Aftershock: The Next Economy and America's Future (20 page)

1
The yearly cost to the federal government: This sum is calculated by multiplying Census data on the number of people in each income category (<$20K, $20K–$30K, etc.) by the average income supplement awarded in that category. We assume an even distribution of incomes in each bracket.

2
If initially set at $35 per metric ton: See Ian W. H. Parry, “Should the Obama Administration Implement a CO
₂
Tax?,” Resources for the Future, Issue Brief #09–05, April 2009. Also, “Energy Market Impacts of Alternative Greenhouse Gas Intensity Reduction Goals,” Energy Information Administration, SR/OIAF/2006-01, 2006. Numbers have been adjusted to 2008 dollars and emissions. Note that these estimates are based on an analysis of pricing of safety-valve permits under a cap-and-trade system—which is, in effect, setting a carbon tax at the margin and effectively produces a ceiling on tradable permit prices. Safety-valve prices would also increase 5 percent in nominal terms annually. Also note that this is a comparison to a reference “business-as-usual” case—the analyzed values do not actually reduce emissions below current levels; only the highest-price scenario keeps emissions stable. Thus, an alternate wording for the above scenario would be: “If set initially at $35 per ton of carbon dioxide equivalent, a carbon tax would raise $210 billion in annual revenue at the outset and would put the United States on a path to reduce emissions by 14 percent by 2020 (28 percent in 2030) compared to a business-as-usual scenario.”

3
By the time it reached $115 per ton: James Hansen, “Cap and Fade,”
New York Times
, December 6, 2009.

4
people in the top 1 percent: “Summary of Latest Federal Individual Income Tax Data, 1980–2007,” Tax Data, Tax Foundation, July 30, 2009. Also, “SOI Tax Stats—Individual Statistical Tables by Tax Rate and Income Percentile,” Internal Revenue Service, IRS.gov.

5
would raise $600 billion more: The total revenue generated by this formulation of the tax code was calculated using IRS data on the number of taxpayers in each income bracket and the total value of federal income taxes paid by all members of that bracket. Those figures were combined to determine the average salary of each bracket, which was then assessed in a marginal fashion at the rates included herein. The total taxes paid by the average earner in each income bracket was then multiplied by the number of earners in that earner’s respective bracket. Federal income tax revenue generated the following amounts. Among $50–$160K: $199 billion. Among $160–$260K: $254.9 billion. Among $260–$410K: $123.8 billion. Among $410K+: $974.1 billion. (All revenue generated by Americans earning less than $50,00 was removed.) Total generated in federal income taxes: $1,551.8 billion. Total generated under current federal income tax system: $1,115.5 billion. Net: $436.3 billion. A similar analysis was done for capital gains taxes, yielding a net of some $170 billion.

6
The four hundred highest-income taxpayers in 2007: See David Cay Johnston,
Tax Analysts
,
http://www.tax.com/taxcom/…/oDECoEAA7E4D7A2B852576CD00714692
.

7
from 1936 to 1980, the top marginal tax rate: “U.S. Individual Income Tax: Personal Exemptions and Lowest and Highest Bracket Tax Rates and Tax Base for Regular Tax,” SOI Bulletin Historical Table 23, Internal Revenue Service.

8
the effective rate, after all deductions and credits: Roberton Williams, “Who Pays Federal Taxes?,” Tax Policy Center, April 2009.

9
Children in these programs are more likely to graduate: James J. Heckman and Dimitriy V. Masterov, “The Productivity Argument for Investing in Young Children,” T. W. Schultz Award Lecture at the Allied Social Sciences Association annual meeting, Chicago, January 5–7, 2007. See also Janet Currie, “Early Childhood Education Programs,”
Journal of Economic Perspectives
15, no. 2 (Spring 2001): 213–38; Ron Haskins and Cecilia Rouse, “Closing Achievement Gaps,” The Future of Children, policy brief, Spring 2005.

10
A total of $20 billion per year: A recent Brookings Institution study by Julia B. Isaacs (“Supporting Young Children and Families: An Investment Strategy That Pays”) found that full-spectrum early childhood care and education would cost $18 billion per year.

11
In 2009, about two-thirds of incoming college students: Survey of 220,00 incoming students at 297 campuses, weighed to represent the 1.4 million full-time first-year students who entered colleges and universities in the fall of 2009. The survey was done by the Cooperative Institutional Research Program, University of California at Los Angeles.

12
The most efficient way: See Sara R. Collins, Jennifer L. Nicholson, and Sheila D. Rustgi, “An Analysis of Leading Congressional Health Care Bills, 2007–2008: Part I, Insurance Coverage,” The Commonwealth Fund, January 9, 2009.

13
A study by the Harvard Medical School: Steffie Woolhandler et al., “Costs of Health Administration in the United States and Canada,”
New England Journal of Medicine
349, no. 8 (August 21, 2003): 768–75.

14
Medicare’s administrative costs: Cathy Schoen et al., “Building Blocks for Reform: Achieving Universal Coverage with Private and Public Group Health Insurance,”
Health Affairs
27, no. 3 (May/June 2008): 647.

15
the Congressional Budget Office has found: Congressional Budget Office, “Designing a Premium Support System for Medicare,” November 2006, p. 12.

16
In a poll conducted for NBC News: The poll can be found at
http://msnbcmedia.msn./i/msnbc/sections/news/090617_NBC-WSJ_poll_Full.pdf
.

17
dramatically reduce traffic congestion: “Assessing the Full Costs of Congestion on Surface Transportation Systems and Reducing Them Through Pricing,” U.S. Department of Transportation, 2009.

Robert B. Reich is Chancellor’s Professor of Public Policy at the Richard and Rhoda Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton, and he served as an advisor to President-elect Barack Obama. He has written twelve books, including
The Work of Nations
(which has been translated into twenty-two languages),
Supercapitalism
, and the best sellers
The Next American Frontier, The Future of Success
, and
Locked in the Cabinet
. His articles have appeared in
The New Yorker, The Atlantic, The New York Times, The Washington Post
, and
The Wall Street Journal
. He is cofounding editor of
The American Prospect
magazine. His weekly commentaries on public radio’s
Marketplace
are heard by nearly 5 million people. In 2003 Reich was awarded the prestigious Vaclav Havel Foundation Prize for pioneering work in economic and social thought. In 2008
Time
magazine named him one of the ten most successful cabinet secretaries of the twentieth century, and
The Wall Street Journal
named him one of the nation’s ten most influential business thought-leaders. He blogs at
www.robertreich.org
.