rejecting the Republicans’ craven indulgence of Big Oil. Page 36.

NUMBER TWO
Op Ed NY Times Large Print edition for January 29, 2012.
Income Taxes at the Very Top by Paul Krugman

I’m actually enjoying watching Mitt Romney doing the Dance of Seven Veils - partly out of voyeurism but also because it is about time we had this discussion.

The theme of his dance is taxes- his own taxes. Although disclosure of tax returns is standard practice for candidates, Mr. Romney has never done so, and at first, he tried to stonewall the issue even in a presidential race. Then he said that he probably pays only “about 15 percent” of his income in taxes and he hinted he might release his 2011 return.

He will take pressure to release previous returns, too. And the public has a right to see the back years: By 2011 with the campaign looming Mr. Romney may have rearranged his portfolio to minimize awkward issues his accounts in the Cayman Islands or his use of the reviled “carried interest” tax break.

But the larger question is what Mitt Romney’s tax returns have to say about U. S. tax policy. Is there a good reason why the rich should bear a startlingly light tax burden?

If Mr. Romney is telling the truth about his taxes, he’s more or less typical of the very wealthy. Since 1992, the IRS has been releasing income and tax data for the 400 highest income filers. In 2008, the most recent year available, these filers paid 18.1% of their income in Federal income taxes; in 2007 they paid 16.6%. When you bear in mind the rich pay little in payroll (FICA) taxes or in state and local taxes, this implies that the top 400 faced lower tax [rates] than many workers.

The rich pay so little because most of their income takes the form of capital gains, which are taxed at a maximum rate of 15%, far below that for wages and salaries. The question is whether capital gains - three-quarters of which go to the top1% of income distribution - warrant such restraint.

The gap between taxes on earned income and taxes on unearned income creates a perverse incentive to arrange one’s affairs to make income appear in the “right” category.

And the economic record certainly doesn’t support the notion that superlow taxes on the superrich are the key to prosperity. During the first Clinton term when the very rich paid much higher taxes that they do now the economy added 11.5 million jobs.

Mr. Romney’s tax dance is doing us all a service by highlighting the favors being showered on the upper-upper class. At a time when self-proclaimed serious people are telling us that the poor at the middle class must suffer in the name of fiscal probity, such low taxes on the very rich are indefensible.
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