MOSCOW (AP) — Gerard Depardieu, the French actor who has been sparring with his native country over taxes, has been granted Russian citizenship.
A brief announcement on the Kremlin website said President Vladimir Putin signed the citizenship grant on Thursday.
Depardieu is angered by French President Francois Hollande's attempt to raise taxes on the mega-rich to 75 percent. Russia has a flat income tax of 13 percent.
A representative for Depardieu declined to say whether he had accepted the offer and refused all comment.
Depardieu has made more than 150 films, among them the 1991 comedy "Green Card" about a man who enters into a marriage of convenience in order to get U.S. residency.
Depardieu said in an open letter published in mid-December that he would turn over his passport and French social security card.
Hollande wants to tax incomes of the ultra-rich at 75 percent to reduce the debt and deficit, and Depardieu's subsequent decision to move to tax-friendly Belgium was slammed by Hollande's government.
"I'm a true European, a citizen of the world," Depardieu wrote in the letter.
The tax on millionaires was struck down by France's highest court Dec. 29, but the government has promised to resubmit the law in a slightly different form soon.
Depardieu was nominated for an Academy Award for his role as Cyrano de Bergerac in the 1990 film by the same name.
He's well known in Russia, where he appears in an ad for Sovietsky Bank's credit card and is prominently featured on the bank's home page.
France's Civil Code says one must have another nationality in order to give up French citizenship because it is forbidden to be stateless. Thursday's decision by the Kremlin appears to fulfill that requirement.
Gilles Sabrie for The New York Times
In October, a student gave blood for an H.I.V. test at the Lingnan Health Center in Guangzhou. The center tries to be a safe space for gay men in an environment that can be hostile toward them.
GUANGZHOU, China — As he waited to give blood for an H.I.V. test one recent afternoon, Le, a 25-year-old marketing professional, explained why he was there. “I was aware of the consequences” of not using a condom, he said, “but somehow I didn’t know how to say no.”
Le, a gay man who would give only his first name, was being tested at the Lingnan Health Center, an organization run largely by gay volunteers, whose walls are adorned with red AIDS ribbons and a smiling condom mascot. In the past, Le went to hospitals to be tested, he said, but the stigma of being a gay man in China made the experience particularly harrowing.
“I’d always be concerned about what the doctors would think of me,” Le said. “Here we’re all in the same community, so there’s less to worry about.”
Le is one of thousands of gay men in this bustling city of 13 million people who are benefiting from a pioneering experiment that supporters hope will revolutionize the way the Communist Party deals with nongovernment groups trying to stop the spread of AIDS and other sexually transmitted diseases.
Encouraged by the new slate of leaders who came to power in November, civil society activists hope the model taking shape here in the prosperous southern province of Guangdong, which has long served as a petri dish for economic reform, will be replicated nationally, not just in the fight against disease but also on issues like poverty, mental health and the environment.
While China’s Center for Disease Control and Prevention has allowed community organizations across the country to participate in disease testing programs since 2008, in practice those efforts remain patchy. But in November, just before World AIDS Day the following month, the grass-roots movement received a high-profile endorsement from the incoming prime minister, Li Keqiang.
At a meeting with advocates for AIDS patients, Mr. Li, a large red ribbon pinned to his jacket, promised more government support and shook hands with H.I.V.-positive people. The image resounded in a society where those infected are routinely turned away from hospitals and hounded from their jobs. “Civil society plays an indispensable role in the national battle against H.I.V./AIDS,” he said, according to the state news media.
Activists remain wary, however, noting that the government has made similar promises in the past. And despite the high-level support and a policy in Guangdong allowing grass-roots groups to register directly with the government — instead of being forced to find an official sponsor, as in much of the country — many organizations say they still are stymied by dizzying bureaucratic hurdles or rejected for missing unannounced deadlines.
Tao Cai, the director of AIDS Care China, which provides support to 30,000 H.I.V.-positive people nationwide but remains unregistered, believes the obstacles come from local officials who are trying to prevent nonprofit groups from competing with their fiefs. “In China,” he said, “we say reform never gets out of Zhongnanhai,” a reference to the walled compound for senior leaders in Beijing.
There is little doubt that public health officials need help. Through October, nearly 69,000 new H.I.V. infections were reported in China in 2012, a 13 percent rise from the same period in 2011. Almost 90 percent of those cases were contracted through sexual intercourse, with rising numbers involving gay men. Medical experts also worry about syphilis, which has returned with a vengeance after being virtually wiped out during the Mao era.
Reported cases of syphilis, known in the south as “Guangdong boils,” have increased more than tenfold in the last decade, according to national statistics. As with H.I.V., gay men and sex workers are particularly at risk. Local health experts estimate that 5 percent of men who have sex with other men carry H.I.V., while around 20 percent test positive for syphilis.
The Chinese authorities have long tackled the rise in communicable diseases among gay men with all the sensitivity of a swinging billy club. In raids on bars, bathhouses and parks, police officers and health officials often force those detained to hand over their IDs and submit to blood tests.
Grass-roots health groups have been frequent targets of official harassment as well. In most provinces, they can legally register with the Bureau of Civil Affairs only if they are sponsored by a government agency. But advocates say few agencies are willing to vouch for groups focused on politically fraught issues like homosexuality, prostitution or sexually transmitted diseases.
In the face of such constraints, the majority of China’s estimated 1,000 H.I.V. organizations operate in a legal purgatory that deprives them of tax benefits and makes it risky to accept foreign donations, usually their main source of support.
Mr. Li, the incoming premier, has a spotty record when it comes to H.I.V. In the 1990s, when he was the top official in central Henan Province, a botched blood-collection program there infected hundreds of thousands of people with H.I.V. Critics say Mr. Li was more interested in covering up the problem than dealing with its causes. Even as he was holding court with AIDS groups, over a hundred of those infected in the scandal marched in Beijing to the Ministry of Health demanding justice.
Mr. Li’s views appear to have changed. In November, social media erupted over the case of a 25-year-old man seeking treatment for lung cancer who was turned away from two Beijing hospitals because he was H.I.V.-positive. A hospital in nearby Tianjin finally removed the tumor — but only after he altered his medical records to conceal his H.I.V. status from doctors. As a battle raged online between those condemning his actions and those sympathizing with his plight, Mr. Li ordered the Health Ministry to prohibit hospitals from rejecting AIDS patients.
This article has been revised to reflect the following correction:
Correction: January 2, 2013
Because of an editing error, an earlier version of a picture caption misspelled part of the name of an organization in Guangzhou. It is the Lingnan Health Center, not Lignan.
The richest people on the planet got even richer in 2012, adding $241 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world's 100 wealthiest individuals.
The aggregate net worth of the world's top 100 stood at $1.9 trillion at the market close Dec. 31, according to the index. Of the people who appeared on the final ranking of 2012, only 16 registered a net loss for the 12-month period.
"Last year was a great one for the world's billionaires," said John Catsimatidis, the billionaire owner of Red Apple Group Inc., in an email written poolside on his BlackBerry in the Bahamas. "In 2013, they will continue looking for investments around the world — and not necessarily in U.S. — that will give them an advantage."
Amancio Ortega, the Spaniard who founded retailer Inditex, was the year's biggest gainer. The 76-year-old tycoon's fortune increased to $57.5 billion, a gain of $22.2 billion, according to the index, as shares of the retailer that operates the Zara clothing chain rose 66.7%.
"It's an amazing company that has done great, and the gains are quite justified given its performance," said Christodoulos Chaviaras, an analyst at Barclays in London who's had an "equalweight" rating on Inditex for about a year. "Can they repeat that? It will be harder. A lot of the positive news is already reflected in the share price."
Global stocks soared in 2012. The MSCI World Index gained 13.2% during the year to close at 1338.50 on Dec. 31. The Standard & Poor's 500 index rose 13.4% to close at 1426.19.
European stocks surged in the second half of the year. The Stoxx Europe 600 index is up 19.6% since June 4, advancing as the European Central Bank introduced bond-buying programs, S&P upgraded Greece's debt and German business confidence rose more than forecast. The benchmark gauge's 14.4% advance for the year was the best annual return since 2009.
Carlos Slim, the telecommunications magnate who controls Mexico's America Movil, maintained his title as the richest person on Earth for the entire year. The 72-year-old's net worth rose $13.4 billion, or 21.6%, through Dec. 31, making him the second-biggest gainer by dollars.
Gains by Slim's industrial conglomerate, Grupo Carso, and Grupo Financiero Inbursa, his banking and insurance operation, more than offset the decline posted by America Movil, his biggest holding. The largest mobile phone operator in the Americas by subscribers fell 5.8% to close at 14.9 pesos at the end of the year.
U.S. software mogul Bill Gates, 57, ranks second on the list, trailing Slim by $12.5 billion. The Microsoft Corp. co-founder added $7 billion to his net worth as shares of the Redmond, Wash., company rose 2.9%. Microsoft stock accounts for less than 20% of the billionaire's fortune.
Warren Buffett, 82, lost his title as the world's third-richest man to Ortega on Aug. 6. The Berkshire Hathaway Inc. chairman gained $5.1 billion during the year, even after donating 22.3 million Berkshire Class B shares in July to charity. The billionaire, who has pledged to give away most of his fortune, spent much of the year pressing for higher taxes on the wealthy.
Ikea founder Ingvar Kamprad, 86, is the world's fifth-richest person with a $42.9-billion fortune. The complex ownership structure behind Ikea, the world's largest furniture retailer, became more transparent in August after Ikea's franchisor published its financial performance publicly for the first time. His net worth rose 16.6% in 2012.
Brazil's Eike Batista, 56, was the year's biggest loser by dollars, falling $10.1 billion. The commodities maven, who vowed a year ago that he'd become the world's wealthiest man by 2015, sold a 5.63% stake in his EBX Group Co. in March to Abu Dhabi's Mubadala Development Co.
As part of the deal, he pledged an unspecified additional stake in 2019 if he fails to meet a 5% annual return on the sovereign wealth fund's $2-billion investment, according to a person with knowledge of the deal. Batista now ranks 75th in the world with a net worth of $12.4 billion. On March 27, he was worth $34.5 billion and ranked 8th on the Bloomberg index.
Batista's former title as the richest Brazilian is now held by 73-year-old banker Jorge Paulo Lemann, who ranks 37th on the index with an $18.8-billion fortune. The country's second-richest person is Dirce Camargo, the matriarch behind Camargo Correa, the Sao Paulo conglomerate that has interests in cement, electricity and Havaianas flip-flops. Her net worth is $13.4 billion, according to the Bloomberg ranking.
Camargo, who doesn't appear on any other major international wealth ranking, is one of 54 billionaires the index uncovered during the year. Among the others: Hamdi Ulukaya, the 40-year-old Turkish immigrant owner of Chobani, the bestselling yogurt brand in the U.S.; South Africa's Nathan "Natie" Kirsh, 80, who amassed a $5.4-billion fortune in retail and real estate; and Elaine Marshall, 70, whose 14.6% ownership of closely held Koch Industries makes her the fourth-richest woman in America. She is worth $14.1 billion.
Koch Industries' two other shareholders, the brothers Charles and David Koch, are each worth $40.9 billion, up $7.1 billion, or 20.9%, for the year.
Oracle Corp. founder Larry Ellison rose $6.4 billion in 2012 as shares of the world's largest database company jumped 31.7%. Ellison, 68, who has more than tripled the amount of Oracle stock he has pledged against lines of credit in the last year, agreed to buy 98% of Hawaii's Lanai island. The 141-square-mile parcel with no traffic lights was purchased from billionaire David Murdock, the 89-year-old chairman of Dole Food Co., the world's largest producer of fresh fruit and vegetables.
The bulk of Ellison's fortune comes from his 23.5% stake in Oracle. He also has interests in software makers NetSuite Inc. and LeapFrog Enterprises Inc., as well as property holdings, including estates in California and Newport, R.I.
SACRAMENTO — Gov. Jerry Brown will push this year to upend the way schools are funded in California, hoping to shift more money to poorer districts and end requirements that billions of dollars be spent on particular programs.
Brown said he wants more of the state's dollars to benefit low-income and non-English-speaking students, who typically are more expensive to educate.
"The reality is, in some places students don't enjoy the same opportunities that people have in other places," the governor said in an interview. "This is a way to balance some of life's chances."
He would also scale back — and possibly eliminate — dozens of rules that districts must abide by to receive billions in state dollars. Some of those requirements, such as a mandate to limit class size, have been suspended amid Sacramento's recurrent budget problems but are set to resume by 2015.
Brown and his aides are keeping most details under wraps. But advisers say his proposals, part of the budget blueprint to be unveiled early this month, will amount to the most extensive changes in decades in the relationship between school districts and state government.
His intentions are already raising concerns among school administrators, district officials and labor unions. The governor postponed earlier plans to push for the changes when the discord threatened to distract from his campaign for higher taxes. Voters approved the tax hikes in November, averting billions of dollars in education cuts.
Now, the transformation of school funding is at the top of his agenda. He says his goal is more local control.
"What the state has done for 40 years is develop one new program after another to compensate for underperforming" schools, he said. "What we have now is command and control issuing from headquarters in Sacramento."
Scores of programs set up by state mandate — for smaller classes, bilingual education and summer school, for example — have their own pots of money sent from Sacramento to pay for them. ¿The Public Policy Institute of California found that nearly 40% of every dollar sent to schools from both the state and federal governments is earmarked for such a purpose.
The programs vary in size and scope: $4.5 million to meet the needs of Native American students, $10 million to improve school Internet access, more than $618 million set aside for school buses, etc.
According to Brown's Department of Finance, 56 such programs received a total of $11.8 billion in state funds last year. ¿The result, the governor says, is a bloated school bureaucracy that takes money away from core instruction.
"You have to have administrators at the state level, district level and at the school level who are engaged in making sure this money is used for what it's supposed to be used for," Brown said. "This constant articulation of rules is a world unto itself that is not directly supporting the teacher in the classroom."
But many of the programs are popular with parents and various interest groups and have staunch defenders in the Capitol. They say lifting restrictions on how schools spend their money could hurt struggling students.
In recent years, state lawmakers have offered districts some flexibility to cope with rounds of budget cuts. The results, some say, have not always been good, leading to larger classes and sharp reductions in programs for adults trying to earn a high school degree.
Since 2008, the average class size in kindergarten through third grade has grown from 20 to 23, among the largest in the nation, according to a study from the Public Policy Institute of California. During the same period, the average class size elsewhere in the country remained at around 15 students.
In addition, "since schools have been given greater flexibility, adult education ... has been decimated throughout the state," said Jeff Freitas, secretary-treasurer of the California Federation of Teachers. "You can't just give the locals carte blanche with the money."
Shifting money to poorer schools at the expense of wealthier ones is also certain to stir protest.
Under a similar proposal the governor floated last year, the Department of Finance estimated that Compton Unified schools would see an uptick of more than $4,700 per pupil by the 2017-18 school year. Manhattan Beach Unified would get a per-student increase of just $681.
Those who have met with Brown's top education aides expect the governor to propose a similar formula in January, asking districts to account for the expenditures to make sure the funds serve higher-needs students.
Adonai Smith, a lobbyist for the Assn. of California School Administrators, said his members would not support a plan that amounts to a "redistribution of resources."
The governor says that even if funding is tweaked to favor more poor students and English learners, all schools will receive more money now that state revenue is on the uptick.
"I want to align more closely the money schools receive with the problems that teachers encounter," Brown said. "When somebody's teaching in Compton, it's a much bigger challenge than teaching in Beverly Hills."
anthony.york@latimes.com
We realize there’s only so much time one can spend in a day watching new trailers, viral video clips, and shaky cell phone footage of people arguing on live television. This is why every day The Atlantic Wire highlights the videos that truly earn your five minutes (or less) of attention. Today:
RELATED: ‘Roseanne’ Predicted Internet Addiction; A Weather Alert from Hell
Filmmaker Ryan James Yezak boiled down the biggest stories of 2012 into four minutes. And, yes, Honey Boo Boo made it in there:
RELATED: Even Batman Gets Tripped up by Apple Maps
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So, raise your hand if you knew Patrick Stewart and company were having this much fun behind the scenes at Star Trek: The Next Generation.
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Marvel’s Stan Lee — the guy who created characters like the Amazing Spider-Man, Thor, the Incredible Hulk, Iron Man, and the X-Men — turned 90 the other day. In honor of him and his heroes, here are all his cameos from all of the Marvel movies he helped create:
And, finally, it’s 2013 somewhere… right? Please take caution when announcing that news to this very excitable baby. Happy New Year!
Wireless News Headlines – Yahoo! News
LOS ANGELES (AP) — Hugh Hefner's celebrating the new year as a married man once again.
The 86-year-old Playboy magazine founder exchanged vows with his "runaway bride," Crystal Harris, at a private Playboy Mansion ceremony on New Year's Eve. Harris, a 26-year-old "Playmate of the Month" in 2009, broke off a previous engagement to Hefner just before they were to be married in 2011.
Playboy said on Tuesday that the couple celebrated at a New Year's Eve party at the mansion with guests that included comic Jon Lovitz, Gene Simmons of KISS and baseball star Evan Longoria.
The bride wore a strapless gown in soft pink, Hefner a black tux. Hefner's been married twice before but lived the single life between 1959 and 1989.
Baz Ratner/Reuters
Tikkun Olam, a medical marijuana farm in Israel, blends the high-tech and the spiritual.
SAFED, Israel — Among the rows of plants growing at a government-approved medical marijuana farm in the Galilee hills in northern Israel, one strain is said to have the strongest psychoactive effect of any cannabis in the world. Another, rich in anti-inflammatory properties, will not get you high at all.
Marijuana is illegal in Israel, but farms like this one, at a secret location near the city of Safed, are at the cutting edge of the debate on the legality, benefits and risks of medicinal cannabis. Its staff members wear white lab coats, its growing facilities are fitted with state-of-the-art equipment for controlling light and humidity, and its grounds are protected by security cameras and guards.
But in addition to the high-tech atmosphere, there is a spiritual one. The plantation, Israel’s largest and most established medical marijuana farm — and now a thriving commercial enterprise — is imbued with a higher sense of purpose, reflected by the aura of Safed, an age-old center of Jewish mysticism, as well as by its name, Tikkun Olam, a reference to the Jewish concept of repairing or healing the world.
There is an on-site synagogue in a trailer, a sweet aroma of freshly harvested cannabis that infuses the atmosphere and, halfway up a wooded hillside overlooking the farm, a blue-domed tomb of a rabbinic sage and his wife.
In the United States, medical marijuana programs exist in 18 states but remain illegal under federal law. In Israel, the law defines marijuana as an illegal and dangerous drug, and there is still no legislation regulating its use for medicinal purposes.
Yet Israel’s Ministry of Health issues special licenses that allow thousands of patients to receive medical marijuana, and some government officials are now promoting the country’s advances in the field as an example of its pioneering and innovation.
“I hope we will overcome the legal obstacles for Tikkun Olam and other companies,” Yuli Edelstein, the minister of public diplomacy and diaspora affairs, told journalists during a recent government-sponsored tour of the farm, part of Israel’s effort to brand itself as something beyond a conflict zone. In addition to helping the sick, he said, the effort “could be helpful for explaining what we are about in this country.”
Israelis have been at the vanguard of research into the medicinal properties of cannabis for decades.
In the 1960s, Prof. Raphael Mechoulam and his colleague Yechiel Gaoni at the Weizmann Institute of Science isolated, analyzed and synthesized the main psychoactive ingredient in the cannabis plant, tetrahydrocannabinol, or THC. Later, Professor Mechoulam deciphered the cannabinoids native to the brain. Ruth Gallily, a professor emerita of immunology at the Hebrew University of Jerusalem, has studied another main constituent of cannabis — cannabidiol, or CBD — considered a powerful anti-inflammatory and anti-anxiety agent.
When Zach Klein, a former filmmaker, made a documentary on medical marijuana that was broadcast on Israeli television in 2009, about 400 Israelis were licensed to receive the substance. Today, the number has risen to about 11,000.
Mr. Klein became devoted to the subject and went to work for Tikkun Olam in research and development. “Cannabis was used as medicine for centuries,” he said. “Now science is telling us how it works.”
Israeli researchers say cannabis can be beneficial for a variety of illnesses and conditions, from helping cancer patients relieve pain and ease loss of appetite to improving the quality of life for people with post-traumatic stress disorder and neuropsychological conditions. The natural ingredients in the plant, they say, can help with digestive function, infections and recovery after a heart attack.
The marijuana harvest, from plants that can grow over six feet tall, is processed into bags of flowers and ready-rolled cigarettes. There are also cannabis-laced cakes, cookies, candy, gum, honey, ointments and oil drops. The strain known as Eran Almog, which has the highest concentration of THC, is recommended for severe pain. Avidekel, a strain rich in CBD and with hardly any psychoactive ingredient, allows patients to benefit from the drug while being able to drive and to function at work.
Working with Hebrew University researchers, the farm has also developed a version in capsule form, which would make exporting the drug more practical, should the law allow it.
Professor Mechoulam, now 82, said in an interview that he had been urging producers over the years to grow cannabis with less THC and more CBD, something in which nonmedical marijuana growers had little interest. He said what Tikkun Olam had done was not great science but “a very practical development.”
In Israel, he said, research in the field is “definitely a work in progress,” and he cautioned, “Science is not a 100-meters Olympic race; it is not who is first on the line that is important.”
Whatever the ultimate shape of the "fiscal cliff" solution that has preoccupied all Washington, and a fair swath of the rest of country, in the final days of 2012 and into the new year, Americans of all walks of life should be asking themselves this question: How do we like being conned?
The deal, passed by the Senate on New Year's morning, was made final late Tuesday when the House of Representatives signed on. Its essential elements include expiration of the President George W. Bush-era income and capital gains tax cuts on couples' incomes over $450,000, and a modest increase in the estate tax.
Unemployment benefits and tax credits for lower-income families will be extended. The payroll tax holiday that replaced a low- and middle-income tax credit in 2009 will end, but the tax credit won't return. Many other items, including the fate of automatic spending cuts mandated by the 2011 debt-ceiling deal, are being put off for weeks or months. Another debt-ceiling fight looms on the near horizon.
Almost everything mentioned above involves a con game of one sort or another, because almost none of it is what it seems on the surface. Since such fakery is certain to continue well into the new year, here's a quick guide to its basic features.
The deficit con: The big daddy. Despite the lawmakers' claims that the debate has been about closing the federal deficit and reducing the federal debt, none of the negotiating over the past weeks has dealt with those issues. Indeed, the tax and spending package will widen the deficit by some $4 trillion over 10 years, compared with what would happen if the tax increases and spending cuts mandated by existing law were implemented.
The House Republican caucus has consistently looked for ways to protect high-income taxpayers from a tax increase, at the expense of beneficiaries of government programs such as enrollees in Social Security and Medicare. If there's a dominant preoccupation with cutting the deficit lurking somewhere in that mind-set, good luck finding it.
The shared sacrifice con: If the goal has been for an approach to deficit cutting balanced among economic strata — and Democrats and Republicans both pay lip service to this notion — then the final deal is a fraud. Every working person earning up to $113,700 in wages this year will shoulder an instant tax increase of 2%. That's because the payroll tax holiday enacted in 2010 is expiring.
The tax holiday, which cut the employee's share of the Social Security tax to 4.2% from 6.2% of income up to the annual wage cap, was always designed as a temporary stimulus measure. But few people expected that it would expire at a single stroke — and without a countervailing working-class tax credit to soften the blow.
Monkeying with the payroll tax was never a great idea, because it undermined Social Security's essential funding mechanism. But what's often forgotten is that the holiday was implemented to replace an existing tax break for the middle class — the Making Work Pay credit—opposed by the GOP. But the credit isn't coming back, so the end of the holiday means a pure tax increase on the 98% of working Americans earning $113,700 or less in wages. For a couple touching, say, $80,000, the increase will come to $1,600.
Quiz: How much do you know about the "fiscal cliff?"
Compare that with the break reaped by taxpayers declaring income in the $250,000 to $450,000 range. That's the difference between the threshold at which President Obama proposed restoring pre-Bush tax rates and the level enacted by Congress. Exempting that slice of income from higher taxes saves up to $9,200 in taxes for families earning $450,000 or more (depending on the cost of phaseouts of exemptions and deductions for those taxpayers).
The estate tax con: There's no purer giveaway to the wealthy than this. The final deal raises the tax to 40% from 35% on estates over $10 million. (That figure is for couples, whose estates are each entitled to a $5-million exemption upon their deaths.) The alternative was to return to 2009 law, which set the tax at 45% on couples' estates more than $7 million.
Who pays the estate tax? In 2011, about 1,800 taxpayers died leaving estates of more than $10 million. Their average estate was somewhere from $30 million to $40 million. Their heirs cashed in on some of the most nimble tax planning on Earth: Although the statutory top rate was 35%, the average rate on estates of even $20 million-plus (the average gross value of which was $65 million) came to only 16.2%.
Estate tax bonus babies long have been protected by the myth that the tax falls heavily, and unjustly, on small family farms and businesses. The Washington-based Tax Policy Center found, however, that fewer than 50 small farms and businesses paid any estate tax in 2011. Their liability came to less than one-tenth of 1% of the total collected. On the other hand, more than 50% of the estate tax was paid by people whose income placed them in the top tenth of 1% of all taxpayers. These are the people protected by estate tax opponents.
The debt ceiling con: The original of this con is what put us at the fiscal cliff in the first place, for the automated spending cuts being dealt with now were put in place as the GOP's price to raise the federal debt ceiling and stave off a government default in 2011. The debt ceiling was not designed as a constraint when it was created in 1917 — it was convenient blanket authority for the Treasury to issue debt so that Congress wouldn't have to vote permission each time a new bond had to be floated.
Approval was always routine — the limit was raised 91 times between 1960 and the showdown in 2011. Now it's a hostage-taking situation, destined to return in the next month or two when Republicans who didn't get what they wanted in this week's cliffhanger menace the creditworthiness of the U.S. again.
For a brief shining moment, President Obama dreamed of folding an end to the debt limit into a fiscal cliff deal, but that didn't happen. The idea that the debt limit discourages fiscal irresponsibility is a scream. It doesn't now, and never has, stopped Congress from enacting any spending plan or tax break it pleases, creating a budget demand that has to be paid for with, yes, debt. If Congress wants less debt, it can cut spending or raise taxes. The debt limit is a dangerous weapon in the hands of irresponsible legislators, and it's time to take it out of their hands.
The bond vigilante con: This is the bedrock con that fuels deficit hawkishness. The idea is that if America doesn't get its debt under control, it will be punished by unhappy bond investors worldwide. U.S. interest rates will soar and the standard of living will plunge.
This con depends on voters overlooking that it hasn't happened. U.S. government bonds remain the most sought-after in the world. Remember August 2011, when Standard & Poor's cut America's credit rating because of poor fiscal policy and dysfunctional government? Neither condition has improved, but the yield on the 30-year Treasury bond has fallen from 3.75% to 2.82%, and on the 10-year note from 2.14% to 1.68%.
The bogeymen of higher interest rates and inflation that are supposed to follow inevitably from our current level of deficit spending have simply not materialized, and aren't visible on the horizon. Moreover, history suggests that more typically they're responses to vigorous economic growth, not to policies aimed at reviving recovery.
That's a clue that the whole fiscal cliff affair is a major con. There is no reason for the country to suffer now the austerity embodied in the spending cuts and tax hikes that were to come due Jan. 1; what's needed is continued stimulus to complete the economic recovery. Indeed, the starkness of the Jan. 1 deadline is itself a con — nothing except its own inaction prevents Congress from temporarily moderating the effects of the cliff by voting to defer tax increases and spending cuts, as it did this week.
In the golden age of individualistic rural America so beloved of today's conservative dreamers, people who perpetrated cons such as these would be tarred, feathered and ridden into the sunset on a rail. Today we allow them to set the agenda in Washington. Is that supposed to be progress?
Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.
WASHINGTON — The Senate voted overwhelmingly early Tuesday to approve legislation to halt a tax increase for all but the wealthiest Americans while postponing for two months deep spending cuts. The vote came just hours after the accord was reached between the White House and congressional leaders.
After a rare holiday session that lasted through the New Year’s Eve celebration and two hours into New Year’s Day, senators voted 89-8 to approve the proposal. Three Democrats and five Republicans dissented, most prominently Sen. Marco Rubio (R-Fla.).
“It took an imperfect solution to prevent our constituents from very real financial pain,” Senate Minority Leader Mitch McConnell (R-Ky) said before the vote. “This shouldn’t be the model for how to do things around here. But I think we can say we’ve done some good for the country.”
President Obama, in a statement released by the White House early Tuesday morning, said, “While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay.”
The lopsided vote puts pressure on the House to swiftly follow suit to ensure the nation avoids the so-called fiscal cliff. As long as Congress is seen to be working toward a solution, no dire economic fallout is expected from the delay. The House is expected to bring the bill up Tuesday afternoon.
The deal, if approved by Congress, would represent a milestone for Republicans, whose anti-tax stance has defined the party since former President George H.W. Bush broke his promise not to raise taxes in 1990. Republicans have not supported an effort to increase income taxes since then.
It also would be a concession for Democrats who backed away from President Obama’s popular campaign pledge that he would ask households earning more than $250,000 to pay more in taxes. Under the deal with Republicans, taxes will increase only on households earning more than $450,000.
Still, the deal spares the average middle class family a tax hike of about $2,200, a reality that drove the sense of urgency that motivated lawmakers in the frantic final hours of 2012.
“I’m not happy the way it happened, but it is what it is,” Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, said before the vote. “It was very important that we prevent an increase on middle income taxes. And I’ll be working next year to get a bigger agreement.”
The deep automatic spending cuts scheduled to begin Wednesday — the other part of the "fiscal cliff" — would be pushed back just long enough to ensure that the partisan budget battles marking Obama's first term will also punctuate the beginning of his second. Negotiations over the cuts were expected to be rolled into talks about extending the nation's debt ceiling, a prospect Democrats promised to resist.
The normally festive time of year turned serious Monday as details of the deal emerged. Vice President Joe Biden, who brokered the deal in marathon sessions with McConnell, was dispatched to the Capitol for an intense 90-minute session with Democrats.
In an afternoon speech with middle-class Americans arrayed on risers behind him, Obama had urged congressional negotiators to press on and resolve the remaining issues.
"It's not done," Obama said from the Eisenhower Executive Office Building next to the White House. He called on Americans to urge their lawmakers to "see if we can get this done."
The talks had largely settled the income tax provisions, which would stop the increase on most Americans and raise rates for households making more than $450,000 a year. But the two sides remained at odds over how to deal with the automatic spending cuts.
"We are very, very close," an upbeat McConnell said on the Senate floor. "We can do this."
Lawmakers were told to stay near the Capitol, and many hunkered down there for New Year's Eve.
Sen. Mary L. Landrieu (D-La.) hosted an evening gathering at her nearby home as lawmakers awaited word of final details. "We're serving beer, not champagne," she said.
Yet Democratic leaders remained largely silent on the proposal before Biden, a former senator who has cut deals with McConnell before, headed to Capitol Hill to brief his Democratic colleagues.
"Having been in the Senate as long as I have, there are two things you shouldn't do: You shouldn't predict how the Senate's going to vote before they vote," Biden said, emerging from the session, which lawmakers described as robust. "And number two, you surely shouldn't predict how the House is going to vote."
The office of Senate Majority Leader Harry Reid, the Nevada deal-maker who stepped aside for Biden to negotiate with McConnell, offered visible evidence of the level of concern. Lawmakers came in and out of his door throughout the day.
"No deal is better than a bad deal," said Sen. Tom Harkin (D-Iowa), an influential liberal. "And this looks like a very bad deal."
The powerful AFL-CIO president, Richard Trumka, tweeted his displeasure.
Conservatives similarly sounded off. "Republicans should kill the compromise, if there are no spending cuts," Erick Erickson, the conservative founder of the influential Red State blog, said in a tweet.
Putting the vote off until Tuesday would accomplish a political back flip that would be particularly advantageous for anti-tax Republicans, and it represented an option that has been discussed for months.
With the existing tax rates set to expire at midnight, Tuesday ushered in the new higher rates. By acting Tuesday rather than Monday, the congressional votes would technically be to lower tax rates on most Americans, rather than raise them.
Biden and McConnell were in close contact all day after working past midnight Sunday and resuming very early Monday morning to craft the deal.
The minority leader convened Republican senators behind closed doors at dinnertime, and many emerged optimistic that a deal was at hand.
"Hope springs eternal around here, even though it gets a little sticky at times," said Sen. Pat Roberts (R-Kan.). House Speaker John A. Boehner convened his troops in a basement office beneath the Rotunda.
Optimism aside, one thing was increasingly clear: With some major issues still unresolved, Washington was poised to continue the partisan budget battles that have defined Obama's first term.
Under the proposed deal, more than $620 billion in revenue would be raised — far less than the $1.6 trillion Obama first sought in new revenue when he still hoped for a large deficit reduction package.
The agreement would set the top tax rates at 39.6% for income above $450,000 for households and $400,000 for individuals, according to a source who spoke on the condition of anonymity because he was not authorized to discuss the negotiations.
Tax rates on investment income would also rise for those higher-income households, from the historic low 15% rate on capital gains and dividends to 20%. Obama had wanted to tax dividends at the same rate as ordinary income.
The rate for the estate tax was a key sticking point throughout the weekend. The agreement would set a new rate at 40% on estates valued at more than $5 million. That is a compromise between the 35% rate in effect in 2012 and the 45% rate Democrats demanded on estates of $3.5 million or more.
About 2 million out-of-work Americans would benefit, if the deal is approved, from a one-year extension of long-term unemployment benefits. Those benefits expired over the weekend.
One area that hewed closer to Democratic priorities was Obama's proposal to reinstate limits on how much upper-income households could benefit from personal exemption tax credits and itemized deductions. Those limits, in place before the George W. Bush-era tax cuts began in 2001, were done away with over the past decade.
The agreement would reduce those deductions for households earning more than $250,000, leading to higher effective taxes on those households without an increase in tax rates, which the GOP had resisted.
Other tax credits established under Obama's economic recovery program would also be extended for five more years. That provision is a nod to Democratic calls for more stimulus spending to help the economy and for adjustments to the tax code to help those with more modest incomes.
Those credits include a $2,500 tax credit for college students and another that allows cash refunds even if no tax is owed for those with children and family incomes below $45,000.
The deal also includes a permanent fix for the alternative minimum tax, a part of the tax code that was established decades ago to ensure high-income earners paid at least a minimum amount of tax even if they were able to reduce their liability through extensive deductions. But it increasingly snares middle-class families because it was never indexed to inflation. Congress must fix it every year, a problem that would be finally resolved with Monday's deal.
The agreement also includes a nine-month extension of a stalled farm bill, ensuring that milk prices would not double, as some had predicted, without price supports. Doctors who serve Medicare patients would also be spared a pay cut, a usually routine adjustment that got caught up in the year-end fight.
Even with the thorny tax issues all but settled, the mandatory budget cuts that would start to reduce federal spending on Wednesday remained a sticking point until late Monday.
Those cuts, which would slice across defense and domestic programs, had been set as a last-ditch trigger designed to spur negotiations for a broader budget deal after an earlier deficit-reduction effort failed.
Talks focused on postponing the cuts for two months but offsetting the $24 billion that would not be saved. The White House and Republicans eventually settled on a mix of revenue increases and spending cuts.
Postponing the automatic cuts for two months, as the Republicans wanted, all but guarantees the budget battles will continue. Democrats had hoped to extend that reckoning for a year to keep Obama's second term from beginning with a repeat of past tumultuous budget battles.
In addition to Rubio, the dissenters to the deal in the Senate were Democrats Tom Harkin (Iowa), Thomas R. Carper (Del.) and Michael Bennet (Colo.), and Republicans Chuck Grassley (Iowa), Mike Lee (Utah), Rand Paul (Ky.) and Richard Shelby (Ala.).
Three senators did not vote: Frank R. Lautenberg (D-N.J.), who is battling the flu; Jim DeMint (R-S.C.), who announced his resignation earlier this month; and Mark Steven Kirk (R-Ill.), who is set to return to the Senate for the first time later this week after suffering a stroke.
lisa.mascaro@latimes.com
kathleen.hennessey@latimes.com
michael.memoli@latimes.com
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