Harvard and the Trump administration face off in court over funding cuts
The hearing represents a pivotal moment in the battle between Harvard University and the Trump administration as a federal judge hears arguments over whether the massive cuts to the university's federal research funding were illegal.
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Yahoo
23 minutes ago
- Yahoo
I Asked ChatGPT What Would Happen If the Upper Class Paid Taxes at the Same Rate as the Lower Class — Here's What it Said
America's progressive tax system is based on graduated brackets that require higher earners to pay a larger percentage of their income than lower earners — at least on paper. I asked ChatGPT what would happen if the upper class paid taxes at the same rate as the lower class, and it explained that the rich would pay more, not less, if the law were changed to even the rates. In fact, it wrote that 'the U.S. economy and society would experience major shifts.' Here's what it told me. Find Out: Read Next: The Effective Rate Looks Nothing Like the Progressive Brackets ChatGPT explained that, thanks to loopholes and deductions, the effective tax rate — what people actually pay — looks more like the following table than the familiar IRS brackets that levy a 10% income tax on the lowest earners and 37% on the highest. Income Group Average Effective Tax Rate Bottom 20% (low income) 10% to 14% Middle 20% 15% to 18% Top 1% 25% to 27% Top 0.01% 23% or lower due to loopholes and capital gains ChatGPT summed it up with this: 'Despite progressive tax brackets, effective tax rates (what people actually pay after deductions) show that the wealthiest often pay less than their tax bracket — especially if their income comes from investments taxed at lower rates (e.g., capital gains, dividends, carried interest).' Discover More: What Would Change If Everyone Paid the Same Rate? The AI platform created a hypothetical scenario where all Americans paid the same effective rate of 20%. It came up with four dramatic changes that could result. The following is a verbatim recounting of its synopsis. 1. Massive Revenue Increase The ultra-wealthy would pay dramatically more. The top 1% currently hold over 20% of total income and over 40% of wealth. Equalizing their rates with lower earners could generate $500 billion to $1 trillion per year in added federal revenue. This alone could fully fund universal pre-K, child care and perhaps even universal health coverage — without raising anyone else's taxes. 2. Reduced Deficit and Debt The U.S. deficit would shrink significantly. Interest on debt could fall over time, freeing up more government funds for infrastructure, education or emergency reserves. 3. Simpler, Fairer Tax Code With fewer loopholes and income-type preferences (like lower capital gains rates), the tax code would become simpler and more equitable. 4. Behavioral and Economic Reactions Wealthy individuals and corporations might: Shift income offshore, increase tax avoidance Reduce investment (if capital gains are taxed higher) Lobby aggressively to reinstate preferential treatment It's Much Better To Be Rich Today Than 50 Years Ago The platform then provided historical context that puts today's tax framework in perspective with this verbatim response. In the 1950s-'60s, the top marginal tax rate in the U.S. was over 90%, and the economy grew rapidly. Today, the top 1% pay a smaller share of their wealth and income than they did 40 to 50 years ago. So the real impact is less about 'raising the rich to poor's rate' and more about closing loopholes that let the rich pay less than their tax bracket. Summary ChatGPT closed by summarizing its report with the following word-for-word synopsis. If the rich paid the same effective rate as the poor: Massive new federal revenue Potential for big public investments or deficit reduction Greater tax fairness Possible economic tradeoffs from investment shifts or tax planning More From GOBankingRates 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth This article originally appeared on I Asked ChatGPT What Would Happen If the Upper Class Paid Taxes at the Same Rate as the Lower Class — Here's What it Said Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Hill
24 minutes ago
- The Hill
Trump's new model to support Ukraine is a win-win
From the start, Ukraine's defense against Russia's full-scale invasion has been underpinned by a robust commitment from its Western partners. The Biden administration's pledge to support Ukraine 'as long as it takes' promised a sustained flow of military and financial aid directly from Washington. This 'direct donor' model was key to Ukraine's initial resilience, providing essential weaponry from U.S. stockpiles. Biden's approach primarily involved direct transfers from U.S. weapons inventories, prioritizing speed and ensuring that Ukraine received vital equipment quickly to counter Russian aggression. The American government provided extensive amounts of equipment, from air-defense missiles to artillery rounds and armored vehicles, directly to Kyiv. Now, under President Trump, the paradigm is shifting. The U.S. is transitioning from a direct donor to a 'strategic supplier,' where European allies purchase American weapons for Ukraine at their own expense. While this reorientation marks a significant change, it is far from the worst-case scenario for Ukraine. Instead, it represents a pragmatic and potentially more sustainable evolution of transatlantic burden-sharing, securing critical capabilities for Ukraine while invigorating the U.S. defense industrial base and recalibrating the nature of allied support. Support is still 'as long as it takes' but also 'at the others' expense.' This marks a departure from the traditional post-World War II donor-recipient model, particularly within the NATO alliance, towards a more transactional 'America First' approach. Future U.S. engagement in global security will likely be contingent upon tangible economic benefits and direct cost-sharing from allies. Such a shift could lead to a more predictable, albeit less altruistic, framework for security cooperation, where allies are compelled to demonstrate their commitment through direct financial contributions. This policy reorientation accelerates European strategic autonomy. While the immediate effect is Europe paying for U.S. weapons, the long-term implication is a forced impetus for greater European defense integration and self-sufficiency. European nations have already been increasing their defense spending and proactively planning for a future with less guaranteed U.S. aid. This new model, by making U.S. weapons available for purchase, encourages Europe to develop its own robust procurement mechanisms and potentially expand its own defense industrial base. Ukraine's most pressing and enduring need remains robust air defense against Russia's escalating missile and drone attacks. The U.S.-made Patriot air-defense system is critical, as it is one of the few systems capable of intercepting high-speed ballistic missiles. These systems are vital for protecting civilian infrastructure and population centers, which have been subjected to relentless Russian bombardment. A critical strategic reality for Ukraine is that not all American weapons are equally replaceable by European alternatives. While Europe is ramping up its own artillery production, the Patriot system's unique counter-ballistic missile capability makes it a requirement that only the U.S. can provide at scale. Europe, at the same time, has demonstrated a clear willingness and increasing capacity to shoulder a greater share of the burden. The European Union has already provided €165 billion in financial assistance and has launched an €800 billion Defense Readiness Plan. Frozen Russian sovereign assets may be used to finance what Ukraine needs. The shift to a foreign military sales model is explicitly intended to invigorate the U.S. defense industrial base. By integrating 'exportability features' into defense systems during the design phase, the U.S. seeks to advance its competitiveness abroad and potentially lower unit costs for both America and its allies. While the foreign military sales process has historically been slow and plagued by delivery backlogs, the new model offers a potential solution. Consistent, large-scale orders from European allies could provide the long-term contract certainty that the U.S. defense industry requires to invest significantly in surge capacity and overcome challenges. This transforms what was previously a 'drain' on American stockpiles, requiring replenishment at taxpayer expense, into a sustained stimulus for U.S. manufacturing, aligning with 'America First' economic principles. This shift is not merely about burden-sharing; it is about recapitalizing and modernizing the U.S. defense industrial base. While immediate fixes for current shortages remain challenging, this strategic reorientation creates a more sustainable industrial ecosystem. Trump's recent rhetoric marks a notable change from his earlier stance, which often appeared conciliatory toward Vladimir Putin. He has recognized that Russia, not Ukraine, is the core problem in negotiations, even threatening tariffs and sanctions on Russia and its trading partners if a peace deal is not reached within 50 days. The reality that Putin is not amenable to a quick 'deal' is now clear. There is now a crucial political opening for continued support to Ukraine, even if the funding mechanism changes. The narrative that Trump desires Ukraine's fall has been refuted. Instead, Trump is committed to ending the war on terms that align with his administration's interests. This represents a significant psychological advantage for Ukraine, as it lessens the fear of a complete U.S. abandonment.
The Hill
24 minutes ago
- The Hill
Columbia to pay $221M to restore funding cut by Trump administration
Columbia University said Wednesday it has agreed to pay the Trump administration $221 million to restore federal funding that was stripped following a probe into antisemitism on the campus. The school, according to the settlement, will pay a $200 million settlement to the federal government over a three-year period and $21 million to the U.S. Equal Employment Opportunity Commission (EEOC). 'This agreement marks an important step forward after a period of sustained federal scrutiny and institutional uncertainty,' Acting University President Claire Shipman said in a statement. 'The settlement was carefully crafted to protect the values that define us and allow our essential research partnership with the federal government to get back on track,' she added. The interim president said the Trump administration deal will allow the school to maintain its academic independence after losing $400 million in grant funding earlier this year. In June, a judge dismissed a lawsuit led by Columbia's faculty, ruling that only the school had grounds to sue the government for revoking its funds. 'Columbia's longstanding research partnership with the federal government is vital to advancing our nation's progress in key areas of science, technology, and medicine,' Board of Trustees Co-Chairs David Greenwald and Jeh Johnson said in a statement on the matter. 'We are proud of the role we play in advancing this public service and preparing the next generations of students to meet complex challenges around the world,' they added. President Trump announced the agreement on Tuesday night in a Truth Social post celebrating the win for his administration. 'It's a great honor to have been involved, and I want to thank and congratulate Secretary Linda McMahon, and all those who worked with us on this important deal,' he wrote. 'I also want to thank and commend Columbia University for agreeing to do what is right. I look forward to watching them have a great future in our Country, maybe greater than ever before!' He warned earlier in the post that other schools could face similar measures to motivate the erasure of diversity, equity and inclusion (DEI) initiatives, which the administration has deemed discriminatory. 'Columbia has also committed to ending their ridiculous DEI policies, admitting students based ONLY on MERIT, and protecting the Civil Liberties of their students on campus,' he wrote in the post. 'Numerous other Higher Education Institutions that have hurt so many, and been so unfair and unjust, and have wrongly spent federal money, much of it from our government, are upcoming,' the president added.
