ESADEgeo Daily Digest, 07/10/2019

The New York Times – David Leonhardt / The rich really do pay lower taxes than you

  • For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data. The overall tax rate on the richest 400 households in 2018 was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.
  • For middle-class and lower-income families, the picture differs. Federal income taxes have also declined modestly for these families, but they haven’t benefited much if at all from the decline in the corporate tax or estate tax. And they now pay more in payroll taxes, including Medicare and Social Security, than in the past.
  • By the middle of the 20th century, the high-tax advocates had prevailed. The United States had arguably the world’s most progressive tax code, with a top income-tax rate of 91 percent and a corporate tax rate above 50 percent. However, the second half of the 20th century was mostly a victory for the low-tax side. Politicians cut every tax that fell heavily on the wealthy: high-end income taxes, investment taxes, the estate tax and the corporate tax.
  • The economy just doesn’t function very well when tax rates on the rich are low and inequality is sky high. It was true in the lead-up to the Great Depression, and it’s been true recently. Which means that raising high-end taxes isn’t about punishing the rich. It’s about creating an economy that works better for the vast majority.

Financial Times – Laura Pitel & Chloe Cornish / Donald Trump paves way for Turkey’s operation in Syria

  • President Donald Trump has given the green light to a contentious Turkish military operation in north east Syria, promising to withdraw US troops from the combat area. The US President spoke with Turkey’s President Erdogan, who expressed his  “frustration” at the lack of progress in talks between the two countries about the creation of a “safe zone” in a region of the country that is controlled by Kurdish militias backed by the United States.
  • A statement shared by the White House following the call said a Turkish invasion was imminent. It added that the US military would not “support or be involved the operation”, but said US troops would “no longer be in the immediate area”. The step appears to pave the way for a long-threatened Turkish incursion into Syria that will alarm Washington’s European allies.
  • Those who oppose a Turkish invasion are concerned that an attack on Kurdish forces, which Ankara considers terrorists, will jeopardise the gains made by a US-led military coalition against the terrorists of , that used to control a large swath of north-east Syria.
  • The Washington Post –  Missy Ryan ,Kareem Fahim & Karen DeYoung / Trump administration pulls troops from northern Syria as Turkey readies offensive

POLITICO – Paul Ames & Ivo Oliveira / Socialists victorious in Portuguese election

  • The Socialist Party of Portuguese Prime Minister António Costa scored a wide victory in Sunday’s general election but did not to secure an absolute majority in the Portuguese parliament. The positive result for the Socialists opens up the possibility of a renewal of Costa’s partnership with parties on the far left, which has allowed a Socialist minority government to rule for the past four years.
  • The Socialists won 36.6 percent of the vote, followed by the center-right Social Democratic Party with the 27.9 percent, its worst result since 1983. With the smaller conservative CDS-People’s Party getting just 4.2 percent, the night was a serious reversal for Portugal’s right. On the left side of the political spectrum, the Portuguese Communist Party saw its support drop to a historic low of 6.5 percent and the Left Bloc, a media-savvy, urban-based party, confirmed its position as Portugal’s third party, falling slightly to 9.7 percent. President Costa said he would reach out to the left to form a government. 
  • Two weeks before the election, different polls indicated Costa could achieve an absolute majority. However, his lead was eroded by revelations of a scandal involving the theft of weapons from an army base and alleged collusion with a criminal gang to secure their recovery, with a former Socialist defense minister involved.
  • The abstention rate rose to 47 percent from 44 percent, in part because of a change that automatically placed over 1.2 million overseas Portuguese on the electoral roll. Previously they had to register. Emigrants represent over 10 percent of the electorate, and rarely turn out to vote.
  • Al Jazeera – Sofia Barbarani / Tunisia parliamentary vote: Exit poll shows Ennahdha in the lead
  • The New York Times – Barbara Surk & Marc Santora / Kosovo voters want a new future, but old problems linger

Reuters  – John Davison, Ahmed Rasheed / Iraqi police fire on protesters in new unrest, death toll passes 100

  • At least eight people were killed in new clashes between Iraqi security forces and anti-government protesters on Sunday, the sixth day of unrest in which the death toll has now passed 100 and more than 6,000 have been wounded.
  • The unrest is the biggest security and political challenge for Prime Minister Adel Abdul Mahdi’s government since it took power a year ago. The clashes have revived fears of a new spiral of violence that could suck in influential militia groups and be exploited by Islamic State.
  • Two years after oil-producing Iraq declared the defeat of Islamic State, security has improved but corruption is rampant, wrecked infrastructure has not been rebuilt and jobs are scarce. The protests do not appear to be organized by a single political group, and has caught the government by surprise. At an emergency cabinet meeting on Saturday night, the government agreed a 17-point plan to increase subsidized housing for the poor, stipends for the unemployed and training programs and small loans initiatives for unemployed youth.

The Washington Post – Anton Troianovski, Chris Mooney & Michael Robinson Chavez / Radical warming in Siberia leaves millions on unstable ground

  • Scientists say the planet’s warming must not exceed 1.5 degrees Celsius — but Siberia’s temperatures have already spiked far beyond that. A Washington Post analysis found that the region near the town of Zyryanka, in an enormous wedge of eastern Siberia called Yakutia, has warmed by more than 3 degrees Celsius since preindustrial times. For the 5.4 million people who live in Russia’s permafrost zone, the new climate has disrupted their homes and their livelihoods. Rivers are rising and running faster, and entire neighborhoods are falling into them. Arable land for farming has plummeted by more than half, to just 120,000 acres in 2017.
  • The migration from the countryside to cities and towns — also driven by factors such as low investment and poor Internet connection— represents one of the most significant and little-noticed movements to date of climate refugees. The city of Yakutsk has seen its population surge 20 percent to more than 300,000 in the past decade
  • A group of scientists, led by Dmitry A. Streletskiy at George Washington University, estimated in a study published this year that the value of buildings and infrastructure on Russian permafrost amounts to $300 billion — about 7.5 percent of the nation’s total annual economic output. They estimate the cost of mitigating the damage wrought by thawing permafrost will probably total more than $100 billion by 2050.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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