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February 12, 2016

The Tax Policy Center (TPC) released its take on Marco Rubio's tax plan on Thursday. They concluded it would overwhelmingly benefits top earners the most, largely because it greatly reduces taxes on wealth income. And maybe eliminates them entirely — it's unclear.

Which brings up another point the analysis highlights: details matter.

For instance, Rubio's plan makes heavy use of tax credits, which allow filers to eliminate a set amount of their final tax liability. But what if the tax credit eliminates all of their tax liability, and there's still some of the credit left over? If the credit is refundable, the filer gets the remainder back from the government. If it's not, they don't.

How refundability would work has massive implications for who Rubio's tax plan would help the most. The TPC said Rubio's people didn't provide them the necessary details, so they went with assumptions based on the Rubio campaign's assertion that "our reforms would not create payments for new, non-working filers." Here are their results, in terms of the percent change in people's after tax income. ("Lowest quintile" means the bottom fifth of workers, "second quintile" means the second-lowest fight, and so on.)

(Graph courtesy of the Tax Policy Center.)

TPC found the plan would also massively reduce government revenue. Since Rubio has promised both a balanced budget and an increase in military spending, this implies enormous reductions in spending elsewhere. Jeff Spross

1:23 p.m.

Brexit isn't the only political crisis tearing the U.K.'s Parliament apart.

Three Conservative and eight Labour members of Parliament have left their parties in the past few days, and they have a surprisingly unified reason, BBC reports. All the defectors are fed up with Brexit proceedings and how their parties are being run, so they're coming together under a newly formed Independent Party.

Britain voted in June 2016 to leave the European Union, but just how that's happening has been a total mystery ever since. Parliament hasn't confirmed a Brexit deal with the EU, it doesn't really want a Brexit with no deal, and it hasn't opted for a referendum on the entire thing. Prime Minister Theresa May has just barely retained her seat through it all.

The leadership crisis has spanned both major parties, with seven Labour MPs first announcing their resignation from the party on Monday, CNN says. One defector, Luciana Berger, cited anti-Semitism within the party and said it had been "hijacked by the machine politics of the hard left." Joan Ryan, an eighth Labour defector, joined the new Independent Group on Tuesday. And on Wednesday, three Conservatives joined the Independents on account of "this government's disastrous handling of Brexit," they said in a letter to May.

The 11-member, centrist party is already united under the premise of fixing a "broken" political system, per its Twitter. The Labour Party is now seemingly worried about losing more MPs, as staffers lost access to voter rolls Wednesday, per The Guardian. Kathryn Krawczyk

1:22 p.m.

The Department of Justice is ready for Special Counsel Robert Mueller to drop his report, CNN reports.

Newly-confirmed Attorney General William Barr will announce "as early as next week" that Mueller has completed his probe into potential ties between the Trump campaign and Russian election interference, sources tell CNN. He'll reportedly only give Congress a summary of the confidential report and not the whole thing — a contrast to what many Democrats demanded of Barr during his confirmation proceedings.

Mueller has been investigating President Trump's 2016 campaign staff for nearly two years and has levied indictments against or negotiated plea deals with 37 people. Per CNN's reporting, this is the strongest sign that Mueller is finishing the probe. Still, "the precise timing of the announcement is subject to change," CNN says. If it comes next week, Trump will likely be in Vietnam meeting with North Korean leader Kim Jong Un.

It's unclear what Barr will include in the summary to Congress, or how long it will take for him to prepare that summary after announcing the probe has wrapped. Both the Justice Department and the special counsel's office declined to comment, CNN reports. Kathryn Krawczyk

1:21 p.m.

Michael Cohen will have two more months of freedom than expected.

President Trump's former lawyer has been granted a request to delay the beginning of his prison sentence. He was originally ordered to report to jail on March 6, but U.S. District Judge William Pauley has delayed this to May 6, reports BuzzFeed News. Cohen had been sentenced to three years in prison after pleading guilty to campaign finance violations related to his role in paying off two women who claim they had affairs with Trump. He also pleaded guilty to lying to Congress.

CNN reports Cohen's lawyers when making this request had pointed to Cohen's shoulder surgery, as well as his planned congressional testimony. Cohen plans to testify before three different congressional committees before his prison sentence begins, according to CNBC, and now, he'll have plenty of time to do so. Brendan Morrow

1:11 p.m.

Before health insurance brokers pitch a plan to employers, the brokers are pitched by the insurance companies themselves — and the pitches come with promises of luxury vacations, $100,000 bonuses and in one instance, the chance to play baseball with former New York Yankee Mariano Rivera.

The lucrative health insurance business doles out commissions and bonuses to independent brokers who are working with employers, reports ProPublica. But these additional incentives are ultimately paid for by the employers and the employees who purchase the plans. One major insurer, Health Care Service Corporation, spent $816 million on broker bonuses and commissions in 2017.

When insurance brokers sign up more employers, they receive commission based on the price of the premium, often upwards of $50,000 per client. Commissions increase for costlier plans, therefore creating a lack of incentive to promote more cost-effective options, per ProPublica. The average cost of employer-sponsored health insurance premiums has reportedly tripled since the 1990s.

Insurers foot the bill for commissions, but these payments are ultimately factored in to the price of the premiums that employers pay. Some insurers offer additional non-financial incentives to brokers, and these are often not revealed by brokers to the employers they are advising unless specifically asked for. Read more about the lucrative brokering business at ProPublica. Marianne Dodson

12:42 p.m.

Southern California has been emerging from its most recent drought cycle thanks to one of the wettest winters the long-parched southern half of the Golden State has experienced in years — 18 trillion gallons of rain have fallen in February alone.

The rest of the state is doing pretty well, too. No area "is considered to be in extreme or exceptional drought," the Los Angeles Times reported on Wednesday.

But don't expect these storms to come to the rescue when — not if — more intense droughts return to the region. All that rain water? Climatologist Bill Patzert estimates that 80 percent of it winds up in the Pacific Ocean.

"When you look at the Los Angeles River being between 50% and 70% full during a storm, you realize that more water is running down the river into the ocean than what Los Angeles would use in close to a year," said Mark Gold, associate vice chancellor for environment and sustainability at University of California, Los Angeles.

There are other reasons run-off evades capture in the region — for example, it's been so arid the last few years that the rainwater falls victim to exceptionally thirsty roots and soil before it can even get to any basins. That means less water for household use even as storms bring record rainfall. "What a waste of water supply," said Gold.

There have been increased efforts to retain more rainwater, which have proved to be more successful this year, and a new property tax passed last year will create funding necessary for better capturing practices. Read more at the Los Angeles Times. Tim O'Donnell

12:26 p.m.

Southwest Airlines took a $60 million revenue loss from the recent partial government shutdown, reports CNBC.

The airline lost money because fewer government workers and contractors were traveling during the shutdown, which stretched between December and January. The closure also halted plans to introduce new jets and routes, per CNBC. The company last estimated the loss to be between $10 million and $15 million, but since then has "continued to experience softness in passenger demand and bookings" due to the shutdown, reports CNBC.

Shares in the airline were down by more than 5 percent on Wednesday after Southwest projected a lower revenue outlook for the quarter. Both Delta and American Airlines saw a drop in shares as well, per CNBC. Aside from hurting air travel profits, the 35-day shutdown cost the American economy $11 billion, $3 billion of which will never be recovered. Marianne Dodson

11:24 a.m.

Democrats are already Berning some cold, hard cash.

Sen. Bernie Sanders (I-Vt.) announced his Democratic bid for the presidency on Tuesday, and 24 hours later, his campaign had already pulled in a massive $6 million. Those donations came from 223,047 different people, each donating an average of $27, the campaign tells The New York Times.

Sanders' campaign haul looked promising just 12 hours after his announcement, with his campaign saying it had raised $4 million by 8 p.m. In fact, it took him just four hours to trounce Sen. Kamala Harris' (D-Calif.) earlier one-day record of $1.5 million for this cycle. Sen. Elizabeth Warren (D-Mass.), meanwhile, reported a $12.8 million Senate fundraising stash in early January — a near-record for a senator that far from Election Day.

It seems likely that Sanders will continue to beat out current candidates' fundraising totals, seeing as $600,000 of Tuesday's donations will recur every month. That means "the campaign can easily factor into budget planning," the Times' Shane Goldmacher writes — and that Sanders may end up with more than the $228 million he raised in his last primary run.

Check out how Sanders' cash stash compares to other 2020 Democrats at The New York Times. Kathryn Krawczyk

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