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11.20 Dead fish to power cruise ships [using dead fish to ultimately kill more fish, animals and plants but at a slower rate]

11.20 Indonesia: dead whale had 1,000 pieces of plastic in stomach [We have to stop killing everything!!!]

11.18 How Extreme Weather Is Shrinking the Planet

11.18 Air pollution levels ‘forcing families to move out of cities’ [like from desertification, lack of drinkable water and rising oceans, there will also be pollution-caused immigration until humans fix things]

11.17 Policies of China, Russia and Canada threaten 5C climate change, study finds [Climate catastrophe is increasingly likely without worldwide organization, funding and commitment to winning THE WAR AGAINST GLOBAL WARMING.]

11.16 Scotland was first Industrialized Country to Run wholly on Wind in October

11.16 How pesticide bans can prevent tens of thousands of suicides a year [how many thousands more die early from eating pesticide-laced food?]

11.15 The Earth is in a death spiral. It will take radical action to save us [fossil fuel burning, un-recyclable plastic production/use and methane gas release must cease ASAP.]

11.15  The long read:  The plastic backlash: what's behind our sudden rage – and will it make a difference? [the world wants to throw-up...]

11.15 Claws out: crab fishermen sue 30 oil firms over climate change [workers are waking-up...]

11.15 Trump administration to cut air pollution from heavy-duty trucks

11.14 Backed by Ocasio-Cortez, Youth Climate Activists Arrested in Pelosi's Office Demanding Democrats Embrace 'Green New Deal'

11.13 What would a smog-free city look like?

11.13 Global report highlights Australia’s renewables potential amid mixed signals for coal

11.13 Interior department whistleblower: Ryan Zinke hollowed out the agency

News Media Matters

11.19 The Biggest Threat to Free Speech No One Is Talking About

Daily: FAIR Blog
The Daily Howler

US Politics, Policy & 'Culture'

11.20 New York City subway and bus services have entered 'death spiral', experts say [death spirals are the end-thing nowadays]

11.19 Last Week Tonight with John Oliver 11/18/2018 (HBO) [29:26 video]

11.19 Michael Bloomberg: Why I’m Giving $1.8 Billion for College Financial Aid

11.19 Trump’s Diminishing Power and Rising Rage

11.19 Trump Says He Was 'Fully Briefed' and Also 'Not Briefed Yet' But Either Way Saudi Crown Prince 'Absolutely' Not Involved Because Trump Knows 'Everything That Went On' Without Listening to Tape of Khashoggi Murder

11.19 'We Need New Leaders, Period': Progressive Newcomers Urge Democrats to Embrace Bold Agenda or Face Primary Challenges [Current Democrat leaders are highly compromised by corporate donations]

11.19 SNL explains Jeff Bezos and Amazon’s HQ2 strategy: trolling President Trump [2:55 SNL video]

11.18 Trump says Pelosi deserves speakership, offers Republican votes [An affirmation of Pelosi's unsuitability]

11.18 Khanna to Pelosi: Don't Just Create Green New Deal Select Committee, Make Ocasio-Cortez Its Chair [Will Pelosi earnestly change, or end her career in disgrace?]

11.18 Chuck Schumer, Feckless Hack [Neoliberal Democrats must go!]

11.18 What the State of the VA Tells Us About Trump’s War on Welfare [Privatizing often results in outright fraud and higher costs by private prisons, privatized health insurance and health care, privatized public schools and online "colleges" like Trump University]

Justice Matters

11.20 'He may not rewrite immigration laws': Trump's asylum ban blocked by federal judge [Has anyone thought about putting razor-wire around the White House?]

11.20 Legal Blue Wave? New Democratic AGs Could Change the Face of Climate Fight

High Crimes?

11.14 The Guardian view on Yemen’s misery: the west is complicit [WAR CRIMES]

Economics, Crony Capitalism

11.19 Bankrupt Sears wants to give executives $19 million in bonuses [blatantly immoral and sick to richly reward those who led the company into the bankruptcy]

11.18 Big Pharma Bankrolled Pro-Trump Group As Trump Pushed Pharma Tax Cut [Corruption Central!]

International & Futurism

11.18 New Evidence Emerges of Steve Bannon and Cambridge Analytica’s Role in Brexit

11.18 France demands UK climate pledge in return for Brexit trade deal [Excellent!]

11.17 Saudi crown prince's 'fit' delays UN resolution on war in Yemen

11.17 Thousands gather to block London bridges in climate rebellion [We're losing WWIII because the enemy is invisible while we're like frogs slowly cooking. We aren't informed enough to be alarmed, but must get organized and motivated to fight back. We need a War Plan to ruthlessly pursue the fight of our lives!]

11.17 CIA finds Saudi crown prince ordered Jamal Khashoggi killing – report

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  Print view: A Tax Break Nobody Needs
FISCAL ANALYSIS:

A Tax Break Nobody Needs

by Gerald E. Scorse
Wednesday, 8 September 2010
It's time to disallow writing off stock market losses against ordinary income. There’s no defense for a tax break so skewed toward the affluent, especially one as gratuitous as this.

Cutting the federal deficit is a hot topic on Capitol Hill, and some kind of action seems certain. Congress is about to take up taxes for the first time in President Obama’s term (including the expiration of the Bush tax cuts), and a report from the President’s national debt commission is expected come December. Both bodies should take a hard look at ending a needless tax break; getting rid of it would raise billions, and make the Tax Code a touch fairer in the bargain.

This little-remarked giveaway is the write-off which the IRS allows every year for stock market losses: when net losses exceed gains, taxable income can be reduced by up to $3,000. This is “I-want-it-now” tax law, and it turns a private loss into a hurry-up claim on the public purse. With the deficit soaring, it richly deserves repeal.

The same as now, capital losses could be written off dollar-for-dollar against capital gains. The same as now, losses could be carried forward indefinitely until they were wiped out. What the repeal would disallow is writing off stock market losses against ordinary income (which, as we shall see, was poor policy in the first place).

It makes much more sense to balance capital losses against capital gains, and leave earned income out of the equation.

Let’s quickly take a look at who gains from this special write-off, and who pays for it. Then let’s look at the hefty inflow to the Treasury if the write-off were written off for good.

Roughly half of all Americans own no stocks, so losses in the market offer no tax advantages to them. While it’s true that more people than ever do own stocks, most have their holdings in tax-sheltered retirement accounts; the write-off doesn’t help them, either. It turns out that the benefits flow entirely to a privileged minority: those well-off enough to have non-retirement investment portfolios. There’s no defense for a tax break so skewed toward the affluent, especially one as gratuitous as this.

And who picks up the tab? Like any other tax deduction, it’s paid for by taxpayers in the aggregate; in this case, the many pony up to benefit the few. Far better for the Treasury, and better for tax fairness, if Congress shows some spine and calls a halt.

The result would be an annual drop in tax expenditures (the revenue the government foregoes via the tax breaks it hands out), and a corresponding uptick in Treasury receipts. Year after year, the deficit would be that much less. Nobody can predict Wall Street’s ups and downs, or individual investors’ either, so the actual numbers could vary widely. All the same, the market’s slump in 2008 and the first half of this year have almost certainly front-loaded the benefits of a repeal.

Portfolio values sank by the hundreds of billions during the sell-off; year-end figures showed that investors took a total hit of $6.8 trillion in 2008. Of course not all the losses were realized, and stocks went on to rally sharply for most of 2009. But by mid-year 2010 the markets had once again soured, and the major indices were nowhere near their former levels. So while it’s impossible to know hard numbers, it’s a safe bet that on-the-books losses hover near a record high.

Which means it’s an opportune time to disallow writing off those losses against ordinary income. It serves no purpose, the money goes to people who scarcely need it, and it’s an annual drag on the Treasury; the sooner it’s repealed the better for the federal deficit.

And everybody cares about cutting the deficit, right?


Gerald E. Scorse, who writes from New York City helped pass a bill that tightens the rules for reporting capital gains.

Mr. Scorse's stories are republished in the Baltimore Chronicle with permission of the author.



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This story was published on September 8, 2010.
 

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