Israeli Prime Minister Netanyahu's campaign to have President Obama draw a nuclear "red line" that Iran cannot cross, amounts to having Obama issue an ultimatum that the US will invade Iran under the conditions specified in the "red line." From his UN speech it appears that Netanyahu sets his red line at Iran's production of an amount of uranium enriched to 20% that will produce enough highly enriched uranium to build a bomb warhead, according to Reuters. According to Wikipedia, the critical mass of U-235 metal needed for a warhead would be about 52 kilograms. Arms Control Now says 225 kg of uranium hexafluoride enriched to 20% would be about the amount needed to produce the uranium needed for a 90% highly enriched warhead. Uranium hexafluoride is the gas that is run through the enrichment centrifuges. Once weapons-grade enrichment level is reached, the uranium metal is separated from the fluorine to produce the warhead. Wikipedia says weapons grade enrichment is usually more than 85% U-235. (Natural uranium contains only about 0.7% of the U-235 isotope.) However, Arms Control Now reports that according to the last two IAEA reports, Iran's stockpile of 20% enriched uranium went down because Iran is using it to fuel its research reactor which needs 20% enriched uranium fuel to operate. The latest IAEA report for August 2012 said that Iran had only 91.4 kg of 20% enriched uranium, considerably less than the 225 kg it would need for a warhead, according to IPS News. The IAEA report for the previous quarter said that Iran then had a 20% stockpile of 101 kg.
According to IPS, the IAEA report also said the total amount of 20% uranium hexafluoride produced by Iran rose from 143 kg in May 2012 to 189.4 kg in August 2012, or about 15 kg per month. At this rate, to go from 91.4 kg to about 225 kg would take about 8 or 9 months, if no enriched uranium was diverted to the research reactor or other uses. In that case, Iran would reach Netanyahu's red line around June of 2013.
Arms Control Now says that once Iran has 225 kg of 20% enriched uranium hexafluoride, it would take about one more month to increase the enrichment to 90%. It would also take time to convert the uranium hexafluoride to uranium metal and then to fabricate the warhead.
Friday, September 28, 2012
Thursday, September 27, 2012
NYT Op-Eds
Two New York Times op-eds on Tuesday ended on very good points. David Brooks lamented the Republican party's focus only on economic conservatism, to the neglect of more traditional conservative ideas. He closed by saying:
On the same page, Joe Nocera commented on the Forbes 400 list of the richest individuals. He supported my concern about the capital gains tax as welfare for billionaires. He said:
Conservatism has lost the balance between economic and traditional conservatism. The Republican Party has abandoned half of its intellectual ammunition. It appeals to people as potential business owners, but not as parents, neighbors and citizens.
On the same page, Joe Nocera commented on the Forbes 400 list of the richest individuals. He supported my concern about the capital gains tax as welfare for billionaires. He said:
The American dream exists not because of the capital gains differential but in spite of it. It is the tax break that most glaringly exists to benefit the wealthy. If you have any doubts about that, all you need to do is read the latest Forbes 400.
Tuesday, September 25, 2012
Romney's Taxes
Romney's release of 2011 taxes and an accountants' statement don't do him many favors. They do show that he paid taxes in all previous years, contrary to Sen. Reid's claim. Otherwise, he does not do much to support America. He paid very low taxes. Andrea Mitchell noted that the summary of 20 years of prior taxes look higher because the tax rates were higher in previous years. I was surprised to find the best listing of prior year tax rates in Forbes.
For much of that 20 year period the top tax rate for salaried income was over 40% and the maximum capital gains tax rate was over 20%. For 2011 the rates were 37% and 15%. The table shows how much taxes on rich taxpayers have gone down. When you look at Federal payroll taxes (for Social Security and Medicare) and state income taxes, sales taxes, and property taxes, the formerly "progressive" tax rates where rich pay higher taxes than the poor, have become "regressive" taxes that fall more heavily on the poor. Romney's claim that 47% of potential taxpayers pay no taxes, ignores all taxes except federal income taxes.
If Romney were a loyal, patriotic American earning as much as he does, he should pay something on the order of 30% of his income in federal taxes, not less than 15%.
Romney and other Republican tax bashers say capital gains taxes have to be low, because they experience double taxation. Their companies pay tax, and they get their investment income only after the companies are taxed. But if the companies paid no taxes, workers salaries could be higher, too. Why don't salaried workers get a double taxation break? In addition, capital gains taxes are paid only after an asset is sold. Therefore, many wealthy individuals have the earnings tax free for years.
For example, if you buy some stock for $100, and it goes up $50 the first year. You have made $50, but you pay no tax on it, because you don't sell it. The next year, if the stock goes up another 50%, you make $75, but you pay no tax on that $75, plus you have made money on ALL of the profit you made the first year, because that profit was not taxed. A salaried worker pays taxes on all of his income in the year he makes it; there is no benefit from compound interest, i.e., interest on the prior years' interest. On the other hand, a rich person can hold a profitable asset for many years without paying any taxes on it, earning profit on the earlier profit that was not taxed. Then when he sells it, he pays much lower taxes than someone who works for a living. Basically the government gives him an interest free loan of the taxes due each year until he sells the asset. Who's the "welfare queen" in this picture?
It doesn't seem fair to me. It's a good deal, but it's not fair.
For much of that 20 year period the top tax rate for salaried income was over 40% and the maximum capital gains tax rate was over 20%. For 2011 the rates were 37% and 15%. The table shows how much taxes on rich taxpayers have gone down. When you look at Federal payroll taxes (for Social Security and Medicare) and state income taxes, sales taxes, and property taxes, the formerly "progressive" tax rates where rich pay higher taxes than the poor, have become "regressive" taxes that fall more heavily on the poor. Romney's claim that 47% of potential taxpayers pay no taxes, ignores all taxes except federal income taxes.
If Romney were a loyal, patriotic American earning as much as he does, he should pay something on the order of 30% of his income in federal taxes, not less than 15%.
Romney and other Republican tax bashers say capital gains taxes have to be low, because they experience double taxation. Their companies pay tax, and they get their investment income only after the companies are taxed. But if the companies paid no taxes, workers salaries could be higher, too. Why don't salaried workers get a double taxation break? In addition, capital gains taxes are paid only after an asset is sold. Therefore, many wealthy individuals have the earnings tax free for years.
For example, if you buy some stock for $100, and it goes up $50 the first year. You have made $50, but you pay no tax on it, because you don't sell it. The next year, if the stock goes up another 50%, you make $75, but you pay no tax on that $75, plus you have made money on ALL of the profit you made the first year, because that profit was not taxed. A salaried worker pays taxes on all of his income in the year he makes it; there is no benefit from compound interest, i.e., interest on the prior years' interest. On the other hand, a rich person can hold a profitable asset for many years without paying any taxes on it, earning profit on the earlier profit that was not taxed. Then when he sells it, he pays much lower taxes than someone who works for a living. Basically the government gives him an interest free loan of the taxes due each year until he sells the asset. Who's the "welfare queen" in this picture?
It doesn't seem fair to me. It's a good deal, but it's not fair.
| Year | Top Regular Rates | Max. Capital Gains Rate | Capital Gains Taxation Notes | |||
| Wages & Other Earned Income | Unearned Income Except Cap Gains | Above Joint Taxable Income of | ||||
| 1916 | 15% | 15% | $2,000,000 | 15% | Realized gains taxed same as other income | |
| 1917 | 67% | 67% | $2,000,000 | 67% | ||
| 1918 | 77% | 77% | $1,000,000 | 77% | ||
| 1919-21 | 73% | 73% | $1,000,000 | 73% | ||
| 1922 | 58% | 58% | $200,000 | 12.50% | Maximum rate | |
| 1923 | 43.50% | 43.50% | $200,000 | 12.50% | ||
| 1924 | 46% | 46% | $500,000 | 12.50% | ||
| 1925-28 | 25% | 25% | $100,000 | 12.50% | ||
| 1929 | 24% | 24% | $100,000 | 12.50% | ||
| 1930-31 | 25% | 25% | $100,000 | 12.50% | ||
| 1932-33 | 63% | 63% | $1,000,000 | 12.50% | ||
| 1934-35 | 63% | 63% | $1,000,000 | 31.50% | Sliding exclusion of 70%>10yrs 0% <1 small="small" yr.="yr."> | |
| 1936-37 | 78% | 78% | $2,000,000 | 39% | ||
| 1938-40 | 78% | 78% | $2,000,000 | 30% | Excl. 50%>2yrs; 67% 18-24mo; 0%<18mo 30="30" ax="ax" small="small"> | |
| 1941 | 80% | 80% | $2,000,000 | 30% | ||
| 1942-43 | 88% | 88% | $200,000 | 25% | Exclusion 50% > 6 months; 25% maximum | |
| 1944-45 | 94% | 94% | $200,000 | 25% | ||
| 1946-47 | 86.50% | 86.50% | $200,000 | 25% | ||
| 1948-49 | 82.10% | 82.10% | $200,000 | 25% | ||
| 1950 | 84.40% | 84.40% | $200,000 | 25% | ||
| 51-64 | 91% | 91% | $200,000 | 25% | ||
| 64-67 | 70% | 70% | $200,000 | 25% | ||
| 1968 | 75.30% | 75.30% | $200,000 | 26.90% | Transition | |
| 1969 | 77% | 77% | $200,000 | 27.50% | ||
| 1970 | 50% | 70% | $200,000 | 32.30% | ||
| 1971 | 50% | 70% | $200,000 | 34.30% | ||
| 1972-75 | 50% | 70% | $200,000 | 36.50% | 50% exclusion - minimum tax effects | |
| 1976-77 | 50% | 70% | $203,200 | 39.90% | ||
| 1978 | 50% | 70% | $203,200 | 39% | ||
| 1979-80 | 50% | 70% | $215,400 | 28% | 60% exclusion | |
| 1981 | 50% | 70% | $215,400 | 23.70% | 50% or 60% exclusion | |
| 1982-86 | 50% | 50% | $215,400 | 20% | 60% exclusion | |
| 1987 | 38.50% | 38.50% | $192,930 | 28% | Maximum rate | |
| 1988-90* | 28%/33% | 28%/33% | * | 28%/33% | Realized gains taxed same as other income | |
| 1991-92 | 31.90% | 31.90% | $82,150 | 28.90% | Maximum rate | |
| 1993-96 | 43.70% | 40.80% | $250,000 | 29.20% | ||
| 1997-2000 | 43.70% | 40.80% | $275,000 | 21.20% | ||
| 2001 | 43.20% | 40.30% | $297,350 | 21.20% | ||
| 2002 | 42.70% | 39.80% | $307,050 | 21.20% | 18% top capital gains rate in rare cases | |
| 2003-05 | 39.00% | 36.10% | $311,950 | 16.10% | Reduced maximum rate which also applied to dividends | |
| 2006-07 | 38.60% | 35.70% | $336,550 | 15.70% | ||
| 2008-09 | 38.30% | 35.40% | $357,700 | 15.40% | ||
| 2010-12 | 37.90% | 35.00% | $373,650 | 15% | ||
| 2013-on | 44.60% | 44.60% | $396,100 | 25% | 21.2% income tax plus 3.8% Medicare tax; also on dividends | |
Thursday, September 20, 2012
Concern about Military is about Contractors
With the approach to the "fiscal cliff," there is a lot of talk about the desire to avoid cutting the Defense budget. On its face, this appears to be concern about the fighting men and women in Afghanistan and other dangerous places, but it's really concern about defense contractors. I don't think the Republicans really care about the people serving in the military. Very few Republicans (or Democrats) in the House or Senate served in the military. But they do care about their contributions from defense contractors, and about jobs in plants in their home districts. Because of their concern about their home districts, the government had to change the whole procedure it uses to close military bases, because if handled the normal way, no base would ever be closed. It's almost the same thing with defense contractors; every congressman wants to funnel money home to his defense contractor. Hence, the frequent congressional mandates to build weapons systems that the Pentagon doesn't want.
So, I am not too concerned about all the furor about saving the Defense Department budget; it's really about saving elections for incumbent congressmen and senators. The bottom line on jobs is serious, but why should we be more concerned about keeping jobs at defense plants than anywhere else? We need more jobs in computer companies, too, in airlines, everywhere. Why should defense contractors get special consideration? Because they give lots of money to the reelection campaigns of people in Congress. It's all about the money, not about patriotism.
So, I am not too concerned about all the furor about saving the Defense Department budget; it's really about saving elections for incumbent congressmen and senators. The bottom line on jobs is serious, but why should we be more concerned about keeping jobs at defense plants than anywhere else? We need more jobs in computer companies, too, in airlines, everywhere. Why should defense contractors get special consideration? Because they give lots of money to the reelection campaigns of people in Congress. It's all about the money, not about patriotism.
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