Corporations Owe Hundreds Of Billions Of Taxes But GOP Goes After Federal Employees

Congress is again fighting over the budget with Republicans now demanding cuts in federal employee benefits. Is this really about the budget? Or is it about destroying government? Meanwhile hundreds of billions of taxes owed by corporations remain uncollected.

The recent Republican shutdown of the government ended with the can being kicked down the road, and the budget still in sequester and unresolved. The temporary funding runs out mid-January, and negotiators are trying to come up with a compromise. But Republicans insist that only cuts will be allowed, and that the sequester spending levels are the new normal.

Going After Federal Employees

Federal employees have endured a pay freeze for three years. They were furloughed during the government shutdown, they face ongoing furloughs because of the sequester cuts, and now they are being threatened with cuts in pay and pensions. WaPo reported in October that GOP lawmakers are eying federal-retiree benefits in upcoming budget talks.

Federal employees are bracing for the possibility of paying more toward their retirement benefits as political leaders slowly renew budget discussions with an eye toward deficit reduction. House Republicans and President Obama have both proposed the change in order to achieve savings.

Also, according to the American Federation of Government Employees (AFGE),

To replace sequestration, House leaders have proposed cuts to federal employees’ pensions and benefits the elderly, the sick and the poor receive through Social Security and Medicare. It’s important to note that cutting Social Security benefits directly affects federal employees.

By the way, this is not part of the budget negotiations, but three Republican Senators have introduced a bill to just do away with pensions entirely.

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What’s Next With Filibuster Reform?

Republicans are obstructing and sabotaging everything government does to make our lives better. Their plan is to run for office saying Democrats couldn’t make government work, so elect them and let them put “efficient” corporations and billionaires in charge. Last week Senate Democrats (finally) started to change the game by changing the filibuster rules. What happens next? With the right changes we could finally get progressive legislation that vast majorities of the public want passed, like expanding Social Security.

When last week started, this was the obstruction situation, with Republican efforts to thwart and nullify the will of the people:

1) Republicans in the Senate were filibustering all nominees to become judges, to run agencies, even to be cabinet members.
2) In the Senate Republicans were filibustering to block almost all legislation from coming up for a vote.
3) In the House Republicans were keeping all bills from being voted on if they would pass because of the votes of Democratic members.
4) In the states Republicans are obstructing efforts to implement the new health care law.
5) In the states Republicans are attempting to restrict voting, to keep people who would vote against them away from the polls.

This week this is the obstruction situation:

1) Republicans in the Senate were filibustering all nominees to be judges, to run agencies, even to be cabinet members to block them from coming up for a vote. Many nominees will be able to get votes and the judicial system and agencies can begin to function and serve We the People.
2) In the Senate Republicans were filibustering to block almost all legislation from coming up for a vote.
3) In the House Republicans were keeping all bills from being voted on if they would pass because of the votes of Democratic members.
4) In the states Republicans are obstructing efforts to implement the new health care law.
5) In the states Republicans are attempting to restrict voting, to keep people who would vote against them away from the polls.

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Economic Sabotage: Republicans Obstruct Infrastructure Work

There is consensus across the (sane) spectrum that the country absolutely needs to repair and modernize our infrastructure. There is widespread agreement this will help the economy now and in the future, and will create jobs. But Republicans in Congress refuse to allow infrastructure projects to proceed. Why? Because doing so will help the economy now and in the future, and will create jobs. Republicans in Congress are committing economic sabotage, and they know it.

Consensus

There is a bipartisan consensus — it even includes the Chamber of Commerce! — that the country has fallen behind and must maintain and modernize our infrastructure for the good of our economy.

President Obama talked about infrastructure in Jacksonville in July, saying,

We know strong infrastructure is a key ingredient to a thriving economy. That’s how the United States became the best place in the world to do business.

On the other end of things the Chamber of Commerce’s “Jobs & Growth Agenda” includes a section on “Reliable and Secure Infrastructure.” The Chamber says,

The U.S. Chamber is leading the charge to improve the quality of America’s infrastructure—whether it’s transportation, energy, or water networks—all of which directly impact our ability to compete in the global economy.

By modernizing our national infrastructure, we can improve commercial efficiency, increase U.S. competitiveness in the global economy, and create much-needed jobs in the near term.

Here are just a few of the other voices supporting a boost in infrastructure spending:

USA Today, USA’s creaking infrastructure holds back economy

Fareed Zakaria, Fixing infrastructure would help fix economy

Alliance for American Manufacturing, How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth

Business Insider, STUDY: Every $1 Of Infrastructure Spending Boosts The Economy By $2

Consensus vs. Obstruction

The Chamber of Commerce might say they are “leading the charge” but the Republicans in the Congress are obstructing the troops.

After the President asked for just a bit more infrastructure work, please, the Senate Republican leader responded, “No!” The House Republican leader has said that fixing the infrastructure is “more stimulus spending doomed to fail.”

The kook right (perhaps that should read “Koch right”) that really “leads the charge” for Republicans these days says Infrastructure Spending Is Not the Federal Government’s Business or that infrastructure spending is just more “big government.” Heritage Foundation claims here that government spending on infrastructure “takes money out of the economy”. Some of the (Koch-funded) kooks even actually claim that investing in infrastructure hurts the economy.

Obstruction Agenda Is Sabotage, Not Ideology

Look at this chart from the Financial Times’ FT Alphaville, The collapse of US infrastructure spending, charted:

This looks like lots of other recent charts, like the ones that show consumer confidence plunging in the face of Republican obstruction of everything (and especially their repeated hostage-taking over the debt-ceiling and their shutting down the government.) It is clear all of these things hurt the economy, and they continue to do them.

Maintaining the infrastructure is not about ideology. Even the conservative Chamber of Commerce understands that you have to maintain the roads and bridges, etc., and that it damages the economy if you don’t. And yet we don’t, and the obstruction continues.

So this is about a different agenda. Paul Krugman says it best at his blog,

This kind of behavior — ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) — is a “tell”. It says that something else is really motivating the policy advocacy.

It is past time to argue that the Republican obstruction is hurting the economy, because it just is, and they know it. It is also past time to argue that they are doing this for some kind of ideological reason. Investing in infrastructure is not about ideology. Austerity is not about ideology.

Hurting the economy is not about ideology. There is a different agenda at work here. This is not an argument between differing visions of how best to help our economy. When this much is being done, hurting the economy again and again, and when the results of these actions are clearly that we are all being harmed, and yet it continues, this is not an accident. It is an agenda.

Economic Sabotage — Why?

So it is past time to argue if they are hurting the economy – that is settled. It is economic sabotage. There is no longer any question.

Now it is time to talk about why they are doing this.

Is it to damage Democratic election prospects? Are they betting that by making everyone feel enough pain, and blaming Democrats and President Obama, they can make people forget who got us into this mess? Do they think that economic sabotage will get them votes? That is the most charitable theory. Considering that much of the funding of the apparatus of the right that is behind this is secret, there are worse conclusions that could understandably be reached.

Democrats: The Filibusters Aren’t Stopping — What Are You Going To Do About It?

Senate Democrats, there have been over 400 filibusters. What are you going to do about it? We the People want to know. We thought we had elections. We thought things were decided and the country could finally move forward.

Are We the People the boss here, or are the billionaires and giant corporations behind this obstruction in charge?

Obstruction Of The People’s Will

Everything that We the People want to get done is being obstructed. In the Senate there is what the corporate media call “a requirement to get 60 votes for anything to pass” and in the House there is the “Hastert Rule” that prevents legislation from getting a vote if a majority that would pass it includes Democrats.

The country is being held back by an intentional strategy to block economic recovery and obstruct change that the public wants, so that Republicans can campaign for office saying the economy is bad so vote for us, and then mocking democracy saying, “How’s that hopey-changey thing workin’ out for ya?”

Are you going to do something about it? Are you going to deliver for We the People? We elected you to use the power of your office to deliver for us.

They sure are delivering for the billionaires and giant corporations who are paying them to do this.

Senate Democrats: What are you going to do about it? Who is the boss, We the People or the billionaires and giant corporations paying for the obstruction?

Here is Rachel Maddow interviewing Senate Majority Leader Harry Reid this week:

Please visit Fix the Senate Now.

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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

Misunderestimating Who They Are

There is a miscalculation at the core of Democratic strategies for ending the shutdown and avoiding default. Democrats keep saying, “They wouldn’t really do that.” But this calculation doesn’t “get it” about who and what the country is dealing with.

Here is the miscalculation: If you listen to right-wing radio, watch FOX News and read their online media and take it seriously (because they do) then you would know that many on the right don’t want to live in a country that has Social Security, Medicare, Obamacare, the minimum wage, Food Stamps, immigration, public schools, infant nutrition programs and the rest of the things government does to make our lives better. And they don’t want anyone else to live in a country that has those things, either.

They are willing to destroy the village to keep the village from having those things. If you don’t “get that” before entering into negotiations, you’re at risk of making a terrible mistake — like the sequester.

The Sequester

Remember what led to the sequester? There was a fundamental miscalculation that led to these terrible economy-killing cuts taking effect. White House negotiators believed the sequester cuts were so terrible and stupid that Republicans wouldn’t really let that happen. So they offered these cuts as an inducement — a worst alternative — to coming to an agreement about taxes and cuts. (Never mind the mistake that any deficit reduction at all right now is economy-killing.) The idea was that the sequester cuts are so terrible and have such a disastrous effect on the country and economy — and people — that “they wouldn’t really do that.”

But they did that. Now many Republicans are celebrating the sequester cuts, calling the sequester an accomplishment. They are celebrating the damage that they have caused to our government.

If you “got it” about who they are then you knew that of course they would do that. Offering the terrible sequester cuts because they were so terrible and stupid that “they wouldn’t really do that” was a fundamental miscalculation of how terrible and stupid — and destructive — their insular ideology has become. It was based on a fundamental misunderestimation of who they are.

Misunderestimating Who They Are

Are enough Democrats listening to right-wing radio, watching FOX, reading the right’s online media? Are they taking what they see and hear seriously? We listen to Rush Limbaugh and laugh. But they listen to Rush Limbaugh and believe.

Are Democrats and the President making a fundamental miscalculation by assuming the right-wingers of the Republican Party don’t want the country to default, and the terrible economic destruction that would bring? A strategy based on the idea that movement conservatives will yield rather than do that much harm to the country and economy and people, like the sequester strategy, is a fundamental miscalculation, fundamentally misunderestimating who they are: They do want things to be that bad!

Don’t Give In

The strategy of offering terrible and stupid cuts to an opposition that is bent on destruction only led to terrible and stupid cuts becoming the ongoing baseline, with them celebrating the sequester as a victory. Trying to scare and shame them with the terrible specter of the destruction from default could be offering them just what they want.

I am certainly not saying here that Democrats should give in to avoid the destruction Republicans are willing to cause. Giving in — or miscalculating and accidentally handing them what they want (like the sequester) — means they will just escalate the destruction — as they have done each time. That has been their game and will be their game. It’s just time to realize this and change strategies.

It is late in the game, much harm has been done, much harm is being done, but it is time for a shift from “get along” strategies to reach “bipartisan compromise” to instead realizing this crowd fundamentally opposes and seeks to dismantle the very things that most of us treasure about our country.

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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

If Dems Give In Now, Social Security And Medicare Will Be Future Hostage-Taking Targets

Remember how Republicans “won” the 2000 election? Remember how they tricked the country into going to war in Iraq? They used non-democratic means to get what they couldn’t get legitimately, and it worked, so they did it more. They got used to getting their way using bullying, so they did it more. Now it’s flat-out hostage-taking. And they’re doing it more.

Again and again, Republicans take a hostage and demand something they could not get through elections or the legitimate constitutional legislative process. The hostages over the last few years have included (but are not limited to) unemployment benefits, the Federal Aviation Administration, the “fiscal cliff,” disaster relief, government funding, even the debt ceiling. Manufactured crisis after manufactured crisis…

Again and again, they take a hostage and demand they get their way. Never mind election results, House and Senate majorities, and especially never mind the will of the people.

And then they have the nerve to mock democracy, saying, “How’s that hopey-changey thing workin’ out for ya?”

The Ongoing Obstruction And Today’s Hostage-Taking Are The Same Game

Here is something to recognize as part of what is happening today. They have also used obstruction to take hostage the power of We the People to legislate. They have used the filibuster in the Senate and the “Hastert Rule” in the House to obstruct almost everything We the People tried to do to make our lives better in the last several years.

They have blocked bills to hire millions to fix the infrastructure. They blocked bills to remove the incentive to move jobs out of the country. They blocked further stimulus to get the economy going. They blocked efforts to fix immigration laws. They blocked the “public option.” They blocked nominees and judges. They have blocked … everything.

This obstruction is part and parcel of what we are experiencing with this shutdown and the threats to force the country to default. It is about getting what they want but can’t win in elections or through legitimate legislative means.

It Will Not Stop Here If They Win

They continue these tactics because it is getting them what they – and the billionaires and giant corporations who fund them – want. They do it because it works. And then they do it again, because it worked.

Here’s the thing about this budget “standoff.” If Democrats or President Obama give in again, Social Security and Medicare will certainly be targets, sooner than later. What else?

Things Republicans hate:

  • #1 of all time: Social Security.
  • #2 of all time: Medicare.
  • Public schools.
  • Environmental Protection.
  • The Food and Drug Administration.
  • The minimum wage.
  • The eight-hour workday and the 40-hour workweek.
  • Unions and the National Labor Relations Board – the right of workers to organize.
  • The 47% of Americans who they say are “takers” and “moochers.”
  • Anything other than fossil fuels to provide energy.

This is not a complete list. Think of things Republicans hate, and then try to picture them not using hostage-taking to dismantle whatever you are thinking of.

Constitutional Crisis: Self-Government Under Attack

It has to stop.

This is a constitutional crisis – as in Republicans have thrown out the idea of following the Constitution, democracy and law, recognizing only power. Republicans have one power that We the People have not yet managed to take away from them: the power to destroy. And they’re using that power to get what they want for the billionaires and giant corporations who fund them.

If we are going to maintain the idea of government by We the People, using elections and the legislative process and everything else the country is supposed to be about, we can’t let them win again. If they win again, they’ll just escalate.

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P.S. I looked through just a few of the posts I have written covering the hostage-taking of the last few years…

March 31, 2011 Budget Fight: Why Are Republicans Forcing a Shutdown?

Sept. 23, 2011 ANOTHER Hostage-Taking Threat To Shut Down Government,

Just weeks after the “debt-ceiling” hostage-taking, forcing trillions to be cut out of the economy, the hostage-takers are at it again. Now they are threatening a government shutdown, demanding even more cuts in the “continuing resolution” that keeps the government operating. This time they even want to cut the disaster-relief spending that helps people hit by wildfires, tornadoes, hurricanes, earthquakes and other natural disasters.

Sept 26, 2011 Shutdown and Hostage-Taking — It Is NOT Both Sides Doing It.

Nov. 29, 2011 Will Republicans Shut Down The FAA Again To Help Deltas Union Busting.

Dec. 15, 2011 Republican Hostage-Taking Threat Again Guess Who Benefits,

Once again, Republicans are holding government hostage, trying to force through unpopular cuts to the things We, the People — “the 99%” — do for each other and our economy, while giving handouts to the 1% who pay for their campaign ads and smears. Once again they are threatening to just shut down the whole government if they don’t get their way. This time the hostage is unemployment benefits for 2 million people and the payroll tax cut that is the only stimulus left to keep the economy going. Here’s the thing, they say they want “cuts” but what they are really doing is shifting costs from the 1% on to the rest of us.

Jan 10, 2013 Disarm The Hostage Bomb: Stop Governing Based On Threats, Intimidation And Lies,

The “fiscal cliff’ was the result of the last debt-ceiling hostage-taking and threats and lies, which was enabled by earlier capitulation to hostage-taking and threats and lies, which was enabled by earlier capitulation to hostage-taking and threats and lies, which was enabled by earlier capitulation to hostage-taking and threats and lies…

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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

How The “Magic Asterisk” Caused The Shutdown

It finally came time for Republicans to put up or shut up. Instead they’re shutting down.

Never mind Obamacare; that’s just a mask for a huge Republican failure to govern. If you want to understand how we got to the point of a government shutdown, ask any Republican exactly what they would cut from the budget, and ask them to give actual dollar amounts of how much money that would “save.”

The current shutdown fight is over passing a “continuing resolution” (CR). Do you know what a continuing resolution is? It is what Congress uses when they haven’t passed an actual budget. It is a resolution to continue operating the government at existing spending levels, under existing policies.

And why hasn’t the Congress passed a budget? I’m glad you asked me that question.

Republican Budget Lies

Under President Reagan, Republicans cut taxes on the rich, and when huge deficits resulted (as intended), they said, “We have a spending problem, and we have to cut government.”

Ever since then, the propaganda has been flowing, 24/7/365: government spends too much, is too big, waste-fraud-and-abuse, is bankrupting us, etc. But they never, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever will tell you what they would cut and by how much. Ever.

If pressed, they’ll say “cut foreign aid.”

Again, Republicans will always, always, always tell people that government spending needs to be cut. And Republicans will never, ever, ever, ever, ever, ever, ever tell people exactly what they would cut, and by how much.

Because they understand that if people knew what they are really talking about cutting, no one would ever vote for another Republican again.

The Magic Asterisk

THIS year, however, it finally, finally came to be “put up or shut up” time. The Republicans in the House had to actually pass a budget that said what and how much they would cut. Instead, however, they didn’t put up and are shutting down.

You might remember that Republicans passed something called the “Ryan budget.” This was a budget outline that dramatically cut the federal budget, but without specifics. Economist Paul Krugman wrote repeatedly about the Ryan plan, explaining how it relied on a “magic asterisk.” This is an asterisk they insert, and below they write that specific cuts will be named later.

For example, Krugman, in “Big Fiscal Phonies,” writes:

…once you strip out Mr. Ryan’s “magic asterisks” — claims that he will somehow increase revenues and cut spending in ways that he refuses to specify — what you’re left with are plans that would increase, not reduce, federal debt.

Later, Krugman wrote in “What’s In The Ryan Plan?“:

Yet Ryan claims a big deficit reduction, via two big “magic asterisks”. First, he insists that the tax cuts won’t reduce revenue, because they’ll be offset with unspecified “base-broadening”. [. . .] Second, there are large assumed cuts in discretionary spending relative to current policy. [. . .] all of the alleged deficit reduction comes from revenue and spending numbers that are simply asserted, not the result of any policies actually described in the “plan”. [. . .] All the claims of major deficit reduction therefore rest on the magic asterisks. In that sense, this isn’t even a plan, it’s just a set of assertions.

Put Up Or Shut Up Time

This Republican budget outline was then sent to the various House committees and they were charged with coming up with specific cuts. It was finally put up or shut up time.

So what happened?

In “Republicans Choose (More) Vacation Over Governing,” I wrote about what happened in one instance of a committee having to specify what to cut and by how much.

This week was put up or shut up time for Republicans. After decades demanding unspecified budget cuts they finally had to put their vote where their budget outline was. So what did they do? They are taking a 40th vote on repealing Obamacare and then heading home for five weeks vacation. This is who they are.

The House Republican leadership withdrew its own THUD bill – Transportation, Housing and Urban Development – because the cuts in the bill were just too much for members to stomach. They had to vote to put actual numbers on their eternal promises to cut, cut, cut, and they couldn’t even stomach it themselves.

What about Tuesday’s shutdown? I wrote at the time, “When they return in the fall it looks like they will try to divert attention from their failure to come up with specific cuts by passing something that Democrats cannot accept and the President will veto, then shut the government down and try to blame Democrats.”

And here we are.

It was put up or shut up time, and they instead decided to shut down. Obamacare is just a mask for what is happening here.

Government Spending

In a democracy, isn’t the definition of “government spending” the things that We the People decide to do that make our lives better?

Conservatives say government makes us “dependent” and not “self-reliant.” Does bringing water to our houses make us “dependent” and less self-reliant on going down to the stream with a couple of buckets, or does it just make our lives better? Does a police force and courts make us “dependent” on not carrying a sword and a big club around with us, or does it just make our lives better?

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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

How To Dismantle A Country

Let’s say it’s the 1970s and you’re a foreign power of one sort or another – Soviet Union, China, Arab oil interests, secret cabal of billionaires, whatever – and you want to dominate the world. But the US is in your way…
Let’s say you do a comprehensive analysis of all the things that make the US a world power (for better or worse). Let’s say you develop a plan to infiltrate, undermine, weaken, fracture and ultimately dismantle each the institutions that made America so strong.

Looking back today, can anyone offer anything that could have been more effective at accomplishing this plan than funding America’s conservative movement?

Government Hands $1 Trillion+ To Wealthy While Deficit Is $642 Billion

While our government is laying off hundreds and hundreds of thousands and cutting services in the name of cutting deficits, a new report exposes that taxpayers are handing more than $1 trillion a year to the wealthiest.

DC Focused On Deficits Not Jobs

Instead of focusing on jobs, Congress and the White House obsess on how to cut the budget -– the things We the People do to make our lives and economy better. While the “sequester” has already cost 900,000 jobs — 1.6 million thru 2014 — Republicans are threatening to shut down the government and force the country to default on its debt as leverage to force even more cuts.

Republican Speaker of the House John Boehner has repeatedly said the country is “broke.” For example, “We’re broke, broke going on bankrupt,” Boehner said Feb. 28, 2011. Here he is saying it on Dec. 11, 2012, “Let’s be honest. We’re broke.”

So we have to cut and cut and cut, even though the cuts are costing millions of jobs and damaging the economy and the prospects for our country and peoples’ future, because supposedly “we’re broke.”

New Report: More Than $1 Trillion Per Year Handed To Wealthiest

But a report out today from the National Priorities Project (NPP) shows that the country is handing more than $1 trillion to the already-wealthy.

That’s right, the government is cutting services and laying off hundreds upon hundreds of thousands in the name of cutting deficits, while handing more than $1 trillion a year to the wealthiest. The rest of us pay taxes and suffer cuts in jobs and services to make up this lost money.

According to the report, lots of 1%ers will pay no taxes at all this year, while the country cuts jobs and services in the name of cutting the deficit.

“Ten major tax breaks that together total more than $750 billion in tax savings in 2013 are tilted heavily in favor of the top income earners; according to the Congressional Budget Office, 17% of the benefits from these major tax breaks go to the top 1% of households. In fact, according to the Tax Policy Center, nearly 1.2 million taxpayers in the top 1% will owe no income tax at all in 2013, thanks in large part to tax breaks that help them reduce their tax liability down to zero.”

Two of the key findings in the report tell the story:

  • Corporate tax breaks will total $108 billion in FY2013 – more than 1.5 times what the U.S. government spends on education funding. Between 2007 and 2013, the revenue lost from U.S. corporations deferring taxes on income earned abroad rose 200%, going from $14 billion to $42 billion.
  • All tax breaks for individuals will exceed $1 trillion this year, with about 17% of the biggest individual tax breaks going to the top 1% of earners. In fact, many individual tax breaks disproportionately benefit wealthy households.

The country’s budget shortfall is not from “entitlements” (things We the People are entitled to as citizens in a prosperous democracy) and “government spending” (the things We the People do to make our lives and economy better). The deficit is down to $640 billion while $1 trillion in tax breaks goes to the 1%. (Actually mostly the 1% of the 1%.)

Click through to read the entire NPP report, and here for a visualization of the impact.

Deficit Talk Is A Rigged Discussion

So why is the country terrified that budget deficits are going to eat us alive? Why don’t people know that the deficit is already down more than 50% from the levels Bush left behind and is falling at the fastest rate since the end of World War II? Why are Republicans able to get away threatening to shut the government and force the country into default in their drive to cut spending on the things that make our lives better?

The reason is that there is a massively-funded PR campaign underway to convince people of these things. Fix The Debt, for example, has pumped at least $60 million into a PR campaign to convince people that we have a deficit emergency and must therefore cut back on the things government does. Wall Street billionaire Pete Peterson has pledged $1 billion toward the same end. These are just two sources of the massively-funded campaign to convince people that the government should be cut back, instead of hiring people to fix the infrastructure, instead of having universal health care, etc.

And those are just two examples. How many headlines like these has the public seen? Budget deficit reaching point of no return, 20 Must-See Charts On America’s Disastrous Level Of Government Spending, Budget, Deficit, Debt Disaster, Deficits Must Be Curbed or It’s Disaster For Economy: Study and on and on and on.

And now we learn that the government is handing more than $1 trillion to the 1% and their corporations, while the deficit in only $640 billion and falling.

A Corruption Spiral

We are witnessing here a corruption spiral. This is big money using money to influence the government to give them even more money. And they then use that more money to influence the government even more to give them even more more money. And they then use that more money to influence the government even more more to give them even more more more money. And they then use that more more money to influence the government even more more more to give them even more more more more money. And then …

[fve]http://youtu.be/Kp5nUQkgWIc[/fve]

What Can We Do About This?

This is about the powerful predatory pigs feeding at the trough and taking it out on the weak. It has to stop.

How do we stop the corruption spiral that is eating our economy, our jobs and the things We the People do to make our lives better? We must get the money out of politics — and out of the national discussion. Money is not “speech.” In a democracy each person having an equal say is “speech.”

Corporate money is supposed to be used to run the corporation, period. Corporations use their money to drive the purposes of the corporation. So corporations by definition cannot use their money without the expectation of getting something in return. Even the use of corporate money to fund a Little League team is for the purpose of advertising and “brand development.” So giving money to a politician is done with the expectation of getting a tax break, a contract, a patent or some other form of advantage over competitors or otherwise increasing its profits. According to the law giving anything of value to any public official with the intent of influencing that official is bribery. It is not speech to give money to a politician, it is bribery. It is corruption.

By the same token, corporations giving their money to lobbying operations is done with the same intent. It is done to influence politicians or use front groups to drive support to politicians (a thing of value) to get them to do something that financially rewards that corporation.

And of course those with the most money are able to have the most influence. Which brings them more money. Which brings them more influence. This increased influence brings them more money, which brings them more influence. This increased influence brings them more money, which brings them more influence. This increased influence brings them more money, which brings them more influence. This increased influence brings them more money, which brings them more influence. This increased influence brings them more money, which brings them more influence. This increased influence brings them more money, which brings them more influence.

Again, a corruption spiral that eats our economy, jobs and democracy.

Corporate money must be banned from politics or otherwise influencing policy. Corporate money should be used to operate the corporation, period.

So how do we stop the influence of the billionaires? We just learned that the Koch brothers ran a group that pumped almost a quarter of a billion dollars into the last election (that we know of). Aside from that, according to the Sunlight Foundation, the 1% of the 1% funded a huge share of the election all by themselves.

The answer here is of course limiting the amounts individuals can put into campaigns and banning efforts to influence elections outside of campaigns themselves. This includes a complete crackdown on the use of special-tax-status organizations in election activities, front groups, etc.

These steps will at least be a start, and will give democracy a bit of breathing room. Then We the People might be able to figure out where to go from there.

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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

A Corporate Tax Idea That Fixes Lots Of Problems

Here is one thing Congress could do that would create more jobs, boost the economy and reduce both the budget deficit and the trade deficit. This one thing would not only provide a big boost now, but would provide an ongoing boost from now on. Congress should modify the “deferral” tax loophole that lets companies dodge their taxes by moving and keeping profits “out of the country.” Tax this cash at 5% a year.

The top corporate tax rate is currently 35%. But corporations are allowed to “defer” paying taxes on profits earned outside of the country until they “repatriate” those profits, which means bringing the money back into the country. (Any taxes paid elsewhere are deducted from the amount owed.) There are solid reasons to allow corporations to do this. Simply put, they might need to put that money to good use, which will benefit the company, which in theory will later benefit our country.

But this tax deferral has turned into a huge loophole that is draining our country of jobs, tax revenue, investment, manufacturing infrastructure and other good things We the People are supposed to receive in return for allowing these corporations to operate. Companies not only are keeping profits out of the country, the loophole gives them an incentive to engage in schemes that shift more and more jobs, production and profit centers out of the country. (One well-known example: Apple transferred ownership of it’s “crown jewels” — “intellectual property” — to Ireland.)

A Ton Of Cash That We The People Could Really Put To Use

The amount now being held outside of the country is astounding. Some estimates say that it is as much as $1.5 to 2 trillion, or even more. If the full amount were brought back and the tax rate applied that would bring a $525-700 billion windfall that the government could use to hire people to get things done that really, really need to get done like modernizing our infrastructure, hiring teachers, building high-speed rail, retrofitting homes and buildings to be energy-efficient … so many things… (Of course it would be less because of taxes paid elsewhere, etc., but we’re still talking hundreds of billions.)

And, of course, after that $1.5-2 trillion is brought back and the appropriate taxes are paid the rest would either be invested or distributed to shareholders — another nice boost to the economy.

Beyond the one-time windfall from bringing that cash back there would be two other major effects of changing this deferral loophole. The first, of course, is that tens of billions of revenue now withheld each year would be coming in to be taxed, thereby reducing the budget deficit. But perhaps more important, the incentive to move jobs, factories and profit centers (“crown jewels”) out of the country would be eliminated, so companies would keep factories and jobs here.

 Why They Do It

The reason so much $$ is being kept away is that companies have good reason to believe that eventually they will be allowed to bring it back without paying the taxes they owe. Congress made a huge mistake in 2004 and gave corporations a “tax repatriation holiday.” They allowed companies that were holding profits outside of the country to bring those profits back without paying all of the taxes due. This created the expectation that Congress will of course do this again (and again). So, not looking a gift horse in the mouth, companies started to find ways to increase their outside-the-country profits and reduce their inside-the-country profits. Jobs, factories, production, profit centers (desks, chairs, carpets…) and everything else that could be moved out of the country started to be … moved out of the country. And it gets worse every year.

Solution: Put A Surtax On Money Held Outside The Country

Some people say we should just repeal the rule that lets companies defer taxes due on profits earned outside of the country until they bring it home. But that undoes the benefits that were the original reason to allow deferral.

Here is a simple idea that could go a long way toward solving this problem. Don’t eliminate the deferral, tax it. As I said, there are good reasons to allow it in certain instances. Instead, put a surtax on profits held outside of the country. Just for illustration, suppose this surtax was 5%. This means that if a company decides to keep $1 billion of profits outside of the country, they would pay 5% of that, $50 million, each year they do this. This is not later used to reduce the amount of taxes due when they eventually bring the money home; when they finally “repatriate” the profits they would be still taxed at the same rate as now (up to 35% minus taxes paid elsewhere, etc.) But instead of gaining from keeping the money out of the country, it instead costs them 5% each year they keep it out.

Of course, this must be coupled with the end of any hope that Congress will eventually give in to hostage-taking and let companies bring profits back at some reduced rate. That was a mistake that has cost the country dearly in lost revenue, jobs, factories, profit centers, (desks, chairs, carpets…) and also cost the country money that should be either invested or distributed to shareholders.

If the companies decide to continue to hold that $1.5-2 trillion outside of the country this surtax would bring the government between $75 and $100 billion per year of additional tax revenue, and these companies would also eventually have to bring it back and pay the up-to-$700 billion due in taxes as well. I’d be happy with that, and so would the country.
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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

Martin Luther King’s Dream Of Jobs And Freedom

Martin Luther King Jr. outlined his dream 50 years ago this weekend. We made much of it happen. Let’s dream some more. Let’s dream about what we could do in the next 50 years.

Fifty years ago Martin Luther King Jr. led the March on Washington for Jobs and Freedom and famously told the country “I have a dream.” Fifty years later there is progress and there are setbacks. We no longer have segregation — separate schools and bathrooms and the rest. Many states finally allow everyone to marry the person they love, but at the same time many states are returning to apartheid-era restrictions of voting rights.

One huge part of the “Jobs and Freedom” Dream that still evades us is the goal of full employment or an income until a job becomes available.

On August 16, 1967 King delivered a speech titled, “Where Do We Go From Here?” addressing the need for everyone to have a job or an income,

…our emphasis must be twofold: We must create full employment, or we must create incomes. People must be made consumers by one method or the other. Once they are placed in this position, we need to be concerned that the potential of the individual is not wasted. New forms of work that enhance the social good will have to be devised for those for whom traditional jobs are not available. In 1879 Henry George anticipated this state of affairs when he wrote in Progress and Poverty:

The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature and elevates thought, is not done to secure a living. It is not the work of slaves driven to their tasks either by the, that of a taskmaster or by animal necessities. It is the work of men who somehow find a form of work that brings a security for its own sake and a state of society where want is abolished.

A Country Based On A Dream

Our country was founded on the dream that We the People can do things for each other instead of depending on the rich and powerful to throw us scraps.

If you look at our Constitution you see that our country is supposed to be for We the People. And I mean just look at it, not read it. The only words you see from any distance are the words “We the People.” The Founders were making a point.

The Constitution told the world about a dream that “We the People” would build a country that protects and empowers us, where together we do things for the common good, to make our lives better. And for a while we did that.

We have lost sight of that dream. We no longer seem to recognize who our country is for. We no longer talk about the common good.

Who is our country for? Who is our economy for? Certainly a We the People economy would at the very least guarantee that We the People have jobs and an income until a job is available.

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They’re STILL Saying Taxes And Spending Hurt The Economy

Serious People were saying that budget deficits hurt the economy. Then we increased taxes on the rich so now deficits are wayyyyy down. So Serious People are saying that taxes hurt the economy. Or is it spending on schools and infrastructure that is going to kill the economy. Wait, it’s the new health care law — millions of people getting coverage is going to kill the economy. How come Serious People never complain that cutting schools, infrastructure maintenance, Social Security, scientific research (and other things We the People spend money on to make our lives better) really, actually does hurt the economy?

The Record On Taxes And Economic Growth

Last year the Congressional Research Service (CRS) took a look at the actual record of taxes and economic growth and issued a report, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945. The report reported,

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced.

Translation from government to English: The top tax rate used to be over 90% and capital gains taxes used to be much higher. At that time economic growth was much higher. Then they dramatically lowered tax rates for the rich and economic growth went waaaaay down. (However, they can’t say for sure that cutting taxes on the rich caused the huge drop in economic growth.) Also the tax cuts didn’t boost saving, investment or productivity growth. BUT the rate-lowering appears to have caused incomes to concentrate at the top, which has screwed and squeezed the rest of us.

And, by the way, the tax cut did cause massive deficits and we stopped maintaining and modernizing our infrastructure, cut back on education, universtities, scientific research, space exploration, medical research and so many other things that We, the People do to make our lives better.

You might not have heard about this study. Senate Republicans made the CRS withdraw the report.

Here is a chart I made some time ago, for the post, Conservative Tax Tricks – Did Tax Cuts Grow The Economy?

Trend line of growth, with top tax rates:

Top Tax Rate vs GDP

And as long as we’re looking at that post, this was also in there, top tax rates and national debt:

Top Rate vs Debt

Similar Claims, Same Results

Republican claims that taxes hurt the economy go hand-in-hand with similar Republican anti-government claims. The claims usually amount to “government is in the way,” “government hurts the economy,” “government spending is bad,” etc. A Google search of “government is in the way” finds many, many examples, including:

Government the Job Killer – John Stossel. In this one Stossel claims that building infrastructure is bad for the economy. “Building giant government projects is no way to create jobs. When government spends on infrastructure, it takes money away from projects that consumers might think are more important.” He actually claims that building the transcontinental railroad was a bad deal for the country.

A post at Noahpinion has been circulating around the economics blogs, Conservative economic arguments since the crisis: A review. The post looks at a number of Republican economic arguments of late, finding them all to be either mostly or completely … well … rubbish. Examples include “Fannie, Freddie, and possibly the CRA caused the crisis.” and “Welfare is the main force prolonging the recession, by discouraging people from working.”

And of course never forget, “Nothing is more important in the face of a war than cutting taxes.” – Tom DeLay, House Republican leader, 2003.

Why do we listen to these clowns at all? (Because they are backed by the big, big money people who get all the money that come from these Republican schemes.) Why don’t we just create millions of jobs by investing in infrastructure and similar projects? Why don’t we just restore a top tax rate of 90% and a top corporate tax rate of 50%? Why don’t we boost capital gains taxes? Does it have something to do with the influence of money over politics?

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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