Insider Report
Headlines (Scroll down for complete stories):
1. November Election Called Blue-State 'Suicide Pact'
2. U.N. Elects 'Slavery Enabler' to Human Rights Council
3. U.S. at No. 16 on Best-Place-to-Be-Born List
4. Mortgage Interest Deduction 'Not Middle-Class Savior'
5. Sudan Claims Israel Using Spy Vultures
6. Robots Flipping Fast-Food Burgers
1. November Election Called Blue-State 'Suicide Pact'
Voters in blue states who went solidly for President Obama's re-election are ironically those who will suffer the most from the tax-the-rich policy promoted by Obama.
"With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest," observes Joel Kotkin, executive editor of NewGeography.com.
"The almost uniform support of blue states' congressional representatives for the administration's campaign for tax 'fairness' represents a kind of bizarre economic suicide pact."
Raising taxes on the so-called rich — defined as households making over $250,000 a year — will have the strongest impact on blue states that depend largely on the earnings of high-income professionals including doctors and lawyers, entrepreneurs, and technical workers, he points out. The states and metropolitan areas that have the highest concentration of these people are overwhelmingly in the bluest states.
But the higher taxes will have far less effect on the truly wealthy Obama purports to target, who derive most of their income from capital gains and have access to offshore tax dodges.
The 10 states with the largest percentage of "rich" households under the Obama policy include New York, California, New Jersey, Connecticut, Maryland, Massachusetts, plus Washington, D.C. All of them are true-blue bastions, yet they would benefit the most from an extension of all the Bush-era tax cuts.
Moves to curb mortgage-interest deductions for affluent households would also fall most heavily on blue states, where home prices are highest and residents carry the largest mortgages on average, according to Kotkin, who also is a presidential fellow in urban futures at Chapman University and author of the book "The Next Hundred Million: America in 2050."
Singling out "rich" taxpayers could also reduce their discretionary spending, which drives employment for lower-income workers.
Kotkin's NewGeography article — which originally appeared in Forbes magazine — also notes that being "rich" means different things in different places. A couple with two children and a $150,000 annual income in a city in red state Texas is far "richer" in terms of housing and personal consumption than a couple earning $300,000 in blue New York City or Los Angeles.
Kotkin adds: "Perhaps the greatest irony in all this is that the Republicans, largely detested in the deep-blue bastions, are the ones most likely to fall on their swords to maintain lower rates for the mass affluent class in the bluest states and metros."
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2. U.N. Elects 'Slavery Enabler' to Human Rights Council
The United Nations' top human rights body marked Human Rights Day on Dec. 10 by electing three countries with poor human rights records as vice presidents for the coming year – including one nation where slavery still exists.
Members of the U.N. Human Rights Council (HRC) met in Geneva, Switzerland, and elected Mauritania, the Maldives, and Ecuador as three of its four vice presidents for 2013. Switzerland received the other vice-presidential position, while Poland was chosen as president.
The Washington-based democracy watchdog Freedom House, which rates nations based on their political rights and civil liberties, rates 23 nations in the 47-member body as "free," 10 countries as "not free," and 14 as "partly free."
Mauritania is rated "not free."
The North African country is ruled by a former military coup leader and is an Islamic state where conversion to another faith is punishable by death. Homosexual acts also carry the death penalty in Mauritania, CNS News reports.
Slavery of black Africans has been rooted in Mauritanian society for centuries. According to the activist website antislavery.org, up to 18 percent of the population may still be in slavery today.
Female genital mutilation is formally illegal but "widely practiced," according to Freedom House. Mauritania was listed in 122nd place (out of 135) in a recent World Economic Forum report on the gap between women and men in economic participation, educational attainment, political empowerment, and health and survival.
"It is obscene for the U.N. to use the occasion of Human Rights Day, when we commemorate the Universal Declaration of Human Rights, to elect the world's worst enabler of slavery to this prestigious post," said Hillel Neuer, executive director of U.N. Watch, a Geneva-based non-governmental organization.
Another of HRC's newly elected vice presidents, the Maldives, is an Islamic state where all citizens are required to be Sunni Muslims, and non-Muslim foreign workers may practice their faith only in private. Speech deemed "contrary to the tenets of Islam" is restricted in the Indian Ocean island nation.
Ecuador is an electoral democracy but Freedom House reports that President Rafael Correa has turned the nation into "one of the more restrictive countries for freedom of expression in Latin America and taken steps to assault freedom of association."
The Insider Report disclosed in November that the U.N. General Assembly had elected Sudan to an influential agency, the Economic and Social Council, even though its president is accused of war crimes.
The leader of the Islamist regime in Sudan, President Omar al-Bashir, has been wanted by the International Criminal Court on charges of war crimes, genocide, and crimes against humanity.
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3. U.S. at No. 16 on Best-Place-to-Be-Born List
A new listing of the best countries to be born in next year places the United States at only No. 16.
One reason cited for the lower-than-expected listing: the federal debt.
The list was compiled by the Economist Intelligence Unit, a sister company of The Economist, and "attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead."
Among the factors considered are wealth, crime, trust in public institutions, demographics, health, geography, and economic forecasts to the year 2030, when children born in 2013 will reach adulthood.
Switzerland ranks at the top of the list, followed by Australia, Norway, Sweden, and Denmark.
Rounding out the top 10 in the list of 80 places are Singapore, New Zealand, Netherlands, Canada, and Hong Kong.
"America, where babies will inherit the large debt of the boomer generation, languishes back in 16th place," The Economist notes.
Germany is tied with the U.S. at No. 16, ahead of Japan (No. 25), France (26), and Britain (27).
At the bottom of the list is Nigeria at No. 80.
The lowest Western Hemisphere country is Ecuador at No. 65, and the lowest European nation is Ukraine at No. 78.
China comes in at No. 49, while Taiwan is No. 14. Russia is down the list at No. 72, just behind Indonesia.
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4. Mortgage Interest Deduction 'Not Middle-Class Savior'
Proposals to eliminate the mortgage interest deduction are often attacked by those claiming it is an important benefit for the middle class and boosts home ownership.
Neither assertion is accurate, according to a new study by the Reason Foundation.
The deduction allowed taxpayers to claim benefits of $82.7 billion in 2010, the latest year for which data is available. But only 32.6 percent of federal income tax returns had any itemized deductions, and 20.8 percent of those claimed no mortgage interest.
So just 22.9 percent of tax filers used the MID that year. And upper-income taxpayers were by far the biggest beneficiaries of the deduction.
More than 70 percent of households earning at least $200,000 a year use the MID in a typical year, as do more than 60 percent of those earning $100,000 to $200,000. But only about 22 percent of middle-class households earning $40,000 to $50,000 take advantage of the MID, as do about 12 percent of those earning $30,000 to $40,000.
In fact, households making $100,000 or more a year accounted for 55 percent of all MID claims in 2010, and they received 78 percent of the deduction's total benefits, according to study authors Anthony Randazzo, Reason's director of economic research, and Dean Stansel, associate professor of economics at Florida Gulf Coast University.
Nearly 19 million returns from taxpayers earning at least $100,000 claimed the MID, compared to just 2.7 million of those earning between $30,000 and $50,000. The upper earners saved about $64 billion in taxes, while the middle-class taxpayers saved less than $2 billion.
The average tax savings from the MID for those middle-income earners was about $80 a month, the authors disclose, adding: "The MID is not the middle-class savior it is made out to be."
The average tax savings for those earning $200,000 or more was $6,370 a year.
As for claims that the MID increases home ownership, the study points out that the deduction is "a fairly ineffective tool" for increasing ownership. Households that rent but would rather purchase a home are typically low-income families that are less likely to itemize their deductions and unlikely to claim the MID.
The authors conclude: "At the very least, the mortgage interest deduction should be phased out and the savings applied to deficit reduction," or used to "give all taxpayers lower income tax rates. This is vastly preferable to giving a select few taxpayers an $82.7 billion tax benefit at the expense of the rest of the country."
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5. Sudan Claims Israel Using Spy Vultures
Officials in Sudan have captured an electronically-tagged vulture they say was on a spy mission for Israel.
The officials reportedly concluded that the bird, found in a town in the Darfur area of western Sudan, was an Israeli secret agent after discovering it was fitted with GPS and solar-powered equipment capable of broadcasting images via satellite, according to the Israeli newspaper Haaretz.
The vulture also had a tag attached to its leg with the words "Israel Nature Service" and "Hebrew University, Jerusalem," further deepening suspicion in Sudan that it was a spy vulture.
In October, Sudan alleged that Israel bombed a munitions depot near the capital city of Khartoum said to be supplying weapons to the Palestinian militant group Hamas in Gaza, The Telegraph reported.
Israeli officials acknowledged that the vulture had been tagged with Israeli equipment, but explained that it was being used merely to study birds' migratory patterns.
The Sudanese allegations about the vulture come less than a year after Saudi Arabia said it had "detained" a vulture accused of spying for Israel.
The bird, which landed in the desert city of Hyaal in January 2011, also carried a GPS transmitter bearing the name of Tel Aviv University, prompting rumors that it was part of a "Zionist plot," according to BBC News.
The device, however, "does nothing more than receive and store basic data about the bird's whereabouts, and about his altitude and speed," a bird specialist at Israel's Park and Nature Authority said.
A month earlier, the governor of an Egyptian province suggested the Israeli intelligence service Mossad was involved in a string of deadly shark attacks off the Egyptian coast.
The governor said it was "not out of the questions" that Mossad had put the killer shark in the area, BBC News added.
The Israeli foreign ministry said the governor "must have seen 'Jaws' one time too many."
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6. Robots Flipping Fast-Food Burgers
Fast-food workers enjoying higher minimum wages might be wary of a new threat to their paychecks: burger-making robots.
The federal minimum wage rose 40 percent in just three years in the past decade and 28 states raised their own minimums above the federal level over a five-year period. Obamacare is also imposing new healthcare and paid-leave mandates on employers.
But labor activists recently orchestrated a campaign in New York City seeking a $15-an-hour minimum wage, and staged walkouts at chain restaurants to bolster their efforts.
Now San Francisco-based Momentum Machines has invented a robotic burger-maker that does the work of three full-time kitchen employees, according to Michael Saltsman, a research fellow at the Employment Policies Institute.
That's 360 burgers per hour "with no complaints about wages and no walkouts," he writes in the New York Post.
Momentum Machines claims that a typical fast-food business spends $135,000 a year on labor.
"That's plainly a low-end estimate, but even at that rate, Momentum's burger-flipper pays for itself within the first year," Saltsman notes. "With a $15-an-hour fast-food wage, it could pay for itself in a matter of months."
In a further effort at automation, he adds, McDonald's announced last year that it was installing touch-screen terminals at 7,000 European locations, "making the cashier position effectively obsolete."
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