'Buffett Rule' Not a Serious Response to Budgetary Problems

By Alan D. Viard

, Resident Scholar at the American Enterprise Institute April 16, 2012

About Alan D. Viard:

Alan D. Viard is a resident scholar at the American Enterprise Institute.

The "Buffett rule's" stated goal of making millionaires pay the same tax rates as the middle class is appealing. Unfortunately, the proposal is based on inaccurate claims about the tax system and its enactment would penalize the investment that fuels long-run economic growth.

Some Buffett rule advocates contend that millionaires typically face lower federal tax rates than the middle class, a claim squarely contradicted by the data. The Urban-Brookings Tax Policy Center reports that Americans with incomes above $2 million (the top 0.1 percent) paid 32.1 percent of their income in federal income, payroll, and other taxes in 2011. Meanwhile, Americans in the middle of the income distribution paid only 12.6 percent of their income in federal taxes.

[See a collection of political cartoons on the budget and deficit.]

The Obama administration admits that "the United States has a progressive tax system" and that "on average, high-income Americans do pay more" tax than middle-class Americans. The administration says that the Buffett rule is not aimed at average millionaires, but at those with unusually low tax bills. Of course, even those millionaires are likely to be paying more than the 12.6 percent paid by the middle class, if not the 30 percent demanded by the Buffett rule.

In any event, the proposal's focus is surprisingly selective. The Buffett rule primarily targets millionaires who earn long-term capital gains, which are slated to face a 20 percent tax rate next year, but leaves completely unscathed those who earn municipal bond interest, which faces a zero tax rate.

[Read what the Buffett Rule Gets Wrong.]

The proposal's focus on capital gains is dubious economic policy. A significant portion of capital gains arise from the reinvestment of corporate profits on which corporate income tax has already been paid. For those gains, the special 20 percent income tax rate mitigates the double taxation of corporate investment and dampens the artificial tax incentive for excessive corporate debt. It would be a mistake to hike taxes on those gains, either directly or indirectly through the Buffett rule's convoluted minimum tax.

The resolution of the long-term fiscal imbalance facing our nation is likely to include tax increases on the rich. But, as commentators across the ideological spectrum recognize, raising taxes on the rich will not be sufficient to close the fiscal gap. Entitlement cuts and more broadly based tax increases will also be necessary. Increasing investment taxes on a small group of millionaires is a political gesture, not a serious response to the budgetary challenge.

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Civil Liberties Organizations Launch Protests Against CISPA

On January 17, some of the most popular websites locked their doors, blacking out for hours at a time to protest the Stop Online Piracy Act, a Congressional bill that would have censored certain websites if they were found to host pirated content. Three months later, the Internet is at war with Congress again, this time over the Cyber Intelligence Sharing and Protection Act, which critics say would allow the government to snoop on private files.

They might have more of an uphill battle this time around—while some of the largest digital companies supported the SOPA protests, many of those have switched sides for CISPA, including Facebook. So while Wikipedia and Reddit are using blackouts to protest SOPA, organizations are trying to create a grassroots movement of Internet users to protest CISPA.

[Photo Gallery: Online SOPA Protests]

The bill would allow private companies to access classified government information to help protect them from cyber attacks that bring down their networks. In return, those companies would be allowed to share users' private information with the government, as long as it constitutes a "cyber threat" or relates to homeland security.

Jim Dempsey, vice president for public policy at the Center for Democracy and Technology, says that with CISPA, Congress is trying to "fundamentally change how Americans use the Internet."

Organizations such as the American Civil Liberties Union, the Electronic Frontier Foundation, and Tech Freedom have set up a "week of action" against CISPA, starting Monday. A site set up by the EFF allows users to tweet directly at their Congressional representative using the hashtags #CongressTMI and #CISPA.

The EFF keeps an eye on most legislation that could affect Internet users, but Rainey Reitman, who leads the organization's activist team, says they have to be careful about which bills they protest.

[Four Things Americans Have Learned From the SOPA Fight]

"We have to make sure they have a decent shot of passing," she says. As soon as they recognize a bill they find threatening, the organization might blog about it, but "a protest requires all our resources," she adds. "It didn't become apparent that [CISPA] was going to move forward until about a week ago."

There have already been some indications that the bill, sponsored by Reps. Mike Rogers and Dutch Ruppersberger, might be weakened before it comes to a vote. On Friday, the House Committee on Intelligence circulated a version of the bill that narrowed the language of the bill, limiting the amount of data that could be shared with the Federal Government.

Reitman says this week is an important one for the bill—next week is "Cybersecurity week" on Capitol Hill, so the bill is likely to be put to a vote.

"We knew this would gain steam next week," she says. "So we wanted to make sure Internet users got a chance to have their say before Congress did."

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agoda.com merilis penawaran khusus Musim Sakura!

SINGAPURA (21 Maret 2012) - agoda.com, situs pemesanan hotel global Asia dan bagian dari Priceline Group (Nasdaq:PCLN), hari ini mengumumkan penawaran istimewa untuk hotel-hotel di Jepang selama musim sakura.

Bunga sakura atau cherry blossom adalah bagian dari budaya dan identitas bangsa Jepang yang tidak dapat dihilangkan. Diagungkan sepanjang sejarah Jepang melalui karya seni, puisi dan lagu, bunga yang menjadi lambang nasional ini hanya menampakkan kelopaknya sesaat saja tiap tahunnya. Kemunculan mereka mengubah ranting-ranting yang gundul sisa musim dingin menjadi awan-awan menggembung, yang kemudian menjadi inspirasi sebuah aktivitas yang dinamakan hanami.

Hanami adalah kegiatan menyaksikan pohon-pohon sakura ketika bunganya sedang mekar penuh – tradisi ini diambil dari Cina pada abad ketiga, di saat kaum bangsawan mengadakan piknik di bawah pohon prem (plum) yang sedang berbunga. Di masa sekarang, pesta hanami diadakan di mana saja yang terdapat pohon sakura yang tengah bermekar; bersama sekumpulan teman-teman, keluarga dan rekan kerja berkumpul di bawah dahan-dahan pohon sakura untuk berbagi makanan dan mendengarkan musik.

Hanami mulai berlangsung di taman-taman dan kebun-kebun di Tokyo sekitar akhir bulan Maret, dengan daerah utara Hokkaido sebagai yang terakhir di mana bunga sakura muncul dari pertengahan hingga akhir bulan Mei. Makanan terkenal pada waktu hanami adalah dumpling (dango), dan set-set kotak bento karena kemudahannya dibawa, dan sake sering juga dinikmati oleh pengamat sakura di malam hari.

Ada beberapa lokasi di Jepang di mana bunga sakura sangat bagus untuk dilihat. Di Tokyo, Taman Ueno memiliki lebih dari seribu pohon sakura. Di Kyoto, tepi Sungai Kamogawa dilapisi dengan bunga sakura, dan di Osaka, orang banyak berkumpul di Istana Osaka di mana 4.000 pohon sakura mekar di seluruh kebun.

Agoda.com memiliki tawaran musim semi yang spektakuler bagi para turis yang ingin menyaksikan mekar bunga sakura. Di bawah ini adalah promosi hotel-hotel yang bertempat di lokasi-lokasi hanami terkenal di Jepang – beberapa di antaranya hanya tersedia selama beberapa minggu saja.

Penawaran Hotel Super Sakura dari agoda.com

Tokyo

Hotel Ryumeikan Tokyo – bintang 4 – diskon 15%!

Mulai dari Rp 1.255.000 per malam. Pemesanan minimal 7 hari sebelum check-in. Berlaku hingga 31 Agustus 2012.

Shinjuku Washington Hotel – bintang 3 – diskon 40%!

Mulai dari Rp. 710.000 per malam. Penginapan minimal 4 malam. Berlaku hingga 27 September 2012.

Cerulean Tower Tokyu Hotel – bintang 5 – diskon 20%!

Mulai dari Rp. 2.565.000 per malam. Penginapan minimal 3 malam. Berlaku hingga 31 Mei 2012.

Narita Excel Hotel Tokyu – bintang 4 – diskon 20%!

Mulai Rp. 528.000 per malam. Pesan sebelum April, menginap sebelum 20 April 2012.

Omori Tokyu Inn – bintang 2 – diskon 30%!

Mulai Rp. 875.000 per malam. Pemesanan minimal 7 hari sebelum check-in. Berlaku hingga 31 Desember 2012.

Hotel Monterey Ginza – bintang 3 – diskon 30%!

Mulai IDR 1.282.000 per malam. Berlaku hingga 27 September 2012.

Hotel Monterey La Soeur Ginza – bintang 3 – diskon 30%!

Mulai IDR 1.282.000 per malam. Penginapan minimal 4 malam. Berlaku hingga 27 September 2012.

Hotel Monterey Akasaka – bintang 3 – Bayar 2 malam menginap 3 malam!

Mulai IDR 1.175.000 per malam. Penginapan minimal 3 malam. Berlaku hingga 30 Maret 2013.

Hotel Monterey Hanzomon – bintang 3,5 – diskon 25%!

Mulai IDR 1.146.000 per malam. Penginapan minimal 3 malam. Berlaku hingga 31 Maret 2013.

Hotel Sun Members Tokyo Shinjuku – bintang 3 – diskon 17%!

Mulai IDR 900.000 per malam. Penginapan minimal 4 malam. Berlaku hingga 30 Desember 2012.

Osaka

Hotel Granvia Osaka – bintang 4 – diskon 20%!

Mulai dari IDR 1.237.000 per malam.  Hanya untuk hari Minggu dan Senin, berlaku hingga 31 Desember 2012.

Swissotel Nankai Osaka Hotel – bintang 5

Mulai IDR 1.645.000 per malam. Penginapan minimal 2 malam.

Hotel Monterey Grasmere Osaka – bintang 4 – diskon 30%!

Mulai IDR 1.537.000 per malam. Penginapan minimal 3 malam. Berlaku hingga 31 Desember 2012.

Osaka Floral Inn Namba -  bintang 3 – diskon 10%!

Mulai dari IDR 773.000 per malam. Penginapan minimal 3 malam. Berlaku hingga 31 Desember 2012.

Best Western Hotel Kansai Airport – bintang 3 – diskon 10%!

Mulai dari IDR 585.000 per malam. Pemesanan minimal 14 hari sebelumnya. Berlaku hingga 31 Desember 2012.

Kyoto

Reiah Hotel Ohtsu Ishiyama – bintang 3 – diskon 30%!

Mulai dari IDR 736.000 per malam. Pemesanan minimal 14 hari sebelumnya. Berlaku hingga 31 Desember 2012.

Hotel Granvia Kyoto – bintang 5 – diskon 20%

Mulai IDR 1.627.000 per malam. Penginapan minimal 2 malam. Berlaku hingga 31 Desember 2012.

Kyoto Royal Hotel & Spa – bintang 4 – diskon 15%!

Mulai dari IDR 890.000 per malam. Pemesanan minimal 14 hari sebelumnya. Berlaku hingga 31 Desember 2012.

Hotel Hokke Club Kyoto – bintang 3 – diskon 15%!

Mulai dari IDR 682.000 per malam. Berlaku hingga 31 Desember 2012.

Seikoro Ryokan – bintang 5 – diskon 20%!

Mulai dari Rp 2.210.000 per malam.  Berlaku hingga 31 Desember 2012.

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10 Lessons You Learn by Doing Taxes

Most people do not do their own taxes. They throw up their hands, decide it's too complicated, and go to an accountant or visit H&R Block or Jackson Hewitt. A lot of people also use electronic services such as TurboTax. This is kind of like doing it yourself, but the electronic process does hide some details of the tax system and how it affects you.

I usually do my own taxes, except for a couple of years when I tiptoed into an accountant's office and found out they don't necessarily do a better job, and they charge you a pretty penny for the service. I have also used TurboTax, but find that it doesn't always make life easier.

While it does take some time, and the process is not entirely painless, doing your own taxes can be an educational experience. I'm not talking about practicing your arithmetic skills. I mean you find out what the government encourages you to do, and what it penalizes. In short, you find out how the world really works. Here are ten lessons I learned doing my own taxes over the last couple of weeks:

1. The federal tax system penalizes working. Not only do you pay the highest rates on the income you earn by working, but you also pay a Social Security and Medicare payroll tax of about 7 percent. (Last year it was a little less because of the payroll tax holiday.) To add insult to injury, the IRS has gotten rid of the "making work pay" provision which allowed you to deduct up to $400 from your tax bill if you had earned income.

2. The federal government wants you to invest in the stock market. Some of the money you make from capital gains—the profit from selling a stock for more than you bought it for —doesn't get taxed at all. The rest is taxed at a lower rate than the money you make on the job. A lot of dividends are taxed at a lower rate as well.

3. Investing in bonds or savings accounts is not encouraged. The interest rate you receive from a short-term bond or regular savings account is the lowest it's been in decades. It's below the rate of inflation, which means you are actually losing money. The IRS doesn't care. It taxes the little bit of interest you earn at its regular rate, meaning you lose even more money.

4. The government can't make up its mind about real estate. Real estate investors can take advantage of certain tax breaks, such as depreciation, but are excluded from others. Rental income is taxed at the full rate, as opposed to stock dividends, which get preferential treatment. Bottom line: Investing in real estate can be a good deal, but it's not for everyone.

5. Owning a business brings special tax breaks and extra paperwork. Again, many tax breaks are available to people who work for themselves, from generous mileage allowances to deductions for travel and entertainment. But there are drawbacks as well. For one, you have to pay both the employer's and the employee's part of the Social Security tax. And the tax-filing process can be confusing and complicated, requiring obsessive record keeping and mind-numbing calculations.

6. The IRS does want you to save for retirement. The government offers a wide and complicated array of vehicles to save for retirement, including the IRA, Roth IRA, SEP IRA, and 401(k) plan. These accounts allow you to pre-pay or defer the taxes you have to pay on your savings.

7. It’s more tax efficient to get health insurance through your business than on your own. The IRS allows you to deduct health insurance premiums if you get medical insurance in the workplace or through your business. But if you buy medical insurance on your own, there is no tax break for you.

8. The government will cut you a tax break if you're sick. You can deduct out-of-pocket medical expenses that exceed 7.5 percent of your income.

9. Going to college is encouraged. There are several ways to deduct a portion of college tuition on your federal tax form, and many states offer tax breaks for educational expenses as well. The 529 college savings plan is a relatively simple and easy way to avoid taxes on money you put aside for college.

10. It’s difficult to do your own taxes. The federal tax code reportedly runs for some 13,000 pages, and details all kinds of rules, regulations, breaks, and penalties. Plus, there are many more pages at the state level. And if you ever get audited, the government will want to inspect all your records and backup materials. The whole process is way too complicated for the average person. The IRS really wants you to go to an expert who will correctly determine your payment and file it electronically.

Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement, and other concerns of baby boomers who realize that somehow they have grown up.

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Coming Soon: New Best High Schools Rankings

On May 1, 2012, U.S. News will publish its new Best High Schools rankings of public high schools in the United States.

To produce the 2012 Best High Schools rankings, which will be available online only, U.S. News teamed up with the Washington, D.C.-based American Institutes for Research (AIR), one of the largest behavioral and social science research organizations in the world. AIR implemented U.S. News's comprehensive rankings methodology, which reflects how well high schools serve all of their students, not just those who are planning to go to college.

With the May 1 launch, U.S. News will significantly expand the number of high schools on which we publish data. The number of high schools we will have information on will rise from around 1,800 to nearly 22,000, a 12-fold increase. The amount of school-specific data on enrollment, ethnicity, location, school type, state assessment proficiency tests, and Advanced Placement and International Baccalaureate tests we will publish on each high school will increase by more than three times.

Here's how the rankings will be calculated: First, we analyzed information from nearly 22,000 public high schools in 49 states and the District of Columbia using data from the 2009-2010 school year. A three-step process will be used to determine the Best High Schools on the national level. The first two steps will ensure that the schools serve all their students well, using state proficiency standards as the measuring benchmarks.

For the schools that make it past the first two steps in their state, a third step will be used to assess "college readiness"—the degree to which schools prepared students in terms of both participation in and passing of college-level work using Advanced Placement and International Baccalaureate tests as the standard. U.S. News will then nationally rank the 4,813 highest-scoring schools.

Schools with highest college readiness will be numerically ranked from No. 1 to No. 500 and will be the gold medal winners. The next group of high schools with highest college readiness indexes will be numerically ranked No. 501 through No. 1,971 and will be the silver medal winners. This will be followed by 2,842 bronze medal winners, listed alphabetically.

A high school's position in the numerical rankings, whether they were awarded a medal, or whether they were ranked at all, will be dependent on how high they scored in all three steps of the rankings methodology.

In addition to the main national rankings, there will be other numerical rankings published for the top high schools in each state and for the best charter schools and the best magnet schools on a national level. A much more detailed Best High Schools methodology will be published when the rankings come out in May.

Media representatives: To get access to embargoed Best High Schools 2012 rankings materials, please E-mail Education-PR@usnews.com.

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