What Is This ‘Cadillac Tax’ Health Insurance Thingy?

You may have heard about the “Cadillac tax” health insurance thing. As with so much else involved with the health care/insurance discussion, policymakers have chosen wording that causes most people to tune out. Terms like “Cadillac tax” have little meaning to regular people because they convey very little information – or they evoke an image that masks its true impact.

When policymakers talk about a “Cadillac tax” on health insurance plans, what they are referring to is an upcoming tax on employers who provide really good health insurance plans that cover lots of things without requiring employees to pay large co-pays and deductibles when they get medical care. These plans cost more, so they are compared to luxury cars that cost more, hence “Cadillac.”

The tax was written into the Affordable Care Act with the consent of the Obama administration, which saw it as a way to limit federal government spending on health care reform. There are people who thing this tax is a good idea, and people who want the tax repealed.

Arguments In Favor Of The Tax

Those in favor of the tax are “market” economists who believe that people’s decisions, even about health care choices, are mostly driven by economic motives. They believe that people are “homo economicus” – a species of people who have good information and make rational decisions based on what will make them (or save them) the most money. These people are seen as “consumers” who respond to prices over other priorities in their lives.

They claim that with good health insurance, “consumers have little incentive to insist on cost-effective care and providers have little incentive to provide it.” The idea is that a tax on employers who offer good health insurance will benefit the country and:
1) create market forces that will reduce the country’s health care costs over time, and,
2) Translate as higher pay to employees because the employers are spending less on health insurance.

These economists believe that the better the health care plan, the more people will go to doctors and specialists when they don’t really have to. They believe people use high-cost medical procedures and drugs because they do not shop around for the lowest-priced alternatives. They believe that making people pay higher co-pays and/or deductibles and limiting which doctors they can see will cause them to “consume” less and stop “overutilizing” expensive medical care.

They say that setting high co-pays and deductibles, and limits on doctors, will make people put “skin in the game” and:

1) Stop knowingly using medical services needlessly. People know when they don’t really have to see a doctor but do so anyway because they don’t have to pay too much.
2) “Shop around” for the lowest-cost doctors (of those offered) when they do need medical care.
3) “Shop around” when a drug or procedure is needed, whether it’s for fixing a broken arm or treating cancer, and will choose the lowest-cost options.

The Argument For Repealing This Tax

That was the market economist side of the “Cadillac Tax” argument. They want the tax to take effect starting next year, as planned. The other side is people who want to repeal the tax. They want citizens to have more access to good health care, with low co-pays and low deductibles and a wide choice of doctors and care options.

On a conference call Thursday, Economic Policy Institute (EPI) Research Director Josh Bivens and Senior Economist Elise Gould outlined arguments against this tax. They explained that research (and basic common sense) shows that consumers are not equipped with information and knowledge that enables them to cut back only on unnecessary or ineffective care. In other words, people go to doctors to find out if they need medical care, because the doctors are the ones trained in medicine, not regular people.

With high deductibles and co-pays, people cut back on health care across the board. They don’t see a doctor when they need to, which can cause them to be sicker when they finally do see a doctor (which is more expensive and undoes the money-saving efforts) or just suffer, which should not be a policy goal (unless you are a conservative or a psychopath).

In EPI’s “Tax on Expensive Health Insurance Plans Could Cut Care Along With Costs,” Bivens and Gould write,

Evidence shows that making health care more expensive does induce people to consume less of it. But the same evidence shows that people do not cut back only on care that is ineffective or somehow luxurious; instead, they cut back across the board. Expecting sick Americans to decide on the fly in an opaque and uncompetitive marketplace what health care is cost-effective–and what is not–is an unrealistic and unfair approach to containing costs.

While overall costs may be pushed down by the excise tax, this is a good outcome only if one believes that the health care squeezed out is merely the ineffective kind. But a lot of welfare-improving care may also be a casualty, and for some patients, cutting back on medically indicated care because of the increased cost-sharing could increase their overall spending. For example: some patients who cut back on low-cost pills to contain cholesterol end up in emergency rooms.

Cutting utilization is also a limited cost-containment strategy…

One more thing: the market economists claim that employers will pass along savings from lower-cost plans to employees as higher pay. What is the fat chance of that? What world do they live in? World economicus? I mean, really.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

“A Senator is needed but missing.”

Jan 6, 2001, African-American members of the House try to object to disenfranchisement of minorities in 2000 election:

In hindsight it might be a good time to bring this up again, maybe ask some of the Democratic senators who were present at the time why they did not join with African-American members of the House.

Here is a list of Democratic senators at that time:

Robert Byrd (D-WV)
Ted Kennedy (D-MA)
Daniel Inouye (D-HI)
Ernest Hollings (D-SC)
Joe Biden (D-DE)
Patrick Leahy (D-VT)
Paul Sarbanes (D-MD)
Max Baucus (D-MT)
Carl Levin (D-MI)
Chris Dodd (D-CT)
Jeff Bingaman (D-NM)
John Kerry (D-MA)
Tom Harkin (D-IA)
Jay Rockefeller (D-WV)
John Breaux (D-LA)
Barbara Mikulski (D-MD)
Tom Daschle (D-SD)
Harry Reid (D-NV)
Bob Graham (D-FL)
Kent Conrad (D-ND)
Herb Kohl (D-WI)
Joe Lieberman (D-CT)
Daniel Akaka (D-HI)
Paul Wellstone[7] (D-MN)
Dianne Feinstein (D-CA)
Byron Dorgan (D-ND)
Barbara Boxer (D-CA)
Judd Gregg (R-NH)
Ben Nighthorse Campbell (R-CO)
Russ Feingold (D-WI)
Patty Murray (D-WA)
Ron Wyden (D-OR)
Richard Durbin (D-IL)
Robert Torricelli[5] (D-NJ)
Tim Johnson (D-SD)
Jack Reed (D-RI)
Max Cleland[5] (D-GA)
Mary Landrieu (D-LA)
Chuck Schumer (D-NY)
Blanche Lincoln (D-AR)
Evan Bayh (D-IN)
John Edwards (D-NC)
Zell Miller (D-GA)
Bill Nelson (D-FL)
Tom Carper (D-DE)
Debbie Stabenow (D-MI)
Maria Cantwell (D-WA)
Ben Nelson (D-NE)
Hillary Clinton (D-NY)
Jon Corzine (D-NJ)
Jean Carnahan[5] (D-MO)
Mark Dayton (D-MN)

VW Case Shows Need For More And Bigger Government

Again and again we hear about corporations doing bad things so they can make more money: polluting, selling contaminated food or otherwise harming people’s health, selling products that injure people or just don’t do what they advertise, tricking and scamming people out of their money, selling banned goods or providing financial services for terrorists or drug cartels, and so many other things that are not good for people or society.

Wouldn’t it be great if there were some entity that was more powerful than these corporations, whose purpose is to protect us, reign these corporations in, make and enforce rules, prosecute offenders and put a stop to this stuff?

This Week: VW

This week we are hearing about Volkswagen (VW). For years the company claimed they were selling “clean diesel” engines, but they were tricking their customers, the public and governments around the world. Their cars are really a public health threat, putting out up to 40 times the legal limit of pollutants that cause asthma and other disease.

VW built a “defeat mechanism” into as many as 11 million cars. This mechanism let the cars pass government tests, even though they were polluting like crazy when driven in the real world. The mechanism made the engine run clean during government tests, then when it detected that the tests were finished it set the engine to start polluting again.

For years these cars have been harming people and until now VW was getting away with (and making big profits from) this. They were finally caught, and we will see whether executives are prosecuted, or if this will be one more case of weak (or corrupted) government issuing a fine that lets a company make its shareholders pay the cost instead of holding the executives that did it accountable.

The Fix For The VW Cars

This is huge. Up to 11 million cars have these “defeat” mechanisms in them. These cars have to be fixed because their emissions can cause people to develop asthma and other respiratory diseases. But fixing this is a big problem.

According to Wired, in “VW Owners Aren’t Going to Like the Fixes for Their Diesels,” there are two choices for fixing these cars – and either choice means the car owners end up losing a lot of what they thought they had paid for.

The first is to update the software so the cars always run in the “test mode” that defeated the emissions tests. But the changes the software made to the engines to get them to operate within the legal emissions limits while being tested will cause the car to either have poor acceleration or poor gas mileage.

The second is to actually fix the problem that causes the engines to pollute. According to Wired, VW would have to add a “urea” tank and the means to inject this into the catalytic converter:

The standard way of making a diesel run cleanly is to use selective catalytic reduction, a chemical process that breaks NOx [mono-nitrogen oxides] down into nitrogen and water. Part of that process includes adding urea to the mix. The super effective system can eliminate 70 to 90 percent of NOx emissions, and is used by other diesel manufacturers like Mercedes and BMW. The downside is that it adds complication to the system, and cost — $5,000 to $8,000 per car. And you need to periodically add the urea-based solution to your car to keep it working.

… So it seems the logical way to get those cars to perform like their diesel cousins is to add a urea. VW’s unlikely to embrace that option, because adding hardware to half a million cars would be far more expensive than a computer update. It wouldn’t be any fun for the TDI owner, either. Not only do you have to spend an afternoon with your local dealer, you have to make room for the tank. That could mean sacrificing cargo space or giving up the spare tire.

The cost to VW will be huge, and the customers lose either way. Never mind all the people suffering asthma and lung disease resulting from the pollution these cars were emitting.

VW Not An Isolated Case

The New York Times reports, in “Volkswagen Test Rigging Follows a Long Auto Industry Pattern,” that,

For decades, car companies found ways to rig mileage and emissions testing data. In Europe, some automakers have taped up test cars’ doors and grilles to bolster their aerodynamics. Others have used “superlubricants” to reduce friction in the car’s engine to a degree that would be impossible in real-world driving conditions.

Automakers have even been known to make test vehicles lighter by removing the back seats.
… [In 1973 the EPA] fined Volkswagen $120,000 after finding that the company had installed devices intended specifically to shut down a vehicle’s pollution control systems. In 1974, Chrysler had to recall more than 800,000 cars because similar devices were found in the radiators of its cars.

[. . .] Beyond emissions, the industry has long been contemptuous of regulation. Henry Ford II called airbags “a lot of baloney,” and executives have bristled at rules requiring higher mileage per gallon.

VW might not even be the only company that is scamming government testing labs with “defeat mechanisms’ right now. From the report,

“We call it the tip of the iceberg,” said Jos Dings, the director of Transport and Environment. “We don’t think this will be limited to Volkswagen. If you look at the testing numbers for the other manufacturers, they are just as bad.”

The Times report lists several examples of the auto industry engaging in profit-making by endangering their customers. There was the “unexploded Pinto” problem of gas tanks blowing up. There were 271 deaths from the Ford-Firestone tire scandal. There were the Takata airbags that either don’t work or injure people. There was Chrysler selling as new cars that had been driven for 60,000 miles with the odometers disconnected. Click through, there’s plenty… But no one has been put in jail.

So what VW was caught doing is “not an isolated incident” and, in fact, VW had already been caught doing the same thing in the 1970s.

Not Just Auto Industry

VW is hardly the only company in the auto industry engaged in these practices, and the auto industry is hardly the only industry engaging in this kind of activity.

● Of course, tobacco still kills over 480,000 Americans each year and no one even talks about doing anything about it. Everyone understands this is because of the great wealth and power of the tobacco companies as well as their influence over a certain political party. More than 480,000 terrible, painful deaths each year!

● The “Obamacare” health reform was written the way it was because it was understood from the start that the insurance and pharmaceutical companies had enough power to block anything they didn’t like. So we didn’t get Medicare for All or even a “public option.” These industries had already blocked the administration of President Bill Clinton from reforming the health care system, leading to more decades of deaths, untreated illness and bankruptcies.

● In 2000, The Nation reported, in “The Secret History of Lead,” that the lead industry knew and kept secret for decades that they were poisoning people with lead in gasoline, paint and other products, and instead of doing something about it they protected their profits by covering this up and attacking government efforts to do something.

The leaded gas adventurers have profitably polluted the world on a grand scale and, in the process, have provided a model for the asbestos, tobacco, pesticide and nuclear power industries, and other twentieth-century corporate bad actors, for evading clear evidence that their products are harmful by hiding behind the mantle of scientific uncertainty.

Mother Jones’ Kevin Drum reported on just one of the societal consequences of this decades-long crime, in “America’s Real Criminal Element: Lead.” His investigative report concluded that lead may be “the hidden villain behind violent crime, lower IQs, and even the ADHD epidemic.” That whole put-millions-in-prison thing that has ruined so many lives? Oops, it might have been the lead industry’s doing. Are any lead industry executives in jail for that?

● The fossil-fuel industry is notorious for polluting and for causing climate change. The industry has captured an entire political party and has them fight the development of alternative energy sources, taxes on carbon, fuel-saving public transportation initiatives, other energy-saving efforts, etc. The industry funds a climate denial cult that threatens the entire planet.

These are just a few of so many examples.

Big Government Prosecutions Can Make A Difference

Corporations save money by cutting corners. Dumping carbon into the air. Putting lead in gasoline. You name it. They price the potential fines into the product as a cost of doing business. And company shareholders pay those fines. The executives who commit the actual wrongdoing are rarely if ever held accountable themselves.

Many companies can safely assume that the government isn’t even going to catch them or do anything if they do. Government cowed by intense anti-government propaganda. We hear that “government can’t do anything as well as business can,” that “big government threatens us,” and “government takes money out of the economy.” We hear about “burdensome government regulations” that “kill jobs” on a 24/7/365 basis. Government and democracy do not have an advertising budget to counter this relentless propaganda.

Government is underfunded because the propaganda elects corporate-backed anti-government politicians who convince people to allow tax cuts (on the corporations and their owners) paid for by cutting back on government. And especially cutting back on government regulation and enforcement. The result is government enforcement is backing down all the time.

Industry executives revolve through the door into government and then back into plush corporate offices where they collect rewards for protecting their industries. Our “captured” government notoriously refuses to bring corporate criminals to justice. Not one banker, for example, was prosecuted for obvious crimes leading to the 2008 financial crash.

However last week we saw one rare instance of a prosecution of individuals for corporate crime. The people running Peanut Corporation of America, a Georgia peanut company, were prosecuted after a salmonella outbreak that sickened and hospitalized hundreds of people and killed 9 of them. Company executives knew for years their product was made in unsafe ways that were causing contamination — but instead of spending what was needed to fix the problem they covered this up. So the owner was sentenced to 28 years in prison and other executives were sentenced to 20 years.

Thanks to an actual prosecution resulting in prison terms for company executives it is likely that the public will suffer fewer food-safety problems, at least for a while.

Our government supposedly exists to protect We the People from wealthy and powerful interests, including other countries. Our revolution against the wealthy British aristocracy and the King’s corporations testify to this. A government that is “of the people, by the people and for the people” should be big enough, strong enough and funded enough to reign in companies and billionaires, and protect We the People from the kind of corporate misbehavior we saw from Volkswagen — long, long, long before it involves 11 million cars all spewing out serious threats to public health.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

The Wild Ride Gets Wilder – Only Government Spending Can Fix This

The world is out of balance. Everyone’s nervous. There is a glut of money floating around the world and no one offers a “safe place” to put it. The stock market is way up, way down, way up, way down – sometimes all on the same day. China’s currency is having dramatic swings while the U.S. has an enormous, humongous trade deficit.

Super-wealthy people are making and losing hundreds of millions (sometimes billions) in a day – none of it on making or doing actual things that matter. Inequality is soaring. (The top 25 hedge fund managers earn more than all kindergarten teachers in the U.S. combined.) And all around the world, there’s very little actual economic growth.

Meanwhile, most people barely (or don’t) have enough to get by.

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A Look At The Fast Track Bill Shows It’s The Wrong Thing To Do

The “fast track” trade promotion authority bill has been introduced in the Senate. Article 1, Section 8 of the Constitution says, “The Congress shall have power to … regulate commerce with foreign nations.” But under fast track, Congress relinquishes that power and agrees to pass trade bills brought to them by the executive branch in a very short time frame with little debate and without making any changes should any problems present themselves.

Though it was announced that this year’s fast track bill was the result of a “deal” between Sens. Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah) the 2015 bill is nearly identical to the 2014 bill that died in Congress without support for a vote. See this side-by-side comparison from Rep. Sander Levin of the House Ways and Means Committee. It is unclear from this comparison why the “negotiations” between Hatch and Wyden took so long, and what Wyden got that enabled him to put his name on it, enabling the bill to be sold as “bipartisan.”

Fast Track Sets Aside Normal Procedure

Congress does not set aside normal procedure, debate, the ability to fix problems that turn up and agree to vote within 90 days except for trade agreements – even though trade agreements have now proven to have such a tremendous and often detrimental effect on our economy, jobs, wages and inequality. Where did the idea to do this come from? According to Public Citizen, this unusual procedure was “initially created by President Richard Nixon to get around public debate and congressional oversight.”

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Will Media Continue Blackout Of Progressive Budget?

Next week, progressives in Congress will release their annual budget proposal. They do this every year, and every year the national news media largely ignores it. Will the elite media report on it this year? Make some noise, and maybe they will.

There are alternative ways to run a government budget, but they are just excluded from the national debate. The elite position creates a “conventional wisdom” that there are no alternatives. But America’s top income tax rate used to be more than 90 percent, to combat inequality and the threat inequality poses to democracy — and the rich still got richer. At the same time, the corporation tax rate was 50 percent, and corporations paid 32 percent of all taxes. That has dropped to just 8.9 percent now, and Congress and the president are now proposing to reduce the corporate tax rate dramatically — again. As a result of these cuts, inequality has soared, budgets have been thrown out of balance, schools have declined, we no longer even maintain — never mind modernize — our crucial infrastructure.

We can have a budget that serves “We, the People.” It’s about priorities. Frankly, in the richest country in history, it is possible to make sure that everyone has a job, good medical care, a good retirement, a good free education, and keep our infrastructure modernized and up-to-date — and all while making sure that the budget is balanced. It really is just a matter of priorities — choices about how we distribute the country’s resources. Unfortunately for 99 percent of us, “we” choose intense inequality and a vast military machine.

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Postal Workers And The Public Want A Postal Banking Public Option

Contract talks between the American Postal Workers Union (APWU) and the U.S. Postal Service for a new contract start Thursday. Along with asking for fair wages and benefits, the APWU wants improvements in customer services, including postal banking.

“There are two competing visions of the future of the Postal Service,” said APWU President Mark Dimondstein. “Postal management’s policy has been to severely degrade service, dismantle the postal network, and engage in piecemeal privatization. … Management has shortened hours at neighborhood post offices, closed mail processing centers, lowered delivery standards, and slowed mail delivery.”

Instead of trying to “save money” by cutting service with layoffs and closings that cause more customers to turn away, which costs revenue, the Postal Service should add services such as postal banking. This would also help millions of people who currently are left wide open to predatory services like payday lending.

Postal Banking: A Public Option For Banking

Until 1967, the Postal Service (then called the Post Office) operated postal banking through the United States Postal Savings System. Reviving postal banking would be like offering a “public option” for financial services. It would let people have accounts they could use to cash checks, get small loans, pay bills and even get prepaid debit cards. These services would enable lower-income Americans to avoid the exploitative “payday lenders” and check-cashing “services” that eat up working people’s earnings.

The Postal Service would use existing bank infrastructure as the backbone for these services, particularly the debit card service. In “A public option for banking,” Mike Konczal explains how the Treasury Department is already doing this with their Direct Express debit card program for disability and pension payments.

The program allows unbanked recipients of Social Security, federal disability and a few pension-related federal programs to receive their benefits on a debit card. The program emerged from congressional efforts in the 1990s to move from paper checks to direct deposits for these benefits. Congress tasked Treasury to make sure there were low-cost accounts available to the unbanked so they could access deposits.

… By 2007, the department initiated a competitive bidding process for the cards, and Comerica won the account by offering the low-fee schedule the cards now have.

The Treasury Department is already offering this service. There is no reason the Postal Service could not do the same thing with postal banking.

Millions Would Benefit

A lot of people would benefit if the Postal Service offered postal banking. The term for people with no bank accounts is “unbanked.’ According to the 2013 FDIC National Survey of Unbanked and Underbanked Households, “7.7 percent (1 in 13) of households in the United States were unbanked in 2013. This proportion represented nearly 9.6 million households.” On top of that, “20.0 percent of U.S. households (24.8 million) were underbanked in 2013, meaning that they had a bank account but also used alternative financial services (AFS) outside of the banking system.”

In “The Post Office Should Just Become a Bank, David Dayen explains how this idea could free these millions from the grips of “check-cashing stores, pawn shops, payday lenders, and other unscrupulous financial services providers who gouged their customers to the tune of $89 billion in interest and fees in 2012,” and help the Postal Service at the same time. With small fees for services, including small, low-interest loans, the Postal Service would be helping Americans and increasing its funding.

Post offices could deliver the same services at a 90 percent discount, saving the average underserved household over $2,000 a year and still providing the USPS with $8.9 billion in new annual profits, significantly improving its troubled balance sheet. The report calls simple financial services “the single best new opportunity for the posts to earn additional revenue.”

These millions are not being served now by the financial industry, as Dayen explains,

Banks don’t want these customers; if they did, they would actually make a play for their business. Large banks have closed branches in the very low-income communities with the largest percentages of unbanked Americans. In fact, banks find it more profitable to fund payday lenders that charge junk fees and outrageous interest—currently the subject of a Justice Department investigation—than actually take market share away from them.

Instead of partnering with predatory lenders, banks could partner with the USPS on a public option, not beholden to shareholder demands, which would treat customers more fairly.

If ever there was an idea whose time has come (again) it is the idea of a public option for postal banking. It would help millions of people, would boost the revenue of the Postal Service and would demonstrate that our government actually can be on the side of regular people. (Note that a government service in a democracy should be providing a government service, not trying to “operate like a business” and “make money” off of citizens.)


Also see “A “Grand Alliance” To Save Our Public Postal Service.”

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

How To End Unemployment

Alongside Friday’s good employment data, there is a brouhaha on the Internets over claims that the government’s employment numbers are a “big lie.” Jim Clifton, Chairman and CEO of the Gallup polling company penned “The Big Lie: 5.6% Unemployment,” claiming that “the media” is “cheer-leading” and the White House is “scor[ing] political points” over phony numbers that the government makes up to make things look better than they are.

In fact, the “top line” unemployment number – now 5.7 percent, representing 9 million people, does not factor in people who have given up looking, 6.8 million part-time workers who want to work full-time, 2.2 million “marginally attached” people, people who are grossly underpaid, etc. But everyone knows that, and the government reports that. The “official” number has a specific definition, the “U-6 “alternative measure of labor under-utilization” reports the more accurate 13.5 percent number. So somewhere between 15 and 20 million Americans count as un- or underemployed. But even that doesn’t count those who have given up. It’s still bad out there, but the government’s figures are not being manipulated.

Intentionally High Unemployment

I want to suggest that this high un- and underemployment is intentional. Here is why. Two things that the government could easily do right now would pretty much get rid of unemployment. But our government is blocked from doing those things by extremely wealthy people, who benefit from the low wages, and a desperate and “cowering” reserve army of unemployed status quo.

First, balancing the trade deficit would by itself bring back more than 5 million jobs. This is based only on the 3.1 million lost to the China trade deficit, 1 million lost to NAFTA and 900,000 lost to the Japan trade deficit. We also have trade deficits with Germany, South Korea, and others.

A way to visualize this is to imagine the effect on our economy of $500 billion of new orders coming in to businesses that make and do things inside the U.S. Then another $500 billion next year and every year after that. Our annual trade deficit is $500 billion. Fixing that means $500 billion of new business here, now,  and continuing every year from now on. What you are visualizing is the damage this trade regime has done to us since Wall Street and the right’s “free trade” ideology took over.

Second, we have deferred maintaining our infrastructure since the Reagan era started the cycle of tax cuts and spending cutbacks. To bring the country’s infrastructure up to standards (never mind modernizing) we would need to spend $360 billion each year for 10 years, according to the American Society of Civil Engineers’ Infrastructure Report Card. If you conservatively estimate that each $1 billion spent on infrastructure creates 30,000 jobs, $350 billion translates to 350×30,000 = 10.5 million jobs.

So that’s conservatively 15.5 million jobs if we just go back to doing what the country did before the Reagan era. (This gives you a hint at the damage Reagan’s “trickle down” economics, and “free trade” market ideology have done. Look around. The extreme inequality that resulted tells you why it was done.)

Balance trade and fix up our aging infrastructure means at least 15.5 million jobs. (Think about what that would mean for wages, too.)

But That’s Just Catch-Up

But those things are just playing catch-up. It comes close to giving jobs to the unemployed, part-time for economic reasons and “marginally attached” workers. It doesn’t even start to dig into the people who have given up and left the labor market.

We got here by cutting taxes for the rich, gutting government, deferring maintenance, a and letting a few billionaires harvest our public wealth through privatization, etc. We’ll get out of it by fixing the trade deficit, repairing our infrastructure, undoing policy mistakes that have continued since the Reagan era, and ending “trickle down” tax cuts.

How do we take this a step further? The following things would employ tons of people and bring a long-term economic return far above any “cost.”

First, retrofit buildings and homes to be energy-efficient. Start with the basics: plug leaks and drafts, paint roofs white. These simple things could employ tons of people who we call “low skilled.” Take it a step further, and install energy-efficient windows, insulation, modern heating and cooling systems, solar on the roofs, etc. — all made in America, of course — and we will employ millions more. The energy payoff would be enormous, and we would go into the future with a much more efficient economy.

Next, engage in 21st century infrastructure projects like high-speed rail across the country and into Canada and Mexico — just like China is already doing. (See: “New Silk Road.“) We’ll create jobs, and end up with a massively more efficient, competitive economy. Then, modernize our power grid and install wind turbines across the plains states. Again, we end up with a massively more efficient, competitive economy. Requiring American-made supplies boosts the return to our economy.

What about building out national, high-speed, fiber internet? Imagine the innovation that would result.

There is so much we could do to first bring about full employment, and then move our economy into the 21st century. But we are held back by this weird Reagan/Wall Street/conservative ideology that tells us not to believe that We the People deserve a government that spends to make our lives better. That spending boosts us up now, makes our lives better, and more than pays for itself later. But we are kept from dreaming and doing because that return on our investment would go to us, instead of into the pockets of a few billionaires.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Give Americans A $2000 Check From “Deferred” Corporate Taxes

U.S. multinational corporations are hoarding an estimated $2 trillion “offshore” to take advantage of a loophole in our tax laws. At our 35 percent top federal corporate tax rate, that represents up to $700 billion in taxes owed but “deferred” because they are “offshore.” This is not imaginary or future money; it is taxes owed on $2 trillion of profits these companies have already made. Who should get this money?

A loophole in the corporate tax code allows companies to “defer” paying taxes on profits made outside of the U.S. until they “repatriate” it – bring the money back to the U.S.. Because of this loophole corporations are holding an estimated $2 trillion of profits “offshore.” Companies are increasingly moving jobs, production and profit centers out of the country to take advantage of this scheme – or are engaging in schemes to make it look like they are. (The amount is increasing 11.8 percent a year and the rate of increase is increasing as well.)

That $700 billion is serious money. Washington lobbyists are working with Congress to come up with various corporate tax “reform” schemes designed to let the corporations off the hook for much of this tax bill – and to lower their future tax bills as well.

The most popular “centrist” idea is to let the corporations just keep much or most of the tax money they owe, if only they would just let us use some of it to maintain our country’s infrastructure. Going along with this would reward these companies for engaging in schemes to “offshore” jobs, production and profit centers, thereby moving (or making it appear that they moved) these profits out of the country – and certainly would encourage doing even more of this from now on.

Send A $2,000 Check To Every Adult – AND Fix Our Infrastructure

Instead of letting these companies off the hook for this tax bill, here is an alternative idea: Let’s collect the taxes that are due on these profits that have already been made, send every adult in the U.S. a check for $2,000, and use what’s left over to fix up our infrastructure.

This is real money, and a lot of it. Instead of making a “deal” on deferment and letting the corporations just keep this money they owe us, let’s fix this loophole and give most of this tax money to the 242 million U.S. residents over 18 as a $2,000 check. What’s left over (and there might be a lot – as much as $215 billion) can be used to fix our infrastructure and other priorities like research and development, fighting Ebola and other diseases, forgiving student debt – you name it.

This is about who gets the money. Do we give the tax money that is already owed to We the People, or do we let the giant corporations just keep it? By making this about a $2,000 check directly to every adult, it becomes personal. It becomes an issue of real money in people’s pockets, not some distant sum that “government” uses for their own good but that people never really feel or touch. Sending people a $2,000 check turns this battle over this money into a personal fight, not just some nebulous, distant, complicated government policy issue.

Who Should Get The Money?

By the way, when we talk about “corporate” money and corporate tax cuts, this is what – more accurately “who” – we are really talking about:

The top 1 percent own 50.9 percent of all stocks, bonds, and mutual fund assets. The top 10 percent own 90.3 percent. The bottom half of all of us own 0.5 percent – one half of one percent. That was 2007 – the top few have only increased their ownership percentages since.

This is about who gets the money. There is up to $700 billion in taxes due and someone is going to get that money. By making this about a $2,000 check to each adult American vs. billions to the owners of the giant corporations, we’re making the “who gets the money” argument personal instead of abstract.

Effect On Economy

What happens to our economy if every adult gets a $2000 check? How much hiring happens in local stores, etc?

What happens to our economy with up to $215 billion going into infrastructure work, with the related hiring and purchases of supplies?

What happens to our economy if companies lose the incentive to move jobs, production and profit centers offshore to take advantage of this loophole?

But wait, there’s more. There’s also that other $1.3 trillion – the “after tax” part that is offshore, too. If we do something about this deferment scam companies would lose the incentive to move jobs, production and profit centers out of the country to make it look like their profits are made elsewhere, and would “bring that money back.” The money would either be invested in the corporation or distributed to shareholders. This would be a big stimulus to the economy either way.

The Numbers

There’s as much as $2 trillion (maybe more) sitting offshore representing up to $700 billion in taxes owed at the top tax rate of 35 percent. (Taxes already paid to other countries are subtracted from what is owed here. This is why the tax bill is “up to” $700 billion. State taxes are also due on these profits, this article concerns itself with the federal share.)

According to the Census Bureau’s QuickFacts there were 316,128,839 Americans in 2013, 23.3 percent of them under 18, leaving 242,470,819 adults.

Sending a $2,000 check to 242.5 million adults costs about $485 billion. Up to $700 billion owed minus $485 billion leaves up to $215 billion for infrastructure and other priorities.

Summary

It’s a great way to accomplish several things that are good for the country:

1) Get cash to people right now. Helicoptered in, $700 billion would make a very big difference that people would feel now and the economy would feel for a while.

2) A $2,000 check shows people how corporate tax breaks are seriously costing them.

3) This puts pressure on “corporate tax reform” deals that reward the corporations by letting them keep any of it.

5) The best part is these companies already owe the money. This is about who gets the money that is owed to We the People. It makes the “We the People” part personal.

The awareness “making this personal” would bring to the issue would lend public support to other efforts to get companies to pay their taxes.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Republicans On Supreme Court Enable Ohio Voter Suppression

The Republican majority on the US Supreme Court by the usual 5-4 today overturned a lower court and blocked a week of early voting in Ohio.

A US Supreme Court just made it much harder for many people to vote — even impossible for some.

Ohio is one of the states that provides plenty of voting machines in affluent, mostly-white precincts while providing few in poorer, minority districts. The result is long, long, long, long lines at the polls in these district, discouraging or making it impossible for people to vote.

I’d call this one of the most blatant uses of raw power for partisan purposes since Bush v Gore, when the Court ruled 5-4 that counting the votes in Florida would “threaten irreparable harm to petitioner Bush, and to the country, by casting a cloud upon what he claims to be the legitimacy of his election.”

Other blatant abuses include letting corporations put money into elections, letting billionaires put as much as they want into elections and getting rid of the Voting Rights Act.